Healthcare and Taxes May Prove How Big a Political Issue Taking Things Away May Become

Pamphlets advertising for the Affordable Care Act are seen at Sunshine Life and Health Advisors store setup in the Mall of Americas on November 1, 2017 in Miami, FL. Photo by Joe Raedle/Getty Images

Indianapolis  There’s a funny thing that happened to the Republicans as they tried to take away the healthcare guarantees embedded in the Affordable Care Act for all Americas: they made it more popular! The message they missed from citizens and voters is that they may have wanted improvements in the pricing, coverage, and general package, but they sure as heck didn’t want to do without the healthcare provided already in Obamacare.

Now after one ridiculous proposal after another the Republicans find themselves owning the problem, proving that you can’t beat a horse without a horse, and you certainly can’t beat a horse with a dead horse, which was the strategy they tried over the last year. A recent poll by the Wall Street Journal and NBC found that more than 50% of Americans would blame the Republicans for any rise in prices for health insurance and only 37% would fault the Democrats. Voters in Maine, given the opportunity to expand Medicaid in their state after the governor had vetoed expansion proposals approved by the legislature four different times, overwhelmingly approved the measure. Other efforts to put the question on the ballot in 2018 are also now moving forward in other states that could drive voters to the polls to punish any opponents of health care protection.

When they failed to get healthcare off the table, the current administration strategy has been to starve it, especially when the enrollment period opened up for only six weeks between November 1st and December 15th. The allocations for recruitment and navigation were slashed to the bone. Other executive orders from the President attempted to cut subsidies and bleed it out with other cuts. How did the public respond? A record number, more than 600,000 people, have enrolled in the early days of enrollment, according to reports from the 39 states using the federal government’s marketplace.

There’s a powerful message in all of this, and it will dangerously imperil Republicans as they continually attempt to avoid it.

The same phenomena is likely to be repeated in the wake of the Republican’s corporate-and-rich-welfare and assistance program, which they are trying to call tax reform. Majority Leader Mitch McConnell has already been forced to admit that some middle class families will pay more to help corporations and the rich, rather than receiving a break. The Senate has already backed away from some of the House takeaways like for medical deductions and certain interest deductions. None of them had the stomach to outright deny mortgage interest deductions, but even a proposal to cap them for the rich has kicked a hornet’s nest. There is a big battle coming around the efforts to deny deductions from federal income taxes for the amounts paid in state and local taxes, with many high tax, Democratic states seeing these efforts as pure political punishment. There are other issues around childcare credits. The list is endless, and each battle prolongs the war, and it’s a war the Republicans are challenged to win. In a long game it’s hard to sell a bait-and-switch claim that this is all about the middle class when in fact the middle class loses more and more each time they look at the details, while the rich and corporations make out like bandits. Add in the current scandal of the Paradise Papers revealing how the rich, corporations, and deep pocketed institutions are avoiding taxes, because they can afford to find the loopholes to the tune of hundreds of billions, while the public is being played for suckers, and where can the Republicans find to hide from the voters?

Heck, they don’t even have the votes tight within their own caucus, so they may be saved from another disaster still by a principled few in their crew among true fiscal conservatives and even fewer moderates, but as health care is demonstrating, people are watching, and increasingly it seems there will be an accounting.

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The Affordable Care Act Needs to be Enforced by the IRS Now

New Orleans   These days everyone wants to talk about taxes, I get that, and that means the IRS, right? Sure it does, but while we’re talking about the IRS let’s talk about the fact that they need to get on the stick and enforce all the laws, not just the ones they feel like, and that means assuring full compliance with the provisions of the Affordable Care Act.

It’s important to never forget that the IRS holds the whip hand when it comes to enforcing the various rules and regulations of Obamacare. For individuals who were required under the individual mandate to buy insurance, they already know this full well, because penalties are being deducted from their tax refunds to cover their penalty. Arguably that’s almost a kinder and gentler way of being dunned because they are taking money from people before they have it their hands, get a good feel for it, and nurture any sort of loving attachment. In some cases, as we’ve pointed out before, for lower income workers it’s a better deal to pay the penalty than to pay a ridiculous amount of your annual income for high-deductible insurance providing bare minimum benefits by lower waged, service sector employers.

So the IRS is good at that part of their job under the Affordable Care Act, because the money is already sitting in the Treasury on a taxpayer’s account. Where they have been dilatory is in enforcing the mandate on employers with 50 or more employees who were required to provide insurance and decided to be scofflaws and just not do it. According to the Wall Street Journal, the IRS finally has sent out thousands of letters to employers going back to 2015 to collect penalties for noncompliance. It adds up, too. According to the Journal, “The Congressional Budget Office estimated in 2015 that employers would owe $9 billion in fiscal 2016 and $13 billion in fiscal 2017.” Maybe that’s not larger than their collective bar bill, but it’s big money and worth the climb to reach out and pull back into the Treasury. Remember as well, these businesses were stiffing their workers on their healthcare, and that’s invaluable.

That’s all great in my book, but there’s more to be done. The IRS is also supposed to be riding hard on nonprofit hospitals and whether they are really justifying their tax exempt status. This was an amendment generated by Republican Senator Chuck Grassley from Iowa, so it almost seems like a bipartisan requirement. There’s a death penalty involved, because the hospitals could lose their exemption by having neglected their charitable purposes. ACORN and Labor Neighbor Research & Training Center with the help of interns from Tulane University in New Orleans and the University of Ottawa have been examining hospital IRS 990s for years. We have found huge billionaire dollar medical institutions, many who claim to be good community citizens, only recording 1 to 2% for charity care, even when the average for such institutions nationally is about 4%. A back of the envelope estimate we have made is that an additional half-billion dollars in free care would be available for lower income families in Texas, Louisiana, and Arkansas, if all nonprofit hospitals even hit the minimum national standard.

The IRS needs to do all of their job under the Affordable Care Act. After years of hammering individuals, it’s good news that businesses are finally being called to account, but it’s past time for hospitals to either be charitable and really spend their money to provide care for lower income families or stop pretending and pay taxes to help pay for the Affordable Care Act.

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