Sifting Through The Ashes, Part Fourteen – Revisiting Health Insurance. A “Better” Plan?

Greetings and Salutations;

Well, back in January, I wrote a blog entry about the Paul Ryan plan to replace the ACA. That plan was, frankly, bat-shit crazy, in that it was essentially taking us back to the abusive days that ended a decade ago, with the implementation of the ACA..and was centered around the idea of a Tax-Free Healthcare Savings Accounts. At the time, I expressed my opinion that this was a BAD idea, and discussed why I thought so.

Well, the Republicans have finally released their proposal for the laws that will replace the ACA. It, frankly, makes the Ryan plan look like the height of mercy and rationality. When Shawn Spicer held his Press Conference to announce this nonsense, his biggest selling point was that it was a much smaller stack of paper than the ACA! It is 125 pages or so long. The ACA is around 2000 pages, so that is true. However, as anyone with a lick of sense understands, the ACA is a complicated piece of legislation, that deals with a lengthy laundry list of problems with the Health Insurance Industry; unregulated areas that allowed them to abuse the Consumers and reap huge profits in the process.. So, yes…it did take a lot of pages of text to detail all that it wanted to accomplish. The simple fact that the Republican alternative is a fraction of its size simply means that the this alternative has some serious problems at dealing with these complicated issues.

While this is not a comprehensive List of the issues with the Republican debacle, here are some high points that provide examples of where it fails the American Consumer.

End the requirement that individuals buy health insurance or pay a penalty (sometimes called the shared responsibility provision). This would, according to one draft, be retroactive to after January 1, 2016, so that there would be no penalty on 2016 taxes This is going to be a problem, because the result will be that the younger, healthier folks that take up some of the burden of the costs of health care will likely drop that insurance, and go back to doing without again. Of course, this will ensure that the the amount of money available to cover insurance payouts will plummet. It will also result in a much larger pool of Citizens who have no insurance, so, will depend on the Emergency Rooms for help when disaster hits, and, will likely walk away from that debt – raising the costs for the remainder of the folks.

End the requirement that certain employers (typically those with 50 or more employees) offer insurance to their employees. I am sure that many companies will drop the insurance they have been required to offer their employees as quickly as possible. I am also sure that the cash that these companies save from not having to pay out these insurance premiums will NOT go into the pockets of the workers. Rather, it will go into the pockets of the Management and Stock Holders in the company. Of course, this will screw the consumer over because it will force them to go out into the market, and purchase health insurance on their own.

Expand Health Savings Accounts (HSAs) by nearly doubling the cap (max contributions for 2017 are currently $3,400 for individuals or $6,750 for families, more on how they work here). As I pointed out in my previous Blog entry, HSAs are great if one has spare cash to drop into it. However, for the vast number of Americans who are living paycheck to paycheck, it is likely that they will NEVER put anything into a HSA..and if they can, it will be a small amount. Now, The limits that this law places on contributions to a HSA are foolish also. the caps are so low that the only way to get ahead is to never use the HSA. It is trivial these days for a single visit to an ER, which mostly consists of sitting around waiting for attention for several hours, to cost $5000…and an admission from the ER kicks the immediate debt up to $10,000 or more. I just heard about a study by the Government that came to the conclusion that at least half of the Citizens would not be able to cover a $400 cost for an emergency. Their only emergency net is to put a charge like this on a credit card. Now, this could be a problem for the millions of Americans who do not have a credit card. Also, getting a loan like this through a credit card is ruinously expensive. The interest rates on credit cards is always a huge percentage of the costs of using them, and cause the amount owed to grow like Kudzu iuntil the balance is paid off.

Repeal of the premium health tax credit. This is a “Luxury tax” on the high end policies, and really only affected the people with $1,000,000 or more in yearly income.

Implement a tax credit ($2,000-$14,000/year) for taxpayers who do not receive insurance through their employer or a government program. Again, like many program proposals by the current administration, the specifics of this tax credit are still unsettled: the options for the credit range from it being income based to an age based calculation. Now, the draft may well incorporate both options. A chart of these proposals is on page eight of the draft bill.

