Healthcare Reform – It’s Not as Easy as It Looks (and It Didn’t Really Look That Easy Anyway)

The IRS now says that they are not equipped to test the accuracy of ACA health information to validate the premium and cost sharing subsidies that were given out over the past years. Unbelievably, for 2015 the IRS expected 77 million Form 1095-Cs and actually got 104 million forms. And of these forms, 5.4% (or 5.6 million) were rejected. 6.1 million individual taxpayers reported that they owed an average penalty of $452 for the 2015 tax year as compared with 7.6 million owing an average of $204 for 2014. In 2015, $18.9 billion in subsidies (in the form of the ACA advanced premium tax credit) was paid to 5.3 million Americans, up from $11.3 billion in help for 2014.

I am guessing, based upon the shortfalls in lives expected to be added to the ranks of insured, that there are many taxpayers who did not self-report a penalty owed and many more who improperly claimed the advanced premium tax credit. As of early this month, for tax year 2016, the IRS will no longer turn away Form 1040s missing an answer on the healthcare coverage question for individuals on line 61. This requirement went from mandatory to optional as a direct result of President Trump’s executive order to reduce efforts to ensure compliance with the ACA – and has probably saved the day for the millions of Americans who, intentionally or not, did not properly comply. But at whose expense? You guessed it – yours and mine. Add to this the effect that improperly distributed ACA credits has on the needs of other programs such as Social Security Disability Insurance, which can be retroactively applied once eligibility is proven – a process that sometimes takes years. What a mess!

This social experiment, The Affordable Care Act, will go down as one of the costliest government blunders ever. And I would have predicted what is happening now. Protests are springing up everywhere for those who will lose the advantages that were created by ACA. President Trump is facing an uphill climb as fellow Republicans are pushing back to a full repeal. When I see “tweak” ACA, I cringe and hold my wallet tightly because that means the United States is about to increase entitlements. Did I mention that increasing entitlements is easy – it’s taking them away that’s difficult?

In my opinion an abrupt pendulum swing is just going to make matters worse. The current administration needs to build consensus to get this done correctly and I am troubled by the political headwinds in DC. The chant should change to 70 votes. Can’t everyone see this as clearly as I do?

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