Universal Health Care Messaging
Bob Jensen at Trinity University

Obamacare --- http://en.wikipedia.org/wiki/Obamacare#Term_.22Obamacare.22
Although President Obama never proposed using that term, eventually he said is was an honor for him to assi8ate his name with this legislation that he promoted to be the crowning achievement of his Presidency. "President Obama endorsed the nickname, saying, "I have no problem with people saying Obama cares. I do care."

First of all, it’s called the ‘Affordable Care Act"
House Minority Leader Nancy Pelosi more unhappy with the use of the word "Obamacare in 2014.

Democrats, who just a couple of years ago were happy to call President Obama’s signature achievement Obamacare, now are bristling at the name and have tried to remove it from the political lexicon. The change comes as the law’s rollout has been rocky, leaving Americans sour.
Stephen Dinan , The Washington Times, January 9, 2014--- http://www.washingtontimes.com/news/2014/jan/9/nancy-pelosi-dont-call-it-obamacare/

Let me state at the very beginning that I'm in favor of nationalized health care. Between 2008 and 2010 the Democrats had substantial majorities in the House and Senate and an enormously popular President Obama could've legislated nationalized health care without any help from a single Republican. Instead the Democrats  blew it and gave birth to an abomination that is yet another unfunded entitlement nail in the coffin of the United States.

I also like Germany's combination of public and private health insurance system for a number of reasons, including the fact that it like the health plans of most other nations is a pay-as-you go plan.
Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance

Don't confuse wanting a government-managed health care system like the one in Germany with the private insurance company rip off in the ACA in the USA where insurance companies have guaranteed profits while shifting the bad debts to the doctors and hospitals.

To add pain to misery these ACA insurance companies are offering over-priced policies with enormous deductibles that discourage patients from having medial treatments except in emergencies.

Hopefully, President Hillary Clinton will have the courage to reduce for-profit insurance companies to offer only supplemental elective plans like they do in Germany and for Medicare in the USA.

I vote for the German system that operates a lot like Medicare for all ages of citizens but with better fraud controls. I used to lean toward the Canadian system, but it's elective medical procedure delays for new hips, knees, and shoulders forces too many Canadians to pay cash for such procedures in the USA. when they grow weary of waiting out Canadian health plan approval.

What bothers me the most are the blatant lies our leaders broadcast to voters just to get a health care bill passed. I would be much less critical if they had flat out been honest about what they really intend for this legislation to cost. One example of a political lie is that Cadillac insurance plans will be taxed. The unions didn't object very loudly because they know full well that by 2018 when the tax is supposed to commence, Congress will have repealed all or most of the Cadillac tax.  The same is true with many other provisions of the legislation that can be altered at taxpayer expense. Also our leaders promised that nearly a half trillion dollars will be saved by reducing third party payments to physicians. But those projections are easily altered if physicians truly demand higher reimbursements.

I just wish that Congress had passed a pay-as-you-go tax as part of this legislation, where people at all levels of income and wealth pay their fair share of the health benefits they receive. Middle class America should foot their own bills for health care through substantial tax increases on the middle class.

"A Simple Theory for Why School and Health Costs Are So Much Higher in the U.S.," by Andrew O’Connell, Harvard Business Review Blog, April 7, 2014 ---
http://blogs.hbr.org/2014/04/a-simple-theory-for-why-school-and-health-costs-are-so-much-higher-in-the-u-s/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29&cm_ite=DailyAlert-040814+%281%29&cm_lm=sp%3Arjensen%40trinity.edu&cm_ven=Spop-Email 

Jensen Comment
One reason higher education costs more in the USA is that more attempts are made to bring college education to everybody with nearby physical campuses such as community colleges and online degree programs from major universities. In Europe and most other parts of the world higher education is available only to a much smaller portion of the population. In Germany, for example, less than 25% of young graduates are admitted to college and opportunities for adult college education are much more limited than in the USA. Those other nations, however, often offer greater opportunities for learning a trade that does not require a college education.

There are many reasons health care costs more in the USA. One reason is that the USA is the world leader in medical and medication research. Another reason is that the USA imposes a costly private sector insurance intermediary where other nations offer insurance from a more efficient public sector.

Still another reason is that malpractice lawsuits are a legal punitive damages lottery in most parts of the USA such that hospitals and physicians must pay ten or more times as much for malpractice insurance relative to nations like Canada that restrict malpractice to actual damages only, leaving out the lottery for lawyers.

Still another reason is that the USA keeps extremely premature babies alive that other nations throw away. Even more expense if what Medicare spends on keeping people hopelessly and artificially alive, dying people that other nations let slip away without all the very costly artificial life extensions.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

National Bureau of Economic Research: Bulletin on Aging and Health --- http://www.nber.org/aginghealth/

Leading ACA Act Blogs ---
http://www.zanebenefits.com/blog/15-best-health-reform-blogs


The Lies and Deceptions

December 31, 2014

December 31, 2013

September 30, 2013

June 30, 2013

March 31, 2013

December 31, 2012

September 30, 2012

June 30, 2012

March 31, 2012

December 31, 2011

September 30, 2011

June 30, 2011

March 31, 2011

December 31, 2010

September 30, 2010

July 29, 2010

July 17, 2010

June 29, 2010

June 10, 2010

May 27, 2010

May 20, 2010

May 10, 2010 

April 29, 2010

April 20, 2010 

April 8, 2010  

March 30, 2010 

March 18, 2010

March 8, 2010

February 23, 2010  

February 15, 2010 (including Health Insurance in Germany)

February 1, 2010

January 26, 2010

January 17, 2010 

January 5, 2010

December 23, 2009

December 17, 2009

December 7, 2009 

November 25, 2009

November 17, 2009

November 10, 2009 (The Most Frightening Legislation in the Shrinking History of the United States)

October 26, 2009

October 15, 2009

October 5, 2009

September 24, 2009

September 15, 2009 Update

September 3, 200 9 Update

August 26, 2009 Update

August 17, 2009 Update

August 07, 2009 Update

Canada

America, what is happening to you?
“One thing seems probable to me,” said Peer Steinbrück, the German finance minister, in September 2008....“the United States will lose its status as the superpower of the global financial system.” You don’t have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming, and underproducing American empire.
Richard Florida, "How the Crash Will Reshape America," The Atlantic, March 2009 ---
http://www.theatlantic.com/doc/200903/meltdown-geography

 

Medical Malpractice Lottery for Lawyers or Criminals or Both

Tax Provisions in the 2010 Act (including changed investment strategies regarding tax exempt bond investments)

History Timeline of Health Care Reform in the United States

Something AARP Wants Kept Secret

Introductory Quotations and Links

Full Text of H.R. 3962 --- http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.3962
 

A Personal Experience
Why many physicians will turn away their Medicare patients just like my wife was turned away by her surgeon in the South Texas Spinal Clinic in San Antonio because she was on Medicare
--- http://www.trinity.edu/rjensen/Health.htm#SpinalClinic 

"The Worst Bill Ever:   Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all," The Wall Street Journal, November 1, 2009 ---
http://www.trinity.edu/rjensen/Health.htm#110709
Jensen Comment
Nancy Pelosi catered to just about every special interest in the United States (except Medicare patients) and doled out earmark frauds like jelly beans to get economy/jobs destroying bill through the House. Please pray for Senate sensibility.

Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009

 

The End of the American Dream

Jensen Choice

Affordable Care Act Chart --- http://www.trinity.edu/rjensen/ObamaCareChart.pdf

20 Questions About the Affordable Care Act

The Top Ten Myths About Medicare

A Brief History of Health Insurance in the United States --- http://everylearner.com/bm/knowledgenews/americana/health-insurance-history-1.shtml
A key stimulus was in 1945 when the National War Labor Board made it possible for unions to negotiate coverage.
More importantly, however, business firms could get tax deductions for health benefits that were not taxable,
Thereby, workers did not have to pay for health insurance out of after-tax dollars.

