[I’ve been super busy this fall and unable to keep up with writing about the ACA. I’m back in the saddle and here I go again. This commentary was just published on the Commonwealth Magazine website.]
A CORE TENET of behavioral economics is that most of us are biased toward optimism. I plead guilty. Today’s Exhibit A of my optimism bias is the Republican federal tax cut legislation heading toward the desk of President Trump for his signature.
It is true that the tax cut legislation is rigged to disproportionately benefit rich corporations and wealthy individuals; it expands the federal debt by $1.5 trillion or more; it’s biased against blue states that provide better public services and education; yes, it’s the pits. And yet…
In at least two ways, this new tax cut law will present opportunities and advantages for progressives, one next year, and the other in the future when Democrats recapture control of the White House, Senate, and House of Representatives, as early as January 2021. In this column, I’ll discuss the first – the tax legislation’s repeal of the so-called “individual mandate” in the Affordable Care Act (ACA). In my next column, I’ll explain how the tax cuts may empower Democrats to do a lot of good public policy in the near future.
Here’s the first way. The tax cut legislation reduces the ACA’s tax penalties under the so-called “individual mandate” to zero. Despite repeated media reports that the law repeals the individual mandate, that’s incorrect. Straight repeal is not permitted under the Senate’s strict “budget reconciliation” rules under which the tax legislation is moving forward, but reducing the mandate’s monetary penalties to zero is kosher.
Many have predicted that disabling the individual mandate will fatally undermine the ACA. That’s also incorrect. The 13 million people – with incomes between 0-138 percent of the federal poverty line – who got covered because of the ACA’s Medicaid expansion are untouched. Also, the 9 million between 139-400% of poverty who receive private health insurance subsidies will be largely unaffected. Continue reading “The Republican Tax Cut’s Silver Linings Playbook”