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We want you to be prepared to tackle your taxes before they tackle you. And to do that, we’re going to dig into what’s new for this tax season and what’s staying the same. Let’s break down the details and find out how those changes impact you this tax season!
The first was to make sure everyone could be insured. Before the ACA, insurance companies could exclude people with pre-existing conditions. As a result, the people with the greatest health expenses had to go without insurance. They couldn't afford treatment. They often ended up in hospital emergency rooms with their diseases became life-threatening. Hospitals passed those expenses onto Medicaid, contributing to rising health care costs. Obamacare allowed these people to afford preventive care, reducing hospital visits, and slowing the rise of health care costs.
To make sure insurance companies could afford these ill patients, Obamacare promised they would receive many healthy patients. It did this by requiring everyone to have health insurance for at least nine months out of every twelve or be subject to a tax.
The third component was federal subsidies to help everyone afford the required insurance.
In December 2017, Congress repealed the tax effective 2019 in the Tax Cuts and Jobs Act. This significantly weakened Obamacare's ability to lower health costs. Even before that happened, many groups had successfully petitioned Congress so they could be exempt from Obamacare.
By removing the mandate, Congress basically assured that health care costs would skyrocket. It told insurance companies they had to take patients with pre-existing conditions, but removed the healthier patients. Since the subsidies remain in place, it also made sure the government would pick up a percentage of these rising costs.
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