Humor

The Wall Street Journal Guide to the Affordable Care Act, October 14, 2009 --- Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage

"Follow the Money," by Ben Shapiro, Townhall, October 21, 2009 ---
http://townhall.com/columnists/BenShapiro/2009/10/21/follow_the_money

Fathom the odd hypocrisy that the administration wants every citizen to prove they are insured, but people don't have to prove they are citizens.
Ben Stein

 

October 15, 2010 message from Bob Jensen to the AECM

Hi David,

There are many reasons why people cannot or should not stay in the main careers. Professional athletes are generally over the hill before age 40 in terms of beating out their competitors, but they generally find alternative employment. We can't trust many pilots and bus drivers and combat buddies after age 55. But they too can find alternative employment.

Trinity University has a management professor named Don VanEynde who was a Battalion Commander in Vietnam, earned a PhD from Columbia University after military retirement, and has been one of the most popular, if not the most popular, campus-wide professors for 15 years. He's still going strong even though he's older than me. .

Professors have many advantages in that many physical ailments like Professor Fordham's arthritis do not detract from outstanding performance as long as wisdom, memory, scholarship, and enthusiasm have not yet waned. .

When tragedy does strike at any age that prevents working in virtually any productive capacity, it's possible to start collecting social security and Medicare before the prescribed ages for retirement. Due to being injured on the job as a surgical nurse, my wife commenced collecting SS disability benefits and Medicare when she 54 years old. After her spinal injury (she was ordered by a surgeon to lift a 300 lb instrument table over a power cord and had to be put immediately on traction for 30 days in the hospital) she worked for 10 more painful years before undergoing the first of her eventual 12 spine surgeries. Each surgery led to worse enduring pain --- http://www.trinity.edu/rjensen/Erika2007.htm She most certainly is not a poster child for million-dollar spine surgeries. Worker compensation paid for the early surgeries until she was declared eligible for social security disability and Medicare.

The problem is that Congress provided disability entitlements without nearly enough funding such that these entitlements now are enormous drivers of present and future multi-trillion deficits being passed on to current and future children in the United States. Extending SS retirement ages will most certainly increase the numbers of disability claims, but the majority of older workers are gratefully not eligible for disability status before retirement at higher ages. Disabled people can start collecting Medicare at any age as soon as they are declared eligible for SS disability benefits.

Disabled people should've been funded outside the SS retirement system, but members of Congress were too chicken to establish a separate Disability and Medical Fund. They sneaked the financial entitlements of the disabled onto the SS retirement and Medicare systems and passed the funding deficits on to our present and future children.

Between 1776 and 1950 the care of the elderly and disabled was the responsibility of their own savings, their parents, their children, and in extreme cases the County Homes. After the disabled became the responsibility of the Federal government, heirs confiscated their parents' savings and children were unburdened of parental care responsibilities. Federal and state governments took on the housing, care, and feeding of every disabled person. In theory, savings of the elderly are to be used for nursing home care, but fraud is rampant in terms of passing these costs on to taxpayers.

We can argue endlessly whether disabled people should be the responsibilities of their families or taxpayers or employers. For example, perhaps I should've been more financially responsible for my wife's disability than the social security and Medicare systems. On this subject I can truly be an academic who can take on any side in a debate. Perhaps worker compensation insurance should've covered my injured wife for a longer period of time, but the worker compensation insurance firm worked tooth and nail to pass her on to SS and Medicare.

The point is that government funding for the disabled should be a pay-as-you-go system taxation rather than a Ponzi scheme of deficit financing. The present entitlement system is not only unfair to future generations, it threatens the very survival of the United States --- http://www.trinity.edu/rjensen/Entitlements.htm

Bob Jensen


Deficit tops $1 trillion second year in a row ($1.29 trillion before November and December) ---
http://money.cnn.com/2010/10/15/news/economy/treasury_fy2010_deficit/index.htm

Long-term problem:
There has been a lot of political hysteria expressed over the annual deficits of the past two years.

Fiscal experts note, however, that the abnormally large deficits incurred in the wake of the financial crisis are not the primary source of the country's biggest fiscal problems.

The biggest source of fiscal concern remains the so-called structural deficit, which is made up primarily of spending on the big three entitlement programs. That structural deficit will continue to balloon faster than the economy grows long after the current downturn has ended.

Indeed, the Government Accountability Office projects that by the end of this decade, the vast majority of all federal tax revenue will be swallowed up by just four things: Interest payments on the country's debt, and the payment of Medicare, Medicaid and Social Security benefits.

The president's bipartisan fiscal commission, charged with recommending ways to get U.S. debt under control, will issue a report in December.


I'm in favor of health care reform that completely nationalizes health insurance phased in reasonably with high tax pay-as-you-go restriction and strict cost-saving caps on punitive damage lawsuits. I really favor former Senator Bill Bradley's long-forgotten Canada-like proposal:

The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1

IOUSA (the most frightening movie in American history) ---
(see a 30-minute version of the documentary at www.iousathemovie.com )

I have come to the conclusion that the real reason this gifted communicator (Obama) has become so bad at communicating is that he doesn't really believe a word that he is saying. He couldn't convey that health-care reform would be somehow cost-free because he knows it won't be. And he can't adequately convey either the imperatives or the military strategy of the war in Afghanistan because he doesn't really believe in it either. He feels colonized by mistakes of the past. He feels trapped by the hand that has been dealt him.
Leftist Leaning Tina Brown, "Obama's Fog War," The Daily Beast ---
http://www.thedailybeast.com/blogs-and-stories/2009-12-03/what-is-obama-talking-about/
Jensen Comment
And President Obama was the dealer.

Voters are increasingly worried about unemployment, but Democratic leaders in Congress remain obsessed with passing health- care reform. Senate Majority Whip Richard Durbin was asked recently if a health-care bill would pass the Senate by the end of this month. "It must," he said. "We have to finish it." Still, many in the trenches are uneasy about the sprawling, complex bill they privately acknowledge has no bipartisan support, doesn't seriously tackle soaring costs and will increase insurance premiums. That may explain Majority Leader Harry Reid's haste—he has ordered a rare Sunday session this weekend to hurry up the debate. Public support for the bill averages only 39.2% backing in all polls compiled by Pollster.com.
John Fund, "Why Dems Are Obsessed by Health Reform:  They believe the liberal base expects them to deliver and will punish them if they don't," The Wall Street Journal, December 4, 2009 ---
http://online.wsj.com/article/SB10001424052748704007804574575584229775884.html#mod=djemEditorialPage


America spends far more on health care per capita than any other nation in the world.
One reason is that America spends trillions each year on people that other nations let go of for cost reasons:

(1) Extremely premature and lightweight newborns that other nations cannot or do not afford to save;
(2) Dying people prolonged by machines in intensive care units that have no hope of leaving ICU alive.

Born at 9.1 Ounces  She Would've been thrown away in most other nations
Cozy in her incubator, set to 81.5 degrees, heart going at 174 beats a minute as she snoozed in her red, footy pajamas, Oliviyanna Harbin-Page may be a global record-holder. Born Aug. 5 to 16-year-old Jamesha Harbin of Eight Mile after 21 to 24 weeks of gestation, Oliviyanna weighed only 259 grams, or 9.1 ounces -- possibly making her, according to the University of South Alabama Children's & Women's Hospital, the world's smallest surviving baby. She now weighs 3 pounds 2 ounces. One of three girl triplets -- the other two are identical, she is fraternal
"Baby who may be world's smallest surviving newborn could go home soon," by Roy Hoffman, al.com, December 18, 2009 ---
http://blog.al.com/live/2009/12/baby_who_may_be_worlds_smalles.html

What went so wrong in the health care system of the United States?
Mostly what went wrong is our ill-conceived and underfunded attempts to reform the system!

The New York Times Timeline History of Health Care Reform in the United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page.

The $61 Trillion Margin of Error, and What "Empire Decline" Means in Layman's Terms
This is a bipartisan disaster from the beginning and will be until the end

David Walker --- http://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)

Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1
Please note that this is NBC’s liberal Newsweek Magazine and not Fox News or The Wall Street Journal.

. . .

In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

. . .

Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

Continued in article --- http://www.newsweek.com/id/224694/page/1

Niall Ferguson is the Laurence A. Tisch professor of history at Harvard University and the author of The Ascent of Money. In late 2009 he puts forth an unbooked discounted present value liability of $104 trillion for Social Security plus Medicare. In late 2008, the former Chief Accountant of the United States Government, placed this estimate at$43 trillion. We can hardly attribute the $104-$43=$61 trillion difference to President Obama's first year in office. We must accordingly attribute the $61 trillion to margin of error and most economists would probably put a present value of unbooked (off-balance-sheet) present value of Social Security and Medicare debt to be somewhere between $43 trillion and $107 trillion To this we must add other unbooked present value of entitlement debt estimates which range from $13 trillion to $40 trillion. If the Affordable Care Act passes it will add untold trillions to trillions more because our legislators are not looking at entitlements beyond 2019.

