New Senate Tax Bill May Raise Your Insurance Premiums Again
The latest tax bill , proposed by GOP senators, contains a tiny detail that will repeal part of the Affordable Care Act. That’s right, right after we thought Trumpcare was dead forever (we never thought about that, did we?), Here’s a smaller, tricky version.
Why now? The bill provides for tax cuts of $ 1.5 billion, so something should be canceled. It turns out that the government will actually save money – freeing it up to lower taxes – if it stops requiring people to pay fines for not having insurance . This sounds like a contradiction at first, because the penalty is revenue, and removing it would put the government in an even bigger hole. The savings are happening because if people don’t have to buy insurance, fewer people will grumble and say “okay,” I’ll just go out and buy the cheapest plan I can find on the exchanges. The government pays out subsidies to keep insurance premiums low, so by abolishing the individual mandate, it doesn’t have to pay as many of these subsidies.
As a result, premiums will rise by 10 percent, according to the CBO, over any increase that would have occurred anyway. If you buy unsubsidized custom plans, you will have to pay the bill. These changes will not affect the insurance you buy now for the next year; they will take effect one year after that.
If you get insurance on an exchange such as healthcare.gov and receive a subsidy to cover a portion of your premium, your out-of-pocket expenses will not change much at first. (This is you if your income is $ 48,200 per person or $ 98,400 for a family of four.) The rest of the ACA will remain in place, including protection from pre-existing conditions.
The real problem is that there is a mandate to have many healthy people in insurance pools. Without this, insurers may decide that it doesn’t make sense to offer plans on exchanges, and then you will have insurance options.
It’s hard to predict what will actually happen, but the opportunities don’t look good. The vote is due soon – this is another hurry up before anyone can analyze it – so if you have an opinion, call your senators.