Obama, Healthcare Reform and the IRS as Enforcers of Mandatory Healthcare Coverage

Fifty-five speeches this past year from Obama on healthcare reform and how it will bring about needed changes. One change few Americans are aware of in Obama and the Dem’s healthcare reform bill: Every American will be mandated to provide proof of healthcare insurance to the federal government and the role of its enforcer, the IRS. Today in an interview with Newsmax, House Minority Leader John Boehner spoke about the new “role” of the IRS:

He (Boehne) also points out that there is a $10 billion appropriation for the IRS so the agency can hire up to 16,000 new agents to enforce provisions of the healthcare bill. They would check to make sure Americans bought health insurance or paid a fine if they didn’t, and check on employers to make sure they complied with the employer mandate or paid the $2,000 per person fine if they haven’t.

Ten billion in taxpayer funds to be used to hire new federal government employees. Employees whose task will be to ensure each and every American has proof of healthcare insurance. Each and every American would include the estimated 41% of the population who currently don’t have to file an income tax return.

In 2006, The Tax Foundation reported “roughly 121 million Americans” or “41% of the population” do not file a tax return. Those days, if the bill passes, are about to end. Not only will you have to send in an income tax return but you’ll also have to file, along with the return, a proof of healthcare insurance form or forms if you and your spouse have separate coverage. Same for the kids, you’ll have to prove they too have coverage. Failure to file proof and you’ll be hit with a fine from the IRS, an agency not known for its “kindness” or, “understanding”.

According to MSNBC, the starting date when the IRS will begin to levy penalties or fines against those who fail to provide proof of healthcare coverage is 2014 with a “starting” penalty of $95. This figure sounds doable until you look at the fine or fines or penalties which will levied by 2016, up from $95 to $695 or, 2.5 of your “income”. There’s no word yet as to whether there is a provision in the bill which “caps” the amount of fines or penalties levied after 2016.

Massachusetts residents, who live under “Romneycare”, healthcare reform enacted by then-Governor Mitt Romney, already face stiff penalties and fines for failure to provide proof of healthcare insurance. Massachusetts could also be a harbinger of things to come for all Americans. The following are guidelines for individual mandates from the state of Massachusetts’ Attorney General’s website:

The individual mandate is a requirement that all Massachusetts residents over the age of 18, for whom available health insurance is affordable, obtain and maintain health insurance that meets minimum coverage requirements beginning July 1, 2007.

Individuals who cannot show proof of health insurance coverage by Dec. 31, 2007, will lose their personal income tax exemption when filing their 2007 income taxes. The 2006 personal exemption is $3,850 for an individual, which translates into a tax savings of approximately $204 for an individual (5.3 percent of $3,850).

Failure to meet the requirement in 2008 will result in a fine for each month the individual does not have coverage. The fine will equal 50 percent of the least costly, available insurance premium that meets the standard for creditable coverage.

No word yet whether residents of Massachusetts will face both a federal and state penalty for failure to provide proof of healthcare coverage.

How’s healthcare reform and mandatory healthcare insurance working out in Massachusetts?

In June of 2009, a little over three years after Massachusetts enacted healthcare reform, Boston.com reported that due to the state budget crisis and a “surge of enrollment” in Commonwealth Care, the state entity which subsidizes premiums for needy residents, the state had to cut $115 million, or 12% of its budget. The side-effects of the budget cuts: People who qualified for full subsidies, an estimated 18,000 poor residents, would no longer be automatically assigned a plan and could face delays in getting care. Elimination of dental coverage for the “poorest residents”, “roughly 92,000″. A “slowing” of payments to the managed-care health insurance companies that won bids to offer insurance through the Commonwealth Care program. The upshot of “slowing payments”, “slowing enrollment growth”:

Regulators said that by slowing enrollment growth, the companies would receive less money than they had banked on when they submitted their bids earlier this year.

Slowing enrollment growth means those who are unable to enroll could face delays in getting care.

In July, the New York Times reported Massachusetts had eliminated healthcare coverage for “some 30,000 legal immigrants”.

The elimination process of those covered by the state of Massachusetts began less than four years after the state enacted healthcare reform in 2006. This month MassLive.com reported on the state of healthcare reform in Massachusetts and the role of federal subsidies which are currently keeping the cost of healthcare reform from busting the state budget:

BOSTON – The Massachusetts treasurer said Tuesday that Congress will “threaten to wipe out the American economy within four years” if it adopts a health-care overhaul modeled after the Bay State’s.

Treasurer Timothy P. Cahill – a former Democrat running as an independent for governor – said the local plan enacted in 2006 has succeeded only because of huge subsidies and favorable regulatory changes from the federal government.

“Who, exactly, is going to bail out the federal government if this plan goes national?” he asked.

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Tags: IRS, Obama healthcare reform