Tax-Free Health Insurance For All Is An Easy Obamacare Fix
American Health Care and Better Care Reconciliation Acts. But for the millions of people not eligible for subsidies and purchasing their health insurance in the non-group market, the failure of both parties to make health insurance more affordable is unacceptable.
As Donald Trump puts his limited energy into showing the world that this presidency thing is way beyond his limited abilities, the insufficient patches to the American health care system lumber into another year. More of the same high-cost but accessible health care is a better deal than what Republicans were offering with their
Republicans lawmakers are not the only ones that waited seven (7) years to suggest changes to the Affordable Care Act (aka Obamacare), Democrats did too. And, to add insult to injury, they callously repeated that the number of non-subsidy receivers was so low and, if you thought about it, these people could technically afford high-cost insurance. They also promised to eventually come up with a solution to this minor Obamacare problem. Well, after 7.5 years Democrats have yet to propose one suggestion to the non-subsidy problem for the millions stuck with paying 100% of high-cost health insurance. However, strangely, there is a law that was passed by both Republicans and Democrats that could help these individuals, including me, but by design, does not.
Say QSEHRA, QSEHRA
In December 2016, a nearly unanimous Congress passed the 21st Century Cures Act. This Act includes a provision that allows small employers to offer a flexible benefits plan, called a qualified small employer health reimbursement arrangement (QSEHRA), to help their employees pay health insurance premiums and health care expenses with tax-free dollars. One way a QSEHRA works is an employee purchases an individual policy, pays the premium out of their pocket and submits proof of coverage to the employer who has set up the QSEHRA plan. The employer reimburses the employee for the premium, with tax-free dollars, up to a mandated amount. Or, if the employee has coverage through a spouse’s plan, the employee can receive tax-free reimbursement to cover medical expenses. The QSEHRA regulation changed the way health reimbursement accounts were treated under Obamacare as it was designed to help small employers provide premium and health care cost assistance to their workers when providing health insurance was not financially or administratively possible.
By all accounts, the QSEHRA law is a good revision to Obamacare. Workers at small companies purchasing individual insurance policies can now take advantage of the same tax-favored and money-saving government regulations that workers at large companies have enjoyed for decades. But guess who’s still left out in the cold—freelancers and other individuals, not eligible for a federal subsidy and who cannot set-up a QSEHRA plan but still have to purchase an individual health insurance plan. These individuals cannot save hundreds to thousands of dollars on their health insurance premiums. The unequal tax treatment of health insurance premiums for individuals versus groups or employers continues even though it does not have to. Congress could have and still can easily pass legislation to allow all Americans purchasing health insurance to pay their premiums with tax-free dollars. They all claim that the treatment is unfair and have for years threatened to do something about it, but when they had the chance, they half-stepped.
As Democrats work with Republicans on Obamacare fixes and promote their single payer and Medicare For All legislation, a simple and much-needed fix to Obamacare is being ignored. It’s way past time to allow everyone to purchase tax-free health insurance.