Monday, July 10, 2017


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 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.
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.
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?

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