For tax year 2015, millions of Americans will be getting a new tax form related to health care reform measures.
Will you know what to do with yours when it arrives?
The Affordable Health Care Act mandated three new tax forms to be used as a kind of proof of insurance so taxpayers may avoid paying a penalty for failure to be covered. They are:
- Form 1095-A, sent to those who purchase health insurance on government marketplaces.
- Form 1095-B, sent to employees of businesses with fewer than 50 full-time employees
- Form 1095-C, sent to employees of businesses with more than 50 full-time employees
According to the Kaiser Family Foundation (KFF), average premiums in the workplace were up 24 percent for individual plans and 27 percent for family plans. The vast majority of privately insured Americans – 9 out of 10 – purchase coverage through their employers.
Cost-sharing grew even faster. KFF reports that the average deductible for all workers was $1,077 in 2015, up from $646 in 2010—a 67 percent increase.
Over the past 5 years, a typical family of four faced 43 percent higher health costs, including both premiums and out-of-pocket expenses. The Milliman Medical Index also shows that employer costs increased by 32 percent, from $10,744 in 2010 to $14,198 in 2015. That’s nearly $3,500 that could have gone into paychecks if health costs had not soared.
Medicaid’s complex federal-state financing structure has long created perverse incentives that discourage efficient care. Key to the problem is the federal government’s uncapped reimbursement of state Medicaid expenditures, which encourages states to artificially inflate their Medicaid spending. Such schemes have significantly increased over the past several years and they likely add tens of billions in generally low-value Medicaid spending each year.
This study examines states’ use of accounting schemes to inflate federal Medicaid reimbursements. The study focuses on the largest of the current schemes, provider taxes. These are assessments states levy on healthcare providers, often accompanied by the explicit or implicit guarantee of increased Medicaid payments to those same providers, financed from the federal matching funds. The study provides an economic and political analysis of these taxes and other strategies that states have employed to maximize federal Medicaid reimbursements, and recommends reforms. It contains an appendix with a case study of Arizona, which shows how the state imposed provider taxes to pay for Medicaid expansion.
The Department of Health and Human Services announced Friday night that it was in the process of shorting the U.S. Treasury $3.5 billion.
Well, they didn’t exactly announce it. You had to read between the lines.
The theft of $3.5 billion will help prop up insurers that have agreed to sell ObamaCare policies in the individual market. Behind all the happy talk from Administration officials about the program’s success lies an unpleasant truth: insurers that participate in ObamaCare exchanges are bleeding money.
Those losses are coming despite billions of dollars in handouts the government is providing the industry. Some of those handouts are entirely lawful; others, not so much.
The so-called “reinsurance” program falls into the latter category.
Some people may not receive the necessary ObamaCare forms, 1095-B or 1095-C, until shortly before the April 15 tax filing deadline because the IRS has pushed back the due date from Jan. 31 to March 31 for employers and others that provide insurance.
What’s a consumer to do? File anyway, even without the form, the IRS says. If people make a mistake on their return because they didn’t have the 1095-B or 1095-C forms and relied on information from their employer or other coverage providers instead, they won’t have to amend their return, the IRS said.
Health insurers that sold plans on the exchanges in 2015 and enrolled droves of high-cost members, could haul away as much as $7.7 billion this year, as part of the healthcare law’s reinsurance program.
The CMS released a memo (PDF) late Friday that said the agency expects its jar of reinsurance money will total $7.7 billion. The payouts, to be issued this year, will reflect data from the 2015 benefit year.
The government granted up to $750 million in ObamaCare tax credits to 500,000 persons who weren’t eligible, many of whom may have been illegal immigrants, a Senate report says.
Half a million individuals mistakenly received the tax credits because of a lapse in verification of their legal status and a lack of coordination among government agencies, the report determined.
Although they failed to verify citizenship or their legal status, they got the “advanced premium” tax credits under the Affordable Care Act. The taxpayer dollars are awarded on the basis of income to help lower premium costs on ObamaCare’s marketplace insurance exchanges.
Democratic candidate Bernie Sanders recently released his health-care plan: a government-run single-payer system for the U.S., similar to what many European countries have. Criticism of the plan has so far focused on its lack of political feasibility, but there is an even more important reason to be wary: Accounting for costs and tax increases, it would reduce labor supply by 11.6 million. In a struggling economy, with tepid wage growth, hurting employment should be the last thing on any politician’s agenda.
The plan truly promises everything under the sun. Not only will everyone be able to get any medical treatment needed — with no cost at the point of service — but the plan won’t require a terribly high tax increase.
President Obama’s Final Budget Proposal includes:
The budget will include three years of federal funding to 19 state governments that passed up an earlier offer to expand Medicaid coverage for more than 4 million low-income people.
TWEAK TO “CADILLAC TAX”
Obama will ask for tweaks to a tax on certain health insurance plans that is unpopular with labor unions.
President Barack Obama is having a tough time winning friends for his Cadillac tax.
His plan to dial back the unpopular ObamaCare tax on high-cost health plans, to be detailed in the fiscal 2017 budget he’ll release Feb. 9, has won him no applause from employers, labor unions or health insurers. The tax still must be repealed, they say, not merely modified.
“The ‘Cadillac tax’ cannot be fixed,” James Klein, president of the American Benefits Council, a nonprofit representing employers, said in a statement. “We’re glad the administration recognizes the ‘Cadillac tax’ is seriously flawed. But its impact in high cost areas is just one of its many problems.”