TurboObamacare Schadenfreude

From Megan McArdle: Latest Tax Season Headache? Obamacare

I've written before that the big Obamacare event of this year will not be the exchange enrollments, but tax season, when people who got too much in subsidies find out how much money they owe the government (and been told by a tax preparer that it was even worse than I thought). Tax preparers, to judge from my Twitter feed, have been panicking for months. But now they face the Herculean job of communicating that panic to the public.

There's been a lot of talk about the "hidden taxes" in the Affordable Care Act, but here's one I hadn't thought of before or seen mentioned anywhere: the sudden need for folks with simple tax returns to avail themselves of the services of a paid professional. If you have no income outside a modest salary, and not much in the way of potential deductions such as huge mortgage interest or state tax bills, then there was really no reason to use a tax preparer. Even the mathematically challenged should, with the aid of a calculator, be able to fill out their 1040EZ forms just fine. But Obamacare has introduced a significant level of complexity into the taxes of lower-middle-class wage earners. More of them are going to need an accountant to negotiate the process -- or risk owing the government hundreds of dollars because they didn't fill out the forms correctly.

The money doesn't go to the government, of course, but in many ways this looks like a tax: Suddenly, people with simple incomes are going to need to pay a significant sum to keep themselves out of trouble with the IRS. This tax will be extremely regressive, because the people most likely to be hit by it are people whose incomes are (or have been) low enough to qualify for subsidies.

Just mo' money for the people who wrote TurboTax. This year, we (and by we, I mean Georgia) determined that program had changed, and to get a version that would handle our investments, we will need a more comprehensive version from the Deluxe version we have been using for years. Now, to have it handle a schedule D we will have to get the Premier version. However, we have been told that if you get the Deluxe version and find you need an upgrade, if you contact Intuit they will give you a code to get the upgrade free. No promises, but it's worth a try.

21 pages of Obamacare tax instructions, IRS demands 'shared responsibility payment'

The complicated process of signing up for Obamacare is now being matched by IRS instructions to help Americans figure out how much in healthcare taxes they owe Uncle Sam. The agency has issued 21 pages of instructions, complete with links to at least three long forms and nine tip sheets.

It is geared to those who have Obamacare or who owe a fine, dubbed “shared responsibility payment,” for refusing to get health insurance. The IRS warned that everybody must have health insurance or pay the tax.

“While the vast majority of tax filers — over three quarters — will just need to check a box on their tax return indicating they had health coverage in 2014, people who have coverage through the Marketplaces, or decided not to enroll in coverage, should be aware of some additional steps that will be a part of the tax filing process starting this year,” said the Department of Health and Human Service, which runs the Affordable Care Act.

Considering that the Army recipe for brownies takes 26 pages, I'm actually surprised that they managed to compress it into 21.

Healthcare costs still rising (but “not soaring”) under Obamacare

If you had a nagging feeling that you were still paying more and more for healthcare coverage while getting fewer covered services, you probably weren’t imagining it, at least according to a new study from the Commonwealth Fund. But before digging into the details, I would take a moment to note how this phenomena is described by Noam Levey of the LA Times.

Although the Affordable Care Act has not led to soaring insurance costs, as many critics claimed it would, the law hasn’t provided much relief to American workers either, according to a new study of employer-provided health benefits.
Workers continue to be squeezed by rising insurance costs, eroding benefits and stagnant wages, the report from the nonprofit Commonwealth Fund found.

Why would you waste our time in such a blatant and ineffective attempt to discredit critics of Obamacare and shore up the reputation of the program when you’re about to show that it has failed in one of its principal selling points? So the “critics” were clearly wrong because the costs of insurance are not soaring. But in the very next sentence we are informed that these insurance costs are rising to the point where workers are being squeezed, their benefits areeroding and their wages are stagnant.

Well, I know I certainly feel better now. For a moment there I was afraid that the costs might be soaring, but there’s clearly nothing to worry about.

I just want to know what happened to the $2500 reduction in family insurance costs the democrats sold the plan on. . .

GOP split over how to tackle ObamaCare

Rep. Erik Paulsen (R-Minn.), who is sponsoring a bill in the House to repeal ObamaCare's controversial medical device tax, acknowledged the divide in his party.
“A lot of these members are passionate about repealing the entire law,” he said. “But I think a lot of these members also recognize that one of the methods to get there might be to dismantle it piece by piece.”

Sen. Susan Collins (R-Maine), who is leading the Senate effort to change the bill’s employer mandate, said her bill is more “realistic” than a GOP effort to repeal ObamaCare, which would be vetoed by the president.

“My focus, despite my opposition to the law, is to try to fix it,” she told The Hill. “We know the president is going to veto a bill that repeals his signature accomplishment. I don’t know if we could even get it through the Senate.”

GOP leaders have promised to hold a vote on repealing ObamaCare, though Senate Majority Leader Mitch McConnell (R-Ky.) has acknowledged the bill would be a dead letter. He has instead vowed to pick apart the healthcare law “root and branch,” though lawmakers say details on his plan won’t emerge until after next week, when House and Senate Republicans meet for their first joint retreat in years.

In a republic, there's often a difference between what you want to do, and what you can do quickly, and it's important to keep your overall goal in mind while negotiating the minefield to the objective.

What would happen if the Supreme Court dismembers Obamacare

If you think Obamacare is bad, just wait until the Supreme Court dismembers it.
The Urban Institute has gamed out what would happen if the justices ended health insurance subsidies for people in 34 states, a plausible result from the court’s current term. Urban’s results, released Thursday, predict a national policy disaster.

The court will decide by June whether the the Affordable Care Act, as (poorly) written, bars the federal government from helping people buy health insurance if they live in one of the 34 states that haven’t created ACA insurance marketplaces. Federal subsidies are critical, because they underlie one of the basic deals the law struck in order to expand coverage: Everyone who doesn’t get insurance from their employer or directly from a government program such as Medicaid must buy individual insurance — but the federal government will help you buy it if you can’t afford it.

Urban found that if the Supreme Court ruled against the Obama administration, it would force the federal government to withdraw subsidies worth $28.8 billion from 9.3 million people in 34 states in 2016. Because individual insurance plans would be significantly less affordable to many, healthier people would drop coverage. With sicker people left in the individual market, premiums would have to rise to cover their costs. Urban figures that this would raise individual market premiums by 35 percent. The number of uninsured people in those 34 states would rapidly spike by 8.2 million people, a 44 percent increase from the number of people who would be uninsured in these states if the court left the policy alone. And many people would end up paying a lot out-of-pocket for worse coverage, with possibly very high deductibles on top of high premiums.

First of all, let's just acknowledge from the start that the Urban Institute has no interest in minimizing the harm that will be done by dismantling this section of Obamacare. But if you don't want a disaster to happen when you write a law in a particular way, well, maybe you shouldn't have done it that way in the first place.

It's pretty clear, now Post-Gruber, that section of the law was written as the carrot and stick to get red states to participate.  Make your own market place, and we'll subsidize your citizens, snub us, and we'll take your money and spend it on our own.

Only sufficient pain will cause the democrats to back off on the most egregious aspects of this Obamantion.