Effective Dates of Patient Protection and Affordability Act

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEC. 1004. EFFECTIVE DATES.

(a) In General- Except as provided for in subsection (b), this subtitle (and the amendments made by this subtitle) shall become effective for plan years beginning on or after the date that is 6 months after the date of enactment of this Act, except that the amendments made by sections 1002 and 1003 shall become effective for fiscal years beginning with fiscal year 2010.

(b) Special Rule- The amendments made by sections 1002 and 1003 shall take effect on the date of enactment of this Act.

Okay, then.  So, the laws go into effect in 6 months except for sections 1002 and 1003 which are immediate.  There are probably other considerations of the act. 

Below is the entire wording for Section 1002 and 1003. So, what is needed is an understanding of the section that adjusts the Tax Schedule in regard to health care.

SEC. 1002. HEALTH INSURANCE CONSUMER INFORMATION.

Part C of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-91 et seq.) is amended by adding at the end the following:

SEC. 1003. ENSURING THAT CONSUMERS GET VALUE FOR THEIR DOLLARS.

Part C of title XXVII of the Public Health Service Act (42 U.S.C. 300gg-91 et seq.), as amended by section 1002, is further amended by adding at the end the following:

The content below is not from the Reconciliation Act.  This is the section of the bill that changes the tax code to reflect 'assistance for coverage.'

Subtitle E--Affordable Coverage Choices for All Americans

PART I--PREMIUM TAX CREDITS AND COST-SHARING REDUCTIONS

Subpart A--Premium Tax Credits and Cost-sharing Reductions

SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING PREMIUM ASSISTANCE FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN.

(a) In General- Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by inserting after section 36A the following new section:

‘SEC. 36B. REFUNDABLE CREDIT FOR COVERAGE UNDER A QUALIFIED HEALTH PLAN.

‘(a) In General- In the case of an applicable taxpayer, there shall be allowed as a credit against the tax imposed by this subtitle for any taxable year an amount equal to the premium assistance credit amount of the taxpayer for the taxable year.

The specific place for this provision is stated as the place where other refundable credits exist in the code. The plan a citizen is receiving the credit for has to be a 'qualified' health plan, therefore, when purchasing health insurance it will be a vital question to ask, "Is this a qualified health plan under Section 1401, Sec. 36B of the Patient Protection and Affordable Care Act?"

I say this because there will be plenty of plans out there that will still try to scam people.  So there has to be an understanding between the insurer and the insured that the plan they are subscribing to is a 'qualified' health plan.  End of that discussion.  That HAS to be known before citizens pay a dime for any coverage.  Right up front.  QUALIFIED plan.

You know, the insurance departments of any State should be able to list the plans that are 'qualified' at a place where citizens can easily access those records.  I think that is the best way to go about it to prevent fraud. 

There is no reason to access the IRS Code at this point.  This is an addition to the code and not a change, so there is nothing to review that would be changed.   

The tax credit is stated to be levied against the tax to be paid, not the income that determines the tax to be paid.  So this is like money in the bank.  The question is what is the definition of "premium assistance credit." 

This is where Paragraph 2 takes a prominent position in the law.


‘(2) PREMIUM ASSISTANCE AMOUNT- The premium assistance amount determined under this subsection with respect to any coverage month is the amount equal to the lesser of--

‘(A) the monthly premiums for such month for 1 or more qualified health plans offered in the individual market within a State which cover the taxpayer, the taxpayer’s spouse, or any dependent (as defined in section 152) of the taxpayer and which were enrolled in through an Exchange established by the State under 1311 of the Patient Protection and Affordable Care Act, or

‘(B) the excess (if any) of--

‘(i) the adjusted monthly premium for such month for the applicable second lowest cost silver plan with respect to the taxpayer, over

‘(ii) an amount equal to 1/12 of the product of the applicable percentage and the taxpayer’s household income for the taxable year.

This looks like a taxpayer gets their premiums back.  The verbiage is lengthy because there may be one or more insurances in play at any given time and it would be the lesser cost of the two which would apply to the credit.

The credit is applied to those citizens that obtain their health insurance through a State Exchange.The State Exchanges are covered here under this law:

PART II--Consumer Choices and Insurance Competition Through Health Benefit Exchanges

The law was to provide competition from any anti-trust issues of companies providing health insurance.  The State Exchanges are to provide that competition instead of a 'federal' Public Option.  So, the tax credit appears to apply to the citizens purchasing through these exchanges and paying for the cost completely on their own. 

