Insurance Rate Changes by State

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White House Publishes Final Regulations For Obamacare’s Individual Mandate — Seven Things You Need To Know

8/28/2013 @ 1:08AM |37,500 views

Avik Roy, Contributor

On Tuesday, the Obama administration released the final regulations for Obamacare’s notorious individual mandate—the provision in the health care law that requires most Americans to purchase health insurance, or pay a fine. Tuesday’s entry in the Federal Register, spanning 75 pages, contains all of the fine print related to the individual mandate: who it applies to, who is exempted, and what kinds of insurance satisfy the government’s rules. Here are seven things you need to know about the mandate, what the law calls your “Shared Responsibility Payment for Not Maintaining Minimum Essential Coverage.”

1. You pay a fine if your spouse and kids are uninsured

If you claim dependents on your tax return, you’re responsible for paying the mandate fines if your dependents don’t have health insurance. “A taxpayer is liable for the shared responsibility payment for an individual without minimum essential coverage if the individual is the taxpayer’s dependent,” write the authors of the new regulation, Heather Maloy, Acting Deputy Commissioner for Services and Enrollment at the Treasury Department; and Mark Mazur, Assistant Secretary of the Treasury for Tax Policy.

This provision takes on special importance because of its interaction with Obamacare’s employer mandate. Under the health law, employers with more than 50 full-time-equivalent workers are required to offer health coverage to their employees and employees’ dependents under the age of 26. Employers are not required to offer coverage to employees’ spouses. Hence, a worker who gets coverage through his job will be forced, under the individual mandate, to purchase coverage on his own for his spouse, if he or she doesn’t have other sources of coverage. A worker who doesn’t get coverage through his job will need to purchase coverage not only for himself, but also his dependents.

2. Pretty much any employer-sponsored plan meets the mandate’s requirements

In order to meet the mandate’s requirement, you have to have “minimum essential coverage.” That is a key term in the context of Obamacare. Medicare and Medicaid count as minimum essential coverage, as do plans purchased in the Obamacare exchanges. As for employer-sponsored coverage, pretty much any plan offered by an employer counts as meeting Obamacare’s requirements.  Paragraph 2 of Section 5000(A)(f) of the Internal Revenue Code defines employer-sponsored minimum essential coverage as “a group health plan or group health insurance coverage offered by an employer to the employee which is [either a government-sponsored plan] or “any other plan or coverage offered in the small or large group market within a State.”

In other words, any health insurance plan that is legally sold within a state’s boundaries counts as an “eligible employer-sponsored plan.” In many states, insurers market inexpensive plans that cover a limited range of services. According to Obamacare, employers can offer these inexpensive plans to their workers and thereby avoid the employer mandate’s strong penalty. Indeed, as I detailed in May, many employers will have a strong incentive to offer these “skinny” plans, and some are already starting to do so.

3. The mandate fine is small, and will have even less impact over time

In 2014, the fine for not carrying insurance is the higher of $95 per person or 1.0 percent of taxable income. In 2015, the fine is the higher of $325 per person, or 2.0 percent of taxable income. In 2016, it’s $695 per person or 2.5 percent of taxable income. You’re liable for up to 2 additional dependents, fine-wise.

A number of people have remarked upon the obvious fact that a several-hundred-dollar fine is nothing, compared to spending several thousand dollars on overly costly health insurance. But what a lot of people don’t realize is that, after 2016, the size of the fine is adjusted annually for cost-of-living increases. But historically, the cost of insurance has gone up every year at rates far exceeding normal inflation.

If that trend continues, the gap between the mandate fine and the cost of health insurance will continue to widen, incentivizing more people to go without coverage.

4. The IRS can’t go after you if you don’t pay the fine

Section 1501(g)(2) of the Affordable Care Act specifies that the IRS cannot subject taxpayers to “any criminal prosecution or penalty” for refusing to pay the mandate fine. Also, in contrast to normal tax levies, the IRS cannot “file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty imposed by this section.”

Basically, the only thing the IRS can do to make you pay the mandate fine is to take it out of your withholding, or withhold it from your tax refund, if you’re due one. So if you don’t participate in the withholding process, the IRS has no way to collect the mandate fine.

5. Many older individuals will be exempt from the mandate

If you need to buy insurance on your own, you’re exempt from the individual mandate if the cost of your coverage is more than 8 percent of your household income. (The percentage is adjusted, over time, using a somewhat complex formula.) This means many older people—who pay higher premiums than younger people—will be exempt from the mandate altogether.

