ACA (a.k.a. Obamacare) Upheld

[Fern]

By all appearances the penalty has no teeth.

I urge caution in adopting this stance ATM.

Everyone advocating reducing your withholdings so that you do not have an overpayment from which the tax can be deducted is making a BIG assumption.

They are making the assumption that the IRS will apply your withholdings FIRST against your regular tax bill. I see nothing in the law requiring that. The IRS could apply your withholding first against your penalty, the remainder being applied to your regular income tax bill. The shortage would be from your regular tax liability and therefore subject to all the usual collection tools including levies and garnishments.

Example:

Regular income tax liability of $1,000.

Penalty of $100.

Withholding (est payments etc) of $1,000

The IRS first applies the withholding towards the penalty of $100. They then apply the remaining $900 towards your regular tax liability. You now owe $100 towards your regular tax liability and that deficiency can be garnished from wages (or other usual collection method applied).

I believe this this limitation on collection methods was done for political purposes to get the votes needed. I also believe the rather low penalty amounts were done for the same purpose. But now that the bill has passed I fear these will be adjusted to provide more 'teeth'.

Fern

 

[sactoking]

Man, whether I agree with the law or not, I am soooooooo glad my governor isn't Bobby Jindal. I just saw a story that he is still planning on preventing Louisiana from complying with the ACA in the hopes that Romney wins the WH and the Senate goes to the R's in November so they can repeal it. That's a pretty dangerous gamble.

 

[Cerb]

Doing something like this would be interesting but probably not viable in with today's House of Representatives. The rancor in this thread as well as on television is evidence to that.

Politically in Washington, yes. Quite a few major reforms got shot down by Baucus and friends, instead of this monstrosity. Practically, it makes the most sense, IMO.

ACA expending how many people qualify for medicaid, and is giving free (or nearly free) insurance to people below a certain income.

Those people would before ACA not have any insurance, and would tend to be the ones that use ER's for health care and freeload on the system.

After ACA, they will either have free insurance under medicaid, or will have insurance purchased for them by the government.


https://www.bcbsnc.com/assets/hcr/pdfs/spotlight_subsidies.pdf
133-150% FPL* 3-4%
150-200% FPL 4-6.3%
200-250% FPL 6.3-8.05%
250-300% FPL 8.05-9.5%
300-400% FPL 9.5%

------

So previously these people that would freeload using ER care, will now either be insured freeloaders, or still remain uninsured freeloaders and pay the penalty.

Therefor, the people that were previously freeloaders and not paying for insurance, will still be freeloading and either not paying for insurance, or paying very little for it.

Which means, the people that are currently paying for health care, will see they're costs go up to cover the newly insured.

I see. Though, is not a great deal of that going to need to come from taxes, rather than premiums? That premiums will be going up I don't think is in debate, though, except by wild-eyed Beltway residents, who live in a reality distortion field.

But what I don't get is why we need this law, especially in it's current incarnation.

We don't. We need real reform of the problems, including giving control of supply, demand, and pricing to the market, rather than the black box doctor-rationed system we have now, with ten prices and costs for the same thing at the same place, and affordable healthcare largely being an employer-provided benefit.

 

[Fern]

"We have no ideas" - Conservatives.

You're wrong. I'm a conservative and I have posted ideas before, rather detailed and with links. I will not go to that length again. Nor would I have responded if you had said "GOP".

My proposal is drawn from the medical profession itself and based, at least partially, upon studies carried out by the New England Journal of Medicine. Briefly, they found that identical patients with identical medical conditions received hugely differing amounts of care - differing by 6 figure $ amounts. There was no explanation other than unnecessary procedures arising from a lack of standards for medical care. Fix this lack of medical care standards and you fix the real problem - the high cost of the medical care itself.

Fern

 

[blankslate]

I have yet to read a compelling reason as to why this law is needed.