The Meaning of "Unbooked" versus "Booked" National Debt
By "unbooked" we mean that the debt is not included in the current "booked" National Debt of $12 trillion. The booked debt is debt of the United States for which interest is now being paid daily at slightly under a million dollars a minute. Cash must be raised daily for interest payments. Cash is raised from taxes, borrowing, and/or (shudder) the current Fed approach to simply printing money. Interest is not yet being paid on the unbooked debt for which retirement and medical bills have not yet arrived in Washington DC for payment. The unbooked debt is by far the most frightening because our leaders keep adding to this debt without realizing how it may bring down the entire American Dream to say nothing of reducing the U.S. Military to almost nothing.

Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

This matters more for a superpower than for a small Atlantic island for one very simple reason. As interest payments eat into the budget, something has to give—and that something is nearly always defense expenditure. According to the CBO, a significant decline in the relative share of national security in the federal budget is already baked into the cake. On the Pentagon's present plan, defense spending is set to fall from above 4 percent now to 3.2 percent of GDP in 2015 and to 2.6 percent of GDP by 2028.

Over the longer run, to my own estimated departure date of 2039, spending on health care rises from 16 percent to 33 percent of GDP (some of the money presumably is going to keep me from expiring even sooner). But spending on everything other than health, Social Security, and interest payments drops from 12 percent to 8.4 percent.

This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

The Meaning of Present Value
Initially it might help to explain what present value means. When I moved from Florida State University to Trinity University in 1982, current mortgage rates were about 18%. As part of my compensation package, President Calgaard agreed to have Trinity University carry my mortgage. I purchased a home at 9010 Village Drive for $300,000 by paying $100,000 down and signing a 240 month mortgage at 12% APR and a 1982 present value of $200,000. At payments of $2,202 per month my total cash obligation (had I not refinanced from a bank when mortgage rates went below 12%) would've been $528,521. However, since money has time value, the present value of that $528,521 was only $200,000.

In a similar manner, Professor Ferguson's $104 trillion present value translates to over $300 trillion in cash obligations of Social Security and Medicare before being tinkered with changed entitlement obligations.

The "Burning Platform" of the United States Empire
Former Chief Accountant of the United States, David Walker, is spreading the word as widely as possible in the United States about the looming threat of our unbooked entitlements. Two videos that feature David Walker's warnings are as follows:

David Walker claims the U.S. economy is on a "burning platform" but does not go into specifics as to what will be left in the ashes.

The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.
David M. Walker, Former Chief Accountant of the United States --- http://www.financialsense.com/editorials/quinn/2009/0218.html
 

An "Empire at Risk"
Harvard's Professor Niall Ferguson is equally vague about what will happen if the U.S. Empire collapses from its entitlement burdens.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

The precedents are certainly there. Habsburg Spain defaulted on all or part of its debt 14 times between 1557 and 1696 and also succumbed to inflation due to a surfeit of New World silver. Prerevolutionary France was spending 62 percent of royal revenue on debt service by 1788. The Ottoman Empire went the same way: interest payments and amortization rose from 15 percent of the budget in 1860 to 50 percent in 1875. And don't forget the last great English-speaking empire. By the interwar years, interest payments were consuming 44 percent of the British budget, making it intensely difficult to rearm in the face of a new German threat.

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.


Empire Collapse in Layman's Terms
In 2010, hundreds upon hundreds of people will daily sneak across the U.S. border illegally in search of a job, medical care, education, and a better life under the American Dream. By 2050 Americans will instead be exiting in attempts to escape the American Nightmare and sneak illegally into BRIC nations for a job, medical care, education, and a better life under the BRIC Dream.

A BRIC nation at the moment is a nation that has vast resources and virtually no entitlement obligations that drag down economic growth --- http://en.wikipedia.org/wiki/BRIC

In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries") is an acronym that refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001. According to a paper published in 2005, Mexico and South Korea are the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed. Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. The four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.

Brazil, Russia, India and China, (the BRICs) sometimes lumped together as BRIC to represent fast-growing developing economies, are selling off their U.S. Treasury Bond holdings. Russia announced earlier this month it will sell U.S. Treasury Bonds, while China and Brazil have announced plans to cut the amount of U.S. Treasury Bonds in their foreign currency reserves and buy bonds issued by the International Monetary Fund instead. The BRICs are also soliciting public support for a "super currency" capable of replacing what they see as the ailing U.S. dollar. The four countries account for 22 percent of the global economy, and their defection could deal a severe blow to the greenback. If the BRICs sell their U.S. Treasury Bond holdings, the price will drop and yields rise, and that could prompt the central banks of other countries to start selling their holdings to avoid losses too. A sell-off on a grand scale could trigger a collapse in the value of the dollar, ending the appeal of both dollars and bonds as safe-haven assets. The moves are a challenge to the power of the dollar in international financial markets. Goldman Sachs economist Alberto Ramos in an interview with Bloomberg News on Thursday said the decision by the BRICs to buy IMF bonds should not be seen simply as a desire to diversify their foreign currency portfolios but as a show of muscle.
"BRICs Launch Assault on Dollar's Global Status," The Chosun IIbo, June 14, 2009 ---
http://english.chosun.com/site/data/html_dir/2009/06/12/2009061200855.html

Their report, "Dreaming with BRICs: The Path to 2050," predicted that within 40 years, the economies of Brazil, Russia, India and China - the BRICs - would be larger than the US, Germany, Japan, Britain, France and Italy combined. China would overtake the US as the world's largest economy and India would be third, outpacing all other industrialised nations. 
"Out of the shadows," Sydney Morning Herald, February 5, 2005 --- http://www.smh.com.au/text/articles/2005/02/04/1107476799248.html 

The first economist, an early  Nobel Prize Winning economist, to raise the alarm of entitlements in my head was Milton Friedman.  He has written extensively about the lurking dangers of entitlements.  I highly recommend his fantastic "Free to Choose" series of PBS videos where his "Welfare of Entitlements" warning becomes his principle concern for the future of the Untied States 25 years ago --- http://www.ideachannel.com/FreeToChoose.htm 


"Social Security to See Payout Exceed Pay-In This Year," by Mary Williams Walsh, The New York Times, March 24, 2010 ---
http://www.nytimes.com/2010/03/25/business/economy/25social.html?hp

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.

Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.

“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.

That episode was more dire because the fund could have fallen to zero in a matter of months. But partly because of steps taken in those years, and partly because of many years of robust economic growth, the latest projections show the program will not exhaust its funds until about 2037.

Still, Mr. Greenspan, who later became chairman of the Federal Reserve Board, said: “I think very much the same issue exists today. Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.”

The Social Security Administration is expected to issue in a few weeks its own numbers for the current year within the annual report from its board of trustees. The administration has six board members: three from the president’s cabinet, two representatives of the public and the Social Security commissioner.

Though Social Security uses slightly different methods, the official numbers are expected to roughly track the Congressional projections, which were one page of a voluminous analysis of the federal budget proposed by President Obama in January.

Mr. Goss said Social Security’s annual report last year projected revenue would more than cover payouts until at least 2016 because economists expected a quicker, stronger recovery from the crisis. Officials foresaw an average unemployment rate of 8.2 percent in 2009 and 8.8 percent this year, though unemployment is hovering at nearly 10 percent.

The trustees did foresee, in late 2008, that the recession would be severe enough to deplete Social Security’s funds more quickly than previously projected. They moved the year of reckoning forward, to 2037 from 2041. Mr. Goss declined to reveal the contents of the forthcoming annual report, but said people should not expect the date to lurch forward again.

The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.

The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.

Although Social Security is often said to have a “trust fund,” the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.

Now that accumulated revenue will slowly start to shrink, as outlays start to exceed revenue. By law, Social Security cannot pay out more than its balance in any given year.

For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.

In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.

Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.

Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015.

After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.

