Posts Tagged health insurance tax
Ever since the Supreme Court’s decision last week declaring the individual health insurance mandate in Obama’s Affordable Care Act as constitutional, a lot of discussions have erupted over the nature of the mandate - or more precisely whether the requirement to be in it or else get a penalty at the end of the year when filling out your taxes, can be considered a tax or a penalty.
Proponents of the Health Care law say it is a penalty, opponents say it is a tax. I say: who cares what it is called. As it is stands it is a bad idea, regardless.
Chief Justice John Roberts upheld the mandate as a tax, although concluded it was not valid as an exercise of Congress’ commerce clause power. The five Justices - Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan - concluded that the mandate, which requires virtually all Americans to obtain minimum health insurance coverage or pay a penalty, falls within Congress’ power under the Constitution to “lay and collect taxes.”
“The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause,” Roberts wrote. “That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Congress’s power to tax.”
Most commentators and political analysts agree that the mandate can indeed be characterized as a tax, as the Court found. However, some contend that it is not a massive tax hike on the middle class because the tax imposed by the individual mandate amounts to either $695 or 2.5 percent of household income for those who don’t have insurance and are not exempt based on income levels. By comparison, the payroll tax cut extension Republicans repeatedly blocked earlier this year would have added 3.1 percentage points to the tax and cost the average family $1,500 a year. It is argued that the Mandate, meanwhile, would hit a small amount of Americans — somewhere between 2 and 5 percent — according to a study from The Urban Institute. The number could be even lower depending on the law’s success: in Massachusetts, the only state with an insurance mandate, less than 1 percent of the state’s residents paid the penalty in 2009.
The majority of the Affordable Care Act’s other taxes, such as a payroll tax increase and a tax on high-cost health plans, are aimed at upper-income Americans. It is further argued that millions of jobs will be created as new people enter the health care system and millions of people will gain access to affordable, quality insurance that they otherwise would not have.
Affordable, Quality Care? Really?
The questions that arise from this legislation supposedly aimed at opening the door to affordable quality insurance for all Americans are manifold and responses to them largely determine the success or failure of the Affordable Care Act:
1) Will people really have access to affordable and quality care? How can requiring people to maintain a minimum level of insurance coverage equate to quality care? By definition, minimum implies some very basic coverage which means a lot of diagnostic tests and procedures will not be performed under an insurance plan that only has to meet minimum coverage requirements. Quality coverage means exactly the opposite of the minimum you have to do. Unless the bar for minimum is set pretty high to include some of those more expensive, comprehensive tests – which given this country’s aversion for altruism is unlikely – it is uncertain how quality applies to what has been commonly coined as Obamacare.
2) Is this really going to be affordable? Especially when coupled with the quality factor mentioned above? Under the Affordable Care Act, people with pre-existing conditions cannot be denied coverage. A provision which is supremely important given that insurance companies have pretty much been able to do so for years, causing people with certain conditions not be able to get insured and thus treatment. But from what I understand, under this Act, there is no law saying that the insurance company cannot hike up the rate or impose huge deductibles. Someone has cancer? Sure – they can’t be denied coverage. Just that they have to pay, hmmm, I don’t know, 950 a month in premiums and a $5,000 deductible. Is that reform? Is that affordable? Because you bet that any minimum coverage – as required by the Mandate above – will not include quality and affordability.
Insurance companies collude with on another. They are not allowed to, but informally they have been for years. Given that this legislation is not accompanied by serious reform of the health care industry and especially insurance companies, it is once again unclear how affordability is ensured. No matter where you go – your premium will not be $300 in one place and $90 in another. Chances are that for a person with a certain medical background they will be uniformly the same across the spectrum. Yeah they’ll cover you, but half the tests won’t be “allowed” or require deductible pay or “special approval.” Good luck dealing with authorization claims endlessness percolating in the system while you succumb to your disease.
Yes, technically you are in some plan, so the government can check you off the list saying “look, we insured her. She is taken care of“. But is it actually going to be affordable? And quality? Will it meet your needs without you having to once again consider bankruptcy or a second mortgage to take care of your health needs?
3) What happens to the “penalty” tax people pay if they do not buy insurance? Where does it go? Back into the tax pool to continue endorsing oil companies? Israel? Wars? Rich people? Corporate welfare? Where will the money go? Since the government isn’t offering health insurance, which was the whole point of reform to begin with, where does that incoming tax-penalty go?
A Mandate without Reform of the Health Insurnace Companies
Which brings me to my next point: The Mandate is worrisome mainly because it is not accompanied by serious reform of the health care industry and especially insurance companies.
That is at the crux of the matter.
The mandate itself is not the problem and the only way it currently is a problem is that it is not accompanied by the reform of a broken health care system.
Europe has a similar system in place. I am specifically referring to Germany where such a Mandate also exists. But they also have government run insurance that is competing with private insurance companies, untimely giving them an incentive to remain competitive and treat their clients better. Obama’s Affordable Care Act does not have that. We don’t have Medicare for All – which, incidentally, is how Obama should have frame his attempts at reform in the first place – and we don’t have a heavily regulated health insurance industry.