Paul Houchens, an analyst at Milliman, puts it this way: if you’re 55 years old, and you’re paying $7,800 a year for health insurance, you’ll be exempt from the individual mandate if your income is between 400 percent of the federal poverty level—about $46,000—and $97,500. (If your income is below $46,000, you qualify for at least a partial subsidy of your insurance costs, which, based on the way the law is written, makes the individual mandate apply to you.)

On the other hand, if you’re a 35-year-old, and you’re paying $3,600 a year for your health coverage, the mandate applies to you in nearly all cases, because $3,600 divided by 8 percent is $45,000, which is lower than 400 percent of the federal poverty level.

6. If you don’t file a tax return, you’re exempt

You’re also exempt if your income is below the poverty line, or if you don’t file an IRS tax return. Indeed, if you add up all of these exemptions, MIT economist and Obamacare architect Jonathan Gruber estimates that 40 percent of people who are uninsured are exempt from the individual mandate.

7. ‘Members of recognized religious sects’ and American Indians are also exempt

If you’re a member of a “federally-recognized Indian tribe,” congratulations! You’re also exempt from the individual mandate. This is in part because theIndian Health Service offers government-run health care to members of such tribes. Members of a “recognized religious sect or division,” as specified inSection 1402(g)(1) of the Internal Revenue Code, are also exempt. So, you might be asking yourself: which “religious sects” are exempt?

The Internal Revenue Code exempts an individual from certain taxes if he is “a member of a recognized religious sect or division thereof and is an adherent of established tenets or teachings of such sect or division by reason of which he is conscientiously opposed to acceptance of the benefits of any private or public insurance which makes payments in the event of death, disability, old-age, or retirement or makes payments toward the cost of, or provides services for, medical care,” including Social Security, Medicare, and Medicaid.

Your “sect” has to have been in continuous existence since December 31, 1950, and the Commissioner of Social Security must agree that your sect “has the established tenets or teachings” consistent with opposition to medical benefits. While there are some on the Internet who believe that this religious exemption applies to Islam, it doesn’t appear that way to me, as Muslims are not exempt from Social Security. Instead, the exemption is meant for groups like the Amish.

So if you really hate the individual mandate, you don’t have to burn your Obamacare card—just join the Amish or an Indian tribe!

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In Colorado, ObamaCare Ads Look More Like Animal House M.D.

By Jon Gabriel on October 23, 2013

Back when I was a wee li’l blogger just finding my way in the online world, I created a lot of Photoshops (like thisthis and this). They were fun to make, but as we entered the Age of Obama, the actual photos became funnier than anything I could create (like thisthis and this).

BrosuranceThe deeper we fall into the President’s progressive rabbit hole, the more ridiculous the images get. Take Colorado’s latest effort to con encourage young, healthy Americans to sign up for Obamacare.

The Centennial State launched its “Get Covered” effort by paying nearly naked models to prance around downtown Denver in flesh-toned skivvies. How this stunt escaped the notice of ever-vigilant feminist groups is beyond me, but it apparently had little impact.

Despite spending more than $21 million in taxpayer funds to promote the Colorado exchange, a paltry 226 people enrolled in the first week. It’s early yet, but a cost of $93,000 per victim is bad, even for the government.

But have no fear, Colorado taxpayers: Denver’s latter-day Don Drapers have created a brilliant new campaign to sell Obama’s signature train wreck on an unsuspecting populace. Behold “Brosurance.”

The first in a series of ads steals the trademarked “Got Milk” tagline, repurposing the catchphrase to sell really bad insurance. The ad then insults their target market: the healthy young people Obamacare needs to pay for the health care of older Americans.

Brosurance

Keg stands are crazy.
Not having health insurance is crazier.
Don’t tap into your beer money
to cover those medical bills.
We got it covered.
Now you can too.

If you like your keg, you can keep your keg. But why blow your dough on a liver transplant when you could spend it on binge drinking — amirite, broheims? ::high fiving followed by chest bumping followed by passing out::

Dean Wormer said, “fat, drunk, and stupid is no way to go through life, son.” But to our bumbling central planners, that is the ideal candidate to recruit as a lifetime ward of the state. Give a bro a beer, he’ll love you for a day; teach him how to keg stand and he’ll vote Democrat forever.

Two of the losers in the brosurance ad appear in another equally moronic appeal to underemployed millennials. “Yo Mom, do I got insurance?” bro #1 asks as the copy explains that this mid-20s manbaby somehow sustained a massive head injury during a simple game of golf.

