ACA trouble. Appeals court rules subsidies illegal

[Fermion]

Many opponents firmly believe that this law is disastrous for America and think anything that will undermine it such that it can eventually be overturned is a valid response. Thus the refusal by multiple states to accept the Medicaid expansion despite that fact that the Fed picks up the full tab now, 90% later. Those states punish their own poor while helping to pay the bill for the other states that that do accept Medicaid all in an effort (maybe a principled effort) to undermine and kill off the ACA. The DC Circuit decision gives those same states a much greater tool to undermine the law. They will take it. I haven't seen any evidence that opponents are willing to join in efforts to modify the ACA to improve it. I suspect that would only happen if, after many years, it becomes clear that nothing will work to kill it entirely.

People will start to vote with their feet, eroding the tax base of states who choose not to participate in ACA and get the federal benefits. One by one these states will cave as they see big budget gaps.

 

[aaronc879]

People will start to vote with their feet, eroding the tax base of states who choose not to participate in ACA and get the federal benefits. One by one these states will cave as they see big budget gaps.

The lower income group of people don't have the resources to move to another state. They will likely just go back to going without insurance.

 

[marko]

People will start to vote with their feet, eroding the tax base of states who choose not to participate in ACA and get the federal benefits. One by one these states will cave as they see big budget gaps.

By definition, those who qualify for subsidies aren't the biggest contributors to the tax base; plus, I'm guessing that most of them didn't have HC until six months ago, so I suspect they'd just go back to their original modus operandi rather than leave the state.

Seriously, I believe that this is all a bunch of noise; in the end there'll be some addendum, nothing will change and everyone will have ACA.

 

[Fermion]

The lower income group of people don't have the resources to move to another state. They will likely just go back to going without insurance.

I didn't mean the people who were lower income would vote with their feet and leave the state, I meant people who were upper middle and high income would leave. They would leave because the state would be forced to raise taxes if it is contributing to a federal healthcare system but not getting the benefits of that system for its citizens.

 

[nash031]

Even in the unlikely event that the subsidies are ruled illegal, it is even more unlikely that the Federal Government tries to recoup subsidies from taxpayers. I would say it's as likely as a plague of locusts devouring the inhabitants of New York City tonight.

This "bump in the road" for ACA will disappear because whether you agree with the premise of the law or not, the few million Americans who are receiving subsidies like those subsidies. As another poster mentioned, no politician is dumb enough to try to take money from voters in an election year, IMO.

 

[easysurfer]

While watching the nightly news last evening, I was surprised there was no mention at all about the appeals court ruling. So, maybe it's just too early to see what impact, if any will turn out. For me, no sense to dwell on this as the dust settles.

 

[youbet]

People will start to vote with their feet, eroding the tax base of states who choose not to participate in ACA and get the federal benefits. One by one these states will cave as they see big budget gaps.

I don't think the subsidy folks kick much into the tax revenue pool. I thought getting subsidies was based on needing help to pay for life's basics, such as health care.

 

[Chuckanut]

While watching the nightly news last evening, I was surprised there was no mention at all about the appeals court ruling. So, maybe it's just too early to see what impact, if any will turn out. For me, no sense to dwell on this as the dust settles.

PBS had a short discussion of both of yesterday's rulings and the possibilities of when and if the Supreme Court might take it up.

 

[MichaelB]

There are two subsidies. The smaller one is obtained directly by taxpayers. The much larger one is taken as a tax deduction (employer provided health insurance) and does benefit higher income taxpayers.

 

[youbet]

There are two subsidies. The smaller one is obtained directly by taxpayers. The much larger one is taken as a tax deduction (employer provided health insurance) and does benefit higher income taxpayers.

I don't believe that the deductibility of employer provided health insurance is what the courts are looking at currently.

 

[donheff]

There are two subsidies. The smaller one is obtained directly by taxpayers. The much larger one is taken as a tax deduction and does benefit higher income taxpayers.

