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Obamacare: Latest Trump Intervention Makes Gaming the System Nearly Impossible

By Charles Omedo , Feb 16, 2017 06:07 AM EST

US President Trump's administration has come up with stricter regulations targeted at the Affordable Care Act (ACA) otherwise known as Obamacare. And the core driver is that the Internal Revenue Service (IRS) will no longer withhold tax refunds for American citizens who fail to abide by requirements set out by ACA guidelines. To start with, the Obamacare health insurance program is a key legacy of the former Barack Obama's government and it provided health insurance coverage to over 20 million Americans who otherwise would not have been able to secure or afford health insurance policies. But then, this is one key President Obama's legacy that President Donald Trump is sworn to either scrap in its entirety or modify to some considerable extent. It seems the modification is what is taking place at the moment.

Health insurers hail Trump for the new Obamacare rules

Several health insurers hail President Trump for reviewing and making changes to Obamacare, but many beneficiaries of the program do not seem to follow since the change might signal higher out-of-pocket deductibles for the insured, Reuters point out. Meanwhile, Humana Inc. had threatened to unsubscribe from the Obamacare program by next year due to unprofitability, but with the new Trump changes, it is not clear whether it will review its chances.

Part of the changes that will be made to Obamacare as stipulated by the US Department of Health and Human Services will ensure that consumers are compelled to pay owed premiums when they sign up for new plans under the same insurer. This will ensure that everyone has an insurance policy and block avenues for gaming the system. To this extent, President Trump wants to ensure consumers will have a very difficult time changing insurance plans and benefiting from the same under the same insurer.

IRS won't withhold tax refunds where consumers ignore ACA requirements

A new ACA rule which proposes tax penalty or withheld tax refunds for consumers who failed to provide the IRS with information regarding their insurance compliance was set to take off this current filing season, but this requirement has now been set aside by the new Trump rules, The Washington Post writes. Under the former IRS requirement for Obamacare, consumers were mandated to notify the IRS that they had a policy in place, exempted from giving the notification, or would pay the required fine/tax penalty for not having a policy.

But the new Trump rule has overturned this ACA requirement and no American is required to notify the IRS of their status while filing for returns, and no penalty would be exacted for failing to do this. This means the IRS is now compelled to process the tax refunds of people who ignore the ACA requirement - a move consumers are already praising the Trump administration for. Ultimately, this will turn out that the burden of healthcare oversight functions at the federal level is drastically reduced.

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