Bill Inspired By IRS Scandal Would Increase Health Care Premiums

(Credit: Politico)

A Senate Republican has seized on the growing controversy surround the IRS scandal to introduce a bill that would effectively repeal a huge chunk of the Affordable Care Act and significantly increase health care costs for millions of Americans.

Sen. Dean Heller’s (R-NV) “IRS Accountability Act” would prohibit “the IRS from receiving any ObamaCare funding that would otherwise be used for implementing the massive healthcare law,” preventing the agency from enforcing the law’s individual health care mandate, determining eligibility for affordability credits, and collecting taxes to help pay for the coverage expansion.

“Nevadans are already concerned about ObamaCare, so the fact that Congress could hand over even more power to an agency under intense scrutiny to enforce the health care law is deeply concerning,” Heller said in a statement. “The ‘IRS Accountability Act’ suspends funding for new ObamaCare IRS agents because right now we can’t trust the IRS to do its job.”

By 2014, the health care law will require the agency to assess fines on individuals who can afford to purchase health care coverage, but choose not to, and distribute tax subsidies for families who make no more than four times above the federal poverty line, approximately $94,200 for a family of four. Should Heller’s bill become law, the government wouldn’t be able to collect the penalties or pay out subsidies. It would also struggle to capture revenues from fees on medical devises, health care insurers and high-cost plans.

The penalty for going uninsured — which will be gradually phased in from 2014 to 2016 and then increase annually by the cost-of-living adjustment — is designed to encourage young and healthy people to buy coverage and spread the cost and risk of coverage across a wider population, thus lowering premiums. Though it’s unclear how many fewer people would purchase insurance if they were not penalized for not doing so, a 2012 study from the Urban Institute indicated that without a mandate, “nongroup premiums overall would increase by roughly 10 percent with high exchange participation and by 25 percent with low participation.”

Heller’s office did not respond to requests for comment.