The Disability Tax

There has been a lot of attention over the past year on tax cuts for people on the federal and state level. Indeed, there is now a proposal to eliminate the federal dividend tax. What no one is paying attention to is the “Disability Tax” which is being raised by the Romney administration.

I am referring to increased premiums for people on the MassHealth’s CommonHealth program. This program has two unique parts. One part allows people with disabilities who are employed to purchase medical insurance based on a sliding scale. The second allows families who have children with disabilities to do likewise.

Like other participants in the program, I received a letter this week from the Commonwealth raising my premiums. What is terrifying about the raise in premiums is the increase in rates. The marginal rates run from 4% of income up to 21.68%. (Marginal Rates are the increase in premiums for each incremental rise in income.) The effective rates are lower than the marginal rates, but they still run from a low of 1% up to 21%. (Effective Rates are the insurance premium divided by the income.)

It is unseemly that the Governor feels that an individual making $26,000 should pay more for their health insurance than they pay in state taxes. For example, a single female making $32,000 would be paying $168.00 a month or 6.3% of their income for insurance. A family of three making $52,000.00 would be paying $152.00 per month or 3.57% of their income. These rates are for people who only have MassHealth’s CommonHealth as their insurance.

MassHealth’s CommonHealth (Medicaid) requires you to carry your employers insurance even if it does not meet your needs. The above single female would pay an additional $109 per month and our family of three would pay an additional $99 per month. Their rates are slightly lower but it is in addition to what they are forced to pay for their employer’s insurance. One for the price of two!

One has to ask why any individual should be forced to potentially pay up to four times as much for health insurance as they would pay in state income tax simply because they have a disability and cannot buy insurance on the open market which meets their unique needs. This decision to increase premiums on the heels of quadrupling the co-pays on medicines will only exacerbate the situation.

The role of government is to encourage people to work and to join the mainstream of our society. Instead, one of the first acts of the Romney administration is to create additional disincentives, permanently locking people with disabilities into a life of dependency living on government handouts.

During the campaign when Governor Romney said that taxes were high enough, he was talking about people without disabilities and families who have children without disabilities. It is time for the Governor to move swiftly and stop taxing people and families based on their disabilities.

How will the new rates affect you? Click here to check your rates.

John Winske is a Partner in DRS Consulting, and is the former Executive Director of the Massachusetts Coalition of Citizens with Disabilities (MCCD). His editorials and writings can be found at DisabilityRights.com.