#DM7 Article: #Obamacare Coverage: “Play the game” (aka lie)

This is a reposting of my most recent Magnificent 7 article at Da Tech Guy Blog:

#Obamacare Coverage: “Play the game” (aka lie)

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By A.P. Dillon

My fellow Magnificent 7 writer, Linda Szugyi, started the week at Da Tech Guy with an article called Peas in a pod which briefly talked about how spam filters have saved all of our inboxes from blowing up and then moved into one that didn’t get caught in the spam filter: An Obamacare advertisement.

The Peas in a pod article goes on to talk about how the ad is a scam and well, so is Obamacare. This is the perfect segue for my article today, which is about yet another Obamacare scam problem. That problem is job changes, tax implications and how Obamacare and the IRS handle that. Or rather, how the IRS and Obamacare don’t handle it.

Reader Tim Wohlford emailed me with his story and I now present it to you. Wohlford is a North Carolina citizen who described himself to me as having sold health insurance at one time and “Donated a total of $1 in my lifetime to the GOP, but did contribute in the MI-7 Congressional race to defeat a Dem who voted for ACA.” Wohlford is from Morrisville, North Carolina — a suburb of the Research Triangle Park area near Raleigh.

Wohlford has an op-ed he shared with me that is posted at HPE.com where he describes the hole in coverage that is likely afflicting many people like himself. The letter is short, so I am posting it here in full with his permission. Emphasis added is mine:

One of the biggest reasons why people don’t have health insurance is due to job change. Either the person loses coverage because they are recently unemployed, or they’re waiting for the new coverage to kick in. Around 30 percent of the estimated 45 million uninsured are in this situation. So, you’d think that the Affordable Care Act (ACA) would’ve taken great pains to address this situation. Sadly, it made matters far worse.
The official program for recently terminated employees to keep their coverage is called “COBRA.” However, many COBRA bills are for $400/month or more, and let’s face it — if you’re suddenly living off of unemployment insurance, you’re not likely to make COBRA payments.
Under the ACA, the unemployed supposedly can buy an individual plan through the individual Healthcare Exchange. If they qualify, they get a “tax credit” (subsidy) for most or all of the cost of a Bronze Plan. At least, that’s the plan.
In my case, a Bronze Plan costs $387/month. The subsidy to pay for that is based either on what I made while I was working, or what I claim I’m gonna make in 2014, NOT on what I’m making right now — which is zero since my unemployment ran out. I made a good living in 2012 (the year they ask about), and I don’t anticipate being unemployed most of 2014 either.  Since I made more than $46,000 in 2012, and anticipate making at least that much in 2014, I get no subsidy. And of course, I can’t afford the $387/month.
I could just “play the game” (aka “lie”) and say that I’m only gonna make $11,500 in 2014, and get the full tax credit so I can afford the coverage. This is what my friends who are loyal ACA fans tell me I would do if I was “smart.”
However, if one earns more than what they forecast, the IRS will come back for the subsidy. In my case, if I did what my friends suggest I’d probably owe around $5,000 in 2015. This situation is kinda like wetting the bed: One problem was solved, but a bigger one was created that demands attention and is pretty messy.
I used to have a better option.

Before ACA I could buy a catastrophic plan for $89/month. Now, for people my age, such plans are “illegal” under ACA. Blue Cross Blue Shield of NC (BCBS-NC) wouldn’t let me keep my plan after December 31. (I did find a “temporary” plan that isn’t ACA-legal these days, but it costs 50 percent more, covers less than the old plan, and only lasts a few months.)
Let me restate my point more pointedly to the ACA apologists:  It wouldn’t have taken much thought to fix this problem. So I have to ask — was this just stupidity, or is there some reason why 30 percent of the uninsured were forgotten in the ACA? And most importantly, when are you gonna fix it?

Shorter: I can get coverage I can afford if I lie.

Wohlford and I had an email conversation about this article he wrote. These are some of  his initial comments to me that were not included in his article but need to be pointed out:

When you’re unemployed, COBRA is supposed to take care of your health insurance.  But let’s be honest, precious few people can afford COBRA payments while unemployed.

The alternative under ACA is to get a Bronze plan.  However, this has several problems:

1.  You start your deductible all over again (something I didn’t mention in that Letter to the Editor)

2.  The subsidy is based on what you made while working, or what you project to make (which assumes you’re gonna be working again?).  So most people won’t qualify for a subsidy.

3.  If you “play the game” (aka “lie”) to get a subsidy so you can afford health insurance, you’re on the hook to pay it all back the following April 15.  In a worst-case scenario, this might be as much as $5000 in tax liability.  Certainly it isn’t hard to imagine that people will be presented with $1000+ in additional taxes if they simply under-estimate their income.  

Of course, getting a short-term catastrophic policy is no longer an option, no matter what Obama says –BCBS-NC won’t offer me that plan anymore, if for no other reason.

This income tax liability is a huge problem — and from what I hear, Obama knows it.  And so do the Dems.  But they just aren’t talking about it (and let’s face it, it’s not a very sexy story, is it?).

Apparently it’s not very sexy to the media. So wait,  where is the NC media on this? *Crickets*  Local media outlet WRAL didn’t investigate, but instead chose to hold a phone bank and seemingly playing the role of an Obamacare Navigator.

