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Health Insurance

Is ObamaCare a Tax or a Penalty?

Is Obama care a tax or a penalty? The real question is does it matter?

Republicans have been making a tremendous effort in the media to announce that Justice Roberts of the US Supreme Court ruled Obamacare is a tax. That’s because the Republicans are great at recognizing how to spin information to their advantage. I’m a Republican and I think I’m also good at spinning which is useful because I have an advertising business in addition to my law practice.

The answer to the question is that it doesn’t make any difference. If someone who elects not to buy health insurance must pay an amount of $695 why does it matter if you call it a tax or a penalty? He or she still has to pay whether it’s called a tax or a penalty.  Of course, if you have health insurance, you won’t pay any tax or penalty.

Questions you should ask:

  • Should people who can afford to purchase health insurance be allowed not to purchase health insurance and get free treatment by walking into a hospital for a cold generating substantial costs to the hospital which has to be passed on to people who pay for health insurance and tax payers? I personally know quite a few people who spend a lot of money on expensive dinners and fancy cars but don’t have health insurance because they think it’s too expensive. One of them received nearly $100,000 of medical treatment at the hospital. The hospital sued him but never received any money. Responsible people pay for that.
  • Is the minimum penalty/tax high enough? Probably not. A lot of people will probably prefer to pay the tax because it will be less expensive than health insurance. In 2016 the amount will be $695 per person and up to 3-times that per family.
  • Will Obamacare work? I have no idea. Some important parts have been stripped out by Republicans which will make it less effective. However, if it’s still around, I’m sure it will be modified over the years.
  • What will happen without Obamacare? In the mid 1980s, I predicted that the health insurance industry would collapse in 20-30 years because of rapidly rising premiums. My timing was off but I believe that the health insurance crisis will reach the point of near collapse within another 10-25 years. With health insurance premiums increasing at 17% a year, it could easily happen soon because in just a few years only the rich will have health insurance. Before the crisis reaches a near collapse of the health insurance system, even the Republicans will recognize the need to do something. If it’s not Obamacare or something similar, it will be socialized medicine like Canada, France, Germany, United Kingdom, Australia, Italy, Israel, Japan and other countries.

All AAA rated countries now have universal / socialized healthcare: http://freakoutnation.com/2011/08/06/s-all-of-which-have-socialized-health-care/
List of countries with universal / socialized healthcare: http://truecostblog.com/2009/08/09/countries-with-universal-healthcare-by-date/

For questions about Obamacare and the true facts, such as How much will the “tax” penalty be for not buying health insurance?
Further explanation of the cost of the tax penalty for not buying health insurance from the EconomicPolicyJournal.com

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