 

Now where this 'competition' issue comes into scrutiny is in the understanding that private insurance companies will be part of the exchanges.  So, in essence they are competing against themselves EXCEPT there are rules laid out for monitoring costs in the exchanges and setting premiums according to market information.  Now, this is where all the 'cost cutting' measures comes into play and why it is vital to take the complaints of the companies with a grain of salt.  They are going to complain and they will probably complain all the time in order to try to drive up market pressure that the exchanges react to.

 

Now, about the rest of the bill which was changed by the Reconciliation Act. I find it really interesting that this should be the first topic in the Reconciliation Act, yet in the primary bill it isn't even close to the beginning.  There must have been many legislators concerned about changing this, so they listed it first.  Interesting.  See, in the main bill the 'reforms' are taken care of before anyone even reads this section because it is the reforms that will directly contribute to the dynamics here.  I really do consider the primary bill as well thought out and well prepared over an extended period of time.  It has been 'in the works' some time.  Long before President Obama came into office.

(1) in subsection (b)(3)(A)--

That is exactly where I was reading last night.  And Paragraph 2 is the important paragraph through this section as well.  And the way I see it, Paragraph 2 is the amount of the lower of any premiums paid for any taxable year.

By the way the laws was signed on March 23rd, 2010.  So, six months from that date, unless otherwise specified.


As to Paragraph 3...I need to read Section 10105 as it applies to the law as it seems to be the place where 'dollar amounts' are discussed.  This might take awhile.


The monies discussed in 10105 are in regard to Small Businesses in Section 1421.


So at issue is the amount of credit citizens that purchase through exchanges receive.  And according to Paragraph 2, it is the entire annual premium of the lesser of any premiums paid.  Of course citizens have to purchase the policy within the taxable year in order to get the credit, but, so what.  Find a way to make the investment rather than pay the penalty.  And consider it an investment.  


About the percentages.  I'll get into that in a minute, but, I still keep coming back to this as the quintessential amount of the Tax Credit, which simply is incredible.


‘(1) IN GENERAL- The term ‘premium assistance credit amount’ means, with respect to any taxable year, the sum of the premium assistance amounts determined under paragraph (2)...

See paragraph 2 simply 'qualifies' the lower amount of any policy and how that will be determined.  The only other aspect of the amount that is different is Paragraph 3. 

‘(3) OTHER TERMS AND RULES RELATING TO PREMIUM ASSISTANCE AMOUNTS- For purposes of paragraph (2)--

‘(A) APPLICABLE PERCENTAGE-  I hope this isn't some kind of percentage that simply outweighs the penalty to provide incentive, because, that is not an incentive.

‘(i) IN GENERAL- Except as provided in clause (ii),...

‘(ii) SPECIAL RULE FOR TAXPAYERS UNDER 133 PERCENT OF POVERTY LINE- If a taxpayer’s household income for the taxable year is in excess of 100 percent, but not more than 133 percent, of the poverty line for a family of the size involved, the taxpayer’s applicable percentage shall be 2 percent.

...the applicable percentage...

‘for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier:...

I really believe the amounts in the percentage table is in addition to the cost of the policies for all the months health insurance was purchased through an exchange.  I keep coming back to Paragraph 1 and in relation to that; Paragraph 3 considers low income and the additional burden such an 'exercise in living' will create for these citizens.  

So, in balance it seems as though there are additional credits for low income citizens that are up to 400% of the poverty line.

The scale that is listed is to be adjusted by the Internal Revenue Service to equally distribute the percentage added to their burden along each continuum of 'class' of income.  As an example, in the 200% to 250% the percentage added to the premium amount as determined in Paragraph 2 RANGES between 6.3% to 8.05%.  So the IRS has to apply equally that range across that '50' percentage points.  That is what that is.

This has huge implications and I understand completely why the Republicans are trying to defame incumbents at every turn.  It could be said that The State Exchanges encourages citizens to even leave their insurances behind and purchase through the exchange IF there are no equal advantages otherwise in the law AND I CAN'T SAY THAT AT THIS POINT.

But it sure looks that way.  I will end here by stating, so far the effective date is six months after March 23, 2010, however, there are no State Exchanges yet and that means there won't be such credits until they are established and I believe from previous readings that was 2014.  

I'll pick up from here and I am going to stick by my assessment of this section !