The more we read about this slight of hand trick to get millions involved in ObamaCrapCare by not verifying income proves to us that this is a scheme to crater the American economy. Now millions will say their income is less than it is and be enrolled in this albatross and then we will be stuck with them. And if you believe that in future years, the IRS will audit these "liars" and make them pay up, you have drinking something. (These are the very core of the Democratic party--they will never have to pay.) We also expect that in future years anyone under the 400% of poverty will NOT have to prove their income to get their benefit.
We suspect that in ten years, over 50% of the public will be under the magic "400%" number so that their health insurance will cost them little or nothing. Meanwhile, the cost of insuring these scofflaws will double or triple from the already tripled CBO estimates.
This law will unilaterally undermine the financial stability of the country--and Obama knows it!
Conservative Tom
The following is a great article by Forbes on this very subject.
http://www.forbes.com/sites/theapothecary/2013/07/06/not-qualified-for-obamacares-subsidies-just-lie-govt-to-use-honor-system-without-verifying-your-eligibility/
Another Article addressing more problems with ACA or better known as ObamaCrapCare:
We suspect that in ten years, over 50% of the public will be under the magic "400%" number so that their health insurance will cost them little or nothing. Meanwhile, the cost of insuring these scofflaws will double or triple from the already tripled CBO estimates.
This law will unilaterally undermine the financial stability of the country--and Obama knows it!
Conservative Tom
The following is a great article by Forbes on this very subject.
http://www.forbes.com/sites/theapothecary/2013/07/06/not-qualified-for-obamacares-subsidies-just-lie-govt-to-use-honor-system-without-verifying-your-eligibility/
Another Article addressing more problems with ACA or better known as ObamaCrapCare:
ACA subsidies reliant on ‘self-reporting’ with absence of employer mandate
July 9, 2013
Industry insiders are beginning to find holes in the Affordable Care Act employer mandate delay announced last week by the Obama administration and U.S. Department of Treasury. The biggest hole so far, say brokers and media alike, is self-reporting for subsidies.
Thom Mangan, CEO of United Benefit Advisers and EBA advisory board member, says he had one main question for the Treasury after the announcement: What about the people who were going to potentially be eligible for subsidies if their employer was not offering “affordable” coverage, as the ACA stipulates? That answer came Friday from the Obama Administration. “It’s crazy,” Mangan says. “It’s self-reporting … Employers don’t have a mandate to go and report if a person is eligible for subsidy. Some people will just apply and they may be at 400% of poverty level, they may be 50%, whatever they report is whatever goes through.”
The announcement, which Mangan says was expected from the Treasury, came in a 606-page document that not only answered his aforementioned question but made clear that all subsidy verification would rely on self-reporting until 2015. Mangan says he predicts there are going to be “plenty” of people who are not qualified for subsidies getting them anyway. “We’re in for an awful 2014, 2015 for the IRS trying to figure this out,” he says.
A Mercer statement Monday on the subsidy loophole nodded to even more potential confusion. “Public exchanges, which are slated to be operational in 2014, may still reach out to employers to verify applicant eligibility for health insurance,” the statement said.
“It will be state by state, and it’s just going to be part of your tax return,” Mangan says about the possibility of some states pursuing verification. “I just moved to Illinois and it was pretty simple in my W2 paperwork, there’s a box [asking if you have health insurance] that if you didn’t check it, you’re going to get flagged.” He caveated that Illinois is ahead of other states in preparing paperwork of this nature already. With some states verifying and others potentially not, the budget could get tricky.
Also contributing to new budgeting problems for the ACA is the missing funds from employer penalties in 2014. Despite the varying sources that say between 94% and 98% of employers already offer coverage, Mangan says there were definitely some businesses planning to pay the fine and not “play.” He explains: “There were still some employers in the high part-time or low-wage industries that never provided benefits. They have 300% annual turnover in the fast food industry … that was more of a logistical nightmare than providing health insurance.” In fact, the Congressional Budget Office had estimated that the penalties from employers would add up to approximately $10 billion in 2014.
“I’d say the CBO had it spot on in terms of what we won’t collect in the end,” Mangan says.
Meanwhile, business groups and insurance brokers and agents immediately celebrated the extra time allowed for employer shared responsibility reporting, un-burdening employers who do not currently offer coverage, or were considering making a change, from making a decision on whether they would pay or play until 2015.
Brian Kalish contributed to this report.
Fact-checking...
ReplyDelete"The changes announced Friday apply only to the 16 states (plus the District of Columbia) that will operate their own marketplaces, and the changes — which are optional for these states — are designed to make the process easier for the states to administer as they get their marketplaces up and running. The changes do not affect the remaining 34 states that will rely on the federally facilitated marketplace to determine eligibility for the health insurance subsidies, which will come in the form of premium tax credits.
