ObamaCare and Tax Evasion

August 14, 2013
73 Views

The Affordable Care Act (aka ObamaCare) may help reduce tax evasion, especially in states that don’t expand Medicaid eligibility. That’s because people whose projected income is between 1x and 4x the poverty level will be eligible for federal subsidies to purchase insurance on the new marketplaces (also called exchanges). There’s an incentive to report more income in order to be eligible for subsidies.

The Affordable Care Act (aka ObamaCare) may help reduce tax evasion, especially in states that don’t expand Medicaid eligibility. That’s because people whose projected income is between 1x and 4x the poverty level will be eligible for federal subsidies to purchase insurance on the new marketplaces (also called exchanges). There’s an incentive to report more income in order to be eligible for subsidies.

Kaiser Health News (In states that don’t expand Medicaid, some of the uninsured may still get help) doesn’t discuss the tax compliance issue directly, but does note that there’s a potential strategy for people to estimate their incomes optimistically in order to qualify for subsidies.

I’ve seen anecdotal evidence of this phenomenon in Massachusetts, since RomneyCare was instituted. Some babysitters and other informal workers started asking their employers for letters stating their hours and wages in order to qualify for subsidized insurance here. It may or may not have made economic sense for these workers to start declaring income, but it gave one more push toward getting on the books and going legit.

You may be interested

Where Is The Balance? Pushing Back Against Consumer Health Tech
eHealth
3 views
eHealth
3 views

Where Is The Balance? Pushing Back Against Consumer Health Tech

Larry Alton - August 18, 2017

When Republican Congressman Jason Chaffetz glibly remarked that Americans struggling to afford insurance should choose between that and their smartphones,…

What to Look for in Patient Solutions Software
eHealth
365 views
eHealth
365 views

What to Look for in Patient Solutions Software

Robert Cordray - August 17, 2017

The medical sector is one area where technology has had a significant impact, largely by providing tools that simplify many…

Can Natural Remedies Like RediCalm Decrease Stress and Anxiety?
Wellness
2 views
Wellness
2 views

Can Natural Remedies Like RediCalm Decrease Stress and Anxiety?

Ryan Kh - August 16, 2017

According to research from the National Institute of Mental Health, anxiety disorders are the most common mental illness in the…