THE TAX ATTIC with Jerry Coon

Jerry Coon

What is ‘Obamacare’?

Last Saturday, I saw a clear example of what causes road rage. I’m not condoning it, but I wouldn’t have been surprised to see an accident occur because of it. After having played two slow-pitch ball games Saturday morning in Kentwood, I was limping my way home on the expressway. Mentally, I was limping because we lost both ends of the double-header, and physically limping because of a slightly damaged Achilles tendon injury that I have been nursing for a while. When I hit 44th St., the traffic started backing up because of construction between Hall and Wealthy streets. There were visible signs that the left two lanes were closed, so most drivers were using the common courtesy approach and began pulling over into the right hand lane.

Some drivers, however, ignored the lane closing signs to the bitter end. Displaying a complete lack of common courtesy, they went speeding by the multitude of cars in the right hand lane. There is no excuse for that action and I believe it may even be illegal. Believe me, it didn’t go unnoticed by those sitting. Once in a while, one of the larger vehicles did pull out into the left lane to slow the passing traffic down. I thought about that, but I was in a Sebring Convertible. Since the Sebring doesn’t have much of a profile and I might have ended up getting squashed, I just sat in the right lane and waited my honest turn. I did have the top down so, in addition to seeing the hand signals, I also heard some expletives hurled at the passing cars.

In all honesty, from time to time in the past, I have been caught out in that left lane with construction coming up and did pass some sitting cars. However, as soon as I figure out what is going on, I make my way into the proper lane.

Many of those people on Saturday were not making any type of effort to move over. They were making an honest effort, executed at high speed, to pass as many cars as they could before the lanes got cut off. That’s wrong.

Perhaps the Secretary of State could put that ethical question on the driver’s license renewal test: “When you see a lane closing sign ahead, when are you obligated to move out of that lane?” If your answer is: “At the last possible moment,” that’s wrong and you flunk the test.

It’s time to talk about the long-term ramifications of health care reform, the Patient Protection and Affordable Care Act (ACA) or, as it’s commonly known as, Obamacare.

There is no question that our health care system needed fixing. To some extent, insurance companies have brought about the need for a solution because of their policies. Here are some of those common problems that the ACA is attempting to fix.

First, insurance companies could terminate your contract upon reaching a benefit limit. Evidently, it was routine to terminate coverage for someone who reached the maximum benefit payout for their contract. Completely legal at the time, but it causes ill-will.

Second, insurance companies would not issue you a policy if you had a pre-existing condition. God help you if you had a pre-existing condition because, for the most part, an insurance company sure wasn’t. In fact, according to a House study, from 2007 to 2009, the four largest insurers, Aetna, Humana, UnitedHealth Group, and Wellpoint, refused coverage for 651,000 people for pre-existing conditions and refused to pay benefits to an additional 212,800 people because they ruled there were pre-existing conditions at the time of the issuance of the contract. Completely legal at the time, but it causes ill-will.

Third, if you had a child who didn’t technically qualify as your dependent because he or she was not in school or had worked part-time, the insurance company reserved the right to not allow you to add that child to your policy.

Fourth, if your employer terminated your position, your health insurance was also terminated. Under certain conditions, the contract could be continued, but no longer than 18 months. Portability definitely had to be addressed.

Fifth, the cost of a decent policy has exploded in recent years.

Some uniformity needed to be brought into the system. Those choosing to stay out of the system needed to be brought into the system. Those unable to get into the system needed to be brought into the system. ACA deals with these issues and attempts to spread the risk and the cost of insurance over millions of more people. That is an effective theory.

As the system stands right now, only the people paying for insurance are carrying all of the costs for the entire system. Those without insurance can still receive care through an emergency room visit and the ensuing care. Those costs are just rolled into the entire system costs. I never have been able to find out what percent of the average premium is used to pay for the costs of those who are uninsured. Wikipedia probably knows. I just am not asking the right question. It might be a shocker.

As I said above, ACA is based on effective theory. The trouble with theories is that they usually are hard to convert to reality. Over the next couple of weeks, I will explore the ACA and how it relates to each of us. That information should be useful.

We have all read the statistics stating that according to the World Health Organization our health care system ranks Number 37 in the world. We come in just above Slovenia and Cuba and just below Canada and Costa Rica. I did look at the report and the methodology they used and I have two comments to make on the whole report.

First, statistics aside, why does the rest of the world, especially Canada, come here when they need something fixed and need it fixed while they are still alive? Did they try the other 36 first and get turned down?

Second, which country is responsible for most of the medical discoveries and miracle drugs that cure deadly diseases we see and hear about? That’s not technically health care, but it’s a part of the system as a whole that fosters research and development.

In any event, the approximately 2,700 pages of the Act did its best to address these issues. My public and private opinion is that the ACA is about 2,650 pages too long. The Constitution of the United States, all of its amendments, and the Declaration of Independence are less than 50 pages in total; 2,700 pages for healthcare might be considered just a little bit of overkill. However, it’s a start, and the Supreme Court says it’s legitimate, so let’s go from there. This is Jerry Coon signing off.

Jerry Coon is an Enrolled Agent. He owns Action Tax Service on Northland Drive in Rockford. Contact Jerry through his website: www.actiontaxservice.com.

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