Some simple changes to improve ACA (Part One)

Here are some simple “fixes” that would reduce confusion over ACA provisions, help further the individual goals of the statute, and possibly improve the efficiency of signing up ACA customers, and the reason why they are needed.

1) Eliminate the Medicaid gap for non-expansion states: The ACA provides that  taxpayer units (individual or joint followers) are eligible for premium assistance tax credits when household income is between 100-400% of the federal poverty line. At the time of drafting, it was assumed that all any person with income under 100% of the FPL would be enrolled in Medicaid, as the terms of the original statute essentially mandated expansion in all states. (States which did not agree to expansion would have faced loss of federal funds).

However, after the US Supreme Court struck down the Medicaid provisions, half of US states opted out, meaning that individuals who earn less than the FPL who live in those states are not eligible for subsidies on the exchanges.  This leaves many of the neediest individuals out in the cold, and undermines the central goal of ACA: to provide insurance for all.
The fix: 

Amend 26 USC 36B(c) as follows:

Current Language:premium payable for a qualified health plan.

(c) Definition and rules relating to applicable taxpayers, coverage months, and qualified health plan

For purposes of this section—

(1) Applicable taxpayer

(A) In general

The term “applicable taxpayer” means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.

(B) Special rule for certain individuals lawfully present in the United States

If—
(i) a taxpayer has a household income which is not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and

(ii) the taxpayer is an alien lawfully present in the United States, but is not eligible for the medicaid program under title XIX of the Social Security Act by reason of such alien status,

the taxpayer shall, for purposes of the credit under this section, be treated as an applicable taxpayer with a household income which is equal to 100 percent of the poverty line for a family of the size involved.
My proposed amendment: 

(c) Definition and rules relating to applicable taxpayers, coverage months, and qualified health plan

For purposes of this section—

(1) Applicable taxpayer

(A) In general

The term “applicable taxpayer” means, with respect to any taxable year, a taxpayer whose household income for the taxable year equals or exceeds 100 percent but does not exceed 400 percent of an amount equal to the poverty line for a family of the size involved.

(B) Special rule for certain individuals lawfully present in the United States not eligible for Medicaid

If—
(i) a taxpayer has a household income which is not greater than 100 percent of an amount equal to the poverty line for a family of the size involved, and

(ii) the taxpayer is an alien lawfully present in the United States, but is not eligible for the medicaid program under title XIX of the Social Security Act because the taxpayer is an alien lawfully present in the United States barred from medicaid by reason of such alien status, or because the taxpayer would be otherwise eligible for medicaid but resides in a State which has not expanded medicaid to cover all individuals with incomes under 133% of the poverty line as provided in this Act, the taxpayer shall, for purposes of the credit under this section, be treated as an applicable taxpayer with a household income which is equal to 100 percent of the poverty line for a family of the size involved.

Impact:

This change will allow individuals with incomes under 100% of the poverty line to qualify for an advanced tax subsidy credit for insurance purchased on an exchange, to be calculated as if their income was exactly 100% of the poverty line. This will further the goal of providing all individuals with a means to purchase insurance and access health care.

(To be continued)

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One thought on “Some simple changes to improve ACA (Part One)

  1. Hi Freenlancer,

    Another change will be in the way subsidy is phasing out. It is not gradually.
    ONE dollar in income more can change the subsidy from 3177$ to 0.
    Use the Kaiser calculator for two people and see the threshold at 62040.00 versus 62041.00 !!
    You can fine other thresholds by trial and error for other cases.
    So make sure your income does not exceed by a few bucks cause you’ll lose thousanads!!

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