Senator Jay Rockefeller today set the record straight about the historic health care reform law, which has been misrepresented by opponents and will in fact bring enormous and tangible benefits to West Virginians and millions of other Americans.
Rockefeller said the law actually saves taxpayers $828 billion over ten years by giving tax credits to help individuals and families afford health care. And he said the so-called tax penalty only applies to free riders -- one percent of Americans -- who can afford basic insurance coverage and yet refuse to sign up for it. Those free riders end up costing everyone else thousands of dollars a year -- in the same way that uninsured motorists end up costing law-abiding motorists more on their car insurance premiums. West Virginia families currently pay about $2,000 extra every year for free riders who get medical care but don't pay for it.
"Special interests and politicians need to stop spreading blatant falsehoods about the health reform law," said Rockefeller. "It's a complicated law -- and while it isn't perfect, it's here to help every American, and the specifics of the law have widespread support. West Virginians have long asked for it and they need it. When people know what is in the law, they like it.
"The American people deserve to hear the truth about the health reform law. Despite phony claims saying otherwise, the law actually drastically cuts taxes and it makes insurance less expensive for everyone. The vast majority of Americans will never pay the penalty which has become such a hot topic of conversation. This back and forth about what to call it is pointless. The important thing is that the penalty would only impact one percent of Americans -- who currently can afford insurance, but choose to let others pay their health costs -- and only if they decide not to get coverage. Letting everyone else pick up their bills is just unfair. Everyone needs health care services at some point, and making sure everyone has insurance brings the costs down for us all.
"The goal of health reform for Americans is so much more important than political wins. And the highly politicized banter on this law is not helping to reduce that cost or decrease the number of Americans without health insurance."
The individual mandate exists so that people cannot wait until they are sick to seek coverage. It means that healthy people and sick people are covered at the same time, which lowers health care costs for everyone. By encouraging currently insured, healthier individuals to stay in the insurance markets and by attracting newly insured healthy individuals into them as well, the individual mandate leads to lower premiums and more stable insurance markets than would be the case without it. This means lower costs for everyone -- individuals, families, hospitals, and the states.
Here are some real facts about the penalty and taxes in the health reform law:
At least 98 percent of Americans will not have to pay any penalty for failing to have health insurance. The penalty is only for those who can afford health insurance, but choose not to get it. Right now, West Virginia families pay about $2,000 every year for those who get medical care but don't have insurance to cover for it. The penalty won't impact anyone else because they already have coverage through their employer, a private plan, or public programs like Medicare and Medicaid; would receive coverage through the health reform law because it provides insurance for 32 million Americans who currently don't have coverage; or they would be exempt from the mandate as is the case for those people with particularly low incomes.
If you are satisfied with your insurance, you can keep it. For the 250 million Americans who already have their own insurance, this law won't affect their coverage. Another way of stating that: fully 75 percent of Americans who currently have health insurance keep it, but now gain strong new protections from the worst health insurance company abuses, like throwing people off when they get sick.
It provides billions of dollars in real tax cuts. While some falsely state that the law provides a large tax increase, in fact, this law gives families and small businesses $828 billion in tax cuts over ten years. And not implementing the law or fighting to repeal it would actually raise taxes on Americans and make these tax cuts defunct.
The majority of West Virginians will receive assistance to get affordable insurance. 90 percent of uninsured West Virginians will be able to gain coverage through Medicaid or private insurance, once health reform is fully implemented. And West Virginians who already have coverage will also gain access to more affordable coverage. An estimated 180,000 people in West Virginia, including about 82,000 who currently have no health insurance, will be eligible for premium subsidies through the state exchanges to help them afford private coverage. $687 million in federal funds will be available to West Virginians for these premium subsidies in the first year alone (2014). 166,000 West Virginians could gain coverage should the state decide to expand Medicaid.
For the one percent who choose not to get insurance, the free rider penalty they will have to pay is either a flat rate or a percentage of income. For individuals, the penalty starts at $95 in 2014 or 1 percent of income, and goes up to $695 by 2016 or 2.5 percent of income. For families, the penalty starts at $285 in 2014 or 1 percent of income, and rises to $2,085 by 2016 or 2.5 percent of income.
Without the individual responsibility requirement, so many of the benefits of the law won't work. The only way private health insurance companies will cover people with pre-existing conditions is if everybody is covered. And the only way to make sure everybody is covered is to require everybody to get coverage -- and give them help if they need it.