Here's one reason

As reported by USA today in May 2002, a report released by the Institute of Medicine (a non-profit organization that advises Congress) titled "Care Without Coverage: Too Little, Too Late.” found that over 18,000 people die each year due to lack of “preventative services, a timely diagnosis, or appropriate care” because they don't have health care insurance. These deaths include 1,400 people who had high blood pressure and 500 to 600 people with breast cancer. (Sternberg, Steve. “18,000 Deaths blamed on lack of insurance” USA Today. 22 May 2002. 02 Nov. 2008. http://www.usatoday.com/news/health/healthcare/2002-05-22-insurance-deaths.htm



Another reason:

Keep in mind that as of 2006 47 million Americans were uninsured. 2006 was about the time American reached 300 million people so about 15.5% of Americans were without insurance.
the information about the uninsured is on page 19 of this .pdf
http://www.census.gov/prod/2007pubs/p60-233.pdf

A newer article shows and increase since then the percentage of people without insurance rose to 16.3% in 2010
http://money.cnn.com/2011/09/13/news/economy/census_bureau_health_insurance/index.htm



Yet another:

This article from 2005 cites some facts about cost trends

If current trends continue, U.S. health insurance costs will consume the average household’s annual income by 2025. As health care becomes unaffordable for most people in the United States, it will be necessary to implement innovative models to move the system in a more equitable and sustainable direction.

In 2004, premiums for employer-sponsored health insurance increased by 11.2 percent—the fourth consecutive year of double-digit increases—outpacing the 2004 national wage increase of 2.2 percent.

With health insurance packages bought and sold as profitable commodities, adequate health insurance coverage will soon be a product of shrinking benefits, to be bought by the wealthy and sold to the healthy. Most individuals cannot shoulder the burden of rising health care costs, and medical expense now tops the list of reasons for personal bankruptcy.5,6 If the system remains the same, the number of uninsured will continue to grow.

Having more people purchase healthcare insurance will mitigate the insurance companies need to increase premiums.



Another reason:

Lack of a health care system can make our businesses less competitive compared to foreign competitors.

A big reason is the cost of labor. As analyzed by Harbour-Felax, labor costs the Detroit Three substantially more per vehicle than it does the Japanese.

Health care is the biggest chunk. GM (Charts), for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota (Charts) pays nothing for retired workers - it has very few - and only $215 for active ones.

http://money.cnn.com/2007/01/26/news/companies/pluggedin_taylor_ford.fortune/index.htm

These are a couple of reasons.

Additionally I heard a story about Toyota deciding to build automotive plants in Canada instead of the U.S. and that the health care advantage was a deciding factor.

In addition to lower training costs, Canadian workers are also $4 to $5 cheaper to employ partly thanks to the taxpayer-funded health-care system in Canada, said federal Industry Minister David Emmerson.

"Most people don't think of our health-care system as being a competitive advantage," he said.

http://www.webhostingtalk.com/archive/index.php/t-425111.html

Unfortunately the link to the actual news item is dead so I can't vouch for this 100%.

 

[blankslate]

Politically in Washington, yes. Quite a few major reforms got shot down by Baucus and friends, instead of this monstrosity. Practically, it makes the most sense, IMO.

You call this a monstrosity.

What makes it a monstrosity?

What form of health care system would you prefer?

Something has to be done.
I've outlined some reasons why in my reply to Dannar19 in post # 830

 

[sactoking]

I urge caution in adopting this stance ATM.

Everyone advocating reducing your withholdings so that you do not have an overpayment from which the tax can be deducted is making a BIG assumption.

They are making the assumption that the IRS will apply your withholdings FIRST against your regular tax bill. I see nothing in the law requiring that. The IRS could apply your withholding first against your penalty, the remainder being applied to your regular income tax bill. The shortage would be from your regular tax liability and therefore subject to all the usual collection tools including levies and garnishments.

Example:

Regular income tax liability of $1,000.

Penalty of $100.

Withholding (est payments etc) of $1,000

The IRS first applies the withholding towards the penalty of $100. They then apply the remaining $900 towards your regular tax liability. You now owe $100 towards your regular tax liability and that deficiency can be garnished from wages (or other usual collection method applied).

