I have spent a lot of time looking through available documents and am
very confident that what follows is correct. But a lot of what I read
was confusing and I beg your indulgence if I got some small detail
wrong.

BACKGROUND

In his campaign and once in office, President Obama promised to provide
affordable healthcare to all Americans. As the "stick" part of his
carrot and stick approach, he argued that a tax be imposed on all
Americans who do not have adequate health insurance and choose not to
buy health insurance through one of the new insurance schemes.

It is important to note that the tax applied to all Americans and the
health insurance provided under the new schemes covers only healthcare
delivered in the US.

This led to two problems facing all Americans living outside the country
who do not have US-based health insurance:

1. Most such Americans already have decent health insurance
provided by the country in which they live (Europe, Canada, Australia,
New Zealand, Japan and others). So it is unfair to require them to buy
insurance that they do not need and, unless they move back to the US,
cannot use.

2. Americans living in most parts of the developing world do not
have (local) government-provided healthcare and there is nothing in any
bill that was proposed that would pay for medical expenses incurred
outside the US.

There's good news and bad news. The good news is that our efforts helped
get an exemption for Americans living overseas. The bad news is that
nothing in the bill that passed does anything to help the folks who live
in the developing world and are otherwise uninsured.

PENALTIES FOR NOT PURCHASING HEALTH INSURANCE

Both the House and Senate bills contained penalties for non-enrolment.
This was the most confusing part of the legislation. Originally, the
House penalties were much higher than those passed by the Senate. As
explained above, the House passed the Senate bill and then raised the
penalties in reconciliation. Here are the "reconciled" terms:

Individuals who can afford to purchase health insurance coverage and do
not do so will face a penalty (tax) of the greater of

* $95 or one percent of income in 2014;

* $325 or two percent of income in 2015; and

* $695 or 2.5 percent of income in 2016,;

* Families will pay half the amount for children up to a cap of
$2,250 for the entire family.

* After 2016, dollar amounts will increase by the annual cost of
living adjustment.

In 2016 the 2.5% will apply to a maximum income of $90,000 and this is
where the number $2,250 comes from (2.5% of $90,000 is $2,250.)

Note: These "penalties" are included into the bill as amendments to the
Internal Revenue Code of 1986 so, whether they are called fines,
penalties or whatever, they are treated as taxes.

HOW DOES THIS AFFECT AMERICANS LIVING OUTSIDE THE US?

Americans living outside the US are exempt! Here is the language in the
final bill.

"(4) INDIVIDUALS RESIDING OUTSIDE UNITED STATES ...

Any applicable individual shall be treated as having minimum essential
coverage for any month-

"(A) if such month occurs during any period described in subparagraph
(A) or (B) of section 911(d)(1) which is applicable to the
individual...."

What does this mean?

First, remember that this is a tax. In order to impose a new tax, it is
necessary to amend the tax code. Section 911 of the tax code gives
certain tax deductions and credits for Americans living overseas. The
best-known such is an $80,000 annual deduction for foreign earned
income.

If the IRS is to give a deduction to someone living overseas, they have
to define what it means to "live overseas." Here's the IRS definition of
a "qualified individual"-that is, someone who can take the deduction.

(1) Qualified individual

The term "qualified individual" means an individual whose tax home is in
a foreign country and who is-

(A) a citizen of the United States and establishes to the satisfaction
of the Secretary that he has been a bona fide resident of a foreign
country or countries for an uninterrupted period which includes an
entire taxable year, or

(B) a citizen or resident of the United States and who, during any
period of 12 consecutive months, is present in a foreign country or
countries during at least 330 full days in such period.

If you want to see more, you can find Section 911 of the tax code here:
www.law.cornell.edu/uscode/26/usc_sec_26_00000911----000-.html

Two important notes:

1. This exemption applies to anyone who qualifies for the 911
deduction. It does not mean that someone who qualifies has to take the
deduction. For example, an American student who grew up and now studies
in France would be exempt from the "non-enrolment" tax even though she
doesn't earn anything and, therefore, doesn't need a deduction.

2. The exemption does not prevent anyone from buying health
insurance in the US. All it says is that if you live overseas, you don't
have to buy it. That is, you can elect to buy into the new system but
you won't be penalized if you don't.

Is this the best way to define what it means to be living outside the
US? I haven't a clue. What I do know is that this was the only
definition that anyone considered. Once the penalty for non-enrolment
was introduced as a tax, any exemptions had to be written as amendments
to the tax code. Section 911 came into force under the Kennedy
administration (the deduction then was $25,000) and the much larger
deduction came into force in 1982-under Ronald Reagan. So, if you're
unhappy with the definition of "living outside the US" in the tax code,
please blame either JFK or President Reagan-who undoubtedly consulted
with his astrologer before signing the 1982 bill into law.