The biggest subsidy to the lowest income, non-taxpaying population is the Medicaid expansion. States have already demonstrated their propensity to kick that group under the bus. The exchange subsidies are tax credits going to working stiffs and some of us non-working stiffs with income. They would take a big hit. The higher bracket taxpayers who foot most of the bill would theoretically be positively effected as less people overall would get subsidies. It would still be frustrating to be a taxpayer in a non-participating state who would continue to pay the bill with no benefits to their own state neighbors.

 

[Fermion]

It would still be frustrating to be a taxpayer in a non-participating state who would continue to pay the bill with no benefits to their own state neighbors.

This is what I am talking about. If a state does not take the federally offered benefits, it still has to pay the bills, which puts the burden on taxpayers. If the burden gets high enough, they will either pressure the state to cave and take the benefits or they will vote with their feet and leave.

 

[Corporateburnout]

Heck, if I didn't have to pay MA income, sales, excise, meals, gas and liquor taxes, high property tax, tolls and other fees, paying the entire full price of my HC would be a walk in the park; I wouldn't even need to think about the subsidies!

You could do worse if you lived in 20 other states when it comes to income, sales and excise taxes according to these rankings.

CNN/Money: Taxes state by state

 

[Chuckanut]

You could do worse if you lived in 20 other states when it comes to income, sales and excise taxes according to these rankings.

CNN/Money: Taxes state by state

Just note these are 2002 figures.

 

[M Paquette]

For whatever it's worth, here are the actual court rulings, without reparsing or interpretation by news readers and assorted talking heads selling their books.

The Virginia opinion: http://www.ca4.uscourts.gov/Opinions/Published/141158.P.pdf

The D.C. opinion: http://www.cadc.uscourts.gov/internet/opinions.nsf/10125254D91F8BAC85257D1D004E6176/$file/14-5018-1503850.pdf

If one were to actually read (horrors!) the opinions, the difference between them is fairly obvious. Such an act would be anathema to the punditverse, as it would deprive the talking heads of the ability to bloviate for hundreds of hours of media time.

The D.C. court opinion relies heavily on a detailed legal parsing of selected clauses of the law, with less consideration to the legislative history or possible intent of Congress, and a detailed parsing of the entire law.

The Virginia court opinion notes conflicts within the construction of the law, and recognizes that this is common in complex legislation, and follows a case law precedent of attempting to discern the intent of Congress.

For better or worse, the Virginia court's reasoning appears to be more in line with existing case law, and I suspect that the opinion of this court will more closely resemble the final outcome from further reviews by the courts.

 

[Mulligan]

I don't know Sam. I noted that possibility because I read in some newspaper comment that the mandate employer penaties could go away where the subsidies are not available. I think it was somehow linked to the government having to pay subsidies but that may have been wrong.



I agree that sponsors expected this from day one but I don't see such a reaction actually happening. I don't want to bring on the bacon so I will try to be cautious with my wording. Many opponents firmly believe that this law is disastrous for America and think anything that will undermine it such that it can eventually be overturned is a valid response. Thus the refusal by multiple states to accept the Medicaid expansion despite that fact that the Fed picks up the full tab now, 90% later. Those states punish their own poor while helping to pay the bill for the other states that that do accept Medicaid all in an effort (maybe a principled effort) to undermine and kill off the ACA. The DC Circuit decision gives those same states a much greater tool to undermine the law. They will take it. I haven't seen any evidence that opponents are willing to join in efforts to modify the ACA to improve it. I suspect that would only happen if, after many years, it becomes clear that nothing will work to kill it entirely.

From what I have read and pieced together, the individual mandate is all but neutered. If you have a grandfathered plan that was canceled, that gets you out of it (hardship). The 8% (I believe that is the correct number) of income exempts you as a hardship also. And no real means to collect on penalty. Unless you are a fool and getting a tax refund they cannot confiscate the penalty from you. Plus they cannot charge interest on outstanding claims either. Just never set your tax structure up in a manner that causes a refund and you can owe them forever and there is no means to collect and be truly penalized.


Sent from my iPad using Tapatalk

 

[Corporateburnout]

Just note these are 2002 figures.

