Thursday, August 7, 2014

Outrageous! Almost 90 Percent of Uninsured Won't Pay Tax as White House #ObamaCare Waivers Surge

The entire law has been a complete clusterf-k. And polls still show a majority of Americans disapproving of it.

The law's becoming another welfare dependency giveaway program that socks it to the middle class. Voters are already pissed about the economy and fearful for their children's future. This just piles on the anxiety when it hits your wallet but not those getting these waivers. Indeed, middle class taxpayers are subsidizing the Obama waiver scofflaws, who were supposed to pay a tax penalty as the law was originally designed.

And now this, at the Wall Street Journal, "Fewer Uninsured Face Fines as Health Law's Exemptions Swell: Almost 90% of Uninsured Won't Pay Penalty Under the Affordable Care Act in 2016" (via Google):

Almost 90% of the nation's 30 million uninsured won't pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement.

The architects of the health law wanted most Americans to carry insurance or pay a penalty. But an analysis by the Congressional Budget Office and the Joint Committee on Taxation said most of the uninsured will qualify for one or more exemptions.

Daphne Gaines expects to be one of them. She said recently she got an electricity shut-off notice, which is one way Americans can get out of paying a fine. "I don't think I should have to pay any penalty," said Ms. Gaines, 52 years old, of Jasper, Ala., who works part time at a church preschool and a drug-recovery clinic.

The Obama administration has provided 14 ways people can avoid the fine based on hardships, including suffering domestic violence, experiencing substantial property damage from a fire or flood, and having a canceled insurance plan. Those come on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects.

Factoring in the new exemptions, the congressional report in June lowered the number of people it expects to pay the fine in 2016 to four million, from its previous projection of six million. Also bringing down the total: At least 21 states have opted not to expand the Medicaid insurance program for lower earners under the health law, and those residents may be exempt from the penalty.

A legal battle over subsidies provided through the federally run insurance exchange could increase the number of Americans entitled to exemptions. In July, a Washington, D.C., appeals court struck down the federal exchange's authority to issue insurance tax credits on the grounds that the health law limits them to state-run exchanges. A Virginia appeals court upheld the subsidies, setting up a legal fight that is likely to go before the Supreme Court.

More than 4 million Americans get subsidies on the federal exchange used by up to 36 states. If the subsidies ultimately are struck down, more people could qualify for hardship exemptions based on their inability to afford coverage.

The exemptions are worrying insurers. The penalties were intended as a cudgel to increase the number of people signing up, thereby maximizing the pool of insured. Insurers are concerned that the exemptions could make it easier for younger, healthier people to forgo coverage, leaving the pools overly filled with old people or those with health problems. That, in turn, could cause premiums to rise.

Patrick Getzen, vice president and chief actuary at Blue Cross and Blue Shield of North Carolina, said he saw more "older and sicker people" enrolled in 2014 than projected. He attributed some of that to the weakened mandate. "With a stronger penalty and less broad exemptions, that would be better for the risk pool."

The Obama administration argued before the Supreme Court in 2012 that the individual mandate was an essential component of the law's insurance-market changes, and the court narrowly upheld it on the grounds it is a tax. Now, Republicans who oppose the law say the administration has undermined that requirement with the exemptions and should waive the mandate entirely.

"If your pajamas don't fit well, you don't need health insurance," said Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the American Action Forum, a conservative think tank. "It basically waives the individual mandate."

The White House referred questions about the exemptions to the Centers for Medicare and Medicaid Services, or CMS, which oversees implementation of the health law. CMS spokesman Aaron Albright said the legislation allows those facing a hardship to apply for an exemption, and their applications are reviewed on a case-by-case basis. "The Affordable Care Act requires people who can afford insurance to buy it, so that their medical bills are not passed onto the rest of us, which drives up health care costs for everyone," he said.

The idea that Americans carry insurance or pay a penalty has been contentious since its inception. In an early version of the legislation, former Sen. Max Baucus (D., Mont.), then chairman of the Senate Finance Committee, floated a penalty of up to $3,800 a year for families who went without insurance. Republicans were turning against the requirement as the tea party gained momentum, and Mr. Baucus began whittling the penalty in hopes of gaining their votes.

That didn't happen, but lower penalties stayed in place in the final legislation. The fine for not carrying insurance in 2014 is $95 per adult, or 1% of family income, whichever is greater. That increases to $695 per adult, or 2.5% of family income, by 2016. The total family penalty is capped at 300% of $695—$2,085 in 2016.

While the health law was being written, President Barack Obama had pledged that Americans who liked their insurance plans would be able to keep them. But last year millions of people were informed their plans would be discontinued because their policies didn't comply with minimum-benefit requirements.

The resulting furor caused the administration to allow insurers who had planned to discontinue policies to extend them by a year. Some insurers and states, however, decided not to do so.

In an effort to address the problem without disrupting the roll out, the administration said consumers with canceled plans could qualify for a hardship waiver, then could buy minimal coverage initially intended only for individuals under age 30.

That sparked objections from an insurance industry long concerned the mandate was already too weak. "To make these new reforms work, there needs to be broad participation in the system," said Karen Ignagni, president and CEO of American's Health Insurance Plans, the industry's largest trade group.

The exemption was initially for one year. The administration has since extended it for two more years through October 2016.

In December, a hardship application form was released that laid out the 14 exemptions. Among other things, people could avoid the penalty if a close family member had died recently, if they were facing eviction or if they had medical expenses that couldn't be paid in the last 24 months and resulted in substantial debt.

Critics have assailed one exemption for people who "experienced another hardship obtaining health insurance" as too broad. That exemption asks for documentation if possible but doesn't require it.