End federal funding for Planned Parenthood and any other healthcare providers that even MENTION the idea of abortion. There are also other restrictions on coverage related to abortion – the term “abortion” appears 29 times in one version of the draft bill. This is a terrible idea for several reasons. First off, this tramps all over the separation of Church and State, as laid out in the Constitution and the Federalist Papers. Secondly, PP offers a huge number of female health care services, including cancer screening, prenatal care, etc. It also spends a big chunk of time working with clients to help them find what is best for THEM. Fourthly, the Abortion part of their services is a tiny percentage of their services. Finally, Planned Parenthood traditionally builds its clinics in the areas that are ignored by the other, For-Profit clinics. So, PP is providing a vital service for the poorer communities in America. Removing funding from PP for their abortion services would be like killing your spouse because they broke their big toe.

Repeal a number of taxes (like the tanning tax, Net Income Investment Tax, Medicare surtax and medical device excise tax) used to pay for Obamacare. Since these are a big source of funding for the subsidies of the ACA, this will also leave us with an unfunded mandate that will, unless other sources of revenue are found, increase the Deficit, and hence, the Debt.

Allow over-the-counter medications to be qualifying expenses for HSAs and similar plans

Restore the 7.5% floor on medical expense deductions. This would be more impressive if it had not increased to 10% for taxpayers in 2016.
A big part of the ACA is that it has quite a few provisions which provide support for research into ways to cure and prevent the ills of humanity. TrumpCare eliminates this funding. So, for example, funding for research into Colo-Rectal cancer will go away completely or, at best, be cut quite a bit. This will lead to more people getting the problem, and any possible treatment for it being pushed off into the distant future. As the old saying says “An ounce of Prevention is better than a pound of Cure”.

Since the Republicans are seeing a groundswell of opposition from their Constituents who are realizing that if “Obamacare” goes away, so does their coverage under the ACA (yes…there are a large percentage of Right-Wingers who do not realize that ObamaCare and the ACA are the same thing) some of the provisions of the ACA are retained by this new proposal. These include the following:

Children would be allowed to remain on their parents’ health insurance plans until age 26.

Insurance companies would not be able to deny coverage or charge more for those with preexisting medical conditions. Of course, because the Insurance Industry has big pull with the Republicans, they are changing this so that if a person loses their coverage, when they get new insurance the agency will be able to charge them a much higher premium.

Coverage in states with Medicaid expansion would remain. However, there are changes to coverage being moved through by the States, which will cut down on the insurance available, and likely will increase the costs of insurance.

Employers would still be required to report the value of health insurance benefits on forms W-2. This WAS important because it was proof that you had insurance during the year, and so were exempted from the penalty. However, with the penalty gone, this seems a waste of paper. But NO! there is a reason for it! See the NEXT set of notes.

Some provisions had been discussed but didn’t make it into the draft proposal – but that doesn’t mean they’re completely off the table. Those include:

Taxing employer-provided benefits. Currently, health care provided by your employer is tax-free. However, the above reporting on the W-2 will make it trivial to slip it into the “Taxable Income” bracket, as the amount will already be included in the tax forms filed for each worker. Guess who will get screwed by THIS little Revenue Enhancing measure?

Repealing the “Cadillac tax” on high-end health care provided by employers. At this point in time, the tax is not being collected, as it was scheduled to begin in 2020. However, this proposal would push off the tax from 2020 to 2025.

What can we do about this? I suggest a few steps that are easy, take little time, and can have a significant effect.

1) Take a few minutes and Email your Federal Representatives, and the SCROTUS. Here is a tool that will make it easy to track down the appropriate contact pages and Email addresses In your Email, be polite about it, but, very clear about the fact that you strongly oppose the repeal of the ACA, and the substitution of TrumpCare for it.

2) Vote. In the coming elections, make it a point to go to the polls and cast a vote for the candidate that BEST expresses the values you support. No candidate will be perfect (unless YOU are running for the office), but, focus less on their mistakes of judgment, and more on their views that reflect yours.

3) Support your neighbors, friends and family in voting. Get them rides to the polls, or take them to the polls. Help them get registered. Do what is necessary to ensure that their rights as a citizen are not blocked by draconian and convoluted laws that are designed to keep them from being registered to vote. Support them and remind them that it is VITAL that every Citizen take a little time and vote.

If we all do just one or two small, and painless things like this, it will be possible for us to actually take back control of America from the politicians that are running things now.

God Help Us All!

Bee Man Dave

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