I believe this this limitation on collection methods was done for political purposes to get the votes needed. I also believe the rather low penalty amounts were done for the same purpose. But now that the bill has passed I fear these will be adjusted to provide more 'teeth'.

Fern

Good point but...

When you file your quarterly returns either by paper or by EFTPS you are required to indicate the tax year the payment is for. I don't have access to CCH right now to look it up but I am fairly certain that tax case law requires the IRS to honor that indication. If the IRS was not required to honor that indication then they would be able to arbitrarily and capriciously apply payments to balances due in a manner that would maximize penalty and interest revenue. That would then make the IRS liable for those penalties and interest.

Or, put another way, if I fail to file a return in 2003 and then file a return in 2004 the IRS cannot use my 2004 payment that accompanies my 2004 return to satisfy my 2003 debt; it sits on the books until such time as I choose to address it.

Caveat: This does not apply if I send in a payment with no instructions on how to apply it. If I just send in a check with my FEIN # on it then the IRS is free to apply it as they see fit (for legal reasons they typically apply it to the oldest balances first).

 

[Cerb]

You call this a monstrosity.

What makes it a monstrosity?

What form of health care system would you prefer?

Something has to be done.

One in which anyone qualified to become a medical practitioner may do so.

One in which care standards are reasonably common across the nation.

One in which employers have no say in health insurance.

One in which any business practicing medicine must be able to quote the same price for the same service to everyone at any given time. Health insurance should not have anything to say about costs except what % it will pay for certain types of services after deductibles. Everything else should be between you and the care provider. Transparency needs to be priority.

I agree something needs to be done. But, if there are problems, the causes for the problems need to be addressed. trying to tackle only the symptoms is not going to be terribly helpful.

 

[Doc Savage Fan]

Do you feel like they won the political fight on Obamacare?

Yes. Democrats crafted the legislation unilaterally behind closed doors. Obamacare passed along party lines especially in the Senate. The Democrats won this political fight hands down.

Right up to yesterday morning and even today the public is talking crazy ignorant shit about it. Hell, the name Obamacare is a political loss. If they handled their politics better they'd actually convince people to take their side on these issues and not have to jump insane hurdles to pass legislation.

The public always talks crazy ignorant shit. Obamacare is highly controversial...Dems are good at spinning...but nobody's that good.

The only one from the list that was a clear win IMO was ending DADT. Because you actually saw people change their mind and there was a larger acceptance across the populace.

That's your opinion...the DCCC is quite proud of all their accomplishments and have taken great pains to note all those tough battles they've won against the evil ones.

And I don't want several of the items you listed to exist in the first place.

I never said you did. I merely pointed out the many victories Democrats have enjoyed recently. This is in direct response to your comment "Based on their inability to win just about any political fight, I'm not sure how you reach that estimation of the Democratic party..."

It really doesn't matter if you do or don't want several of the items listed...Dems have won many political fights. That's the fact Jack!

I know it's easier to ascribe a position to me than actually discuss things with me, but it's just fucking rude.

Fucking rude? I didn't mean to be fucking rude. I'll try to be more aware of your sensitivity regarding such things in the future. You have my apologies sir.

 

[blankslate]

I agree something needs to be done. But, if there are problems, the causes for the problems need to be addressed. trying to tackle only the symptoms is not going to be terribly helpful.

Well, this was what was finally able to be passed in the current political climate.

Not that I find your standards disagreeable at all.

 

[Iron Wolf]

You call this a monstrosity.

What makes it a monstrosity?

What form of health care system would you prefer?

Something has to be done.
I've outlined some reasons why in my reply to Dannar19 in post # 830

It's 2700 pages that no one has read in it's entirety or understands, and no one is sure what the full consequences will be yet. It was enabled by a fiat decision from a divided court by a chief justice who thought it was better to create a political legacy than uphold his own principles. I'd call that a monstrosity.