Mr. Greenspan recalled in an interview that the sour economy of the late 1970s had taken the program close to insolvency when the commission he led set to work in 1982. It had no contingency reserve then, and the group had to work quickly. He said there were only three choices: raise taxes, lower benefits or bail out the program by tapping general revenue.

The easiest choice, politically, would have been “solving the problem with the stroke of a pen, by printing the money,” Mr. Greenspan said. But one member of the commission, Claude Pepper, then a House representative, blocked that approach because he feared it would undermine Social Security, changing it from a respected, self-sustaining old-age program into welfare.

Mr. Greenspan said that the same three choices exist today — though there is more time now for the painful deliberations.

“Even if the trust fund level goes down, there’s no action required, until the level of the trust fund gets to zero,” he said. “At that point, you have to cut benefits, because benefits have to equal receipts.”


Where Did Social Security Go So Wrong?
Social Security in the United States currently refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. It commenced only as an old age ("survivors:") retirement insurance program as a forced way of saving for retirement by paying worker premiums matched by employer contributions into the SS Trust Fund. Premiums were relatively low due heavily to the proviso that the SS Trust Fund got to keep all the premiums paid for each worker and spouse that did not reach retirement age (generally viewed as 65).  Details are provided at
http://en.wikipedia.org/wiki/Social_Security_(United_States)#Creation:_The_Social_Security_Act

If Congress had not tapped the SS Trust Fund for other (generally unfunded social programs of various types), the SS Trust Fund would not be in any trouble at all if it were managed like a diversified investment fund. But it became too tempting for Congress to tap the SS Trust Fund for a variety of other social programs, the costliest of which was to make monthly living allowance payments to each person of any age who is declared "disabled." In many cases a disabled person collects decades of benefits after having paid less than a single penny into the SS Trust Fund. It's well and good for our great land to provide living allowances to disabled citizens, but without funding from other sources such as a separate Disability Trust Fund fed with some type of other taxes, the disability payments mostly drained the SS Trust Fund to where it is in dire trouble today.

The obligation to pay pensioners as well as disabled persons was passed on to current and future generations to a point where the Social Security and Disability Program is no longer self-sustaining with little hope for meeting entitlement obligations from worker premiums and employer matching funds. The SS Trust Fund will have deficits beginning in 2010 that are expected to explode as baby boomers collect benefits for the first time.

Where Did Medicare Go So Wrong?
Medicare is a much larger and much more complicated entitlement burden relative to Social Security by a ratio of about six to one or even more. The Medicare Medical Insurance Fund was established under President Johnson in1965.

Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.

The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.

A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

What is really sad is the way Republicans are standing in the way of making rational cost-benefit decisions about dying by exploiting the "Kill Granny" political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at --- www.defendyourhealthcare.us

The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.

Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.

Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.

The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded  TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.

The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.

A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.

The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.

In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against the Affordable Care Act legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.

Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.

In any case, The New York Times presents a nice history of other events that I left out above ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html

"THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign Collapsed --
A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert Pear and Robin Toner, The New York Times, August 29, 1994 --- Click Here
http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html

November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]

The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/19/AR2009111904053.html?referrer=emailarticle 

Richard Sansing

The New York Times Timeline History of Health Care Reform in the United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page. The biggest problem with "reform" is that it added entitlements benefits without current funding such that with each reform piece of legislation the burdens upon future generations has hit a point of probably not being sustainable.

Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk:  How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1

. . .

In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.

. . .

Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.

Continued in article

This is now President Obama's problem with or without new the Affordable Care Act entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.

Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.

Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm

Bob Jensen's threads on entitlements ---
http://www.trinity.edu/rjensen/entitlements.htm


Quotations

Let me get this straight.
We're about to get a health care plan shoved down our throats that is Written by a committee whose head says he doesn't understand it, Passed by a Congress that hasn't read it but exempts themselves from it, signed by a president that also hasn't read it, With funding administered by a treasury chief who was caught not paying his Taxes, overseen by a surgeon general who is obese, and financed by a Country that's nearly broke.
What could possibly go wrong?

IS THIS A GREAT COUNTRY OR WHAT!

Forwarded by Maureen

Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/

"How can Obama Top a Great Speech," by Joan Walsh, Salon, September 10, 2010 --- http://www.salon.com/opinion/walsh/politics/2009/09/10/healthcare_speech/index.html 
Jensen Answer
Dear Ms Walsh, President Obama can top his great speech by filling in details of truthful estimates of the Affordable Care Act costs and how he plans to finance these added costs of wider coverage of health issues and more people covered. Thus far his sweeping claims of cost savings sound like snake oil.

Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html

H.R.  3200 Summary
http://www.trinity.edu/rjensen/Health.htm#HR3200
Introduced in the House on July 14, 2009
Also see http://www.defendyourhealthcare.us/houseandsenatebills.html

H.R.   676  Summary ---
http://www.trinity.edu/rjensen/Health.htm#HR676
Introduced in House on January 26. 2009

U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

Bob Jensen's threads on pending economic disaster ---
http://www.trinity.edu/rjensen/Entitlements.htm

Jensen Comment
Because of the present health care system in the United States is unjust and inefficient, I am in favor of a National Health Plan modeled after the Canadian National Health Plan where Canadians are taxed for a huge portion of their health services irrespective of their levels of income. Any system that does not make users of the system share heavily in the cost of the services will be unjust, abused, and inefficient --- http://www.trinity.edu/rjensen/Health.htm#Canada

Having said that I prefer a Canadian-style national health plan for the U.S., I wish democrats in Congress would use their power and vote one in in spite of protests around the country. With a 60-vote surplus in the House and only needing 51 votes in the Senate, the Democrats could vote in National Health Care in an instant. The reason they won't is that most of them would be voted out of office the next time they come up for re-election. They know this!

But Americans at all levels of income would have to agree to much higher taxes
The average Canadian family spends more money on taxes than on necessities of life such as food, clothing, and housing, according to a study from The Fraser Institute, an independent research organization with offices across Canada. The Canadian Consumer Tax Index, 2007, shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

The Fraser Institute, April 16, 2007 --- http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
Jensen Comment
I put the portion of the Canadian tax dollars going into comparable health and social services contained in the Affordable Care Act legislation to be about 40% of each Canadian's tax dollar where malpractice coverage and government fraud is greatly controlled relative to the United States
---
http://www.trinity.edu/rjensen/Health.htm#Canada
Canada greatly restricts the number of free riders in the system and negotiates much lower prescription drug prices relative to insurance companies and Medicare in the United States. Malpractice awards in Canada are tightly controlled.

So the present (health care) system is an unsustainable disaster, but you can keep your piece of it if you want. And the Democrats wonder why selling health care reform to the public has been so hard?
Ramesh Ponuru,
"the Affordable Care Act's Fatal Flaw:  Democrats claim their plans will save money, but they have too many conflicting goals," Time Magazine August 17, 2009, Page 35
Jensen Comment
The problem is that they keep adding expensive medical services that sound great on paper, but few people, companies, and certainly not government can afford these uncapped benefits.

YouTube - ABC's John Stossel Destroys/Pulverizes/Crushes Obama's anti-American 'Health Care' Plan --- Click Here

Congressman Mike Rogers' opening statement on Health Care reform in Washington D.C. ---
http://www.youtube.com/watch?v=G44NCvNDLfc

Jacob Hacker: Fixing America's Healthcare System (not humor) ---
http://fora.tv/2008/07/21/Jacob_Hacker_Fixing_America_s_Healthcare_System

Jack Webb on Health Care and America (Humor) ---
http://pubsecrets.wordpress.com/2009/09/05/just-the-facts-barack/

Video:  Jon Stewart reveals Glenn Beck speaking about health care from both ends of his digestive tract ---
http://www.thenation.com/blogs/notion/462437/breaking_rush_newt_and_sarah_supported_death_panels_too

Americans who want to tip the debate in the most progressive direction should take advantage an opening provided at the last minute during negotiations to get a bill approved by the House Energy and Commerce Committee. And they should do so by advocating even more aggressively for single-payer health care.
John Nichols, "Why Single Payer Advocacy Matters Now More Than Ever ," The Nation, August 4, 2009 --- Click Here
Jensen Comment
Passionate advocates of universal health care are screaming "yes, yes, yes" without even caring how health care will be funded or whether or not it will further destruct the U.S. economy. The cannot care because they're so willing to vote yet before a funding proposal is even put forth. I actually favor single-payer nationalized health care but I'm unwilling to destroy by beloved homeland in a passionate rage for the gold plated version that this debt-ridden nation can ill afford at the present time --- http://www.trinity.edu/rjensen/Entitlements.htm
"Schumer: Healthcare Changes This Year 'No Matter What'" --- Click Here
U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/

