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Friday, February 22, 2013

Obama Care Shock (and) Awe

ObamaCare Shockers

I have always stated that Obamacare would have unintended consequences and negative effects that require some level of interest in how insurance really works when coupled with an eligibility system derived from the welfare system.

In what Paul Craig Roberts calls the most comprehensive analysis available on ObamaCare, a person who wishes to remain anonymous explains how Obama Care “works for the insurance companies but not for you”

Obamacare, a Deception
Lower-income Americans who receive a subsidy to buy mandated insurance may have to pay it back if their income increases. In other words, instead of an expected tax refund they will get a bill. Note that the subsidy (“advance tax credit”) was paid to the insurance company, but the payback comes from the individual.
Persons eligible for Medicaid cannot receive a tax credit. If an Exchange finds a person to be eligible for Medicaid, he will be enrolled. Some states will auto-enroll people in Medicaid who appear to be eligible when they apply for another program such as SNAP (food stamps). If their income changes, people may be bounced back and forth from Medicaid to a tax-subsidized plan.
If a person is put into Medicaid, he has just gotten a mandated collateral loan if he uses Medicaid benefits at age 55 or older. Depending on state law, anything in the estate (the multi-generational family home and everything in it, annuities, bank accounts, etc.) may be subject to state recovery of funds expended by Medicaid for certain benefits, or possibly of all expenditures. This happens because the asset test was dropped as part of the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993). While this provision does not come from the Affordable Care Act (ACA), ObamaCare’s Medicaid expansion means it can be applied much more widely. “Recovery provides revenue for cash-strapped states and it’s a big business,” the article states. It is not clear how disclosure of this provision will be made if people are bumped into Medicaid or auto-enrolled.
For some reason, getting people to enroll in ObamaCare is expected to require a high-pressure sales pitch. Enter “Enroll America,” a tax-exempt organization backed by Big Insurance. Spin experts are working on what to say and what not to say.

So, let's say you are currently unemployed, or underemployed and you do qualify for one of these Health Benefit Exchange subsidized plans and you sign up for the year. Six months into the year you are hired ! Surprise you now have to pay back whatever the subsidy amounted to. As Paul Craig Roberts writes in the Institute for Political Economy, It's very complicated”.

Come April 15th of each year you will now need a CPA, a tax specialist, a health insurance expert, and another volume of the IRS Tax Code.

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