Protecting Consumers from Conflicts between Taxes and Healthcare

02262013_Deficit_Taxes_slideshowNew Orleans Income tax filing time is when the old expression comes to mind that the only things we can’t escape are death and taxes.  True that, but, frankly, I’m a little uncomfortable when those things get put too close together and in the hands of big private, profit maximizing companies, specifically the H&R Blocks, Jackson-Hewitt’s, and Liberty tax preparation giants, and I bet money that’s what they are thinking as they look at how to squeeze themselves into the seams of the Affordable Care Act.

We’ve always understood that there was going to need to be a bright, flashing warning light around the enforcement and penalties that come with the mandatory enrollment requirements of Obamacare and the role of the Internal Revenue Service in balancing the books at the end of the day.  No insurance means that the IRS has to collect the penalty, rising in each successive year, from everyone when they settle up every April.  The penalty is only a part of the play, since the other calculations required of the Service will be figuring out whether or not your estimated income, when you enrolled and qualified for potential subsidies and cost sharing benefits, is accurate or not.  Guessing wrong means that you will need to settle that problem with the taxman.  Good economic fortunes like a big raise at work or a new job or whatever, might mean that you could owe big time paybacks on your subsidy even after your refund check is drawn and quartered.

Not infrequently, it will be a tax preparer that is sitting next to you working out the problem before it sails with your filing to the nearest IRS office, and it should be no surprise that that could mean big money for H&R Block and its wannabes.  They seem to get it. Even in stories about healthcare advocates and assisters, many of them are quoted practicing a public service announcement of sorts by reminding people that health insurance is a mandate and they need to get with the program.

Won’t the next step be for them to also start giving – and charging – their customers for advice on what insurance policy to select?  Why not?  And, what prevents them from having interests and agreements with various insurers?  There are no requirements in any law or regulation that would prevent conflicts of interest other than their good intentions, which are often pretty suspect, given some of their past and present temptations around predatory practices.  The big boys might stutter step in this direction rather than leaping into it, because they have so many fish to fry, but the mom-and-pop tax preparers with less training and support will be sorely tempted not to partner with healthcare insurance providers, and what’s to stop them.

I read recently a prominent Obamacare enrollment advocacy group, likely in some spirit of desperation, suggesting that maybe the whole enrollment process should be pushed to align with tax filing time to make it easier to get the help of tax preparers.   Yikes!  That’s a terrible idea!!!

There’s a high, sharp curve in the road coming and we’re barreling down on it without any guardrail or warning signs along the way, but for god sakes we need to look out, because this will be nothing but mess and mischief, unless some protections are put in place, and right now, there are none.

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