Why Is The Taxation Without Benefit Act Important?

In the United States, health insurance is a major financial burden for families and individuals. Health insurance helps families avoid the large costs of medical treatment that can be covered only through an insurance policy. Health insurance also helps reduce the financial burdens of prescription drug costs as well as the costs of long-term hospital stays. However, the lack of health insurance among certain demographics may lead to increasing health insurance premiums and deductibles for those who do not have access to health insurance through their employer, themselves, or through a private plan like Medicare. There are three major reasons why the uninsured rate continues to rise for the uninsured.

 

In 2021, 8.6 percent of all individuals, or 27.3 million, did not have health insurance, at some point during the year, according to the Kaiser Family Foundation. The uninsured rate and number of young, uninsured individuals increased slightly from 2021 (8.2 percent or 22.2 million). The percentage of adults without health insurance actually decreased slightly from 2021 (9.2 percent or 20.4 million adults). The number of adults without health insurance also dropped slightly, from 17.2 million in 2021 to 16.2 million in the year ending July.

 

One of the reasons why there is such a high uninsured rate among lower-income and minority individuals is because many of these groups don’t look forward to getting insurance, they just hope they don’t get sick or injured, and if they do they will have the coverage they need. According to the Kaiser Family Foundation, seven out of 10 uninsured Americans fall into this last income group. A decrease in the uninsured rate for this demographic could be very helpful to the health insurance industry and to those Americans who want to obtain health insurance.

 

The U.S. House of Representatives recently passed the American Health Care Act, also called the Trumpcare bill, which has been designed to undo many of the damaging elements of the Affordable Care Act. Some of the provisions that could affect low-income and minority individuals the most are the elimination of the mandate penalty for individuals who do not carry health insurance, and it repeals parts of the Health Insurance Repeal Act that imposed a yearly fee on insurance providers for reducing the number of individuals who obtained insurance through rate increases. Many people think that the United States will begin to implement the European-style system of medical tourism, where individuals traveling to other countries to receive medical care in countries for significantly reduced costs. This may be a possibility in the future, but for now the European system has been implemented successfully.

 

An additional change that could help reduce health insurance premiums for U.S. citizens would be to reform the way the insurance industry treats people who are considered “guaranteed issues.” Guaranteed issue policies are purchased based solely on individuals’ current health status, and there is no process that determines how healthy an individual may be. People who purchase these types of policies are often younger, less healthy individuals who seek out lower premiums because they believe that they will not become ill. The insured citizens often become sick and are hospitalized, forcing their premiums to skyrocket. If this legislation is passed, insurance companies may be more likely to insure these individuals, which could ultimately help keep health care premiums lower for everyone.

 

There is another proposed change that could directly affect the cost of health insurance for millions of adults in the United States. This proposal would allow states to block the mandate penalty for people who do not purchase health insurance. The penalty is meant to encourage people to purchase coverage, but if the penalty is eliminated states will lose revenue. It is believed that this would encourage people who are not interested in buying medical care to pay for the coverage on their own. The proposal would likely affect both adults and children.

 

The Affordable Care Act also includes provisions that would allow people to save money on the cost of medical care through a variety of different methods. Some plans offer the freedom to choose the doctor or hospital that you prefer, and some allow you to see any medical professional that you choose as well. This could drastically reduce the cost of medical care for many families. Some employers are trying to help employees buy affordable care insurance by offering them the option of a Flexible Spending Account. This type of account allows employees to set aside money each month that they can use towards medical care, and the money that they have in this account is not taxable.

 

The battle over medical insurance in the United States has been raging for quite some time now. Many have questioned the effectiveness of the Affordable Care Act, and many have expressed concerns over its possible effects on the economy. Many in our country do not believe that the United States of America should suffer the consequences of another health insurance crisis. With the passage of the Taxation Without Benefit Act, many of the fears that were raised about the Affordable Care Act will no longer be a problem for American citizens.

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