Beginning in October, Americans will be able to register with new state health insurance exchanges to purchase their health insurance. The Affordable Care Act requires the Internal Revenue Service to offer federal subsidies for those who qualify, making health insurance more affordable. The Hawaii Health Connector is our local version of a health insurance exchange.
By Jan. 1 the law requires every American to have signed up for health insurance or face a financial penalty. Will it happen? According to a June Gallup poll, 43 percent of Americans don’t even know about it.
The bigger question is whether the IRS will come through to pull it off. To do so, the scheme will first need funding. President Barack Obama’s 2014 budget proposal includes a 9 percent increase in IRS spending, bringing the agency’s appropriations to approximately $13 billion for the next fiscal year. The problem is that last Wednesday a House subcommittee approved a bill that would cut the IRS budget by nearly one-quarter, dropping it to $9 billion for 2014, a level not seen since 2001.
Partisan squabbling aside, assuming the funding is approved, can the IRS effectively collaborate with state exchanges to subsidize health care? Well, what is the government’s track record? There is certainly controversy over the ability of the City and County of Honolulu to fill our potholes enough to make the front page of the paper now and again. The state did not show great prowess when building Aloha Stadium (major rust problems) or the Hawai‘i Convention Center (way over budget with poor revenue).
At the federal level the government also struggles to do good work, partly because it has to be done on such a massive scale. The U.S. Postal Service, even in its heyday, got a "B" at best. The Department of Defense has just transitioned to United Healthcare for medical services that the military chooses to outsource to the civilian community. It is now in the midst of a major fiasco in its effort to manage outside health referrals for the men and women who serve our country. It is doing still worse in regards to releasing payments for services rendered in good faith, at least to Manakai o Malama.
The involvement of the IRS in health insurance exchanges fundamentally changes the relationship Americans have with their tax collectors. Until now, most of us have filed our taxes, taking deductions with varying degrees of gray. We hope that the returns we submit and the taxes we pay keep the beast at bay. We don’t want to hear from the IRS except when it comes time for a refund.
Beginning in October, the IRS is supposed to become an active partner in determining credits for health insurance. It is the underserved, and in most cases less educated Americans, who will depend upon the IRS to be accurate and timely. I’m concerned.
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Ira Zunin, M.D., M.P.H., M.B.A., is medical director of Manakai o Malama Integrative Healthcare Group and Rehabilitation Center and CEO of Global Advisory Services Inc. Please submit your questions to info@manakaiomalama.com.
