Insurance exemptions open to interpretation

One of the most controversial parts of the Affordable Care Act is its requirement that all Americans buy or have health insurance this year, or face a tax penalty — but, for many, the requirement may not apply.

Are you homeless? You’re exempt.

Did you recently get a shut-off notice from a utility company? You’re exempt, too.

Have you been evicted, been a victim of domestic violence, or had your home damaged by fire? Those get you off the health-insurance hook, too.

But wait, there are more — and some of these “hardship exemptions” are pretty broad.

For example, if you’re among the several thousand Montanans who had their health insurance canceled within the last six months because it didn’t comply with Affordable Care Act minimum standards, and you can’t find another plan you consider affordable, you’re exempt from the mandate.

Joe Balyeat, state director of Americans for Prosperity, an advocacy group that opposes the Affordable Care Act, has been traveling the state in recent weeks, giving presentations on elements of the law.

Part of his presentation focuses on the 14 hardship exemptions identified by the U.S. Health and Human Services Department, and how they’re greatly open to interpretation.

“We’re treading new ground here,” says Balyeat, a former state legislator who’s also an accountant. “As a practicing accountant, I don’t know if the IRS is going to play hardball or, if you submit documentation, will give everyone approval.”

“If I had to bet, I’d bet they would give approval to the majority of them, but we don’t know.”

The tax penalty this year is $95 per adult in a household, $47.50 per child, or 1 percent of your household income — whichever is higher. It increases next year.

One exemption to the tax penalty applies to as many as 50,000 people in Montana: Those earning less than 100 percent of the federal poverty level ($11,670 for a single person), and who don’t qualify for Medicaid.

This group was supposed to be covered by an expansion of Medicaid, as part of the Affordable Care Act, but the U.S. Supreme Court made that expansion optional for the states, and Montana’s 2013 Legislature rejected the expansion.

Federal health officials decided that in states where Medicaid wasn’t expanded, those earning less than 100 percent of the poverty level can be exempt from the insurance-purchasing mandate.

Another exemption category says merely that “you experienced another hardship in obtaining health insurance,” and to “please submit documentation if possible.”

Balyeat says these broad exemptions could be good news for Montanans who don’t want to buy health insurance. But it also undercuts a fundamental Affordable Care Act premise, which is that everyone is supposed to pay into the health insurance system to make it financially sound, he adds.

“There are so many instances [in the law] where you solve one problem, but create another,” he says. “I won’t hide the fact that I think Obamacare is a bad idea. It’s just not going to work.”

Joe Balyeat will give “Surviving Obamacare 101,” his presentation on the effects of the Affordable Care Act, at 6:30 p.m. today at Sykes’ in Kalispell.

Distributed by MCT Information Services