The Tax Reform bill is going to cause foreclosures everywhere in the U.S.! I singled out the state because Florida leads the nation in Obamacare enrollment, so the impact here will be greater.
One of the previsions of the H.R. 1 Tax Cuts and Jobs Act eliminates the mandate penalty in the Affordable Care Act. The directive requires that individuals and companies provide health insurance for themselves and their employees. Before the repeal an income based penalty was levied but not anymore.
So what if I told you that repealing the mandate could eventually cause you to lose your home to foreclosure? Why? Because of increased Debt!
Studies show that there is a strong relationship between debt caused by lack of health insurance and mortgage default. Christopher Tarver Robertson, who is an expert in Health Law at Harvard University found that
“seven in ten homeowners experienced a significant medical distress in the two years preceding their foreclosures.”
“Our evidence suggests that medical disruptions are a major contributor to mortgage default, often striking in combination with other factors,” Robertson said. So the loss of healthcare is just one issue but how illness effects the ability to generate household income is another. The study also concluded that “Foreclosures were caused in part by a medical problem but also included unmanageable medical bills, lost work due to a medical problem or caring for sick family members.”
Ultimately, repealing Obamacare’s individual mandate would cause 13 million Americans to lose health coverage compared with the current law, according to the nonpartisan Congressional Budget Office (CBO). As discussed, more Floridians have registered for Obamacare so a higher proportion would lose coverage and be burdened by debt if their health fails.
Many health care advocates and experts warn that repeal will destabilize the entire market leading to premium increases or insurers dropping out of certain areas.
The CBO also predicts that premiums in “all” health insurance markets would spike 10% without Obamacare’s individual mandate as the exchanges are left with a sicker consumer pool. Health insurers selling Affordable Care Act plans in Florida will raise monthly premiums by nearly 45 percent on average in 2018.
The GOP tax plan guts Obamacare by repealing the individual mandate. Here are the effects: pic.twitter.com/UqJmOrFP3n
— TheBeat w/Ari Melber (@TheBeatWithAri) December 15, 2017
The entire point of Obamacare’s individual mandate is to make health coverage affordable so more people could be covered. Sy Mukherjee of Fortune magazine explained, “The goal was to make sure that it’s not just sick people who are buying health insurance in these markets. By widening insurance risk pools to include a mix of young and old, healthy and sick, premiums go down in the overall market”.
Since the Affordable Care Act was launched, expanded health coverage played a major role in reducing debt and bankruptcies.
Foreclosure has a negative effect for borrowers’ families, neighborhoods, and local communities. Foreclosure can wipe out the homeowners’ savings and leave them owing debt on homes they no longer own. Lenders are becoming more aggressive in collecting deficiency judgments from borrowers after foreclosure. Moreover foreclosure defeats the national goal of home ownership and a equity source for retirement.
Some United States Senators have recognized the problems that will be caused with the Obamacare repeal. Sen. Bill Nelson (D-FL) and Sen. Susan Collins (R-ME) have proposed a $4.5 billion in Federal Reinsurance Funding Bill over 2018 and 2019 to help lower insurance premiums by compensating insurers for their costliest patients. It doesn’t look like it is getting a lot of attention.
There are many reasons why people have trouble with their mortgage payments and debt due to loss of healthcare is a significant factor. Household debt is only further complicated by the repeal of the Obamacare mandate. Tim Sanders, a Credit Specialist at Credit Repair of Florida advises ” If you find yourself threatened to miss a mortgage payment contact your mortgage company and ask to make payment arrangements”. He added “the next call should be to a HUD-approved housing counseling agency.”
Foreclosures will increase do to this legislation. But let’s wait and see what happens…..If you can afford to??????
Keith Jackson is the President of Eureka Realty Florida. He is a Licensed Real Estate Broker and Distress Property Expert with over 10,000 hours helping homeowners work through foreclosure. www.EurekaFlorida.com
Call 321.662.0422 or Email KJ@EurekaFlorida.com