The nightmare of Obamacare, about to be finished off
The best part of this week's vast tax cut reform package, set to be approved this morning, is the end of the hellish Obamacare mandate.
What a massive relief to millions of Americans, stuck between the rock of having to buy overpriced, under-delivering Obamacare health insurance policies and the hard place of paying large, gratuitous fines, which the Supreme Court ruled a tax, if they don't.
It's the most questionably legal and outrageously bad law since Prohibition because it's literally a life tax. Obamacare law up until now requires that everyone stuck in the individual market either buy these costly policies or be taxed for being alive without one. It's not like states requiring the purchase of car insurance, as some have claimed. In that instance, one always has the choice to not drive a car. One doesn't have the choice to be alive. To Obamacare boosters, being alive is being obliged to buy Obamacare.
It's also a poverty tax. It's an actual punishment tax for being poor. Typically, these one-size-fits-all policies are so overpriced based on the kind of costly coverage they require, such as pregnancy care and drug addiction rehab, that they aren't affordable without subsidies. What's more, if a buyer is never going to need this kind of coverage, either because he cannot get pregnant or refuses to ingest illegal drugs, he must pay for the insurance plan cost anyway. Net result: Overpriced Obamacare policies on the individual market have made purchase of health care insurance impossible for millions of Americans, and those are the ones who pay the fines.
A recent survey of Obamacare fines shows that most fines are coming in from the poorer range of Americans, meaning this poverty tax has slammed the working and lower middle classes hardest of all. Jeb Graham at IBD shows how this has happened:
The 2017 tax data offer new evidence that there's much to be gained by moving away from the individual mandate and much to lose by sticking with it. Tax returns that had been processed as of April 27 included 4 million that paid ObamaCare fines (officially known as individual shared responsibility payments), with an average payment of $708.
What is striking about the data is that the average payment is barely higher than the minimum payment of $695. Since people were required to pay the greater of $695 or 2.5% of taxable income above the filing threshold ($10,350 in 2017), one takeaway is that most of the $2.8 billion in fines paid through April appear to have come from people with modest to moderate incomes.
Betsy McCaughey write that the phenomenon is so bad that it's made the middle class "the new uninsured."
And that brings us to the third point: it's unaffordable and anti-health, mocking the very Affordable Care Act name it claims to embody. How does paying for health care policies the size of a mortgage help the middle class? How is that not punitive taxation? And how does paying fines affect the ordinary Americans who cannot afford the mortgage-sized Obamacare policies? Well, consider that paying fines pretty well keeps millions of Americans from paying for plans they can afford – smaller plans not in the Obamacare cavalcade of offerings, plans that are not larded up with pregnancy, pediatric dental, and drug treatment coverage, or policies that that include the kind of health care that some buyers need, such as dental care, which is not included in Obamacare policies. If one is spending all of one's health care dollars on fines, you can bet he isn't going to have a lot left for checkups, mammograms, replacing a tooth, or getting a crown. Some health care.
What a massive relief it is for millions of Americans to be released from the Obamacare mandate. Now the Obamacare advocates and insurers are going to have to work for their consumer dollar, offering policies that actually serve consumers' needs and can be delivered at a genuinely affordable price. The consumer will finally have to be consulted, not the bureaucrat. Otherwise, no one will buy.
There is still a long way to go for that market to build itself up and for insurers to get a better idea of what consumers want. But freed of the Obamacare mandate fetters, at least there is a fighting chance.
Congress should be praised for this great tax relief package at Christmas, which ends this most hideous tax of all.