They can do whatever they want to do, as long as they don’t run directly into what has been specifically prohibited or provisioned for in the law. They have, right now, a team of lawyers working on how to make it the most profitable for them by seeking out loopholes. So, for instance, they might not call it pre-existing condition, since that is against the law, but they’ll call it something else – just as the banks did: they were no longer allowed to charge overdraft fees, so now they charge you a mandatory monthly fee or have added fees hidden in something else – directly avoiding the letter of the law but essentially carrying out it essence.
Reform, however, has to be good and meaningful. Otherwise just putting anything on paper without truly thinking it through is neither progress nor reform.
The foundation of this health care reform is lacking. Just like a building that was erected on a shaky foundation. Who cares what great materials were used and how awesome the design of the rest of the structure is. If the foundation is lacking and brittle, like this mandate, the whole building will eventually fall apart and collapse.
Coercing people, under penalty of law, to become the customers of insurance companies that have traditionally been scamming the American people bankrupt and sick and which remain largely unregulated, is not reform. The mandate would be a good idea if the insurance companies actually did have real competition – i.e. government run insurance running side by side private insurance - but as it is now, we are being sold to insurance companies and if we don’t become their customers, we get penalized at the end of the year when we do our tax returns.
Health care reform is direly needed in this country and I have always supported it. The idea of a person’ s access to doctors and medical treatment depending on one’s employment status and whether one’s employer would even choose to give you benefits at all, has always seemed extremely bizarre to me. The first question that first sprang to my mind was “well then what do people who don’t have a job or money? Or what if your employer chooses not to insure you?” People are walking around in this country with their health on their sleeves and at risk. If you don’t have insurance, then hope you don’t get sick. If you do have insurance, also hope you don’t get sick really because chances are you may be waiting for weeks and months to get your claim authorized or maybe even dropped from your plan altogether.
When I first started working an after-school job in retail, I was stunned that it was rather a given that one would get health insurance when working somewhere and that one had to wait 3 months or work a certain hours to maybe qualify for coverage.
This is unacceptable and no way for human beings in an Enlightened and civilized society to live. People shouldn’t lose their health and lives because they aren’t wealthy. And people also should not lose their houses and go bankrupt because of medical bills?
Government run insurance or Medicare For All is the solution. In fact, offering government-run insurance to people so that the insurance companies have some competition and thus an incentive to treat their customers better if they don’t want to lose them to the government run insurance was one of the most important – if not the most important – pillar of health care reform. Not this lousy compromise of guaranteeing cut throat insurance companies every citizen in the country for them to prey on without much constraint essentially.
What really irks me is that as usual the middle class will carry the burden. This is just another tax imposed on them since rich people, the 1%, won’t be affected either way – just like they have not been affected by the meltdown.
People in this country are so used to being the victims of corporations and at their mercy, that they are ok with any little crumb that might maybe improve their lives. Something is better than nothing, so this bill must be good.
Tax or Mandate. Does it Really Matter?
So, what does it matter what it is called? The bottom line is that money is being taken away from someone based on whether they are insured or not. Period. Now the naive populace of this country and the rest of the corrupt politicians can quibble over semantics as much as they like, but the facts speak for themselves. Whether you call it a mandate or a tax or a penalty tax – the outcome is the same.
If this current “Citizens United and corporations are people” Court supports it, it can’t possibly be good. Promising insurance companies every single citizen in this country isn’t health care REform. Without reform of the entire medical industry - from the insurance companies, to the free riders, to the AMA itself - this law has little to offer. This is just another tax on the middle class and poor people.
What about mandatory car insurance you say? Owning a car is optional. If I can’t afford it, I don’t buy it. But I have no choice living and breathing. And the government delivering us on a silver platter to insurance companies without having reformed them is a step in the wrong direction. The more I think of this, the worse of an idea it is. So of course the Supreme Court upholds it.
Ultimately, Obama’s health care “reform” is built on a shaky foundation and if the foundation is not right, it is bound to break down and collapse. In this case creating a huge government bureaucracy without much backing and substance.
Republicans Should be Happy
I know there is a lot of hatred going on for Obama and that the “anyone but Obama” mentality persist among the racist, jingoist members of this god-blessed country. But if you think about it, Republicans should really be hooting and follering over this; they won once again: force people to purchase a product, tax them if they don’t. That is like their wet dream come true – every single day.
Insurance companies control you life – literally – by deciding how to cover you and how much and what. People are completely at their mercy. In fact, insurance companies make money by not covering people, not by covering them. They are so used to looking for loop holes to deny claims and not pay that it has become an established practice in the industry and ingrained fundamentally in their practices. Throwing the American public at their mercy, like a herd of lemmings given to a pack of wolves, is not the solution, even though it is quite en par with the Right Wing and Republican agenda.
Justice Roberts gave this law a blow from two angles: first, by calling it a tax and then by saying it was constitutional. However, the only constitutional option would have been the public option. Yes we’d lose tons of jobs in the insurance industry and government officials would lose millions in bribes, err, I mean “lobbying perks”, but it would have been the right thing to do by the American people who have been suffering at the hands of these cut throat, extortionist corporations that post record profits at the expense of the sick.
Ultimately the Supreme Court sided with corporations once again, making sure they receive 30+ million more customers. Yes, this was once again a corporate decision – good for the private sector, instead of good for the American people. Thank you Mr. Roberts for your allegiance to your beloved insurance companies and thanks America for being completely incapable of enacting meaningful public policy and consistently voting against your self interest.