Anchorage Tea Party
Don't Expand Medicaid
Dr. Ilona Farr's Letter to the Alaska State Legislature 24 March 2015
Dear Senators and Representatives,
Please vote against HB 148, and do not expand Medicaid, as this is an unsustainable, costly program ($6.2 billion by 2032 without expansion) that will soon consume the entire budget, drive providers out of business, and eventually bankrupt us as a state.
We now have about 160,000 patients on Medicaid. It is estimated that the expansion population is approximately 40,000; 27,000 of these people are already covered via IHS, and 29% are already covered under other insurance programs. Other states that have expanded Medicaid have greatly underestimated the enrollment, having triple or quadruple more enrollees resulting in dramatic tax increases or deficit spending to cover these unexpected costs. HSA accounts linked to insurance are a much better option for these uncovered low income single adults and would not indebt us further as a state.
HB148 places undue regulatory burdens, more audits, a change in reimbursement and now a special tax on providers that are only being paid to see Medicaid patients at or below their cost. Over 1000 providers have stopped providing care to Medicaid patients from 2010 to 2014 and this will rapidly accelerate in the future if this bill is passed. You will see many providers go out of business, and many more close their doors to Medicaid in a desperate attempt to stay solvent.
There are problems with providers getting paid now via the new system and this will only increase as more people are added. The state now pays the federal government $80 million a year just to keep Medicaid patients enrolled during the month of October so they can get their PFDs with the dramatic increase in numbers of enrollees this number will increase. It costs about $900/year per enrollee in administrative costs, it is $7500 approximately for a young person per year on Medicaid and costs $65,000/year for older more sickly patients. However there are 2000 Hepatitis C patients to be treated at $300,000/per person that has not yet been budgeted for in the new budget that I can find. Where will all these funds come from?
There is much fraud and abuse in the current system that needs to be fixed to make this program sustainable for future generations including 5400 plane tickets with no provider visit, $1.2 million in medevacs for one person, 250 therapy visits for one patient in a year, etc. Please vote no on HB148 or any other bill to expand Medicaid and instead focus on meaningful reform that does not result in increased costs, taxes, or audits to those of us that are actually caring for these patients.
Ilona Farr MD, Family Medicine, WWAMI 1979,
Member of MRAG (Medicaid Reform Advisory Group)
Dr. Ilona Farr's Letter to the Alaska State Legislature 24 March 2015
Dear Senators and Representatives,
Please vote against HB 148, and do not expand Medicaid, as this is an unsustainable, costly program ($6.2 billion by 2032 without expansion) that will soon consume the entire budget, drive providers out of business, and eventually bankrupt us as a state.
We now have about 160,000 patients on Medicaid. It is estimated that the expansion population is approximately 40,000; 27,000 of these people are already covered via IHS, and 29% are already covered under other insurance programs. Other states that have expanded Medicaid have greatly underestimated the enrollment, having triple or quadruple more enrollees resulting in dramatic tax increases or deficit spending to cover these unexpected costs. HSA accounts linked to insurance are a much better option for these uncovered low income single adults and would not indebt us further as a state.
HB148 places undue regulatory burdens, more audits, a change in reimbursement and now a special tax on providers that are only being paid to see Medicaid patients at or below their cost. Over 1000 providers have stopped providing care to Medicaid patients from 2010 to 2014 and this will rapidly accelerate in the future if this bill is passed. You will see many providers go out of business, and many more close their doors to Medicaid in a desperate attempt to stay solvent.
There are problems with providers getting paid now via the new system and this will only increase as more people are added. The state now pays the federal government $80 million a year just to keep Medicaid patients enrolled during the month of October so they can get their PFDs with the dramatic increase in numbers of enrollees this number will increase. It costs about $900/year per enrollee in administrative costs, it is $7500 approximately for a young person per year on Medicaid and costs $65,000/year for older more sickly patients. However there are 2000 Hepatitis C patients to be treated at $300,000/per person that has not yet been budgeted for in the new budget that I can find. Where will all these funds come from?
There is much fraud and abuse in the current system that needs to be fixed to make this program sustainable for future generations including 5400 plane tickets with no provider visit, $1.2 million in medevacs for one person, 250 therapy visits for one patient in a year, etc. Please vote no on HB148 or any other bill to expand Medicaid and instead focus on meaningful reform that does not result in increased costs, taxes, or audits to those of us that are actually caring for these patients.
Ilona Farr MD, Family Medicine, WWAMI 1979,
Member of MRAG (Medicaid Reform Advisory Group)
Obamacare Analysis
These are notes provided by Dr. Ilona Farr regarding the implications of Obamacare, presented at our August 2012 forum.
| obamacare_-_farr.docx |
Frequently Asked Questions about the ACA Tax Penalty
Q: How is the ACA tax penalty calculated and why is there so much confusion?
A: The penalty in 2014 is calculated one of two ways and the IRS will assess whichever amount is higher:
1% of annual household income (only the amount of income above the tax filing threshold, $10,150 for a single filer, is used to calculate the penalty).
$95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The maximum penalty is capped at the national average premium for a bronze plan, which, for 2014, is $204 per uninsured individual per month ($2,448 annually). In other words, if the penalty calculated using the larger of the 1% of AGI method or the flat-dollar method is higher than the national average bronze premium per uninsured individual per month, the penalty is capped at that bronze premium amount. Furthermore, if a family consists of more than 5 uninsured individuals, the cap cannot exceed $1,020 per month ($12,240 annually).
The reason there is so much confusion is because many taxpayers have only heard the $95 calculation method and are unaware of the 1% of annual household income calculation method.
Q: Is there a difference in calculating the penalty for not having insurance if a taxpayer files jointly or separately?