#ICYMI => @WRAL‘s Hard Hitting #Obamacare Navigator Investigation http://t.co/ca1vwq7sIr #ncpol #ncsen #mediabias

— LL1885 – A.P. Dillon (@LadyLiberty1885) March 5, 2014

Also in that email conversation, he expressed a few questions that are probably pertinent, definitely important and in one case, rather pointed with regards to NC Senator Kay Hagan. Those comments are below.

Issues from my point of view:

– Why in the HELL ACA didn’t address the entire unemployed person thing, when (since at least the 1970’s, when I studied health insurance) 1/3 of all uninsured are that way due to job change?  I mean, it doesn’t take a rocket scientist to figure out any number of fixes for this one.  It’s like ACA wasn’t meant to solve the issues that were raised or something (ahem)?

– Do people who get “subsidies” know that they’re potentially on the hook for every dime of that “subsidy”?  When you’re broke you simply say “I’ll worry about that tomorrow” but then tomorrow DOES come.  Do people understand that if they get a job, make 1 dime over the max, that they’ll be on the hook for every dime of “subsidy”?  And in fact, are on the hook if they make more than they “guess” they were gonna make when they signed up?  

– I understand that Obama knows about this, and there is some discussion about waving those paybacks.  Is that true?  Let’s get Kay and the rest of the Dems to demand that Barry O give us an answer.  Obviously if he waives those fees during the year he invites massive fraud, so I don’t think he can do this before the election.

– Kay Hagan’s office has been woeful on ACA help.  Then again, her constituent services have always been woeful while in the Senate.  I watched a GOP Senator in Michigan, who had horrible services, get booted out by a Dem who had great constituent services while a state senator.  And in fact the GOP has barely put anyone up against her in the last 2 elections, partially ’cause they themselves get helped by her office!  Kay’s staffer told me to “Call the White House” on one occasion… and “Call the IRS” on another.  No followup, no letter expressing concern, NOTHING beyond that.  I’m saying that this WILL be a factor in the next election.  Kay, and every other Senator — certainly every DEM supporter — should’ve had subject matter experts ready to go when this rolled out. 

All good points and questions. All valid. The comment on Kay Hagan is pretty scathing, but she ducked the President, so it’s clear she has no problem dodging her own state’s citizens.

What Tim is going through here is probably happening to a lot more across NC. So how is the administration dealing with the plethora of problems that are riddled throughout Obamacare? Delay after delay — with no Congressional action of course. The latest round? Purely political move to try to save 2016 since Obama knows 2014 is lost. The individual mandate is now delayed? Via JoshBlackman.com:

The WSJ reports that the Administration has quietly buried in a PDF (rule by blog post you know) a rule that extends for two years a waiver from the individual mandate for those claiming a hardship exemption (basically health insurance is too expensive because of Obamacare). Is this right?

ObamaCare’s implementers continue to roam the battlefield and shoot their own wounded, and the latest casualty is the core of the Affordable Care Act—the individual mandate. To wit, last week the Administration quietly excused millions of people from the requirement to purchase health insurance or else pay a tax penalty. This latest political reconstruction has received zero media notice, and the Health and Human Services Department didn’t think the details were worth discussing in a conference call, press materials or fact sheet. Instead, the mandate suspension was buried in an unrelated rule that was meant to preserve some health plans that don’t comply with ObamaCare benefit and redistribution mandates. Our sources only noticed the change this week.

That seven-page technical bulletin includes a paragraph and footnote that casually mention that a rule in a separate December 2013 bulletin would be extended for two more years, until 2016. Lo and behold, it turns out this second rule, which was supposed to last for only a year, allows Americans whose coverage was cancelled to opt out of the mandate altogether.

In 2013, HHS decided that ObamaCare’s wave of policy terminations qualified as a “hardship” that entitled people to a special type of coverage designed for people under age 30 or a mandate exemption. HHS originally defined and reserved hardship exemptions for the truly down and out such as battered women, the evicted and bankrupts. But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you “believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy” or “you consider other available policies unaffordable.”

This lax standard—no formula or hard test beyond a person’s belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that “you experienced another hardship in obtaining health insurance,” which only requires “documentation if possible.” And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one. I was waiting for the individual mandate to be delayed.

And this looks like it is it.

In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one. WOW.  So great, it’s almost nearly totally repealed by the President whose signature law it is. Read the rest.

This seems apt to close with:

If you enjoyed this article, you should really check out other pieces written by Da Tech Guy’s Magnificent Seven writers and maybe hit that tip jar!

A.P. Dillon (Lady Liberty 1885), is a Conservative minded wife and mother living in the Triangle area of North Carolina. A.P. Dillon founded the blog LadyLiberty1885.com in 2009. After the 2012 election, she added an Instapundit style blog called The ConMom Blog. Mrs. Dillon’s writing, in addition to Da Tech Guy’s Magnificent 7, can also be found at StopCommonCoreNC.org, WatchdogWireNC and WizBang. Non-political writing projects include science fiction novellas that are, as of yet, unpublished. Her current writing project is a children’s book series.

About A.P. Dillon

A.P. Dillon is a freelance journalist and is currently writing at The North State Journal. She resides in the Triangle area of North Carolina. Find her on Twitter: @APDillon_
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