HOW DA AND OUR EXECUTIVE DIRECTOR HELPED TO GET THIS EXEMPTION INTO THE
FINAL HEALTHCARE LEGISLATION

Our involvement goes back to 1993. Hillary Clinton had submitted her
healthcare bill to Congress and happened to be in Rome. She met with
then DPCA Chair Peter Alegi-in the Vatican! (Yes, Peter swears that it's
true). I don't know how he did it (divine intervention?) but he
persuaded Hillary to include an exemption for overseas Americans in her
proposal. The added language is virtually identical to what now appears
in the current legislation.

As was explained to me, the particular exemption language was included
because folks on Hillary's staff feared that granting an exemption for
overseas Americans from buying health insurance under the new healthcare
system might lead to tampering with Section 911. The clause was written
as an amendment to section 911 in the tax code in order to minimise the
risk that someone would want to delete or emasculate our tax exemptions.

The House began working on healthcare reform sometime last spring. One
of the leaders of the draft committee was Rep. Chris Van Hollen
(MD)-Chair of the DCCC and a good friend of Democrats Abroad. The first
draft of the House bill took a lot from Hillary's bill

Lindsey Reynolds (DA's executive director in DC) met with Van Hollen's staff members and it didn't take
a lot of persuasion to get them to include the exemption language into
this first draft. That language survived every draft brought up in the
House and appeared in the bill that passed the House in November.

In the meantime, Peter and Anthony Sistilli-our International
Counsel-went through initial versions of the House bill and explained
those parts that affected Americans living overseas. It was they who
first highlighted the two fundamental concerns-the need for an exemption
and the need for coverage for those who did not have a national health
scheme in their countries of residence.

Lindsey sent me an email last summer, asking me to ask Max Baucus to
include the exemption in the allegedly "bipartisan" bill to emerge from
the Senate Finance Committee. She made the request because I know Sen.
Baucus from his early days as a congressman from Montana (I worked on
his first campaign). My efforts proved fruitless and the (no longer
bipartisan) bill reported out of the Finance Committee contained no
mention of the exemption.

But we were successful with the bill that came out of Harry Reid's
office. We got help from a number of sources. Andy Green-former Chair of
DA Hong Kong and a now a senior staffer in Sen Merkley's office--was
helpful in directing us to sympathetic people in Reid's office. Peter
discussed it with his contact on Nancy Pelosi's staff. Trey Barnes-a
member of DAUK who works with Senator Schumer, Chair of the
DSCC-forwarded a letter describing the need for exemption to the senior
staffer in Reid's office who was working on healthcare legislation.
Other people raised the issue. The result was that exemption
language-similar to what had passed in the House-got added to the Senate
bill that passed in December.

But you are all the real heroes in this drama. A few people had contacts
or were in a position to lobby for this exemption. But high ranking
staffers in Harry Reid's and Nancy Pelosi's office-and a few other key
offices in Washington--were willing to listen to us in the midst of the
most charged debate in Congress since the Civil War. They listened
because we helped to get Democrats elected. Everyone in Democrats Abroad
who registered voters, raised money to promote votefromabroad.org,
worked on our Global Primary, made banners, participated in videos and
everything else we did in 2008 (and 2009) deserves as much (or more)
credit as someone who made a phone call or sent an email. Anyone can
send an email. Your efforts ensured that our emails were read.

Why am I telling you about this only now? Because anything can happen in
Congress and we were concerned about any adverse publicity that could
affect its inclusion in the final bill. We were holding our collective
breath and felt free to report this only after the President had signed
the final Reconciliation bill on March 30th.

WHAT ABOUT HEALTHCARE FOR AMERICANS LIVING IN COUNTRIES WITH NO NATIONAL HEALTH SERVICE?

Last September, I got an email from Susan Marx, former Chair of
Afghanistan. In one paragraph she poignantly articulated the problem:

"DA Afghanistan had a monthly meeting on Friday September 11, focusing
on healthcare. We listened to the president's address to Congress on an
MP3 player and had a brief time to reflect and discuss how healthcare
coverage affects those of us who not only live overseas but, like the
majority of us in Afghanistan, are aid workers who commit our lives to
living and working in the developing world with greater risk and less
opportunity for insurance. In countries like Afghanistan, Iraq, Sudan
and other war-torn nations, if you do not work for the US government or
another entity that provides you with healthcare (and that includes
every NGO worker, researcher, journalist and independent consultant),
you have to buy outrageously expensive insurance because most programs
have a 'war exclusion'. There are a number of members [of Democrats
Abroad] in Afghanistan currently serving with no health insurance
whatsoever, including a few in their sixties. This just isn't right."

