One of the
reasons I created this blog was to initiate and facilitate thought and
discussion on topics of interest and importance to the tax preparer community.
While not
specifically a tax topic, the issue of “repeal and replace” does involve taxes
and 1040 preparation.
The basic
concept of Obamacare – attempting to provide universal comprehensive health
insurance coverage by using advance credits to help reduce the up-front out of
pocket cost – is a good one.
But Obamacare
was hastily written by the idiots in the Democratic Party, without taking the
time to properly and completely think it through, or taking the time to read it
before passage, to provide Obama with a quick and early victory. The Affordable Care Act (ACA) is a convoluted
mess.
The
Republican Party has also earned the right to bear the description
"idiots”. They have opposed the
Affordable Care Act from the beginning, more because it was Democratic
legislation than probably anything else.
So the Republicans have had 7 years to come up with an appropriate
alternative to replace Obamacare. Of
course the idiots did nothing, and are now scrambling to come up with something
in the same way the idiot Democrats scrambled to put together the original
legislation.
Obviously, at
least to the intelligent among us, what needs to be done is not Republican
“repeal and replace”, but Republicans and Democrats working together to fix
what is wrong with Obamacare, while keeping what is right – as some Democrats
have actually suggested. But the concept
of “Republicans and Democrats working together” on anything has been impossible
to achieve for decades now.
Here, from a
post that originally appeared at THE WANDERING TAX PRO, is, in my humble
opinion, the Good, the Bad, and the Ugly of Obamacare.
THE GOOD
The absolute
best thing about Obamacare is the advance premium credit. It provides direct assistance to individuals
not covered by employer plans who cannot afford the monthly cost of health
insurance premiums.
Historically
tax credits are always “after the fact” – you must wait until you file your tax
return to get the benefits for the prior year.
For example – for the education credits you must wait until February to
April of 2017 to get federal tax aid for tuition paid as early as January of
2016.
With tuition,
and more especially with health insurance premiums, you actually need the money
provided by the tax credit at the “point of purchase” – when you must actually
pay for the tuition or the premiums – and not a year later.
Another of
the good things about Obamacare is the requirement that “pre-existing
conditions” are covered.
THE BAD
There are
many bad things about Obamacare.
1. The penalty for not having “adequate” health insurance
coverage. Individuals should not be
forced to purchase a certain degree of coverage by being financially penalized
for not doing so. And employers should
not be forced to provide health insurance for employees, and be financially
penalized for not doing so. There should
be no “shared responsibility penalty”.
2. The requirement that individuals must purchase health
insurance through the official Obamacare Marketplace in order to get the
advance premium credit. An individual
who purchases qualifying health insurance directly from an insurance company,
at probably a slightly lower premium, cannot get the needed premium assistance
to which he or she would otherwise be entitled to based on income. This is totally unfair and unjust. Individuals should be allowed to purchase
whatever is determined to be “adequate” insurance directly from whichever
provider they choose, and then go to a government health care website to apply
for the advance premium credit, which would be applied to reduce the monthly
premium charge, or apply for the credit directly with the insurance company at
the same time they apply for coverage.
3. The Obamcare NIIT and Medicare “surtaxes”. I firmly believe that taxing the so-called
“wealthy” simply because they can supposedly afford it is NOT the answer to
every problem.
4. The various restrictions and penalties on certain
types of employer health care benefits, such as the “Cadillac plan” and health
care reimbursement programs.
5. The other “nickel and diming” charges, surtaxes, and
penalties used to fund Obamacare.
THE UGLY
Truly the
worst thing about Obamacare, and about the House Republican replacement option,
is age-weighted premiums. This is a new
concept.
Under Obamacare
health insurance premiums became much more expensive for older Americans, and
cheaper for younger ones. I was told the
reasoning behind this was to encourage young taxpayers just starting out to buy
health insurance, and maintain coverage, by making it very inexpensive.
In reality it
is the younger Americans, just starting out and without any family or mortgage
expenses, who are, in many cases, more able to afford to pay for health
insurance - while older Americans not yet eligible for Medicare coverage often
find paying for insurance difficult, especially with substantially higher
age-based premiums.
The calculation
of premiums should return to the way it was done before Obamacare, with older
Americans not unfairly and improperly excessively charged.
We most
certainly need to “repeal and replace” the current idiot in the White House (I
realize there are several idiots currently in the White House – but you know
who I mean). Maybe we also need to
“repeal and replace” Congress!
So what do
you think about Obamacare – what should be kept and what should be repealed?
TAFN
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