76 Ohio St. L.J. Furthermore 1 (2015)

handle is hein.journals/furth76 and id is 1 raw text is: 







                  Gambling for Health Care

                            JACK L. MILLMAN*

                            TABLE OF CONTENTS

I.  INTRODUCTION                                                          I..........1
II. BACKGROUND TO THE PROBLEM...................................2
III. ONE ABSURD   SOLUTION   TO AVOID  THE  GAP          ...................... 3
IV. PRACTICAL   CONSIDERATIONS AND POLICY CONCERNS ...            ............ 5
V.  CONCLUSION.................................................... 8

                             I. INTRODUCTION

    Gamble.  Win   a little. Maybe  lose a little more. Obtain  free health
insurance? It is an absurd tax planning technique that should actually work-at
least in theory. And, it perfectly illustrates the nonsensical system now in place
in the states that have refused to expand Medicaid coverage as envisioned when
the Affordable Care Act was enacted. In those states, the very poor tend to be
already covered by Medicaid, while those with higher incomes qualify for the
exchange-based  credits. A middle group-those too poor to be covered by the
Affordable Care Act  but not impoverished enough  to qualify for their state's
Medicaid  coverage-is  left out in the cold. Oddly, gambling may provide this
group a way to obtain subsidized health care coverage.
    In this Paper I argue that certain low income taxpayers could prepare to
gamble  in the upcoming year in order to inflate their estimated Adjusted Gross
Income   (AGI)  and qualify for  thousands in  health insurance related tax
credits-thus making  their insurance affordable. Tax planning strategies usually
do not involve increasing one's AGI via gambling, but states' refusal to expand
Medicaid,  combined  with the Affordable  Care Act, has  created a situation
where millions of adults' best opportunity to obtain health insurance may come
through gambling. I do not advocate that most eligible taxpayers should actually
attempt this strategy for reasons detailed below, but instead discuss it to
illustrate the current problems with the law.
    One possible objection to this strategy is the downside economic risk these
already poor Americans would  have to bear in order to get the health insurance
subsidy. Another possible objection concerns the risk that the IRS may disallow
attempts to avoid the economic downside anyway, resulting in the poor getting
stuck with losses twice. Others may have moral objections. They might argue
that it violates the spirit of the Affordable Care Act. I would respond that

     * Staff Editor, New York University Law Review; J.D., New York University School
of Law, expected 2016. I would like to thank Professor Catherine Sharkey for being my
Furman Program mentor, Professor David Kamin for providing feedback and helping
develop the idea for this article, and Kevin Benish, Kyle Lachmund, Joanna Langille, and
Susan Navarro Smelcer for their helpful comments and edits on earlier drafts.

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