A number of people-particularly in Asia-have been thinking about how
best to address this problem. Our International Treasurer, Wayne
Weightman, in Cambodia, Ada Chen in China, Patricia Ferrari (former RVC
for the Americas and Chair of Brazil), Phil Bendenoun in Brazil, and
others spent a considerable amount of time trying to come up with an
affordable system for covering those who are now left out.

It soon became clear that Democrats in Congress weren't going to spend
political capital on creating a new system that would help only
Americans living abroad So we tried to find a way to allow uninsured
Americans overseas to obtain medical coverage through an existing
program By "uninsured" we mean people who do not live in countries with
decent national health systems and do not have health insurance provided
by the US government or any private company. Without a new system, the
only way to increase coverage-immediately--for the uninsured was to open
up some existing program to all overseas Americans.

Anthony Sistilli, John McQueen, Margo Miller, Andy Green and others came
up with possible options. There seemed to be two:

* Tricare This is medical insurance for Americans in the
military who live anywhere in the world. There are recognised hospitals
and physicians who can provide services and get directly reimbursed by
the government-not unlike Medicare.

* The Foreign Service Benefit Plan (FSBP). This presently
serves about 30,000 foreign service members, DOD, State Department and
other staffers worldwide.

We asked the staffer in Harry Reid's office about these options and got
the following response [K is the person who wrote our exemption into the
Senate bill.]:

"On the second item, I spoke with K and it is indeed a huge lift. K
feels there will be huge objections to expanding the eligibility of
expats to participate in the Tricare or FSBP programs. We'll get DOD,
VA, State and eventually the White House all pushing back. They will
simply say the current plans cannot support any expansion."

And, when we investigated further, it soon became clear that neither
option-even if politically possible-would really work for us. In
reference to the Tricare program, John McQueen pointed out that medical
facilities for military personnel based overseas are, unsurprisingly, on
military bases. This would not be useful for many civilians. But this is
moot because we are not about to challenge the Veteran's Administration,
the State Department, the Department of Defence and the White House.

So, for the moment, we have failed to get medical coverage for uninsured
Americans living abroad. But, we are not giving up. Let me describe one
approach that may very well bear fruit.

One of the real scandals of our current healthcare system relates to
Medicare. There are many people who pay Social Security taxes for dozens
of years and then retire outside the US. When they get sick, they can
get their medical expenses reimbursed by Medicare only if they get
treated in the US. The dire consequences are obvious.

DA representatives go to Washington each year to lobby for issues
important, primarily, to Americans living overseas. Paul Crist, a member
of DA Mexico, has come to two of our "doorknocks" to lobby for a pilot
program to extend Medicare coverage to Americans living in Mexico. Paul
has lobbied hard and is gaining lots of support. Not much attention was
paid to this-or anything else-while the great healthcare debate was
going on. But, now that it's over, we will be pushing hard for this
trial to begin.

If the pilot program goes ahead-and is successful-then the obvious next
step is to extend Medicare elsewhere.

There is not much difference between providing Medicare benefits to
seniors living abroad and using the same structures to provide medical
benefits to all Americans who choose to buy American-based health
insurance. This may be the model that, eventually, leads to achieving
the President's goal of making affordable healthcare available to all
Americans.

WHAT DOES ANY OF THIS HAVE TO DO WITH GOTV (Get Out the Vote) AND FUNDRAISING?

Everything! We are told that people will contribute to DA if they see
where the money is going and, sometimes just as important, how they can
benefit personally. I feel comfortable approaching a potential big donor
and telling her/him the following:

* We raise money.

* We spend it to promote Votefromabroad.org

* We register tens of thousands of Democratic voters

* These voters make the difference in close elections

* This gives our leaders and members, acting 'officially' or as
individuals, access to key Democratic lawmakers and government
executives to push hard for issues important to our constituents-who are
all Americans living abroad

* We use that influence to affect legislation-in particular the
exemption that can save you over $2,000/year in additional taxes

* So give us money to increase our influence so we can do more
for you.

Our International Finance Committee-chaired by Wayne-will be heading
fundraising efforts leading to the critical elections in November. But,
in the meantime, if you know any possible big donors, you can tell them
why they should contribute to Democrats Abroad today.

Stanley Grossman, UK