The federal government is not here to help, and nothing good can come of it's ever expanding reach.

I personally think that we should go back to a pre-50's cash-and-carry system, whereby doctors simply provided a service at reasonable rates, and you paid them. People could still have insurance, but only to protect against catastrophic illness or injury.

I just worry that some of what Rush and others have said is correct. That this is the "largest tax increase in American history," since that is how Roberts justified it when the Commerce clause rationale was thrown out. So our federal and state taxes increase to pay for the increase in Medicare and to run the exchanges, and our health insurance rates increase to pay for all of the others that are now being insured, or else I don't get to have insurance at all and pay a penalty, or become a tax-evading criminal. Great.

I heard another interesting possibility on the radio today as well. What happens if companies simply choose to pay the penalty as cheaper than providing insurance to their employees? It seems to me like a lot of people are going to have their insurance choices limited to whatever brilliant plans their state comes up with.

As usual, Washington screws the middle class to help the poor. What else is new?

 

[Iron Wolf]

One in which anyone qualified to become a medical practitioner may do so.

One in which care standards are reasonably common across the nation.

One in which employers have no say in health insurance.

One in which any business practicing medicine must be able to quote the same price for the same service to everyone at any given time. Health insurance should not have anything to say about costs except what % it will pay for certain types of services after deductibles. Everything else should be between you and the care provider. Transparency needs to be priority.

I agree something needs to be done. But, if there are problems, the causes for the problems need to be addressed. trying to tackle only the symptoms is not going to be terribly helpful.

This is an excellent post, and one I agree with fully. Well stated, sir!

 

[blankslate]

just worry that some of what Rush and others have said is correct.

Sorry you just lost me there... Rush... yeah ok.

Doing nothing wasn't much of an option. So they went with the Massachusetts plan.

Now Governor Romney is against something that is basically his own plan... nice.

 

[Fern]

Good point but...

When you file your quarterly returns either by paper or by EFTPS you are required to indicate the tax year the payment is for. I don't have access to CCH right now to look it up but I am fairly certain that tax case law requires the IRS to honor that indication. If the IRS was not required to honor that indication then they would be able to arbitrarily and capriciously apply payments to balances due in a manner that would maximize penalty and interest revenue. That would then make the IRS liable for those penalties and interest.

Or, put another way, if I fail to file a return in 2003 and then file a return in 2004 the IRS cannot use my 2004 payment that accompanies my 2004 return to satisfy my 2003 debt; it sits on the books until such time as I choose to address it.

Caveat: This does not apply if I send in a payment with no instructions on how to apply it. If I just send in a check with my FEIN # on it then the IRS is free to apply it as they see fit (for legal reasons they typically apply it to the oldest balances first).

Yes, the taxpayer can stipulate what year the payment is for and the IRS must honor it.

However, I do not understand what that has to do with my point?

My point is that as of now we do not have a mechanism permitting taxpayers to stipulate the application of their payments to either the regular tax or the penalty. I see nothing that prevents the IRS was applying the payment first towards the penalty. The year doesn't really matter because the resulting (and accumulating) deficiency would be considered 'regular tax' and could be recovered by lien, garnishment etc.

The ability to stipulate your withholding to a specific year means they cannot take that payment and apply it to a previous year. But they can use liens etc.

The deficiency is going to be subject to interest and penalty too. And the statute for collection is ten years. Even if the IRS agreed to apply all your withholding toward the regular tax first you're going to be sweating out a ten year wait hoping the law regarding collection of the penalty does not change.

Fern

Fern

 

[zinfamous]

It's 2700 pages that no one has read in it's entirety or understands, and no one is sure what the full consequences will be yet. It was enabled by a fiat decision from a divided court by a chief justice who thought it was better to create a political legacy than uphold his own principles. I'd call that a monstrosity.

The federal government is not here to help, and nothing good can come of it's ever expanding reach.

I personally think that we should go back to a pre-50's cash-and-carry system, whereby doctors simply provided a service at reasonable rates, and you paid them. People could still have insurance, but only to protect against catastrophic illness or injury.

