As most people know, the law was frontloaded with a basketful of goodies with all the pain coming after Obama’s was supposed reelection. Benefits such as having your child tethered to your insurance until they turn 27 years old are already in effect. Other changes, such as lifting lifetime caps and eliminating the ability to cancel insurance for sick people, no doubt have beneficial effects. But they contribute greatly to the skyrocketing cost of insurance.
One of the major concerns allegedly addressed by the law was the affordability of insurance for small employers, and how these companies could extend coverage to all their employees. The answer that the Democrats came up with was to provide a tax credit. Like the CLASS provisions, which were to confront the issue of long-term care, the costs and benefits of the credit were wildly misjudged. In fact, it appears that the projections were done by the same people who estimated how far away the iceberg was from the Titanic. Mercifully, the CLASS Act was repealed before the outrageous costs were thrust on taxpayers’ backs, but the Small Employer Health Insurance Tax Credit has an entirely different story.
The number of claims for the Credit has been low despite IRS efforts to inform the 4.4 million taxpayers who could potentially qualify. According to the IRS, through May 2011 only about 228,000 taxpayers had claimed the Credit, for a total of just over $278 million. The Congressional Budget Office estimated that the Credit would provide benefits of $37 billion over 10 years, and that taxpayers would claim up to $2 billion in Credits for the 2010 tax year. The IRS plans to conduct focus groups to determine why the claim rate was so low.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins