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Financial Planning > Tax Planning > Tax Reform

Everybody loves a conspiracy

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Conspiracies are as American as tin foil and talk shows. And can be just as entertaining (Area 51), mainstream (JFK) or dark (9/11).

And we’ve got a federal government willing to stumble spectacularly — and publicly — enough to keep those flames of conspiracy burning. (Between the IRS and the NSA, we’re set for at least another decade.)

So forgive me for indulging in a little bit of my own theorizing today. What if — now hear me out — the Patient Protection and Affordable Care Act wasn’t anything but another part of Obama’s stimulus package?

What if its primary goal wasn’t to cut costs (fiction from the start) or to expand coverage (questionable depending on your state) but simply developed as an economic driver? To keep jobs flowing into one of the few industries unaffected by the housing bubble or the collapse that followed? (In fact, health care remained a growth industry during the great recession, creating jobs at something like a 12 percent clip.)

It’s hardly sinister, but it’s certainly very “Chicago.” Despite billions in bailouts over a year-and-a-half, the economy continued to slump along like a tradeshow hangover. Suddenly, health care reform emerged as an issue, and just like that we have reform. It was, after all, one-seventh of our economy last time I checked.

Which reminds me, since we’re speculating; do you think we’d have had health reform in a different economy? I can’t think of any other reason for the unions — who were taking a bath during the crisis — to get on board.

Only now, three years later, have the union bosses figured out that, oops, maybe this Cadillac Plan tax could screw us. I’d argue the administration decided long ago that the Cadillac tax would never come to pass and it was slipped into the law as a token effort to “fund” it while appealing to the angry Occupy Wall Streeters.

Either way, the unions are just the latest group to realize the grass ain’t as green as they thought it would be on the other side of reform. Hospitals, who jumped on board long ago, have also since realized they’re not only getting socked with more fees than ever, but they’ve got to pitch in with enrollment, as well — essentially translating into more work for less pay. Talk about the American dream.

Speaking of conspiracies, I’ve heard broker friends tell me for months the law’s intent all along was to drive enrollment in the exchanges. I’d always laughed that off, wondering what the end game could possibly be. Then it dawned on me last week in Chicago that if we moved everyone onto the exchanges — whether public or private — the feds could save billions by eliminating the employer health care tax break. (And don’t think for a second that won’t start cropping up more often as the tax reform talks heats up over the next 12 months.)

Finally, I just want to reiterate that despite the delay of the employer mandate —and the House’s 40th attempt at repeal — I maintain the October enrollment in the exchanges will move forward. It’s really all that’s left. And as important as this legislation is to what’s left of the president’s legacy, I honestly can’t see him backtracking further.

Course, he’s surprised me once this summer already.


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