President Trump’s executive order restraining Obamacare is already in effect at the IRS. The IRS will accept tax returns that do not declare health insurance status.
Obamacare requires individuals to have a qualified level of health insurance or pay the penalty. IRS tax returns require filing as to whether the filer has health insurance. Previously, the IRS would reject any tax return that would claim an adequate form of health insurance or exemption. Now, declaring one’s health insurance status is optional.
The IRS told Reason that the change in policy reflects Trump’s executive order to lighten the burden of Obamacare, saying, “The recent executive order directed federal agencies to exercise authority and discretion available to them to reduce potential burden.” The IRS continued, “Consistent with that, the IRS has decided to make changes that would continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.”
While the mandate requires individuals to have health insurance, the IRS’s new policy makes enforcing the tax penalty more difficult. Ryan Ellis of the Conservative Reform Network said, “It’s hard to enforce something without information.” However, Ellis added, “The mandate can only be weakened by Congress. This is a change to how the IRS is choosing to enforce it. They will count on voluntary disclosure of non-coverage rather than asking themselves.”
The individual mandate requiring health insurance is an integral part of Obamacare. The Supreme Court ruled in 2012 that the mandate is constitutional as a tax penalty. The weakened Obamacare enforcement might cripple the Obamacare exchanges. Humana announced yesterday it will leave all Obamacare exchanges in 2018.
Republicans are working on a full Obamacare repeal bill, although they remain divided on how to undo the Affordable Care Act. President Trump’s executive order is a start to unraveling Obamacare, even if by piecemeal.
Judge Andrew Napolitano said Trump’s Obamacare executive order was “revolutionary.” Napolitano told Fox’s Bill Bremer a president has never said, “You will exercise your judgment against the government and in favor of the individual. That is truly revolutionary and is exactly what [Trump] promised he would do.”