Tag Archives: tax credits

Affordable Coverage Choices for All Americans

That’s the title of Subtitle E.

And, because this is the Federal Government, affordable coverage choices start with taxes and subsidies. This shouldn’t surprise anyone that has taken any economics, as the primary tool of a government has to affect actions in the economy is through taxes and spending.

This particular section – 1401 – discusses a tax credit, given against a tax, for premium assistance. What the heck?!?

First – this implies that there is premium assistance for those who are unable to afford their health insurance premiums. And there is. Since insurance is mandated, the Act recognizes that not all people will be able to afford the premiums, so it gives some people money back. This applies if your household makes over 133% of the poverty level. If it makes less – you are probably (at least under the Act) eligible for Medicaid. There is some chance that your particular state will decide not to expand Medicaid coverage to people who make between 100% and 133% of the poverty line, or who don’t have dependent children. If your state doesn’t expand this coverage, I suggest you think about why, and possibly, how to move to state that does.

The premiums in the Exchanges, which are what the rebates are for, are also related to the color of the plan (remember the colors of the plans back in this post?) – with the amounts tied into the second lowest cost for a silver plan. Confused yet?

If you choose to buy insurance from your employer, rather than through an Exchange, and that health care is deemed to be meeting the essential minimal coverage guidelines, and to be affordable, or you receive health care under a free choice voucher (a later section) then you aren’t eligible for the premium assistance. It is up to you to decide if your health insurance would be cheaper through your employer, or through an Exchange.

So – because you received money, that’s considered income. To avoid having people taxed on this “income” the IRS gives you a tax credit. That’s the Feds for you – if there is a complicated way to do something – that’s what they choose.

There are provisions in this section to review this tax credit, and the insurance plans in general, after 5 years, to see if it met the purported goals of increasing health insurance coverage without being too burdensome on the populous. If the history of the US is any indication, it will be unlikely that a tax credit will get eliminated, but it’s possible.

You might be asking yourself, why all of this complicated tax credit, premium assistance, etc, is part of a Reform Act intended to make getting health care easier? Well – that’s because it isn’t precisely intended to make getting health care easier. If that were the goal, it would have set up a single payer system. Single payer systems, which have been referred to as socialist, the work of the devil, and sensible, are present in the US, but only if you are old, or a veteran. Otherwise, you get insurance. So the PPACA is there to make getting insurance easier. It’s also good, if you like the PPACA, that they picked a taxation system, rather than trying to implement a mandate strictly through the use of the Commerce Clause of the Constitution. The Opinion that supported the constitutionality of the individual mandate made it clear that they wouldn’t have done so had it not been a tax matter.

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In need of health care myself

I’ve fallen back off the posting wagon, due to illness in the youngest son, and myself. We had to enjoy some fine health care – which, thankfully, we have. The next sections of the PPACA are actually quite interesting. They discuss the Exchanges, or the private market compromise so as not to have government provided health care (except for the Armed Forces, the VA, Medicaid, and Medicare of course) once everyone is required to buy health care insurance.

Sec 1311 gives money to the states to set up these Exchanges, which most likely due to insurance laws are run through the States. They have to be set up starting in 2014, and money won’t be available after January 1, 2015.

The Exchanges themselves are to “facilitate the purchase of qualified health plans” and assist small businesses in doing the same, which under the PPACA are now required to offer health insurance in finding appropriate plans. These are separate goals, although states can choose to offer a single Exchange to achieve them both. There are some restrictions placed on advertising, so as not to scare off people with high medical needs, ensure provider choice, assistance for low income people in finding health insurance, meet certain quality standards and plans for improving quality, and share information with those people who would choose to enroll in these plans.

The plans would be rated, by a system developed by the states, to make decision making easier on the prospective enrollees. These ratings, and all of the other information, would be available by the aforementioned Internet Portals (Portals!!). The Exchanges would have open enrollment periods similar to the ones that current health insurances have. There are special provisions that say that stand-alone dental plans can be offered, even though they don’t offer any of the previously described qualifying health benefits.

The states retain the right to add benefits to the plans in their Exchanges, above and beyond the Federal minimum, but these costs must be borne by the state.

So, to sum up, the Exchanges will certify health plans, operate a toll-free number where you can ask for assistance, operate the Internet Portal, rate the health plans, present the details of the health plans in a standardized format, tell people when they are eligible for Medicaid, CHIP, or any state assistance program for health care, provide a calculator that tells people how much their insurance actually costs after the tax credits (that we haven’t gotten to) are applied, grant certifications that people are exempt from the penalty for not purchasing insurance (we’ll get to that soon), tell the employers who ceases to have insurance each year, and establish something called the Navigator program (explained at the end of this post).

The Exchanges have to be self-sustaining, they must consult with the relevant stakeholders, and they must publish their costs. The Exchanges also ask the health plans to justify any rate increases they wish to implement, and then use this information in deciding whether the plan can be offered in the Exchange. It also requires the insurance plans to increase their transparency of costs. They must also implement methods to improve health care quality such as patient-centered education, reduction of medical errors, wellness and health activities, and reduction of disparities.

The final part of this section provides grants for Navigators, or entities that have previously established relationships with employers and employees, consumers, or the self-employed, that could be used to facilitate those groups’ purchases of the health plans available from the Exchanges.

So – there you have it – one of the more controversial sections of the PPACA. The only one more controversial is the section that provides for the penalties if you don’t buy a health plan. We shall press on and try to get to that one quickly.

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