Jesus, the Great Healer, wants Obamacare according to MSNBC (even if top preachers are "dreadfully silent"). Watch the video ---
http://hotair.com/archives/2009/08/13/msnbc-host-hey-wouldnt-jesus-want-us-to-have-universal-health-care/

But what helps many Americans as individuals may hurt society as a whole. That's the paradox. Unchecked health spending is depressing take-home pay, squeezing other government programs—state and local programs as well as federal—and driving up taxes and budget deficits. The president has said all this; he simply isn't doing much about it. He offers the illusion of reform while perpetuating the status quo of four decades: expand benefits, talk about controlling costs. The press should put "reform" in quote marks, because this is one "reform" that might leave the country worse off.
Robert J. Samuelson, Health Reform That Isn't:  Despite the Rhethoric, Costs (and trillion dollar deficits) Will Rise, Newsweek Magazine, August 3, 2009, Page 26 --- http://www.newsweek.com/id/208439/page/2
Samuelson is the author of The Great -Inflation and Its Aftermath.

For starters, $1 trillion of extra debt-financed spending would cause the government to pay about $300 billion of extra interest in the next decade. Moreover, the CBO's method of estimating the cost of such a program doesn't recognize the incentives it creates for households and firms to change their behavior. The House health-care bill gives a large subsidy to millions of families with incomes up to three times the poverty level (i.e., up to $66,000 now for a family of four) if they buy their insurance through one of the newly created "insurance exchanges," but not if they get their insurance from their employer. The CBO's cost estimate understates the number who would receive the subsidy because it ignores the incentive for many firms to drop employer-provided coverage. It also ignores the strong incentive that individuals would have to reduce reportable cash incomes to qualify for higher subsidy rates. The total cost of ObamaCare over the next decade likely would be closer to $2 trillion than to $1 trillion.
Martin Feldstein, "ObamaCare's Crippling Deficits The higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standard," The Wall Street Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage

In 1935 President Franklin Roosevelt engineered the Social Security Act with honest and well-defined components of benefits and costs. It was intended to only be a supplemental pension program to force people to save something for their retirements. Later on Congress muddled the program up by adding social services (such as lifetime pensions for disabled people of all ages and death benefits for families of soldiers who died in service). Medicare and Medicaid health coverage was later added to massively increase the entitlements obligations of Social Security as pension fund (as originally crafted).

The Wall Street Journal Guide to Obamacare, October 14, 2009 --- Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage

Bumper Stickers --- http://www.upyoursobama.com/

The Promise and Peril of Big Data --- http://www.aspeninstitute.org/sites/default/files/content/docs/pubs/InfoTech09.pdf

Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009

Full Text of H.R. 3962 --- www.defendyourhealthcare.us .


"We Pay Them to Lie to Us," by my hero John Stossel, Townhall, November 25, 2009 ---
http://townhall.com/columnists/JohnStossel/2009/11/25/we_pay_them_to_lie_to_us 

When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician.

President Obama insists that health care "reform" not "add a dime" to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow "$900 billion over 10 years" has been decreed to be a magical figure that will not increase the deficit.

It's amazing how precise government gets when estimating the cost of 10 years of subsidized medical care. Senate Majority Leader Harry Reid's bill was scored not at $850 billion, but $849 billion. House Speaker Nancy Pelosi said her bill would cost $871 billion.

How do they do that?

The key to magic is misdirection, fooling the audience into looking in the wrong direction.

I happily suspend disbelief when a magician says he'll saw a woman in half. That's entertainment. But when Harry Reid says he'll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it's not entertaining. It's incredible.

The politicians have a hat full of tricks to make their schemes look cheaper than they are. The new revenues will pour in during Year One, but health care spending won't begin until Year Three or Four. To this the Cato Institute's Michael Tanner asks, "Wouldn't it be great if you could count a whole month's income, but only two weeks' expenditures in your household budget?"

To be deficit-reducers, the health care bills depend on a $200 billion cut in Medicare. Current law requires cuts in payments to doctors, but let's get real: Those cuts will never happen. The idea that Congress will "save $200 billion" by reducing payments for groups as influential as doctors and retirees is laughable. Since 2003, Congress has suspended those "required" cuts each year

Do you feel the leaked information from a global warming alarmist organization is meaningful? This was an illegal information leak that should be ignored It makes me question my belief in global warming activists It's an example of dangerous scientific politicization I haven't really heard about the controversy

This was an illegal information leak that should be ignored (1 %)

It makes me question my belief in global warming activists (8 %)

It's an example of dangerous scientific politicization (86 %)

I haven't really heard about the controversy (5 %)

Our pandering congressmen rarely cut. They just spend. Even as the deficit grows, they vomit up our money onto new pet "green" projects, bailouts for irresponsible industries, gifts for special interests and guarantees to everyone.

Originally, this year's suspension, "the doc fix," was included in the health care bills, but when it clearly pushed the cost of "reform" over Obama's limit and threatened to hike the deficit, the politicians moved the "doc fix" to a separate bill and pretended it was unrelated to their health care work.

Megan McArdle of The Atlantic reports that Rep. Paul Ryan of Wisconsin asked the Congressional Budget Office what the total price would be if the "doc fix" and House health care overhaul were passed together. "The answer, according to the CBO, is that together they'd increase the deficit by $89 billion over 10 years." McArdle explains why the "doc fix" should be included: "They're passing a bill that increases the deficit by $200 billion in order to pass another bill that hopefully reduces it, but by substantially less than $200 billion. That means that passage of this bill is going to increase the deficit."

From the start, Obama has promised to pay for half the "reform" cost by cutting Medicare by half a trillion over 10 years. But, Tanner asks, "how likely is it that those cuts will take place? After all, this is an administration that will pay seniors $250 to make up for the fact that they didn't get a Social Security cost-of-living increase this year (because the cost of living didn't increase). And Congress is in the process of repealing a scheduled increase in Medicare premiums."

Older people vote in great numbers. AARP is the most powerful lobby on Capitol Hill. Like the cut in doctor's pay, the other cuts will never happen.

I will chew on razor blades when Congress cuts Medicare to keep the deficit from growing.

Medicare is already $37 trillion in the hole. Yet the Democrats proudly cite Medicare when they demand support for the health care overhaul. If a business pulled the accounting tricks the politicians get away with, the owners would be in prison.

Something AARP Wants Kept Secret

"McCain Urges Seniors to Abandon AARP," Fox News, December 3, 2009  ---
http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/

"Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare change will cost taxpayers a bundle and lead to poorer drug coverage," Tom Scully, The Wall Street Journal, December 7, 2009 ---
http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage

There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.

As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.

The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.

It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.

But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.

It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.

The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.

Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.

In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.

To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.

There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.

Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.


"What the Pelosi Health-Care Bill Really Says:  Here are some important passages in the 2,000 page legislation," by Betsy McCaughey, The Wall Street Journal, November 7, 2009 --- Click Here

The health bill that House Speaker Nancy Pelosi is bringing to a vote (H.R. 3962) is 1,990 pages. Here are some of the details you need to know.

What the government will require you to do:

• Sec. 202 (p. 91-92) of the bill requires you to enroll in a "qualified plan." If you get your insurance at work, your employer will have a "grace period" to switch you to a "qualified plan," meaning a plan designed by the Secretary of Health and Human Services. If you buy your own insurance, there's no grace period. You'll have to enroll in a qualified plan as soon as any term in your contract changes, such as the co-pay, deductible or benefit.

• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a "qualified plan" covers and how much you'll be legally required to pay for it. That's like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.

On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.

• Sec. 303 (pp. 167-168) makes it clear that, although the "qualified plan" is not yet designed, it will be of the "one size fits all" variety. The bill claims to offer choice—basic, enhanced and premium levels—but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill.

• Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement.