These latest Obamacare pitches are an embarrassment. Not that long ago, the only U.S. government ads targeting young men encouraged them to “be all they can be” or perhaps join “The Few. The Proud. The Marines.”

Today, we’re telling twentysomethings they should just throw a kegger since mommy can fix any boo-boos they get during their 4th anniversary funemployment party.

Perhaps I’m wrong and the government’s ad agency is on to something. If anyone is stupid enough to respond to these ads, they might be stupid enough to pay the exorbitant rates under Obamacare. Instead, they should refuse, and instead find the plan that works for them.

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There’s a reason no one washes a rental car

By Butch Mazzuca, Vail Daily , October 28, 2013

Harvard’s president emeritus, Lawrence Summers, once said, “In the history of the world, no one has ever washed a rented car.”

Why? Because when there’s no vested interest; there’s no ownership.

Similarly, most of us really don’t care how much medical procedures cost for the simple reason that we’re not vested. The fact is tht most of us have no idea how much medical procedures cost because the insurance company picks up the tab.

And therein lies the biggest problem with the Affordable Care Act (Obamacare): Congress’ failure to address the singular most important aspect of the issue — human nature.

It’s human nature to take pride in or put energy into things that benefit us directly, just as it’s human nature to disregard those things that don’t. It’s when people have no “skin in game” regarding the cost of medical procedures that costs get out of hand.

One size doesn’t fit all

The notion that one size fits all regarding health care is patently ridiculous. During the health care debate, proponents used the argument that the United States was the only Western industrial nation without a system of national health care.

But that reasoning is flawed because the average industrialized nation in the Western world has a population of roughly 15 million people. National health care is far easier to manage in relatively homogenous nations such as Sweden (9 million), Denmark (5 million) or Switzerland (8 million) than in a heterogeneous nation of 320 million spread across 3,000 miles.

In retrospect, it should be easy to see why the Affordable Care Act was doomed from the start. Creating a one-size-fits-all health-care system in a nation as large and diverse as ours is akin to making a square circle — it’s just not possible.

The second biggest problem with the act was creating a law supported by only one political party. Those who justify the act passing without a single Republican vote compare Obamacare with Social Security and tell us people didn’t like Social Security at first but learned to love it. That type of reasoning is the ultimate in arrogance — it’s the ruling class telling Americans, “We know better than you.”

But if Congress really does know better than us, why is the nation $17 trillion in debt? The “we know better than you” attitude is a socialistic perspective, and we all know how well that worked for the Soviet bloc from 1945 to 1990.

But possible solutions should always accompany criticism, so what follows are a few suggestions regarding modifications that should be made to the Affordable Care Act:

1. First and foremost, the Affordable Care Act should apply equally to all American citizens, including the president and Congress.

2. Instead of spending the billions the act will cost taxpayers, Congress might give thought to empowering consumers by giving them a fixed amount of money annually that must be used for health care. This money should not be taxed and if there is any residual, the individual should be allowed to keep the difference, similar to what Mitch Daniels did with Indiana’s state employees, a program that was enormously successful.

3. It’s axiomatic that when competition is introduced, prices go down. To inject competition into the market place, insurance companies should be allowed to sell policies (and compete) across state lines.

4. The government should also create a blue ribbon committee made up of insurance industry experts with oversight by the SEC and the Senate Finance Committee to design a basic standardized insurance policy that includes preventive health care protocols. Congress could mandate that all health insurance carriers offer this basic policy in order that people are able compare policies on an apples-to-apples basis. After a basic policy is created, consumers should be given options to purchase additional or modify certain coverage, such as pregnancy benefits, dental, eye exams, etc., as well as making use of increased or reduced deductibles based upon on an individual’s preferences or needs.

5. To redress the problem of expensive and unnecessary tests and procedures as a matter of “defensive medicine,” the government could create a medical injury pool with congressional oversight to compensate people due to a physician’s omission, mistakes or accidents.

Funding this pool could be accomplished by adding a small tax to everyone’s insurance premiums. Such a policy would spread the cost of actual malpractice, eliminate the need for medical malpractice insurance and eliminate trial lawyers from the equation.

6. There must be financial incentives for living a healthy lifestyle, such as premium discounts for getting annual checkups and for doctors to practice more preventive medicine.

These are but a few ideas that could be easily implemented if only our legislators would put human nature back into the equation and ensure that everyone (including themselves) is vested in the outcome.

Quote of the day: “Our democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

Thomas Jefferson

Butch Mazzuca, of Edwards, writes regularly for the Vail Daily. He can be reached at bmazz68@comcast.net.

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