The fallacy of "GOP healthcare bill better for Medicaid recipients"

[Honeycombe8]

Saw TX rep on MSNBC state that the GOP healthcare bill would actually help Medicaid or low income people get healthcare more than Obamacare.

Bear with me while I explain why that is a false statement.

In Texas, which did NOT expand Medicaid, you can currently get Medicaid ONLY if you are disabled and have kids (there are other requirements, too). So if you earn, say, $24,000 a year and are a single adult, no Medicaid. If you gross $24k, you likely will pay no taxes, after your deductions. (A sole person household.)

If you made $24k, you didn't qualify for Medicaid, but you COULD buy an individual Obamacare policy on the exchange, and get an immediate subsidy that paid most of the premium for you, requiring you to pay little or nothing as a contribution to the premium. Let's say you end up paying $100/mo. for a good silver policy, getting $8,400 a year subsidy from the govt.

Under the GOP plan, you would have no exchange to buy a policy. Instead, you have to shop on the open market & buy something that you can afford. But all you can afford is maybe $200/mo. (10% of gross income). There is no insurance for that amount, so you can't buy insurance and have no health care.

Oh, wait .... there are tax credits! But, someone making $24k probably will not pay enough, or any, tax dollars to use the "credit" on. Even if he did, the person can't afford to pay the premium up front., without the immediate subsidy like Obamacare provided.

So the tax credits are not useful for the poor and the lower middle class, since they can't pay for the ins. up front.

I also don't buy into the "huge premium cuts!" meme. I have seen no evidence that that will happen, and I have personally never seen an ins. co. cut its premiums because it made too much profit! ("Here's a check, Honeycomb! We made too much money this year!&quot Once a company has a taste of big bucks, they are loathe to give that up w/o regulation. They would have to cut premiums a LOT to be affordable. If over 50 yrs old, person in my state can expect to pay at least $750/month for an Obamacare policy. That would be 1/3rd of this person's income, at an income level where every dollar is important for other necessities (not expendable income), like groceries, household items, car maintenance, gas, car ins., OTC meds, car registration or public transportation, clothing for work, utilities, phone, etc.

[spanone]

1. that's a lie.

how can reducing their benefits help them? silly lie

[Honeycombe8]

2. What is?

[spanone]

3. what the rep said.

[Honeycombe8]

4. Yes, of course it is. Your response sounded like my response to him was a lie. nt

[The_Casual_Observer]

5. They want to eliminate the tax that supports the ACA that only rich people pay.

they will say and do anything to make it happen.

[wiggs]

10. What's stunning is how much money a 3.9% capital gains tax generates. Tells us something about

how much money the extra-wealthy people are making just off the money they have that is not needed for expenses.

[Hoyt]

6. Right on. One correction, they get the amount of the tax credit no matter their income.

But even if they find a policy where they can afford premiums, the rest of your OP is exactly right, they probably couldn't afford deductibles and copays.

[Honeycombe8]

7. I don't think anyone with low income can afford to pay the premiums.

If I made $24k, I couldn't afford $800/month for a plan (my plans start at $800 for the lowest bronze plan). That would be almost 50% of my $24k income. No way I could afford anything more than $180/month...and there are NO policies (pre or post Obamacare) that cost that for someone over a certain age. Now, for a person in her twenties, there are, I think.

But this person would have been up a creek before Obamacare, too, with inability to buy insurance. So she has to look for a job that provides insurance coverage. Can't get health care any other way with that income in TX.

Not sure what you mean by getting a tax credit, anyway. You mean the govt will send a check for that amount, as reimbursement, even if the person hadn't paid that in taxes? That's not really a tax credit. That's a subsidy reimbursement, not tied to income taxes paid.

[Hoyt]

8. Yes, government will send check because credit is "refundable." It's a bit more complicated though.

As deplorable as GOPers are, I don't think they will change the tax credit mechanism to screw lower income people who don't owe enough income tax. Of course, they'll screw them in other ways.

It's too early to find anything written specific to the Senate Plan, but here is how it works under ACA. You can choose to have the tax credit paid to the insurance company or you can take it as a offset to taxes owed, or "refund" if your tax liability isn't enough.

Here's how it works under ACA from IRS site --

What is the premium tax credit?
The premium tax credit is a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange, beginning in 2014. The size of your premium tax credit is based on a sliding scale. Those who have a lower income get a larger credit to help cover the cost of their insurance. When you enroll in Marketplace insurance, you can choose to have the Marketplace compute an estimated credit that is paid to your insurance company to lower what you pay for your monthly premiums (advance payments of the premium tax credit, or APTC).

Or, you can choose to get all of the benefit of the credit when you file your tax return for the year. If you choose to have advance payments of the premium tax credit made on your behalf, you will reconcile the amount paid in advance with the actual credit you compute when you file your tax return. Either way, you will complete Form 8962, Premium Tax Credit (PTC) and attach it to your tax return for the year.

The credit is “refundable” because, if the amount of the credit is more than the amount of your tax liability, you will receive the difference as a refund.

If you owe no tax, you can get the full amount of the credit as a refund. However, if advance credit payments were made to your insurance company and your actual allowable credit on your return is less than your advance credit payments, the difference, subject to certain repayment caps, will be subtracted from your refund or added to your balance due. . . . . .

3. How do I get advance payments of the premium tax credit?

When you or a family member applies for Marketplace coverage, the Marketplace will estimate the amount of the premium tax credit that you may be able to claim for the tax year, using information you provide about your family composition, projected household income, and other factors, such as whether those that you are enrolling are eligible for other, non-Marketplace coverage. Based upon that estimate, you can decide if you want to have all, some, or none of your estimated credit paid in advance directly to your insurance company to lower your monthly premiums. If you choose to have advance credit payments made on your behalf, you will be required to file Form 8962 with your income return tax to reconcile the amount of advance payments with the premium tax credit that you may claim based on your actual household income and family size.

If you do not opt for advance credit payments or the Marketplace determines that you were not eligible for advance payments at the time of enrollment, you may be eligible to claim the credit on Form 8962 when you file your tax return for the year, which will either lower the amount of taxes owed on that return or increase your refund.

https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premium-tax-credit




Whatever, the "tax credit" ain't enough and there is no help for deductibles and copays for low income people. That's just wrong.

[Honeycombe8]

9. I know how subsidies work under the ACA. I get a subsidy.

What's unclear to me is how the GOP bill handles that. Under the ACA, I can get the subsidy up front, to pay the ins. co, by buying thru the exchange. If it weren't for that, millions couldn't buy the policies in the first place. Reimbursement doesn't work, if you can't pay the premiums in the first place.

So I don't know if that's the way the GOP bill treats the subsidies, or whether it's an after-the-fact subsidy, which is not that useful for low income people.

If the GOP bill provides subsidies at the point of purchase, that's much better, and will enable millions to buy ins. Depending on the amount of the subsidies.

Thanks.