• Sec. 412 (p. 272) says that employers must provide a "qualified plan" for their employees and pay 72.5% of the cost, and a smaller share of family coverage, or incur an 8% payroll tax. Small businesses, with payrolls from $500,000 to $750,000, are fined less.

Eviscerating Medicare:

In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions.

• Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what's called a "medical home."

The medical home is this decade's version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to "disseminate this approach rapidly on a national basis."

A December 2008 Congressional Budget Office report noted that "medical homes" were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority.

• Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients.

• Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida.

• Sec. 1161 (pp. 520-545) cuts payments to Medicare Advantage plans (used by 20% of seniors). Advantage plans have warned this will result in reductions in optional benefits such as vision and dental care.

Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/

• Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of "medical items and services."

Questionable Priorities:

While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability.

• Sec. 399V (p. 1422) provides for grants to community "entities" with no required qualifications except having "documented community activity and experience with community healthcare workers" to "educate, guide, and provide experiential learning opportunities" aimed at drug abuse, poor nutrition, smoking and obesity. "Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program."

These programs will "enhance the capacity of individuals to utilize health services and health related social services under Federal, State and local programs by assisting individuals in establishing eligibility . . . and in receiving services and other benefits" including transportation and translation services.

• Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their "right" to have an interpreter at all times and with no co-pays for language services.

• Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should "give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population." And secondary-school grants should go to schools "graduating students from disadvantaged backgrounds including racial and ethnic minorities."

• Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance.

For the text of the bill with page numbers, see www.defendyourhealthcare.us .

Ms. McCaughey is chairman of the Committee to Reduce Infection Deaths and a former Lt. Governor of New York state.

 

Making Sense of Health Care Reform (from the AccountingWeb on September 1, 2009) ---
http://www.accountingweb.com/topic/tax/making-sense-health-care-reform


A long-delayed correction of a lie
"You Might Lose Your Doctor Under Obamacare," WebMd, March 14, 2014 ---
http://hotair.com/archives/2014/03/14/great-news-80-of-employers-have-or-may-raise-deductibles-thanks-to-obamacare/

Voters in November might be ready to show Democrats what they think about removing choice and hiking costs, as well as their arrogance in determining that a few politicians in Washington know better about their choices than they do. Unfortunately, Barack Obama doesn’t appear to have figured out this problem. In an interview with WebMD, Obama finally acknowledged that, contra his promise, people might not be able to keep the doctors they liked, but that they probably shouldn’t have liked those doctors in the first place.

Jensen Comment
Why won't he still admit the truth. Many of those doctors that "they liked" tend to be so good that they get more than enough business without working for medical clinics and

Here in New Hampshire 10 of the 26 hospitals and many of the best physicians in the state refuse to go on network. One of the main reasons is that patients in default on their health exchange premiums must be treated for 90 days with physicians and hospitals bearing the treatment costs for the last 60 of those 90 days. God forbid that the fat-cat insurance companies or the Federal government take the risks of paying for the free care during those 60-days.


Questions
Was President Obama correct in promising that the ACA insurance would transfer Medicaid patients from ER rooms to ACA networked physicians?

How does the ACA expansion of Medicaid greatly increase the moral hazard of new Medicare patients?

One of the naive promises made by President Obama was that uninsured people previously seeking free care in Emergency Rooms (ER) would relieve the ER rooms for all the new Medicaid patients who could now have access to network physicians with their new free medical care and medication insurance policies. This was naive because he should have known that previous Medicaid patients preferred ER rooms even when they had  freeMedicaid insurance. He should have known that when Oregon expanded the number of people on Medicaid that demand for ER services increased by 40%.

People receiving free medical care and medications are inclined to favor ER services even when they can have care from network physicians. Reasons are complicated especially when walk-in medical clinics are available. One reason is that walk-in clinics serving Medicaid patients are not usually as close by as hospitals with ER services. The physicians in the ER facilities are likely to not only be MDs, they are sometimes better MDs that the staff of walk-in medical clinics who often hire newly graduated MDs still in residency or physicians assistants. In other words, if you want the best physicians the odds are usually better for ER rooms than networked ACA physicians and walk-in clinics.

When walk-in clinics are not convenient, getting an appointment with a networked physician may take weeks or even months. Top physicians are available 24/7 for emergency patients and non-emergency Medicaid patients. Insured patients not on Medicaid may be discouraged by co-pays of expensive ER services. But Medicaid patients never have to worry about co-payments.

Last night CBS News reported that ER use expanded by 40% due to new Medicaid patients.

 

"Medicaid Expansion Boosted Emergency Room Visits In Oregon," by Julie Royner, NPR, January 3, 2014 ---
http://www.wbur.org/npr/259128081/medicaid-expansion-boosted-emergency-room-visits-in-oregon

Giving poor people health insurance, the belief was, would decrease their dependence on hospital emergency rooms by providing them access to more appropriate, lower-cost primary care.

But a study published in the journal Science on Thursday finds that's not the case. When you give people Medicaid, it seems they use both more primary care and more emergency room services.

"Medicaid coverage increases emergency department use, both overall and for a broad range of types of visits, conditions, and subpopulations," says Amy Finkelstein, an economics professor at MIT and one of the authors of the study. "Including visits for conditions that may be most readily treatable in primary care settings."

In other words, people are going to the emergency department for things that aren't emergencies. This is exactly what policymakers hoped to avoid by giving people health insurance – including the huge increase in Medicaid coverage coming as part of the Affordable Care Act.

And the increase in ER use found in the study was significant – "about 40 percent," Finkelstein said.

This would be a good place to point out this is not just any study. It is the third major paper from something called the Oregon Health Insurance Experiment, which Finkelstein heads along with Katherine Baicker from the Harvard School of Public Health.

The experiment was a rare opportunity to create a randomized controlled experiment – the gold standard of scientific research. It came about almost by accident, thanks to Oregon's decision in 2008 to expand its Medicaid program via a lottery.

The result, said Finkelstein, was that the groups of people with or without insurance were identical, "except for the fact that some have insurance and some don't. You've literally randomized the allocation of insurance coverage."

And that gave researchers the ability to compare the effects of having health insurance — in this case, Medicaid.

The first paper from the research team, published in 2011, was mostly positive. It found that people who got Medicaid coverage were more likely to use health services in general, less likely to suffer from depression, and less likely to suffer financial problems related to medical bills than those who remained uninsured.

The results in the second paper, published last spring, were more equivocal. Researchers found no measurable health benefits in the Medicaid group for several chronic conditions, including hypertension, high cholesterol and diabetes.

It's not clear that the emergency room results will translate nationwide: The study only lasted 18 months and the study population is both more while and more urban than the rest of the nation.

But that's not stopping critics of Medicaid expansion.

"When you make ER care free to people, they consume more of it. They consume 40 percent more of it," says Michael Cannon, head of health policy for the libertarian Cato Institute. "Even as they're consuming more preventive care. And so one of the main arguments for how Obamacare was going to reduce health care costs is just flat out false."

Cannon says the study will likely further hurt President Obama's credibility for vowing that expanding Medicaid would help get people out of emergency rooms. But what's likely to bother the administration even more, he says, is what it may do to the half of the states that have yet to adopt the Medicaid expansion.

"This study is going to make it less likely that the 25 states that decided not to expand Medicaid are going to change their minds and decide to expand Medicaid," Cannon predicts.

But this study doesn't come as much of a surprise to those people who actually run Medicaid programs around the country.

"This is not something that is unexpected and not something that we're not prepared for," says Kathleen Nolan. She's director of state policy and programs for the National Association of Medicaid Directors.

Continued in article

Jensen Comment
The majority of new Medicaid patients will be poor, although it is possible for millionaires to now qualify for Medicaid with devious financial planning such as low income students having million dollar trust funds. The poor patients have incentives to game the ER services for prescription pain medicine. With one network physician or clinic, there will be records as to when prescriptions can be renewed. Given the Administration's track record for implementing databases, I strongly doubt that a Medicaid patient intent upon selling prescription pain killers can be prevented by traveling around to different hospital ER service for prescriptions that would not be granted if the ER physician was aware of the last time a Medicaid patient received such a prescription in another hospital and another and another.

I'm not certain how well pharmacies share prescription data or even if privacy laws even allow CVC and Walgreen and Wal-mart to even share a person's prescription data without receiving permission from the patient.

