Tax cuts: Killing Obamacare penalty could cost some Floridians $1,392

A U.S. Senate plan to cut taxes would remove the $695 or more penalty for not buying health insurance, but not everyone gets a break — if you’re 60 in Florida, it could raise your premiums a projected $1,392 in 2019, a new analysis says.

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It’s no small matter in a state that once again leads the nation with more than 500,000 residents signed up so far for plans on healthcare.gov. Enrollment for 2018 ends Dec. 15.

A benchmark health plan would cost $656 more for a Floridian who is 40 and $538 more at age 27 for those buying coverage in the Obamacare marketplace,  according to the New York-based Commonwealth Fund. The 99-year-old foundation that says it aims to promote health care access for seniors, low-income people and others.

The reasoning: An estimated 13 million people nationally won’t buy health insurance without the penalty, the Congressional Budget Office says, and that affects what others pay.

Whether it’s because people don’t want it, are healthy and hope they don’t need it, or can’t afford it, having no penalty removes an incentive to buy health insurance.

A Kaiser Family Foundation analysis released this month found that 54 percent or 5.9 million of the 10.7 million people who are uninsured and eligible to purchase an Affordable Care Act marketplace plan in 2018 could pay less in premiums for health insurance than they would owe as a tax penalty.

But if folks bail on health insurance, their actions don’t just happen in a vacuum — they affect others, the argument goes.

“Since many of those expected to drop coverage in the individual market would be healthy, insurers would increase premiums to cover costs for a pool of less-healthy enrollees,” Commonwealth figures.

Not everyone thinks the impact of removing the penalty would be so severe. Rating service Standard & Poor’s, for example, predicts 3 million to 5 million fewer people will buy health insurance over a decade.

Others focus on the benefits of removing the penalty. Dumping it would free up $338 billion in the federal budget over 10 years, because fewer people would need government spending such as financial aid to lower premiums, CBO projected. That liberates more money for tax cuts, while also removing something that has long bothered small-government advocates  — it amounts to government coercion to buy a product, health insurance.

U.S. Sen. Lisa Murkowski, R-Alaska, has been a notable GOP holdout on previous Affordable Care Act overhaul efforts that she thought went too far. She signaled support for the idea last week.

“Repealing the individual mandate simply restores to people the freedom to choose,” Murkowski said. Nothing else about the health law would change, she said.

If a  tax bill killing the penalty can pass both the House and Senate, “that’s great,” White House budget director Mick Mulvaney said Nov. 19. “If it becomes an impediment to getting the best tax bill we can, then we are OK with taking it out.”

It’s a dicey political calculation that rests largely on voter perceptions: Is it welcome relief from overreaching government? Or is it pushing millions out of health coverage (and making others pay more) to deliver tax cuts that largely benefit upper-income folks? Health care was a leading issue in exit polls among Virginia voters who turned out strongly for Democrats this month.

Enrollment in Obamacare plans is running about 46 percent ahead of last year, though that’s partly because of a shorter sign-up period and it’s too soon to know how final numbers will look.

“Despite uncertainty in the market, we’re thrilled that Florida once again leads the nation in getting covered,” said Epilepsy Foundation of Florida CEO Karen Basha Egozi, whose group helps coordinate sign-up assistance.

Total enrollment has been projected to drop after the Trump administration cut budgets for advertising and in-person assistance and reduced the sign-up period by six weeks.

Estimated Florida premium hikes
Additional premium costs on benchmark Affordable Care Act marketplace policies in 2019 under a Senate tax plan to repeal the penalty for not carrying health insurance
Age 27 $538
Age 40 $656
Age 60 $1,392
Source: The Commonwealth Fund

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