A: For Married-Filing-Single (MFS) filers, both spouses will pay the penalty on their individual MFS returns on only the income reported on each separate return. MFS filers do not have to add the other spouse’s income to their own before calculating the penalty on the MFS return. For Married-Filing-Joint (MFJ) filers, the penalty will be calculated on the combined income of both spouses on the joint return.
Q: Will the IRS enforce collection on ACA tax penalties?
A: Yes, the IRS has indicated it will follow the law and collect ACA tax penalties. The penalty will be paid by either reducing the refund or adding to the balance due on the tax return.
Q: Are ACA tax penalties increasing in the future?
A: Yes, ACA tax penalties will increase. The flat fee amount will increase from $95 in 2014, to $325 in 2015, $695 in 2016 and is inflation-adjusted thereafter. For the percentage method, the percent will increase from 1% of net household income in 2014 to 2% in 2015 and 2.5% in 2016. The percentage amounts are not inflation adjusted in future years. As explained earlier, the penalty will be the higher of the two calculation results.
Q: Is a taxpayer still liable for the penalty for a dependent the taxpayer doesn’t claim?
A: A taxpayer is liable for the individual shared responsibility payment on behalf of every person in the tax household who does not have minimum essential coverage or an exemption for the month in question. The tax household generally consists of all individuals the taxpayer can claim as dependents, regardless of whether those individuals are claimed as dependents. However, a taxpayer’s tax household does not include an individual the taxpayer could—but does not—claim as a dependent if the individual:
• Is properly claimed on another taxpayer’s return, or
• Can be claimed by another taxpayer with higher priority under the tie-breaker rules.
For example, because a custodial parent is usually the parent entitled to claim the personal exemption for a child, that custodial parent would generally be required to pay the shared responsibility payment for the months the child was uninsured; however, if the custodial parent releases the child’s personal exemption to the non-custodial parent and the non-custodial parent claims the child, the liability for the shared responsibility payment would be assigned to the non-custodial parent.
Q: What is Household Income for the purposes of the Individual Mandate?
A: Household Income is the Modified Adjusted Gross Income (MAGI) of the taxpayer, plus the MAGI of each individual in tax household (with a filing requirement) for whom the taxpayer actually claims a personal exemption. Note that MAGI for the purposes of the Individual Shared Responsibility Payment (ISRP) does not include Social Security Benefits, which are included in MAGI for the purposes of the Premium Tax Credit.
Q: How is the ACA tax penalty calculated and why is there so much confusion?
A: The penalty in 2014 is calculated one of two ways and the IRS will assess whichever amount is higher:
1% of annual household income (only the amount of income above the tax filing threshold, $10,150 for a single filer, is used to calculate the penalty).
$95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The maximum penalty is capped at the national average premium for a bronze plan, which, for 2014, is $204 per uninsured individual per month ($2,448 annually). In other words, if the penalty calculated using the larger of the 1% of AGI method or the flat-dollar method is higher than the national average bronze premium per uninsured individual per month, the penalty is capped at that bronze premium amount. Furthermore, if a family consists of more than 5 uninsured individuals, the cap cannot exceed $1,020 per month ($12,240 annually).
The reason there is so much confusion is because many taxpayers have only heard the $95 calculation method and are unaware of the 1% of annual household income calculation method.
Q: Is there a difference in calculating the penalty for not having insurance if a taxpayer files jointly or separately?
A: For Married-Filing-Single (MFS) filers, both spouses will pay the penalty on their individual MFS returns on only the income reported on each separate return. MFS filers do not have to add the other spouse’s income to their own before calculating the penalty on the MFS return. For Married-Filing-Joint (MFJ) filers, the penalty will be calculated on the combined income of both spouses on the joint return.
Q: Will the IRS enforce collection on ACA tax penalties?
A: Yes, the IRS has indicated it will follow the law and collect ACA tax penalties. The penalty will be paid by either reducing the refund or adding to the balance due on the tax return.
Q: Are ACA tax penalties increasing in the future?
A: Yes, ACA tax penalties will increase. The flat fee amount will increase from $95 in 2014, to $325 in 2015, $695 in 2016 and is inflation-adjusted thereafter. For the percentage method, the percent will increase from 1% of net household income in 2014 to 2% in 2015 and 2.5% in 2016. The percentage amounts are not inflation adjusted in future years. As explained earlier, the penalty will be the higher of the two calculation results.
Q: Is a taxpayer still liable for the penalty for a dependent the taxpayer doesn’t claim?
A: A taxpayer is liable for the individual shared responsibility payment on behalf of every person in the tax household who does not have minimum essential coverage or an exemption for the month in question. The tax household generally consists of all individuals the taxpayer can claim as dependents, regardless of whether those individuals are claimed as dependents. However, a taxpayer’s tax household does not include an individual the taxpayer could—but does not—claim as a dependent if the individual:
• Is properly claimed on another taxpayer’s return, or
• Can be claimed by another taxpayer with higher priority under the tie-breaker rules.
For example, because a custodial parent is usually the parent entitled to claim the personal exemption for a child, that custodial parent would generally be required to pay the shared responsibility payment for the months the child was uninsured; however, if the custodial parent releases the child’s personal exemption to the non-custodial parent and the non-custodial parent claims the child, the liability for the shared responsibility payment would be assigned to the non-custodial parent.
Q: What is Household Income for the purposes of the Individual Mandate?
A: Household Income is the Modified Adjusted Gross Income (MAGI) of the taxpayer, plus the MAGI of each individual in tax household (with a filing requirement) for whom the taxpayer actually claims a personal exemption. Note that MAGI for the purposes of the Individual Shared Responsibility Payment (ISRP) does not include Social Security Benefits, which are included in MAGI for the purposes of the Premium Tax Credit.
