Monday, November 16, 2009

Making Sense Out Of Obama's New Health Plan Law

I've been trying to make sense out of the law, not because I live in the United States, but because we've been hearing very peculiar and frightening things about the proposed law.  At first I ignored the scary emails, because I just couldn't believe that the United States would tax expats, those of us citizens who have chosen to live abroad.  Then more and more people who generally are immune to scare tactics showed worry.  So I blogged about it.

But I really wanted to hear the opinion of my rebbe in these matters of United States Law and how it affects us in Israel.  I'm referring to Yitzhak Heimowitz, known as "our lawyer" by New York Betarim of my generation.

I asked Yitz to summarize the proposed law and his opinion of it.  Here's what he sent me:

Both the Senate and the House of Representatives (House) are considering bills for health insurance reform, a major Obama campaign promise. The purpose of the law, when enacted, will be to force all Americans to buy health insurance from "qualified insurers", a term which will not be defined for some time to come.

Americans who do not buy such health insurance will be encouraged to buy it, or punished by having to pay an excise tax of $750 per person per year, for which they will get nothing.

Americans who live outside the US are unable to obtain health insurance from American carriers, because these do not provide services abroad. Medicare and Medicaid only provide services in the US, not outside. In the past when an effort was made to set up an HMO in Israel to enable such services, it was not successful.

Thus the law will force American citizens abroad to buy insurance from which they cannot benefit, and if they don't, it will punish them by charging them the $750 excise tax. For us it will be a lose - lose situation.

The House bill recognizes this and exempts Americans abroad from the penalty. The Senate bill does not. We are trying to explain this injustice to the Senators so they will also include the exemption, as the House bill does.
If the Senate and the House pass different bills, which is quite likely, there will be a conference committee of members of the Senate and the House to compromise the differences. If by then both bills do not provide the exemption for Americans abroad, the conference committee will provide another chance.
One of the causes of the American revolution was "taxation without representation". We must do our best to remind the Senate of that.

Yitzhak Heimowitz


Leora said...

Thanks for helping to explain the differences between the House and the Senate bills. See, one can learn all sorts of important things by reading your blog, Batya!

Batya said...

It's Yitz who cleared it up in normal, rather than Lawyer-lingo. Leora, the first part he wrote that you'll be required to buy "a pig in the poke" should have all Americans worried.

This law hasn't been fully thought out. Good luck!

josh said...

What's the big deal?
It's like paying for Bituach leumi. Since all Americans will have health insurance, then ex-Pats might want to exploit free health insurance.

Anonymous said...

The big deal? T4

Batya said...

It's not like paying for Bituach Leumi the way they've written it. You only pay something, which is negotiable if you want to reinstate yourself for BL benefits. The Obama law is more a fine.

a, ?

U.S. Common Sense said...

Great article. I'm sure many in Congress have yet to take expats into consideration with their Health Care Reform (or any other) proposals.

Batya said...

Thanks, ther are so many expats all over the world. The last thing we need is to be taxed.