Moreover, a rigorous income verification process remains in place in all states, including those that will operate their own marketplaces. All marketplaces must first check the income level that an individual reports on his or her application against a federal database that contains data on the applicant’s federal income tax returns, as well as information on his or her Social Security benefits if any.
If an applicant reports a significant drop in income (more than 10 percent) from the income shown on his or her last tax return, then both the state and federal marketplaces must check additional electronic data sources, such as state and commercial databases that provide information on employment income, to verify the income decline.
Here’s where the change comes in: it applies to the small percentage of cases where 1) an applicant reports income to the state marketplace that is substantially lower than the income level on the applicant’s last tax return, and 2) no additional electronic sources of income data are available that can confirm the drop in income.
In these cases, the state marketplace can request additional information from the applicant or his or her employer as part of a more detailed verification process. The change is that, for 2014 only, the state marketplace can accept the income level reported by the applicant. However, if the state adopts this option, then the marketplace must conduct additional verification on a random sample of applications in this category of cases to ensure that relying on applicants’ reported changes in income is working.
It is critical to note that even if this process results in some inaccuracies for a small share of subsidy recipients, there is a back-up that will come into play in virtually all such cases. The marketplaces only determine the amount of advance payments of the premium tax credits. The final amount of an individual’s premium credit is determined based on individual’s actual income for the year as reported on the individual’s tax return, filed after the year is over. Individuals who under-report their income will have to pay back excess advance payments of premium credits when they file their taxes.
The HHS rule also provides a similarly-narrow exception to verifying whether an applicant has received an offer of coverage from his or her employer. Here, too, the exception is for 2014 only and applies only in the 16 states that will run their own marketplaces. Applicants with an offer of employer coverage will still have to provide information that they obtain from their employers on whether the employer-based coverage is affordable and meets minimum coverage standards. Originally, HHS was going to help the 16 states by conducting a random sample of cases to verify the information regarding job-based coverage on the applications, but will not take this on until 2015. Rather than require the states to take on that task with little notice, HHS is allowing states to forgo sampling until HHS can do it for them in 2015.
The new regulation is complex and comes in the wake of a rule delaying a requirement that employers must provide certain information to the marketplaces. This may be the source of some of the apparent confusion and misunderstanding of what the new rule does and doesn’t do. But people interested in these issues should make no mistake: the state and federal marketplaces will continue to verify income data, and applicants must still supply information about their job-based coverage."
--David
You wrote, "We suspect that in ten years, over 50% of the public will be under the magic "400%" number so that their health insurance will cost them little or nothing."
ReplyDeleteYou don't have to wait 10 years. The U.S. is already there. Every state in 2011 had over 50% of its population under 400% FPL…
http://kff.org/other/state-indicator/population-up-to-400-fpl/
The tragedy for poor people in this country is that in most states where it is over 70% we have bone-headed Republican governors like Rick Perry who refuse to participate in the program. This will cost their states hundreds of millions in lost federal revenue over the next 10 years and needlessly leave millions of their citizens uninsured.
--David
David,
ReplyDeleteThe government subsidy for Medicaid is only three years, not the ten you say.
But you miss the entire point of the article, there will be NO Federal review of people's income tax statements (at least in the first year) and we suspect that the only income statements that will be reviewed will be those over the 400% number. That means someone earning $90,000 per year could say that he/she earned 19,000 and get all of his health insurance paid.
This is no different from the Obama Phones which were supposed to be given only to those who had low income. Now we are hearing of many people with six digit income getting the phones. We have spoken to them! This has not been picked up by the Lame
Stream media because it would hurt the diKtator.
tom
No, what I said is that the stubborn Republican governors like Rick Perry will cost their states hundreds of millions of dollars in lost federal revenue over the next 10 year. They get 100% federal subsidy for Medicaid expansion for the first 3 years and 90% thereafter.
ReplyDeleteIRS will flag the applications that report a 10% or more decrease in annual income compared to the previous year. Then they will take a random sample of this group to statistically test whether people are under-reporting their incomes. And, in any case, the federal government is not going to lose any revenue, because when they file their next income tax in April, 2015 the IRS will take back any pre-payments they received from the government that they were not entitled to receive. I don't know whether there will be any additional tax penalty for cheaters, but there should be.
--David
The IRS will not check income, at least the first year and we are not sure what will happen in future years. In addition, we doubt that they will check low income "low information" voters income. It is not productive to them, those voters might not vote for them.
ReplyDeleteYes, it is the "plan" that the recover dollars given to taxpayers who did not give the right number. Isn't is remarkable that the government only is going to recover dollars but it is not crediting money to those who over-reported their income.
Typical governmenteze.
That is not accurate. They will not check every single application the first year, but they will check a random sample of those with a 10% or more difference between their previous year tax return and what they are claiming as the income on their applications. This 10% rule is across the board, regardless of income level. The computer will kick out every application with more than a 10% year-over-year income decrease. If you over-reported your income, you get the adjustment when you file your taxes. The adjustment works both directions.
ReplyDelete--David