The moral hazard is greater with poor people in need of selling their pills like they sell food stamps.

Can prescription data be shared between different corporations without patient consent?

And then there's the problem of granting Medicaid to people who do not qualify for Medicaid. For example, an audit in Illinois revealed that have the people on Medicaid did not qualify for Medicaid. This appears to be yet another entitlement going crazy at taxpayer expense.

Bob Jensen's health care messaging updates --- http://www.trinity.edu/rjensen/Health.htm


The Lies and Deceptions

Americans stubbornly resist this landmark legislation in part because virtually every major claim about its benefits is turning out to be false—and people recoil when misled.
Karl Rove, The Wall Street Journal, September 30, 2010 ---
http://online.wsj.com/article/SB10001424052748704116004575522073624475054.html?mod=djemEditorialPage_t


Hi Norma,

Due in heavy part that the Affordable Care Act is passing both its deductible nonpayment bad debts and its premium non-payment bad debts (two of the three months of a three-month nonpayment grace period), many hospitals like the Andersen Cancer Center and many doctors (70% in California) are refusing to serve patients insured by the exchanges. The TV networks and major newspapers seem to conspire to not report this.
 
You may not be able to choose your doctor or hospital unless you pay cash or go on a high premium Cadillac plan that, in 2015, will cease to be tax deductible by you or your employer..
 
After his gun control initiatives failed in Congress, President Obama unilaterally added very expensive mental health coverage to the Affordable Care Act without mentioning that most psychiatrists will refuse to serve patients having any type of insurance..  Psychiatrists are already in short supply in the USA. Nearly half already only serve cash-paying patients and currently won't bill any insurance companies, including Medicare or Medicaid. I think even more will reject the the exchanges.
 
I have a relative who needs psychiatric medications daily. Even though her husband is on a good state university medical insurance plan for coverage of most of her medical needs, she's dependent upon the only (overworked) psychiatrist in the area. That psychiatrist does not accept insurance.
 
Why are there so few psychiatrists?
One reason is that psychiatry is the most dangerous medical specialty. Exhibit A is the recent mass murderer James Holmes in Aurora, Colorado who was booted off campus for threatening his psychiatrist. Personally I think another reason is that doctors do not like going into a specialty having such a low proportion of cure rates and having to be on call 24/7 (usually to prevent suicides).
 
Something will have to be done to prevent passing bad bad debts onto hospitals and doctors.
Now that the GOP has given up on deficit reduction (Sen. Ryan lied by excluding interest on the debt in his budget), perhaps  legislation to Federal coverage of bad debts on to the Federal government along with assurances that doctors can bill at their full rates they charge cash paying patients. The blow to the deficit will be devastating since patients have little incentive to pay their deductibles if the government will pay those deductibles.
 
What we now have is two political parties so desperate to win elections that both are now promising nearly-free medical coverage that will explode the deficit and provide false promises about the quality of medical care in short supply to meet exploding demand.
Medical care will be almost free as long as the government fails to seriously prevent frauds in Medicaid. Medicare phony disability coverage,  and the Affordable Care Act subsidies --- all three of which are now frauds out of control due to failed government enforcement

 

"Obamacare: Silence of the Insurers," by Jonah Goldberg, Townhall, December 18, 2013 ---
http://townhall.com/columnists/jonahgoldberg/2013/12/18/obamacare-silence-of-the-insurers-n1764535?utm_source=thdaily&utm_medium=email&utm_campaign=nl

When will the insurers revolt?

It's a question that's popping up more and more. On the surface, the question answers itself. We're talking about pinstriped insurance company executives, not Hells Angels. One doesn't want to paint with too broad a brush, but if you were going to guess which vocations lend themselves least to revolutionary zeal, actuaries rank slightly behind embalmers.

Still, it's hard not to wonder how much more these people are willing to take. Even an obedient dog will bite if you kick it enough. Since Obamacare's passage, the administration has constantly moved the goalposts on the industry. For instance, when the small-business mandate proved problematic in an election year, the administration delayed it, putting its partisan political needs ahead of its own policy and the needs of the industry.

But the insurers kept their eyes on the prize: huge guaranteed profits stemming from the diktat of the health insurance mandate. When asked how he silenced opponents in the health industry during his successful effort to socialize medicine, Aneurin Bevan, creator of the British National Health Service, responded, "I stuffed their mouths with gold."

Hence, the insurers were ready on Oct. 1. They rejiggered their industry. They sent out millions of cancellation letters to customers whose plans no longer qualified under the new standards set by the Affordable Care Act. They told their customers to go to the exchanges to get their new plans.

But because President Obama promised Americans "if you like your health care plan, you can keep it," (PolitiFact's "Lie of the Year"), those cancellations became a political problem of Obama's own making.

In response, the president blamed it on the insurance companies or "bad apple" insurers. White House spokesman Jay Carney insisted that it was the insurance companies that unilaterally decided not to grandfather existing plans. (The Washington Post's "Fact Checker" columnist, Glenn Kessler, gave this claim "Three Pinocchios.")

Then, just last week, Health and Human Services Secretary Kathleen Sebelius announced that she was "urging" insurers to ignore both their contracts and the law and simply cover people on the honor system -- as if they were enrolled and paid up. She also wants doctors and hospitals to take patients, regardless of whether they are in a patients' insurance network or even if the patient is properly insured at all. Just go ahead and extend the deadline for paying, she urged insurers; we'll work out the paperwork later.

Of course, urging isn't forcing. But as Avik Roy of Forbes notes, the difference is subtle. Also last week, HHS also announced last week that it will consider compliance with its suggestions when determining which plans to allow on the exchanges next year. A request from HHS is like being asked a "favor" by the Godfather; compliance is less than voluntary.

The irony, as Christopher DeMuth recently noted in the Weekly Standard, is that if the architects of Obamacare had their way, the insurers would have been in even worse shape today. The original plan was for a "public option" that would have, over time, undercut the private insurance market to the point where single-payer seemed like the only rational way to go. If it weren't for then-Sen. Joe Lieberman's insistence that the provision be scrapped, DeMuth writes, "Obamacare's troubles would today be leading smoothly to the expansion of direct federal health insurance to pick up millions of canceled policies and undercut rate increases on terms no private firm could match."

In other words, the insurers knew the administration never had their best interests at heart but got in bed with it anyway.

Continued in article

Jensen Comment
Until recently the enthusiasm of medical insurance companies was understandable since the the losses for deductible portions of contracts were passed on mostly to patients themselves and possibly their doctors. Most medical service bad debts of for default of premium payments were passed on to hospitals and doctors.

Also the big and prosperous insurance companies were allowed to opt out of participating in the more risky health insurance exchanges. Most did opt out such that the government had to make loans for new exchange companies to to become insurers for individuals not covered by their employers. These exchanges are poorly capitalized, and many will probably have to be bailed out by the government if and when they encounter insolvency.

To get more heavily capitalized insurance companies to participate would require higher premium rates and more protection against bad debt losses. But this in turn would raise premiums dramatically and be counter to the whole purpose of the Affordable Care Act ---  to get more people insured and using more preventative care options. High premiums and low deductibles could destroy the Affordable Care Act by making more rather than fewer people insured.

The silence of the media on astute health care providers is more problematic.
Many of the biggest and best hospitals like the Andersen Cancer Center will not serve patients covered by the exchanges. Over 70% of California's physicians will not serve patients covered by the exchanges (except in the case where emergency treatment is called for).

Has any media source complained that with proper investment planning very wealthy people, especially college students on trust funds, may get free Medicaid medical care and medications.

Jensen Question
I asked the following question on the Turbo Tax Forum Regarding the Affordable Care Act Questions:
Question
I'm told that only income, not wealth, will be the deciding factor on eligibility for Medicaid beginning in 2014.
If I'm a full time student having zero income and $10 million trust fund of stock paying no dividends, will I be eligible for Medicaid?

A Turbo Tax expert says that wealth may still be a criterion in the states that rejected the Medicaid expansion. Having valuable assets is no longer a criterion in those states that yielded to Whitehouse pressure and temporary funding to expand Medicaid roles.

