The ongoing debate over Congress and President Obama’s attempt to fundamentally transform the health care system in the United States has become more and more heated as the issues present themselves. The proponents’ “altruistic” goals of universal coverage have been met by a fierce opposition, many of whose members fears are rooted in the perception that their current coverage or choices of coverage will be eliminated. Much of the evidence each side of the debate offers is purely anecdotal, and there is no definite way to be sure that a government option in health care will eliminate private insurers or reduce the quality of care. Similarly, there is no way to guarantee that costs and expenditures will go down under the new bill, nor is there any guarantee that all will be covered or treated. Nevertheless, each side will continue to blindly shout their support or opposition to this bill, forgetting there is a much more important and personal issue hidden within the bill:
Section 401 of bill H.R. 3200, the currently proposed legislation, states that any individual who fails to obtain “acceptable health care coverage” is subject to a 2.5% tax increase proportionate to the filer’s gross adjusted income, not to exceed the national average premium. What is the national average premium? Barack Obama stated in the final presidential campaign debate, “the average policy costs about $12,000.” This tiny section of the 1000+ page bill has the potential to affect every individual. It also raises some very interesting scenarios:
Scenario 1:
Joan Day, a 22 year-old single college student with a part time job, has a gross adjusted income of $35,000 on her income tax return. Having rarely been sick, and never participating in dangerous activities, she declined to obtain health insurance because the cost—between about $2,000 and $4,000 a year—was prohibitive to her desired lifestyle. She went the entire year without ever needing the medical expertise of a doctor or hospital and felt justified in her decision not to obtain costly and useless insurance coverage. However, upon completing her tax return, she realizes that she will not receive a refund from the IRS; rather she will owe the government money because of the $875 tax they will impose on her simply for not purchasing an unwanted and unnecessary commodity.
Conclusion: Not only will Joan be taxed by the government for living a healthy and responsible lifestyle, but her taxes will have been increased—a blatant violation of President Obama’s pledge not to raise taxes on the middle class.
Scenario 2:
Fred Smith, married with two children and an expectant wife, is a successful entrepreneur who makes over $480,000 a year. He is adamant about not purchasing insurance due to a moral conviction; he would rather pay medical expenses out-of-pocket. His entire family receives an annual physical, which costs about $400 per year. One child broke his arm, which cost Mr. Smith an additional $3,000 in medical expenses. His wife will have a natural child birth at home with a certified midwife, adding another $2,000. Throughout the year, Mr. Smith will spend a total of about $6,000 in medical expenses. (An average premium would have cost about $10,000).
Because his gross adjusted income is so high, Mr. Smith will be fined $12,000 by the IRS for refusing to purchase insurance, despite having paid all outstanding medical expenses and incurring no further costs on society as a whole. Seeing this as a moral outrage, Mr. Smith refuses to pay this tax on the grounds that neither he nor his family received any unpaid service, and cites the religious exemption clause of the tax code. Nevertheless, the IRS determines that these claims are invalid and the religious exemption clause only applies to the Old Order Amish who refuse to pay Social Security taxes. This decision is eventually upheld by a court of law, and Mr. Smith, still refusing to pay the tax, is thrown in prison.
