Penalty Gone, but Obamacare Remains

December 20, 2017

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People are happy that the Obamacare penalty has ended. But just to be clear, the tax reform bill, which has been sent to President Trump today for his signature, does not repealthe ACA’s individual mandate or the penalty. It simply drops the penalty amount to zero.

And even the zero-penalty doesn’t happen until 2019—after the mid-term elections. Penalties will be enforced for failure to be covered in 2018.

The ACA, which currently has the mandate penalty at $695 or 2.5 percent of your income, will have a penalty of “$0” or “zero percent” of your income for coverage starting in 2019. See the bill language on page 103:

(a) IN GENERAL.—Section 5000A(c) is amended

(1) in paragraph (2)(B)(iii), by striking ‘‘2.5 percent’’ and inserting ‘‘Zero percent’’, and (2) in paragraph (3)—

(A) by striking ‘‘$695’’ in subparagraph (A) and inserting ‘‘$0’’, [. . .]

Any mention of repeal is fake news. The Republican leadership has not only never tried to actually repeal the entire law, the tax reform bill does not repeal the individual mandate or the penalty.

With the mandate still in place, will the next Congress simply raise the penalty from zero to a number of their liking—likely much higher than $695 or 2.5 percent of your income?

Regarding repeal, James Wallner wrote in the Washington Examiner that the GOP made a “tactical blunder: the decision to repeal and replace Obamacare in a single bill—A decision, of course, that doomed the party’s efforts to do both.”

Perhaps it wasn't a "blunder." Perhaps it was a calculated strategy. GOP Senate leadership has a “backroom deal” to stabilize the ACA by (1) appropriating billions in bailouts (cost-sharing reduction (CSR) subsidies) for health plans and (2) setting up a federal reinsurance plan to provide taxpayer funds to insurers for high-cost individuals. GOP Senate Majority Leader Mitch McConnell promised Sen. Susan Collins (R-ME) he’d hold a vote to add these two items to the upcoming short-term spending bill, which will temporarily prevent a “government shutdown” over the holiday season. But with only a few days left, this promise has been pushed to January.

Nevertheless, if enacted, health plans could not just double-dip as Judge Chhabria warned, but triple-dip or quadruple-dip. Health plans would receive your premium dollars (already raised higher to compensate for no CSR subsidies), plus taxpayer-funded CSR subsidies, taxpayer-funded premium subsidies, taxpayer-funded reinsurance subsidies—and, with tax reform, reduced corporate taxes!

Contact the U.S. House and Senate—especially Speaker Paul Ryan and your House Representative. Thus far, House Republicans appear unwilling to stabilize the ACA with bailouts to these corporate health plans, which were complicit in the enactment of Obamacare.  The law eliminated their competition, and limited our choices to these managed care corporations.

Tell Republicans that they were put in charge to repeal the Affordable Care Act, not force taxpayers to sustain and support itCapitol Switchboard: #202-224-3121.

Committed to health freedom,

Twila Brase, RN, PHN
President and Co-founder