In order determine how my clients might be affected by the proposed new Premium Tax Credits under the American Heath Care Act (AHCA or Trumpcare) introduced by the Republicans in March 2017, I compared the current income based Premium Tax Credits under the ACA to the new age based tax credits of the AHCA. On average, my clients included in the comparison will lose $157 per month to help pay for their health insurance. Young individuals, under 30 years old, have the smallest change of premium tax credit under the age based rules. Within my clients, people over 55 year old will get hit the hardest losing $200 to $400 per month in premium tax credit assistance.
California Insurance Commissioner Dave Jones slammed President Trump’s Executive Order relaxing enforcement of the Affordable Care Acts provisions as potentially destabilizing to the health insurance market.
With all the discussion about congress repealing the Affordable Care Act, there is confusion over what exactly is an Obamacare health plan. Some people think the federal government is dictating the type of health plans that must be sold to individuals and families. It is up to each state to set the rules for their health insurance plans. The federal government under the regulations of the Affordable Care Act (ACA) stipulates what type of health plans are eligible for the Premium Tax Credits that make health insurance affordable for individuals and families.
I try to be pretty pragmatic when it comes to presidential elections. Regardless of the promises made by any candidate, we rarely see any real change in the U.S. with the election of a new president. However, Donald Trump ran on a platform to repeal and replace Obamacare. Since 90% of my income comes from enrollment generated by the Affordable Care Act, I am facing a drastic reduction of my income if Trump fulfills his promise.
Under the new GOP presidency and congress Obamacare looks to be repealed and the replacement to emphasize Health Savings Accounts. The economic rationale for Health Savings Accounts (HSAs) is that when consumers pay for their health care out of the accounts, they will drive down the cost of health care by favoring the least cost procedures. Unfortunately, HSAs without price transparency for the consumer does nothing to bring lower prices or efficiency to the market place. HSAs in our current market place are just scams.
For the first time in my life I can commiserate with people who are losing their livelihood because of a government action. Just as some workers have been displaced because the government outlawed a product, changed an environmental regulation, or enacted a trade deal that smothered their industry, I too am on the receiving end of government legislation that will decimate my income. If Obamacare is repealed and the subsidies that make health insurance affordable for millions of Americans ceases, I will lose 90% of my clients.
Some individuals and families who purchased their health insurance through a government exchange like Healthcare.gov or Covered California may be subject to the Penalty for Underpayment of Estimated Tax. The underpayment penalty is triggered when the federal income tax due is less than 90% of the previous year’s tax liability. If a tax household received thousands of dollars of the monthly Advance Premium Tax Credit (APTC) subsidy to lower their health insurance premiums, but earned too much taxable income to actually qualify for the Premium Tax Credit, the tax payer has to repay the entire subsidy. This repayment amount could easily trigger the underpayment penalty.
Because of all the rhetoric from Republican Presidential contenders about repealing Obamacare I’ve fielded many calls from people wondering if Covered California will survive a Republican President. The fear instilled by the shrill comments of conservative politicians that hate the Affordable Care Act (ACA) is that families who rely on the premium assistance provided by Obamacare through Covered California will suddenly end if a Republican is elected President.
Even those people who hate Obamacare come running to it when they need help. A person who contacted me to clarify that he could enroll in an Obamacare plan because his Christian health care sharing ministry wouldn’t cover pre-existing conditions shows how people use these sharing ministries to dodge Obamacare and reveal their hypocrisy when they do need real health insurance.
Health Net notified all their California agents by a letter dated January 29th, that effective March 1, 2014, they will slash the sales commission by over 50% on four of their five individual and family plans offered in California. This further reduction in compensation for agents since the ACA was passed continues to make customer service oriented health insurance agents a “family of dinosaurs” who will quickly become extinct.