A cred­i­ble IRS is cru­cial

At­tacks seek to un­der­mine agency’s abil­ity to roll out re­form law

Modern Healthcare - - OPINIONS | EDITORIALS -

It didn’t take long for the IRS scan­dal to metas­ta­size. Last week, the mi­dlevel bu­reau­crat at the cen­ter of the mush­room­ing af­fair, Lois Lerner, in­voked her con­sti­tu­tional right to avoid self-in­crim­i­na­tion. Rep. Dar­rell Issa (R-Calif.), chair­man of the House Over­sight and Govern­ment Re­form Com­mit­tee, said the pub­lic should draw no inference from her re­fusal to tes­tify about the “out­ra­geous IRS tar­get­ing of Amer­i­cans for their po­lit­i­cal be­liefs.” Right.

“What’s she hid­ing?” Rep. Vern Buchanan (R-Fla.) told Politico. “The Amer­i­can peo­ple de­mand and de­serve an­swers.” House Speaker John Boehner (R-Ohio) set the tone by de­mand­ing be­fore the first hear­ing that some­one go to jail.

The Obama ad­min­is­tra­tion did lit­tle bet­ter in its ef­fort to avoid get­ting bogged down in mul­ti­ple con­gres­sional in­ves­ti­ga­tions. The pres­i­dent dis­patched At­tor­ney Gen­eral Eric Holder to launch his own in­ves­ti­ga­tion even though IRS of­fi­cials tes­ti­fied un­der oath that there had been no com­mu­ni­ca­tions be­tween the White House and the IRS, which was also the find­ing of the Trea­sury’s in­spec­tor gen­eral.

So what does any of this have to do with health­care re­form, you may be ask­ing? Last week, I called the head of the scrupu­lously non­par­ti­san Tax Pol­icy Cen­ter in Wash­ing­ton to see if the scan­dal would have any im­pact on the IRS’ abil­ity to carry out its role in the Pa­tient Pro­tec­tion and Af­ford­able Care Act, aka Oba­macare. His an­swer: “I don’t know.”

That’s a dis­turb­ing re­sponse. The IRS’ en­tire mis­sion—col­lect­ing taxes—de­pends on the Amer­i­can peo­ple’s faith in its abil­ity to carry out the law in a fair and even­handed man­ner. If it loses its cred­i­bil­ity, the roll­out of health­care re­form is doomed. Let us count the ways the IRS will be cru­cial to car­ry­ing out the law. The IRS will be re­spon­si­ble for de­ter­min­ing house­hold in­come and el­i­gi­bil­ity for in­sur­ance sub­si­dies on the state and fed­eral ex­changes, as well as im­pos­ing a tax on peo­ple who fail to buy in­sur­ance.

The IRS will be as­sess­ing a $2,000-per-em­ployee penalty on em­ploy­ers with more than 50 work­ers who do not of­fer health in­sur­ance cov­er­age to their work­ers. It will al­lo­cate tax cred­its to small busi­nesses with fewer than 25 work­ers that of­fer cov­er­age as long as they pay for half the cost.

To fi­nance health­care re­form, the IRS will be col­lect­ing a slew of new and ex­panded taxes. They in­clude a 0.9% Medi­care sur­tax on fam­ily in­comes over $250,000 and in­di­vid­ual in­comes over $125,000, and ex­pand­ing the Medi­care pay­roll tax to cover in­ter­est, div­i­dends and cap­i­tal gains, which go mostly to the well-off. In­deed, 85% of the $318 bil­lion raised over the next decade by those two levies will come from the top 1% of house­holds.

The IRS will be col­lect­ing new taxes from the med­i­cal de­vice, phar­ma­ceu­ti­cal and health in­sur­ance in­dus­tries. Start­ing in 2018, it will im­pose a tax on Cadil­lac plans, which will re­quire it to de­ter­mine if the cost of fam­ily cov­er­age ex­ceeds $27,500.

But it isn’t just anti-tax fever that is mo­ti­vat­ing the Tea Par­ty­backed op­po­nents of Oba­macare. Last week, Rep. Michele Bach­mann (R-Minn.) told ABC News that Amer­i­cans’ “most per­sonal, sen­si­tive, in­ti­mate, pri­vate health­care in­for­ma­tion is in the hands of the IRS that’s been will­ing to use peo­ple’s tax in­for­ma­tion against po­lit­i­cal op­po­nents of this ad­min­is­tra­tion.”

IRS of­fi­cials have re­peat­edly tes­ti­fied on Capi­tol Hill—long be­fore the cur­rent af­fair—that they would have no ac­cess to per­sonal health in­for­ma­tion. The jour­nal­ism watch­dog Factcheck.org called the Bach­mann slur an ex­am­ple of “Repub­li­can over­reach” on the IRS is­sue.

We’re at a mo­ment when what the unin­sured pub­lic and small em­ploy­ers need is hon­est, dis­pas­sion­ate in­for­ma­tion about the roll­out of re­form. What we’ve got in­stead is a pub­lic square dom­i­nated by po­lit­i­cal op­por­tunists whose only mis­sion is un­der­min­ing the law and po­lit­i­cally de­stroy­ing its name­sake.

MER­RILL GOOZNER Edi­tor

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