Government Takeover of Health Care

IRS Could Tap Refunds for Health Insurance Penalties

April 5, 2010

Reuters - The Internal Revenue Service could tap individual tax returns to collect fines against people who fail to buy health insurance as required under recently enacted healthcare legislation, the U.S. tax commissioner said on Monday.

Most individuals are required to get health insurance under the new law, or face penalties that would be phased in over time. By 2016, people without coverage could see fines of 2 percent of their income.

Subsidies would help poorer people buy coverage, and states would set up exchanges to allow individuals and small groups shop for insurance.

People who do not comply would be levied penalties, and if they don't pay them the penalties could be taken out of their tax refunds.

"There has been some insinuation about how we are going to approach our job," IRS Commissioner Douglas Shulman said after speaking at the National Press Club.

Under the new law, the IRS cannot seize assets or levy fines, so Shulman said refunds were the most obvious option to collect penalties.

The new law aims to expand coverage to about 32 million uninsured Americans.

Last month, President Barack Obama signed the legislation, which passed both houses of Congress with backing only from his fellow Democrats. Republicans have been attacking the bill ever since, calling it an overreach of government power.

Representative Dave Camp, a senior Republican on the tax-writing Ways and Means committee in the U.S. House of Representatives, issued a report shortly after its passage arguing that law "dangerously expands IRS authority."

"The individual mandate would create millions of captive customers for health insurance companies, with the IRS acting as the enforcement agency for those companies," Camp's report asserted.

NEW AGENTS?

Shulman also dismissed claims by Republicans that the government would need to hire 16,500 agents to enforce the new rules.

"That is a made up number. The only official numbers come from the IRS, which I have to sign off on. We don't have a number yet," Shulman said.

A staffer for Republicans, which circulated the 16,500 estimate, defended it on Monday.

The staffer said the number was based on an estimate by the Congressional Budget Office that $10 billion would be needed to implement the law over a decade, subtracting $1 billion for administration costs.

"If it's not 16,500, how many thousands of people will the IRS have to hire to enforce their portion of the bill?," the aide, who was not authorized to be quoted by name, said. "How is the IRS going to spend billions of dollars in taxpayer money to enforce its portion of the bill?"

Shulman, appointed by former President George W. Bush and retained by Obama, said the U.S. health department and insurance companies would determine if individuals have purchased acceptable levels of coverage.

"There are not going to be IRS agents having discussions with the American people about the intimate details of their health insurance," Shulman said.

None of the provisions related to individual taxpayers come into force this year, with most phased in in 2013 and 2014, he said.

Health Care Reform Leaves Out Illegal Immigrants

April 4, 2010

Associated Press (Fresno, Calif.) – Paula Medrano shifts uncomfortably on the doctor's examination table, holding out a wrist inflamed and swollen by arthritis. The 78-year-old has no health insurance, lives below the federal poverty level, and can't pay for the medication she needs.

Just days before her appointment, President Barack Obama signed, with much fanfare, a historic bill to extend health care access to 32 million currently uninsured people. But Medrano and her daughter, Juana Aguirre, barely paid attention.

"It's a great thing, but it's not for us," said Aguirre.

Medrano is an undocumented immigrant — one of the 7 million uninsured people living in the United States who were explicitly excluded from the legislation, according to estimates by the Congressional Budget Office.

The question of whether to extend coverage to illegal immigrants was so politically contentious that, under the approved legislation, they will not even be able to buy health insurance in the newly created purchasing pools called exchanges if they pay entirely out of their own pocket.

Proponents of reducing immigration believe that allowing illegal immigrants access to health care is an incentive for them to come, and an unfair tax burden on Americans.

Although the approved legislation explicitly excludes undocumented immigrants from participating in the exchanges, there is no foolproof way of verifying their documentation to keep them out, said Yeh Ling-Ling, executive director of Alliance for a Sustainable USA.

They will also continue to have access to emergency medical assistance.

"It is not fair on struggling Americans," said Yeh.

What is clear is that as the ranks of the uninsured diminish, immigrants like Medrano will continue to patch together health care as they can — at health centers such as Fresno's Clinica Sierra Vista, at hospital emergency rooms, or through programs like Healthy San Francisco, which offers universal health care to all who live in the city.

"We have to be very creative — not asking for labs unless it's really essential, working with generics, working with drug companies, giving them samples," said Juan Carlos Ruvalcaba, the doctor seeing Medrano at Clinica, which charges on a sliding scale of $40 to $70, depending on the patient's ability to pay.

Once an undocumented immigrant himself, Ruvalcaba was able to become a citizen and attend medical school because of an amnesty program in 1986. He remains committed to serving all patients, no matter their insurance or immigration status, but there is only so much he can do, he said.

He was able to give Medrano the drugs she needed, but he asked:

"What happens when they need a specialist? What if they end up in the emergency room, and end up with a big bill?"

Some who work with this population are afraid that with the focus shifting onto providing care for the newly insured, those shut out of the system will be forgotten, left to fend for themselves with even fewer resources.

"It may make things worse — if you say 32 million are covered, there may be less done for these large groups who are here, who are working, who are such a large part of our agriculture industry," said Norma Forbes, executive director of Fresno Healthy Communities Access Partners, a nonprofit network of eleven health care organizations in California's rural Central Valley.

Illegal immigrant won't be the only uninsured left: about 16 million Americans are estimated to remain outside the health care system even after access is expanded over the next few years, according to the Congressional Budget Office.

This includes those who opt out, who don't know how to enroll, or who are exempted from the health insurance requirement because they can't afford the premiums, even with a subsidy.

For these patients, there will indeed be fewer options as doctors, hospitals and other providers increase their caseload to take in new patients bearing insurance, said Dan Hawkins, who is charged with policy and research at the National Association of Community Health Centers.

"There will be greater concentration of care for the uninsured in fewer places," Hawkins said.

Community health centers, the lynchpin of the safety net system now caring for the medically underserved, whether they are immigrants or citizens, will remain one of the places where people like Medrano will be able to see a doctor at an affordable cost.

Federally qualified clinics got a substantial funding boost through the health reform package.

They will get $11 billion in new funding over the next five years, which will allow them to double the number of patients they see, from 20 million a year now to 40 million people a year by 2015.

Most of these new patients will come bearing new insurance cards, or be part of the larger pool qualifying for Medicaid. But among them will be illegal immigrants, said Hawkins.

"Health centers will continue to be open to everyone regardless of their ability to pay, undocumented immigrants and everyone else," he said. "We don't know how many of the uninsured we serve right now are undocumented. But we do know a health center is a better, and less expensive, place for them to get that care."