Couple Sells Home, Cashes Out 401(k) To Cover Obamacare Bill

MacIver News Service | August 30, 2017

By M.D. Kittle

[Madison, Wis…] Shari and Vern Colby experienced first-hand the broken health care law that is Obamacare, according to U.S. Sen. Ron Johnson.

The River Falls couple sold their home after finding out from the IRS that they owed thousands of dollars to Uncle Sam thanks to the Affordable Care Act, commonly known as Obamacare.

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“Shari and Vern Colby are literally the quintessential example of the forgotten men and women within this health care system,” Johnson (R-Oshkosh) told MacIver News Service in a recent interview on NewsTalk 1130 WISN.

Vern works 60-hour-plus weeks, while his wife puts in 35 hours weekly at a florist shop. They signed up for Obamacare in 2014, assured by a representative that they would qualify for promised federal subsidies. The Colbys paid their premiums and ultimately submitted their check stubs to make sure they qualified for the subsidies they had received.

When they filed their tax return in March 2015, the IRS followed up with the bad news. The Colbys had to pay back the $7,000 they had received in subsidies to cover their expensive Obamacare premiums “because they made a little too much money,” Johnson said. The couple’s combined income was $59,000, according to Shari Colby.

“It was just due to the IRS. We had talked about doing late payments, but you have to pay the money. It’s the IRS,” she said.

“So they had to pretty well deplete their 401(k), plus they had to sell the house they had intended to live the rest of their lives in because they didn’t want to lose it in foreclosure,” Johnson added.

A review of Pierce County real estate records shows the couple sold the home that Shari designed, their “forever home” that the Colbys have resided in for 26 of the 28 years they’ve been married.

Shari reached out to Johnson late last month, just as the Senate was taking up the so-called “skinny repeal” of Obamacare – legislation that went down in flames.

“Shari and Vern…have been so drastically harmed and damaged by Obamacare,” Johnson said. “They’re working hard, making a little too much money, but they simply can’t afford these premiums that have doubled and tripled, and it cost them their 401(k) and their house.”

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While U.S. insurers bail out of the marketplaces created under the Affordable Affordable Care Act, sending the markets into a death spiral, Senate Republicans have failed at every opportunity to do what they promised to do: repeal and replace former President Barack Obama’s signature initiative.

In June, more than 1,200 counties were expected to have only one insurance provider available on the individual market next year, and 35,000 people were expected to live in counties with no insurance options, according to a scathing criticism in National Review.

“These numbers are expected to increase as insurers finalize their 2018 plans,” the piece states.

Premiums have also increased by more than 100 percent since the implementation of Obamacare, according to a report issued in May by the Department of Health and Human Services. Average individual premiums increased from $232 in 2013 to $476 in 2017.

In Wisconsin, premiums are expected to jump at least 12 percent next year, according to an analysis of preliminary rate increases by the MacIver Institute.

Folks like the Colbys are paying a greater price, Johnson said. Effectively they are caught between Barack and a hard place. Obamacare’s individual mandate demands Americans purchase health insurance – often very expensive insurance – or pay a penalty.

The Internal Revenue Service took in $2.8 billion in Obamacare penalties on 2016 tax returns from 4 million Americans, according to the Washington Free Beacon.

The Colbys bought insurance through the marketplace, but at a higher price than they ever dreamed. When they could no longer afford it, they were forced to pay a $2,500 penalty for not carrying health insurance, the punishment provision of the law.

“It’s a real tragedy, but unfortunately not enough of my colleagues in Washington, D.C. are worried about them because they didn’t seriously address these premiums that have skyrocketed, and they weren’t willing to be honest and courageous enough to address the root cause of the problem and bring those premiums down,” Johnson said.

Wisconsin’s senior senator has been highly critical of the process and much of the product coming out of the Senate. Last month he told NewsTalk 1130 WISN that Republicans over-promised on the campaign trail with repeal-and-replace pledges.

“I come from the business world where the standard is to always underpromise and overdeliver,” Johnson said on the Jay Weber Show. “I would say that’s…one of the reasons after the election I started talking about what we ought to do is repair the damage, focus on repairing the damage and working to transition to a system that actually works.”

Johnson took fire earlier this month when he suggested Arizona U.S. Sen. John McCain’s bout with brain cancer may have played a part in McCain’s vote against repeal of Obamacare.

“I think my comments were completely misconstrued. I was trying to first of all defend John’s position. A lot of us were pretty upset about the process, and I was also just being sympathetic with his condition,” Johnson said on CNBC’s “Squawk Box.” “I’ve got nothing but a great deal of respect for John McCain.”

Johnson told MacIver News the Obamacare problem isn’t going away. The Colbys are proof of that, he said.

Johnson said it’s time to turn management of health care back over to the states.

“I think we have the responsibility to try to limit the damage, try to do everything we can to stabilize these markets so Americans don’t experience a 25, 30, 35, 40 percent price increase because of Obamacare,” the senator said.

Shari Colby said she and her husband can’t take much more “affordable” health care.

“I hope at some point, sooner rather than later, things change in a big way to make it easier for folks like us,” she said. “I’m not opposed to paying for a premium, but when they’re gouging you and they can drop you and deny you, it’s all a mess. The private sector and the public sector.”