What’s this? A Tax Plan with healthcare provisions?


Healthcare Update November 7, 2017

What’s this? A Tax Plan with healthcare provisions?

If you’ve been following the proposed bill for the Trump Tax Scam, you’ve read the individual mandate to enroll or pay a penalty may be repealed as part of the tax bill. Republicans claim this would save $416 billion over a decade, which some find tempting in light of the $1.5 trillion the bill would add to the national debt over that same period.

As reported recently on PBS News Hour, House Leader Paul Ryan has stated “a lot of members are suggesting” that the House include the repeal in their tax plan. However, Mr. Ryan did not commit himself on how he felt the coverage mandate should be covered. Another House leader, Rep. Kevin McCarthy, R-CA, was also evasive about committing his personal support for the idea.

House Freedom Caucus leader, Rep. Mark Meadows, R-NC, supports the repeal of the mandate in the tax plan, citing the revenue saved by enrollees who would like to opt out without a penalty, would “soften the blow from the expiration of various tax credits and the elimination of the deduction for state income and sales taxes.” The remaining enrollees would constitute an overall more needy pool so their costs would rise.

The Washington Post reports in the first week of the current open enrollment, there is a “reverse Robin Hood” going on. If you qualify for government help in buying a plan, there are more options this year, but if you don’t qualify for help, premium costs are much higher and the choices may be fewer. This applies particularly to individuals who buy in the open market on their own, that is, without plans offered through their employers.

Earners who make below 400% of the federal poverty level ($98,400 for a family of 4) can get subsidies to help lessen the cost of their plans. Those who earn more cannot.

People who do not get subsidies have seen their premiums double or triple, and while these earners may have what some would deem a comfortable income, it’s not high enough for them to afford $2000+ monthly premiums for plans with a high deductible and high copays. These high premiums are driving some individuals and families from the insurance marketplace altogether.

However, according to the Washington Post, the flip side is that subsidies will rise next year for those who qualify for them. According to the Department of Health and Human Services, eligible enrollees will get $555 per month next year on average, up from $382 average monthly credit this year.

How did this happen? It is partly due to Trump halting extra payments to insurers for the cost-sharing discounts they must offer. To offset this, many companies are raising the premiums of their mid-level “silver” plans. Given that premium subsidies are based on the cost of the second level silver plans, subsidies are increasing to a level so generous that the lowest-income, marketplace shopper in nearly 98% of the counties across the country, will receive the lowest-grade, “bronze” level plan for free. These shoppers using Healthcare.gov will find a bronze plan available free if they make less than 150% of the federal poverty level ($36,900 for a family of four).

But these subsidies and bronze level plans won’t help individual earners making more than $48,240 (400% of the federal poverty level). It’s a strange algorithm, which, in many cases, inflicts economic pain on the “less poor.”

One more thing–open enrollment began November 1st and will end December 15th with absolutely no fanfare, publicity, or efforts to facilitate the process from the federal government. I noticed that social media has taken on some of that role with Facebook sharing of the enrollment dates and website links back in October.

The Republican Congress and its President keep stating that the ACA is collapsing. They belong to the school of Repeat-Something-Over-and-Over-Until-It-Becomes-True. But if the ACA is in fact strangled by the GOP and grows so weak it becomes ineffective, the Democrats need to spotlight their efforts so the Republicans own their healthcare debacle.

 

Sources:

Ryan: ACA mandate part of tax talks; https://www.pbs.org/newshour/politics/ryan-says-health-insurance-mandate-part-of-gop-tax-talks

The Health 202: Obamacare is helping the poor and hurting the less poor; https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2017/11/06/the-health-202-obamacare-is-helping-the-poor-and-hurting-the-less-poor/59fdec2930fb0468e76540f5/?utm_term=.aa748481f63d

Submitted by: Bev George, Co-Chair of the Healthcare Committee