True but not in the top 10 worst states for taxes according to these 2014 figures

The 10 Worst States for Taxes in 2014 | The Fiscal Times

 

[modhatter]

Here is language from bill which did anticipate some states would refuse to set up their own exchanges, so government provided that if they didn't the federal government would.

"The government's argument is that Section 1321, which sets up federal exchanges, says that when states fail to construct an exchange the federal government shall "establish and operate such Exchange within the State and the Secretary shall take such actions as are necessary to implement such other requirements.."

The key word there is "such": the Obama administration holds that the clear intent of that line was that a federal exchange counts as a state exchange for the purposes of the law. That may be a bit confusing — but given the context of everything else in the law, it's clear enough."

 

[sengsational]

So those monthly checks that the government is sending to the insurance company would need to get covered by the insureds.

Wouldn't that be a surprise for a lot of folks...get a $15,000 bill from the IRS when they only made $40,000 all year. That's gonna get paid!

I'm sure a lot of people are looking for a reason to participate in a tax revolt.

 

[Fermion]

I am willing to make a little side wager with anyone on here that anyone who claimed a subsidy in a state with a federal exchange and had the income level to qualify for that subsidy will never repay a dime.

I'll even give you 10 to 1 odds.

Any takers?

 

[modhatter]

Even with six paragraphs in the bill supporting subsidies and exchanges whether set up by state or fed. gov., the biggest problems are yet to come. Indiana and Oklahoma are next to go to court. Two ultra conservative states to the core.

Who knows, maybe Alabama, Mississippi and South Carolina next.

Also court cases are slated to hit in 2015 attacking the "50 employees or more" rule effecting corporations. There going to just keep coming. So anyone planning leaving work for an early retirement counting on a subsidy to make it happen better have a contingency plan.

 

[sengsational]

I am willing to make a little side wager with anyone on here that anyone who claimed a subsidy in a state with a federal exchange and had the income level to qualify for that subsidy will never repay a dime.

I'll even give you 10 to 1 odds.

Any takers?

I was also going to make that kind of offer (but I wasn't so bold as to offer 10 to 1, and I didn't know if a comment about a bet would break any rules here). The moderators have a hard enough time, so I try to step back from the line (when I'm thinking). There's a site called longbets.org (cool site where people bet on stuff and the loser funds go to charity)... but this will be all over before "long", hehe.

 

[Fermion]

Even with six paragraphs in the bill supporting subsidies and exchanges whether set up by state or fed. gov., the biggest problems are yet to come. Indiana and Oklahoma are next to go to court. Two ultra conservative states to the core.

Who knows, maybe Alabama, Mississippi and South Carolina next.

Also court cases are slated to hit in 2015 attacking the "50 employees or more" rule effecting corporations. There going to just keep coming. So anyone planning leaving work for an early retirement counting on a subsidy to make it happen better have a contingency plan.

Easy enough to have a contingency plan. If insurance gets too expensive and they stop offering subsidies, just go without insurance. If you get sick, go to the emergency room. Don't pay any hospital bills. When the bills pile up too high after a couple of years, declare bankruptcy. Your 401K and IRA are protected. Rinse repeat.

 

[aaronc879]

Easy enough to have a contingency plan. If insurance gets too expensive and they stop offering subsidies, just go without insurance. If you get sick, go to the emergency room. Don't pay any hospital bills. When the bills pile up too high after a couple of years, declare bankruptcy. Your 401K and IRA are protected. Rinse repeat.

This forum is full of good ideas

 

[sengsational]

Easy enough to have a contingency plan. If insurance gets too expensive and they stop offering subsidies, just go without insurance. If you get sick, go to the emergency room. Don't pay any hospital bills. When the bills pile up too high after a couple of years, declare bankruptcy. Your 401K and IRA are protected. Rinse repeat.

I hope that if the case goes against me, I hope that I end up owing the insurance company money and not owing the IRS money! Cuz yeah, I'd tell the insurance company to pound salt. Unfortunately, it's a bit more difficult if I end-up owing the IRS money.