The Patient Protection and Affordable Care Act

THE TAX ATTIC with Jerry Coon

August 23, 2012 // 0 Comments

In a June 28, 2012 commentary, Jack McHugh of the Mackinac Center for Public Policy recently analyzed what the Patient Protection and Affordable Care Act (ACA) means to the average American. To quote Mr. McHugh: “For Americans, the world has changed. What do the law’s provisions mean for you? For starters, employer-provided insurance is an endangered species. For political reasons, the penalty the law imposes on employers who don’t provide insurance was made much lower than the cost of insurance, which will now be much higher due to the law’s insurance policy coverage mandates. This means it will make much more sense for employers to just drop their coverage and let employees go to the government ‘exchange’ for insurance.” This is just Mr. McHugh’s opinion, of course. However, after reviewing several columns written by a variety of public policy experts, I have come to the conclusion that Mr. McHugh and the others are most likely correct. ACA was meant to provide a structure and incentive for the 30-50 million taxpayers who don’t currently have health care insurance to buy insurance. The structure is the state-run exchange system with policies that appear to be similar to today’s Health Savings Accounts. The incentive is the federal subsidy that will keep the policy costs affordable. For example, a family of four with earnings of $50,000 will receive a subsidy of approximately 76% of the policy cost. A net cost of 24% may be hard to pass up. As confirmed by the Supreme Court, taxpayers will either buy insurance or they will be penalized. The subsidies will help to guarantee most will buy insurance. It appears there won’t be many individual penalties assessed. What employer “penalty” then is Mr. McHugh referring to in his commentary? Currently, there are approximately 170 million taxpayers with employer-paid group insurance. For small employers with less than 50 employees, there are no penalties for not providing health insurance to their employees. With the advent of the exchanges, it may make financial sense for these small employers to drop their insurance, encourage all of their employees to go to the exchanges, and perhaps offer to pay their employee’s unsubsidized policy amount. For employers with 50 or more employees, the decision to drop or not provide […]

THE TAX ATTIC with Jerry Coon

August 9, 2012 // 0 Comments

“We are masters of our own deception.” Bryan Boersma, Rockford Reformed Church’s Associate Pastor, started his sermon last Sunday by attributing this quote to one of his favorite authors, Frederick Buechner. Bryan actually said he thought this was a quote from Mr. Buechner, but couldn’t put his finger on it. I have read some of Mr. Buechner’s writings and while I couldn’t find that exact quote either, it certainly seems Frederick Buechner’ish to me. Bryan’s sermon was on the topic of Jesus’ parable of the Good Samaritan. As one of the factors in gaining eternal life, we are told to love our neighbor. According to Bryan, how we define loving our neighbor is exactly where we are the masters of deceiving ourselves. In fact, we can be downright selective in defining who we want to love and how we want to love that person. In the parable, a priest and a Levite chose to not define the person lying on the side of the road as their neighbor and since he wasn’t their neighbor, they didn’t need to love or, in this case, help him. The Good Samaritan came to the opposite conclusion, helped the beaten person, and received praise from Jesus. Bryan’s sermon was certainly thought provoking. In how many situations have I been pretty good at deceiving myself? How many times should I have helped someone and didn’t? Of course, I’m going to say to my recollection, it has never happened. I don’t believe that I’m a master at deceiving myself, but perhaps I am so good at thinking I’m not deceiving myself that I really am a master at it. Let that sink in for a moment. Thank you, Bryan, for making me consider how I define my neighbor and, in turn, how I should love that neighbor. The Patient Protection and Affordable Care Act (ACA) is an attempt by the federal government to require all people to participate in the health care system. The logic is that everyone is participating in the health care system to some extent now, but there are approximately 30 to 50 million people who don’t pay to participate because they don’t have insurance. The costs associated with the 30 to 50 million people is borne by […]