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Obamacare: A Deception

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Affordability rates (the percentage of your MAGI the government has decided you can afford to pay for insurance) are based on boardroom formulas which don't take particular individual needs into account such as housing costs, property taxes, debt, education, transportation, retirement savings, etc. Also, FPL Guidelines are standard across the country and do not take into consideration those who reside in a more expensive region or vice versa. They are one-size-fits-all with the exception of Alaska and Hawaii. See topic 8 in this lesson to learn about exemptions.

Check out what self-proclaimed health care expert Jonathan Gruber says about affordability and get a load of all the "formulas." According to Mr. Gruber, you may be having too much fun in life and need to get serious, buy health insurance and live under a rock in order to pay for it. He was involved with Romneycare in Massachusetts and was also Mr. Obama's go-to man under a no-bid contract. Per a bar graph on page 6 of a report prepared by Stan Dom for the Urban Institute, subsidized plans under the ACA are estimated to cost 2 to 3 times more (give or take) than the subsidized plans under Romneycare. Per several surveys during the years that Romneycare has been in effect, many low and modest income MA residents have had difficulty paying for those plans and the out-of-pocket costs to use the insurance, particularly chronically-ill residents.


Perhaps you recall hearing politicians, including Mr. Obama, say if you can't afford to pay for health insurance, the government will help you. That was one of the key talking points repeated non stop. We just went over the help part -- the tax credits. Now we'll look at what Mr. Obama, et al, didn't tell you which is important to understand because it could cause you some serious financial distress.

Remember the "advance payment of the tax credit" in topic 2 of this lesson? Well, essentially, that was a loan from the government which was paid in advance to the insurer on your behalf when you purchased your plan, and, as you know, loans have to be paid back. So, when you file your tax return for the year you received your "advance tax credit" (your loan), if your income has changed, you have to settle this with the IRS. Here's the deal:

a)  If your MAGI is higher and the increase puts you into a higher FPL, you may have to pay back a portion or all of the tax credit because it was based on a lower MAGI. In other words, you could have an additional tax liability on top of the income taxes you already paid (or still owe) because you received a higher tax credit than you were entitled to.

b)  If your MAGI is lower and the decrease puts you into a lower FPL, a refund could be coming to you because you were eligible for a larger tax credit than the government paid to the insurer. In other words, you overpaid for your portion of the insurance premium.

c)  If you earned a bit more or less, but your extra earnings or loss didn't bump you into another FPL, you're home free.

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To figure out your payback, you will have to enter the relevant figures on the reconciliation page of the tax return. Changes in filing status such as the number of people in your household will also have an impact. For those of you who marry or divorce, the rules for the payback amount as well as the amount of the tax credit you are eligible to receive will make your head spin -- the computation includes pre- and post-marriage FPL and uses the highest FPL of the two people involved. Ditto for divorce.

Here is one of the reconciliation explanations in IRS-speak: Your liability for an excess tax credit you received must be reflected on your current year income tax return subject to a limitation on the amount of such liability.

Oh! Limitation on the amount of such liability. That sounds good.

Let's take a peek at the payback limitations on record at the time of this writing. "At the time of this writing" are the operative words because the cap has been increased twice since the ACA was signed into law. The original payback was capped at $400 for families under 400 percent FPL and $200 for individuals. We'll skip over the first increase. The story behind the second one is that a particular revenue stream was removed from the original law, so something had to be done to compensate for this lost money. Thus, an amendment was passed that increased the cap using a sliding scale, thereby putting a huge financial burden on the backs of the very people the ACA claims to help. In other words, tag, you're it. You are the cash cow.

Here are the current sliding-scale caps:

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If the household income (expressed as a percent of poverty line) is:
--less than 200 percent, the applicable dollar amount is $600
--at least 200 percent but less than 300 percent, the applicable dollar amount is $1,500
--at least 300 percent but less than 400 percent, the applicable dollar amount is $2,500

Effective date: the amendment made by this topic shall apply to taxable years ending after December 31, 2013. Very truly yours, House Ways and Means Committee.

The name of this bloodsucker is The Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011.

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Dr. Roberts was Assistant Secretary of the US Treasury for Economic Policy in the Reagan Administration. He was associate editor and columnist with the Wall Street Journal, columnist for Business Week and the Scripps Howard News Service. He is a contributing editor to Gerald Celente's Trends Journal. He has had numerous university appointments. His book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is available here. His latest book,  How America Was Lost, has just been released and can be ordered here.

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Obamacare is the greatest gift given to the parasi... by 911TRUTH on Tuesday, Feb 5, 2013 at 9:27:51 PM
the economy will crash, most people will say eff t... by Mark Adams JD/MBA on Tuesday, Feb 5, 2013 at 10:01:23 PM
You have eyes to see and you use them. Thank you f... by Ron Brassfield on Thursday, Feb 7, 2013 at 6:42:05 PM
The neo Liberal fascists who support Obummer and h... by Davey Jones on Tuesday, Feb 5, 2013 at 10:46:27 PM
It's tough when you find out how blinkered what I ... by Ron Brassfield on Thursday, Feb 7, 2013 at 6:52:01 PM
In 1948 The United Nations adopted The Universal D... by E. J. N. on Wednesday, Feb 6, 2013 at 12:47:38 AM
" circumstances beyond his control."Difficul... by Doc McCoy on Wednesday, Feb 6, 2013 at 2:59:39 AM
"Everyone has the right to a standard of living ad... by E. J. N. on Wednesday, Feb 6, 2013 at 1:02:18 PM
It would be turn around Corporate Empire and the F... by Michael Dewey on Wednesday, Feb 6, 2013 at 4:58:06 PM
I also have a conviction that America would have h... by Ron Brassfield on Thursday, Feb 7, 2013 at 6:59:01 PM
I will never understand why it infuriates some peo... by David Smith on Wednesday, Feb 6, 2013 at 5:24:34 PM
... have an aversion to higher taxes. The European... by Ron Brassfield on Thursday, Feb 7, 2013 at 7:20:09 PM
Thank you.... by Ron Brassfield on Thursday, Feb 7, 2013 at 6:54:05 PM
I'm not buying a thing.  They can screw thems... by Lester Shepherd on Wednesday, Feb 6, 2013 at 6:28:09 AM
... don't give them the satisfaction.... by Ron Brassfield on Thursday, Feb 7, 2013 at 7:14:53 PM
If we don't fix Healthcare, the price will doubl... by Michael Dewey on Wednesday, Feb 6, 2013 at 7:14:06 AM
Every insurance worker knows that he larger the po... by Ron Brassfield on Friday, Feb 8, 2013 at 8:32:15 AM
Mitt Romney, or Sarah Palin?... by John Sanchez Jr. on Wednesday, Feb 6, 2013 at 7:23:16 AM
... won't it? Once I saw, back in 2010, that singl... by Ron Brassfield on Thursday, Feb 7, 2013 at 7:03:28 PM
Obama's To Do List Only A Magician Could Master&nb... by Lance Ciepiela on Wednesday, Feb 6, 2013 at 11:42:29 AM
"Obamacare has no cost controls. There is nothing ... by David Smith on Wednesday, Feb 6, 2013 at 5:19:02 PM
While I agree that the system of financing the cre... by David Smith on Wednesday, Feb 6, 2013 at 5:20:01 PM
... the most positive aspect of the development I ... by Ron Brassfield on Thursday, Feb 7, 2013 at 7:13:35 PM
Judging by your research...maybe we should have le... by Edward H. on Sunday, Feb 10, 2013 at 8:39:15 PM