The middle class certainly use tax credits unless you’re defining the middle class as well above $100,000/year household income. The child tax credit is the first I can think of, but there are others that childless taxpayers certainly claim.
Does it matter if you can’t forcefully collect the penalty from the rich? Aren’t they the ones that are already set with regard to affording health insurance? Are any significant number actually going to stop purchasing insurance just because they want to thumb their noses at this law?
The low risk pool (young and healthy) that needs to purchase insurance to make PPACA work from a fiscal sense are also among the groups that tend to get refunds and claim tax credits. No large numbers of other people will want to opt out because they generally have an actual need for insurance.
A refund is really determined by how you set withholding, and most of the tax credits I am aware are for things like home purchase and green energy purchases.
I think certain states require insurers to cover those with pre-existing conditions but do not have a mandate. They are likely northeast states, but I forget which ones. I have no idea how it affected costs of insurance.
As it stands, it seems most people with severe conditions are already in the system. Medicare, medicaid and state high risk pools catch most people. So I don’t think there is a massive group of high cost uninsured people who want to join onto plans. They exist, but it seems most truly sick people have various public plans open to them. The definition of a pre-existing condition is really, really loose. I have a pre-existing condition that I spend $2/month on medications for. I can’t get private insurance because of it, but in the last 5 years I’ve probably spent under $1000 on medical care including all my doctor, dentist, eyeglass and prescriptions for whatever aliments I had. I wouldn’t be surprised if many uninsured people with pre-existing conditions are more like me (and less like the severe diabetic who needs dialysis), a fairly healthy person with a health condition that is cheap to treat and fairly well controlled.
I assume the same thing that happens on the state level will happen on the federal level, you’ll have individual coverage that refuses to cover pre-existing conditions then public plans for the truly sick who can’t get private coverage. Which is stupid, once someone stops paying money to your company and starts costing money you hand them over to the government (aka socialism for the rich). So w/o the mandate you can’t cover pre-existing conditions in the private sector outside of group plans.
But that is likely what’ll happen IMO. Either way, I don’t know if uninsured people getting insurance will do anything to slow the 6-10% a year cost growth in health care. That is the true problem, and Romney’s plan in MA still had 7.5% annual health care cost growth even with a mandate.
Or (if not claimed as a dependent) the Lifetime Learning Credit. Took it each year I was in grad school and it wiped out most of my tax due and gave a pretty good refund.
You don’t necessarily need to be truly sick to find the state high-risk pool useful. My mom was in one for a while, when she was unemployed and before she was old enough to be eligible for Medicare; she had a history of arthritis and back problems, neither of which was disabling or led to large medical expenditures, but which led to every insurer she could find refusing her a policy.
The only way for her to get coverage at all was through the state high-risk plan, which was hideously expensive, but she considered it preferable to risking losing her house if anything serious happened to her. I’m sure she would have preferred being able to buy an individual policy, but it was simply impossible.
Perhaps if this court decision stands, it will eventually lead to a single-payer option. If the government can’t mandate the purchase of a commercial product, it can certainly mandate the payment of taxes and spending it for the general welfare.
I can imagine it happening: The mandate gets struck down, but everything else in the law stands. We end up with an insurance death spiral that has to be addressed in some other way. It would be ironic in the extreme if the conservatives challenging the law became directly responsible for ushering in single payer.
You’re way off base. Most people with severe conditions are not in “the system,” and could not get into the system if they wanted to. I am a perfect example, and there are a lot of people just like me. I am 35 and have been very healthy until 9 months ago when I was suddenly diagnosed with two different autoimmune disorders. One is rheumatoid arthritis. Without insurance coverage it would cost me at least $30,000 a year just for medications alone, without which I would be in constant pain and not be able to move, and the disease would quickly destroy/disfigure my joints permanently.
I was lucky enough be to covered under an individual insurance plan when I was diagnosed, otherwise I would be SOL. (I was on an individual plan because I am unemployed due to a layoff, like many people right now.) In my state, there is no high risk pool, and I would be ineligible for either Medicare or Medicaid. I would not have been able to purchase a new insurance plan because I now have (what are considered to be a serious) preexisting conditions. Insurance brokers have told me that I am essentially “uninsurable.” No insurance company would touch me with a ten-foot pole, one guy said.
My other condition, an autoimmune liver disease, would kill me within 10 years without treatment. The medication for this, alone, costs another $5,000 a year. Then add on the costs of seeing a liver specialist and having regular blood tests, which this year alone have cost me more than $5,000 (just the tests).
Then add on my emergency gall bladder removal (related to my liver disorder) I just had last month that probably cost $100,000 (haven’t got the itemized bill yet, but that is probably a conservative guess).
Tell me, what would someone like myself do if I were not lucky enough to have had family who are well-off enough to help me purchase insurance? I would simply be untreated. If untreated, the RA would completely disable me and the liver disorder would kill me. In the meantime I would suffer greatly and die a slow death.
So, Wesley Clark, your idea that “most truly sick people have various public plans open to them” is way off.
Aren’t we missing the point that if the individual mandate is unenforceable, then the system is already broken? Or do you really expect young people and poor people to cough up $750-$2250 per year to the government if there is no possible downside to avoiding the payment?
It seems to me that the likely result is the creation of millions of ‘deadbeat’ students and young adults and poor people who amass thousands of dollars in uncollectable debt. And if I know the government, they’ll use that unpaid debt as an asset to mask the true cost of health care and take it off-budget.
Eventually, there will be some form of debt relief or amnesty that will wipe it off the books, and it will become essentially a health care subsidy paid for by taxpayers - i.e. the same free-rider problem that was used as justification for the health care bill will still exist, meaning that taxes will go up and premiums will go up, and that trillion-dollar health care plan will skyrocket in cost.
This is true regardless of what the Supreme Court declares, because a fine that has no consequences when ignored is pretty much the same as no fine at all.
This seems like a colossal flaw in the bill. I can easily imagine an awful lot of people exploiting it, which would massively drive up insurance premiums once health care companies can no longer discriminate against people with pre-existing conditions.
I don’t see how premiums won’t increase massively anyways. Come Jan 1, 2014, the insurance companies will be inundated with sick people buying their policies at normal rates. The best and the greatest policy they offer (because, after all, they will be using much more than they pay)
On the other hand, the healthy young people will drag their feet, and if they pay into the system at all, they will get the highest deductible cheapest run of the mill garbage plan they can buy.
How can insurance companies bear this cost without increasing premiums on everyone?
Damage that other people have to pay for if you don’t have insurance. Either the person will use the emergency room, or they will go bankrupt, as, if they can’t afford insurance, they definitely can’t afford the large medical bills. Either the money comes from the government, which comes from taxes on the people, or it will come from the higher rates on medical care.
If everyone has to have insurance, then people will be able to get care earlier (before they believe it worth it to go to the ER or go bankrupt), thus lowering costs.