Tag Archives: health insurance companies

Obamacare: Taxpayers Must Report Personal Health ID Info to IRS

After recent revelations, perhaps it is time to just change the name of the IRS to the KGB or the STASI. The motto of the STASI was “the sword and shield of the party”.

Americans for Tax Reform:

The new form will require disclosure of a taxpayer’s personal identifying health information in order to determine compliance with the Affordable Care Act’s individual mandate.

As confirmed by IRS testimony to the tax-writing House Committee on Ways and Means, “taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment”.

So why will the Obama IRS require your personal identifying health information?

Simply put, there is no way for the IRS to enforce Obamacare’s individual mandate without such an invasive reporting scheme.  Every January, health insurance companies across America will send out tax documents to each insured individual.  This tax document—a copy of which will be furnished to the IRS—must contain sufficient information for taxpayers to prove that they purchased qualifying health insurance under Obamacare.

This new tax information document must, at a minimum, contain: the name and health insurance identification number of the taxpayer; the name and tax identification number of the health insurance company; the number of months the taxpayer was covered by this insurance plan; and whether or not the plan was purchased in one of Obamacare’s “exchanges.”

This will involve millions of new tax documents landing in mailboxes across America every January, along with the usual raft of W-2s, 1099s, and 1098s.  At tax time, the 140 million families who file a tax return will have to get acquainted with a brand new tax filing form.  Six million of these families will end up paying Obamacare’s individual mandate non-compliance tax penalty.

As a service to the public, Americans for Tax Reform has released a projected version of this tax form to help families and tax specialists prepare for this additional filing requirement. Taxpayers may view the projected IRS form at www.ObamacareTaxForm.com.  On the form, lines 3-4 show where taxpayers will disclose their personal health ID information.

View PDF here.

Smaller insurance companies going away thanks to Obamacare

As we have said several times before and even when yours truly wrote for his old college blog, consolidation is a goal of the progressive secular left.

What is consolidation? It is when smaller players are driven out of the market by slanted government regulations, enforcement, and taxes in favor of the biggest players who tend to be campaign contributors. It also makes controlling the economy easier as a few players are easy to monitor and control. You cannot control the economy without first controlling people, so the less people to control the better. [Smaller companies tend to contribute to Republicans – Editor.]

Forbes: Obamacare Consolidation Continues: Aetna Buys Coventry For $7.3B

Consolidation in the healthcare sector was an obvious consequence of the latest Supreme Court ruling that upheld Obamacare. On Monday, Aetna announced it reached an agreement to buy Coventry Health for a transaction value of $7.3 billion including debt in over to increase its exposure to government business such as Medicare and Medicaid.

On the market side of that issue, major companies are already in consolidation stage. Aetna’s acquisition of Coventry, for which it will pay $5.7 billion in cash and stock, is a direct consequence of the Supreme Court’s decision to uphold the individual mandate. As I wrote in the aftermath of the ruling, “in the face of it, this should be negative for major health insurance companies, as it will drive more customers at lower margins, and positive for Medicaid companies.”

Aetna was very clear in the press release, the transaction will increase its “share of revenues from government business to over 30% from 23% currently.” Coventry will add over 5 million members to Aetna’s plans, including about 4 million medical members and 1.5 million Medicare part D members. The deal also “substantially increase[s] Aetna’s Medicaid footprint, creating more opportunity to participate in the expansion of Medicaid and to pursue high acuity positions as they move into managed care.”

The Supreme Court ruling already fueled WellPoint’s acquisition of Amerigroup for about $5 billion, while last year Cigna bought HealthSpring for $3.8 billion in a push to gain exposure to Medicare patients. Markets appear to approve of consolidation in the industry, as stock prices showed on Monday.

You paid the high cost of RomneyCare in Massachusetts….

This study from the Beacon Hill (Economics) Institute at Suffolk University illuminates the disastrous results of the failed experiment known as RomneyCare and yet presidential candidate Mitt Romney continues to stand by the program.

Here are the key findings from the Beacon Hill study:

The High Price of Massachusetts Health Care Reform

http://www.beaconhill.org/BHIStudies/HCR-2011/BHIMassHealthCareReform2011-0627.pdf

We find that, under health care reform:

• State health care expenditures have risen by $414 million over the period;

• Private health insurance costs have risen by $4.311 billion over the period;

• The federal government has spent an additional $2.418 billion on Medicaid for Massachusetts.

• Over this period, Medicare expenditures increased by $1.426 billion;

• For a total cumulative cost of $8.569 billion over the period; and

• The state has been able to shift the majority of the costs to the federal government.

The federal government continues to absorb a significant cost of health care reform through enhanced Medicaid payments and the Medicare program.   Health care reform has also increased the rate for Medicare Advantage plans in Massachusetts, which has contributed to an increase in Medicare health care expenditures through prices for medical service delivery.

This is not defendable.

It gets worse. The Beacon Hill Institute did a fraud study to determine how the RomneyCare system is being “gamed”:

Massachusetts Health Care Reform Mandates: The Gaming Gamble

http://www.beaconhill.org/BHIStudies/HCR-2011/GamingMandates2011-1128.pdf

The law requires that individuals with sufficient means purchase health insurance and that businesses with more than ten employees make a “fair and reasonable” contribution toward their employees’ health insurance. Under the law, health insurance companies cannot refuse to cover individuals with preexisting conditions.  Individuals and businesses face fines if they fail to comply with the mandates.

Because the fines imposed by the law cost are often less than the cost of insurance, the law is vulnerable to the problem of moral hazard.

Individuals can game the mandate by buying insurance only upon being diagnosed as needing a non‐emergency procedure such as a hip replacement and then canceling their insurance after receiving the treatment or procedure.  Businesses can likewise game the mandate by canceling their health insurance plans and shifting their employees to newly subsidized state plans.    Massachusetts taxpayers and health insurance policyholders pick up the tab for these “jumpers and dumpers.”
The Beacon Hill Institute (BHI) has estimated the prevalence and cost of gaming the mandates.  We find that:

• In tax year 2008 (the latest data available) 26,000 individuals paid a total of $16 million in fines, while 758 businesses paid $7.1 million.

• In 2009, between 2,089 and 2,659 individuals gamed the individual mandate at an estimated cost to insurance carriers of between $29.3 million and $37.3 million.

• Between June 2006 and June 2010 enrollment in state subsidized insurance plans increased by 319,000, while the private group (employer) market was flat and the individual market increased by 83,000.

In essence, the incentives in RomneyCare, just as in ObamaCare, are backwards. They encourage people to behave in ways that maximize costs and inefficiency. This is what economists refer to as an “Adverse Selection Spiral”. Eventually the system collapses under the weight of its own costs and inefficiency.

UPDATE – Thomas Zaleski adds:

Wouldn’t it be great if you could purchase AUTO insurance AFTER you had an accident? That is PRECISELY what Romney care is. Break a leg, BUY insurance the SAME day!