I just worry that some of what Rush and others have said is correct. That this is the "largest tax increase in American history," since that is how Roberts justified it when the Commerce clause rationale was thrown out. So our federal and state taxes increase to pay for the increase in Medicare and to run the exchanges, and our health insurance rates increase to pay for all of the others that are now being insured, or else I don't get to have insurance at all and pay a penalty, or become a tax-evading criminal. Great.

I heard another interesting possibility on the radio today as well. What happens if companies simply choose to pay the penalty as cheaper than providing insurance to their employees? It seems to me like a lot of people are going to have their insurance choices limited to whatever brilliant plans their state comes up with.

As usual, Washington screws the middle class to help the poor. What else is new?

I was not aware that you, or anyone other than Chief Justice Roberts, were capable of defining for the man his own principles.

interesting--but this is the political climate we live in, isn't it? We are not only so certain of ourselves and what is truly "right" and truly "wrong," but we are also so certain that any given person will agree with us fully, lest they be charlatans!

(Granted--I, too, am shocked. As up to now, I was convinced the man had no principles.)

 

[First]

Man, whether I agree with the law or not, I am soooooooo glad my governor isn't Bobby Jindal. I just saw a story that he is still planning on preventing Louisiana from complying with the ACA in the hopes that Romney wins the WH and the Senate goes to the R's in November so they can repeal it. That's a pretty dangerous gamble.

It's moronic. The likelyhood of ACA getting repealed is as close to zero as possible. I suppose there's an outside chance, but it's still pretty ludicrous after yesterday's SCOTUS decision.

Of course, it will quite literally be zero if (when) Obama is re-elected.

 

[michal1980]

It's moronic. The likelyhood of ACA getting repealed is as close to zero as possible. I suppose there's an outside chance, but it's still pretty ludicrous after yesterday's SCOTUS decision.

Of course, it will quite literally be zero if (when) Obama is re-elected.

If rommeny is elected, he can just say that the law can be ignored. Like Obama & other presidents use exectuive privelge.

 

[Charles Kozierok]

It's just one day's data and thus not enough to draw any firm conclusions. But today Gallup has Obama up by 5 points, a dramatic jump to a lead he hasn't had in two months. Even Rasmussen has Obama up by 1 point, the first time the GOP-leading pollster has had Obama in the lead in three weeks.

I think it's easy to understand why. While Republicans kid themselves that the decision is going to motivate those who hate Obama -- as if they weren't already sufficiently motivated -- what the ruling does is legitimize the law and the president in the minds of those who are not already very tuned in to politics. Since the GOP themselves have spent so much time castigating Obama because of his "illegal" health care law, Obama is going to gain, possibly significantly, from the SCOTUS upholding it.

 

[Ryan]

If rommeny is elected, he can just say that the law can be ignored. Like Obama & other presidents use exectuive privelge.

No - they won't have much of an option. Many of the provisions in the law apply to the insurance companies - if I ran one, I would not chose to NOT follow the law just because the president didn't want to - imagine the lawsuits from your customers.

That, and most states are implementing ACA. It's going to cost them money - money the federal government has already promised and started doling out. If Romney were to prevent the money from being disseminated, you're looking at situation where states will be suing the federal government. No court will side with Romney in this case.

The only option is to pass a law through the senate repealing ACA. Without a filibuster proof republican majority, you can kiss that goodbye.

 

[shortylickens]

The Patriot Act was the least patriotic government policy ever revealed.
I have a suspicion the Affordable Care Act will be very similar.

 

[sactoking]

Yes, the taxpayer can stipulate what year the payment is for and the IRS must honor it.

However, I do not understand what that has to do with my point?

My point is that as of now we do not have a mechanism permitting taxpayers to stipulate the application of their payments to either the regular tax or the penalty. I see nothing that prevents the IRS was applying the payment first towards the penalty. The year doesn't really matter because the resulting (and accumulating) deficiency would be considered 'regular tax' and could be recovered by lien, garnishment etc.

