Obamacare Is Unicorn-Care: Fines Rise As Subsidies Go To People Who Don't Exist
Eric Boehm writes at Watchdog.org:
The IRS fined more than 7.5 million Americans who didn't have health insurance in 2014, even as Obamacare subsidies flowed to people who didn't even exist....Penalties will increase to $395 or 2 percent of income per person in 2015; that will jump to $695 or 2.5 percent of income in 2016.
Those penalties are supposed to force Americans to purchase health insurance -- or to at least make it financially wise for them to do so.
...But an investigation by the Government Accountability Office recently revealed that fake applicants who enrolled in health insurance programs through the federal exchange were receiving subsidies. Those phony applicants had initially enrolled during 2014, but they were automatically re-enrolled and continued to benefit from tax subsidies in 2015, the GAO said.
The application process used by the Healthcare.Gov federal exchange is not set up to detect fraud, concluded Seto Bagdoyan, chief of GAO audits and investigations, who submitted testimony to the Senate Finance Committee earlier this month.
@reasonpolicy
It's hard to imagine a more illegal program: Forcing people to buy a product, fining them if they refuse. Insane. On top of that, the whole thing is poorly conceived.
The fines are a joke, since they cost a lot less than the product itself. If you don't want Obamacare, you save money by paying the fine. Lots of young, healthy people are likely to do exactly this.
If they do get sick, well, you can't be turned down, so they can basically enroll on the way to the hospital. What's not to like?
a_random_guy at August 1, 2015 5:11 AM
Yes, a $500 fine for not purchasing a $5,000 product is a joke. But you can't enroll on the way to the hospital unless it is January, February, or March. Those are the magic months.
And the biggest issue with Obamacare . . . it won't be fully implemented until 2018 (maybe). So, for a law passed in 2010 we still have 3+ years to figure out what is in it. And with the recent supreme court victory what is written doesn't matter. It is what regulators feel is 'the over all intent of the law' that matter. Not personally being able to read bureaucrats future minds I can't be sure exactly what they will do.
Ben at August 1, 2015 6:01 AM
The fines are a joke, since they cost a lot less than the product itself.
That should be "fines" complete with scare quotes. The IRS doesn't have an actual enforcement mechanism - they can't garnish your wages. The only time they can collect is if you have a refund due. And that's easy enough to avoid, just jigger your withholdings.
Those are the magic months.
You can't be denied care, so I'm not seeing the downside. Besides, in many cases you have to hit the out of pocket expenses before your insurance starts paying. And that's going to be much closer to your insurance premium than your fine.
So, again, what downside is there? y'all are talking like Obamacare was meant to succeed. I'm thinking it was designed to fail, so that the federal leviathan can be feed even more responsibility.
It's almost as if they intend to plunder and deceive.
I R A Darth Aggie at August 1, 2015 7:01 AM
I didn't fully get it because I joined in the middle and was driving at the time... but on the radio there was a business owner asking for advice. His company is small enough to not have to purchase insurance for employees. However, he had opted to anyway but not through the Obamacare setup. So because it was not through the system he had to pay an extra ~$100 per month per employee to the IRS. Even more than if he simply didn't purchase insurance for his employees.
Anybody know anything about this kinds of situations?
THe only advice they had was to talk to a lawyer specialized in that area.
The Former Banker at August 1, 2015 9:41 AM
I'm in the middle of this freaking nightmare right now. I have part time employees I have to watch like a hawk so they don't go over their hours, while every couple months we have to sit in on some webinar about what rules have changed and what rules MIGHT change and no one has any real clue how this is all going to shake out. I'm over it.
Daghain at August 1, 2015 9:42 AM
how this is all going to shake out
Seems to be the whole point. In any socialist/communist/marxist country, the future was/is always unpredictable. Read Life and Death in Shanghai, by Nien Cheng. There was some sort of Party denouncement/revolution/conspiracy every few months, bringing new "laws", attitudes. For some time, planting flowers was a bourgeois vestige. Then after somebody denouncing somebody else in the Party, it was OK. Then it went back to not being OK.
Stinky the Clown at August 1, 2015 11:00 AM
I'm confused. I thought the government was supposed to get proof that you had insurance, approve you for the subsidy, and then pay the subsidy directly to that company.
They are just mailing out checks? Cant they even be bothered to make it LOOK like its supposed to work?
lujlp at August 1, 2015 2:12 PM
I don't know about the extra $100 a month per employee fee they are talking about, but DH owns a small business with 9 employees on average. He doesn't have to provide insurance and the employees voted they didn't want us to continue when we presented them their options when Obamacare was going into effect and how much our plan was going up in costs. We just give them $350 a month now to purchase their own, the amount we had been paying for their premiums before Obamacare.
BunnyGirl at August 1, 2015 4:29 PM
They'll fix the fines, just wait. A few years from now it will be $5000. And you will pay the fine unless your plan exactly matches one of the mandated Obamacare plans.
Cousin Dave at August 3, 2015 8:13 AM
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