The ability to stipulate your withholding to a specific year means they cannot take that payment and apply it to a previous year. But they can use liens etc.

The deficiency is going to be subject to interest and penalty too. And the statute for collection is ten years. Even if the IRS agreed to apply all your withholding toward the regular tax first you're going to be sweating out a ten year wait hoping the law regarding collection of the penalty does not change.

Fern

Fern

But the penalty isn't incurred until after the regular tax is paid.

For any given tax year, say 201X, I have to make 4 quarterly payments due 4/30, 7/31, 10/31, and 1/31. My 201X return is then due April 15.

The penalty for defying the mandate will not be calculated and applied until the annual return is filed. The ACA requires health insurers to issue a statement of coverage similar to a 1099 which will be attached to the 201X return. So, by the time I file my 201X annual return showing I defied the mandate and have accrued a penalty all of my 201X quarterly payments will have been made. If I accrue a penalty and refuse to pay is will show as a 201X balance.

From that point forward I can make my 201Y quarterly payments and stipulate that they avoid the 201X balance. In effect, I can leave the 201X balance on the books as long as I like.

I do agree that failure to pay the penalty will accrue interest. I am not sure that you will be subject to the penalty for failure to pay taxes, as it's already a penalty and I doubt you can pay a penalty on a penalty. For example, the standard failure to pay penalty is 0.5% per month. I believe it is calculated at a simple rate of (Amount Owed) x (Months Late) x (0.005). If you could pay penalty on the penalty then it would compound and the calculation would be (Amount Owed) x ([(1+.005)^Months Late] - 1). Of course, the tax court could always say that they're two separate penalties so they can stack or that the penalty isn't a penalty but a tax (following the USSC).

At any rate, I'm not sure how the penalty and regular tax for any given year can accrue simultaneously given the methodology contemplated by the ACA for determining compliance with the mandate.

 

[OneOfTheseDays]

Nobody is saying ACA is the end game solution here. It was a compromise that Obama had to make to get us on the path to real healthcare reform. This is going to pave the way to a truly universal single-payer system. That has been the end game all along by the Democrats and progressives.

Once you give the public something, it is near impossible to take way. The Democrats know this and that's why this victory is so monumental. There's only one way we can go from here, and that's in the forward direction....we will never go back to what we had. Ever.

 

[michal1980]

Nobody is saying ACA is the end game solution here. It was a compromise that Obama had to make to get us on the path to real healthcare reform. This is going to pave the way to a truly universal single-payer system. That has been the end game all along by the Democrats and progressives.

Once you give the public something, it is near impossible to take way. The Democrats know this and that's why this victory is so monumental. There's only one way we can go from here, and that's in the forward direction....we will never go back to what we had. Ever.

I wouldn't call it forward. IMHO its like jumping off the bridge because everyone else is doing it.

I do agree with you on where its heading/what the end goal of the dems is.

Once again they want everyone depedant on goverment so they can own their votes.

There is one way to take it away from the public.. once the country is bankrupt

 

[Charles Kozierok]

There is one way to take it away from the public.. once the country is bankrupt

The country isn't bankrupt and isn't going to be bankrupt. You people are in lala land.

 

[nageov3t]

No - they won't have much of an option. Many of the provisions in the law apply to the insurance companies - if I ran one, I would not chose to NOT follow the law just because the president didn't want to - imagine the lawsuits from your customers.

That, and most states are implementing ACA. It's going to cost them money - money the federal government has already promised and started doling out. If Romney were to prevent the money from being disseminated, you're looking at situation where states will be suing the federal government. No court will side with Romney in this case.

The only option is to pass a law through the senate repealing ACA. Without a filibuster proof republican majority, you can kiss that goodbye.

I believe Obama's already been issuing ACA waivers to his donors, I don't see why Romney (or the next Republican President down the line) couldn't issue waivers to other companies or instruct the IRS not to pursue people who aren't paying the ACA tax.