There are 24 states who are not expanding Medicaid and may, therefore, still deny Medicaid to millionaires. The other 26 states may now grant free health care to millionaires who strategically lock in their wealth for long-term growth and negligible current income ---
https://www.statereforum.org/tracking-health-coverage-enrollment-by-state


"What 2014 means for Obamacare," by Sarah Kliff, The Washington Post, January 1, 2013 ---
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/01/what-2014-means-for-obamacare/

. . .

The next Obamacare fight is going to be about access.
After three months of enrollment, January will be the first month when shoppers can see what they purchased. We know that the plans for sale on the marketplace tend to have relatively limited networks, as insurers restricted doctor access to hold down premium prices. New subscribers could find that a doctor they want isn't in network, and get frustrated. Co-payments may seem alarmingly high -- a byproduct of keeping premiums low. While the health-care system probably has the capacity to absorb a few million new insurance subscribers (for a variety of reasons explored here) there is still room for issues about access to specific doctors and the price tag that comes along with trips to the doctor's office.

Continued in article

Jensen Comment
While the new Medicaid patients will probably flood the hospital ERs instead of seeking out network physicians, the patients on plans requiring co-payments and deductibles will probably seek out physicians on their network plans. Hospital ERs tend to charge large co-payments which of course do not matter to Medicaid patients since they do not have to pay any co-payments.

 

In some instances physicians who are suing the ACA network insurers after being dropped by the networks
",MDs sue ObamaCare insurer over dropped doctors" by Geoff Earle, Fox News, December 28, 2013 ---
http://nypost.com/2013/12/28/mds-sue-obamacare-insurer-over-dropped-doctors/

A group of New York doctors is suing insurance giant UnitedHealthcare, charging that it booted doctors from its network to avoid cost hikes imposed by ObamaCare.

The company’s decision to kick more than 2,000 docs from its Medicare Advantage network threatens to harm elderly and disabled patients, according to the filing in Brooklyn federal court.

“By terminating numerous physicians from the . . . network, United seeks to stem financial losses occasioned by reduced federal payments under the Affordable Care Act,” the suit launched by the Medical Society of the State of New York claims.

“This, of course, comes at the expense of physicians,” the suit continues, arguing that the company violated doctors’ contracts by failing to give sufficient notice, among other things.

Tugging at the heartstrings, the suit specifically mentions elderly and disabled patients “who must now either find new physicians (including traveling farther distances to find a participating . . . provider), switch plans to continue treatment with the terminated physicians, or pay significant additional out-of-pocket costs to continue treatment with an ‘out-of-network’ provider.”

It accuses United of “shifting the financial burdens imposed by the Affordable Care Act from itself, a multibillion-dollar company,” to providers and patients.

Medical Society President Sam Unterricht told The Post the company’s decision was unfair to patients, since they had to choose a new plan under Medicare Advantage, a private alternative to traditional Medicare, by Dec. 7, when company Web sites still showed doctors who were being kicked out of the network at the start of the new year.

“For some people who are medically fragile it can really be dangerous. There can be gaps in care,” he said.

Unterricht said reduced Medicare Advantage payments to physicians are being used as a cost-saving measure to fund ObamaCare. He said docs would get paid 20 percent or even 40 percent less per patient.

“A lot of doctors are not going to be able to accept that and really give good medical care at that kind of a price,” he said.

Continued in article

Jensen Comment
This is a reversal of the stories we are hearing about physicians boycotting the ACA networks.

We are seeing a bit about this up here. In their separate offices in our Littleton Regional Hospital three different medical network groups each dropped one of its MDs. Interestingly, all three of the dropped physicians at one time or another been general practitioners for my wife or me. The dropped MDs were all women MDs who were replaced by new and much cheaper Physician Assistants who are permitted, at least up here, to examine patients like a physician and write prescriptions.

One of the MDs, Dr. Virginia Jeffryes, after facing the huge expense of starting a new practice, was hired back by her network group but now has to commute to Whitefield. Dr. Kathleen Smith and Dr. Robin Hallquist are incurring the expenses of commencing new practices in Littlleton and Twin Mountain respectively. The startup expenses include renting office space, hiring medical and administrative staff, buying computers and other equipment,, going it alone for malpractice insurance premiums. Plus there is an enormous amount of red tape involved in getting permission to bill third parties like Medicare and Worker Comp.

I firmly believe these quality physicians were dropped by their respective medical network groups and replaced by Physician Assistants (PAs) and/or Osteopaths to save money. That, however, is only my opinion since I have no inside tracks to the accounting records.

One of the network groups retained a cheap and uncaring MD trained in another country. She needs and attitude adjustment. I'm told by a neighbor who works in the hospital that her patients are continually asking for another "doctor" be it a PA or an Osteopath.

Why didn't the group fire the lousy MD and retain the high quality MD? That's a no-brainer question for a managerial accounting student.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


Deloitte's Map of the Number of Healthcare Exchanges Estimated Per State ---
http://www.deloitte.com/assets/Dcom-UnitedStates/Local Assets/Documents/Health Plans/us_hp_hix_IndividualMarketCompetition_81313.pdf
For example, New Hampshire and West Virginia have one whereas Texas has 11, Wisconsin has 13, and New York has 16.
Each carrier does have multiple plans that vary largely on the size of the deductibles with bronze plans having 40% deductibles and silver having 30% deductibles. Prices vary in different states. Prices also vary with age and smoking.

There are differences even among states who are not providing their own exchanges. Currently there are 26 states who rely on Federally provided exchanges ---
https://www.statereforum.org/where-states-stand-on-exchanges
Why does Maine have only two exchanges while Texas has 11 exchanges?

How to Mislead With Statistics and Graphs

Question
If you were teaching statistics how could you use the following article to illustrate how to mislead with statistics?

"Obamacare Prices: Competition Lacking in Some Exchanges," by John Tozzi, Bloomberg Businessweek, December 19. 2013 ---
http://www.businessweek.com/articles/2013-12-19/obamacare-prices-competition-lacking-in-some-exchanges?campaign_id=DN122313

The drafters of the Affordable Care Act imagined vibrant marketplaces that would give consumers options from many insurers. So far, competition is limited: 40 percent of Americans live in counties with three or fewer companies selling Obamacare policies, leaving them more wireless carriers to choose from than health plans.

 

Jensen Comment
No matter how much we preach that correlation is not causation, journalists, students, and even professors fall into the same old trap of not digging deeper for causes rather than implying that correlation is synonymous with causation.

Yes premiums do seem to be correlated with competition. But how much is the competition really affecting price relative to underlying causal factors that affect such things as companies refusing to enter the competition?

Insurance companies themselves are not very forthcoming about why they avoid certain markets other than providing vague statements about those markets not being profitable. The bottom line is that I don't know why there is so little medical insurance competition in some parts of the country relative to other parts of the USA. But I would not be so naive to imply that lack of competition is a causal factor. Where there's lack of competition there are most likely either underlying barriers to entry or other causal factors that make medical insurance less profitable in those areas. Charging higher prices for insurance in those markets is a result of whatever factors are driving potential competitors out of those markets.

A skilled analyst would probe deeper as to why there is so little competition in come counties and states.

  • Could regulations at the state or county level be making the insurance market so unprofitable that most companies elect not to enter those markets?

     
  • Could litigation risks may be so high in a state or county that most companies are avoiding the market?

     
  • Could there be underlying causes result in higher medical service costs that drive the competition away in some counties?  For example, some states have more county hospitals that are funded by property taxes, thereby allowing for lower priced services of the hospitals.

     
  • Could it be that some counties/states have a higher proportion of people likely to become bad debts? Remember that in case an insured person defaults on a premium, the insurance company must pay for the medical care of that person for 30 days and the health care provider must pick up 60 more days in a 90-day grace period where a person remains insured in spite of defaulting on payments under Obamacare.

     
  • Could health differences explain the reluctance of companies to enter some markets. Health differences around the country explain between 75 percent and 85 percent of the cost variations." Jordan Rau in Kaiser Health News.
    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/05/29/trouble-for-obamacare-in-new-hampshire/

December 24 reply from the TurboTax Forum

Hello rjensen,

SweetieJean commented on an answer to your question: Why does the number of exchanges vary so greatly. For example, New Hampshire and West Virginia have only one exchange whereas New York has 16 exchanges and Texas has 11 exchanges?

Saw a recent article about someone who had only 1 insurance in their Exchange, but their across the street neighbor (who lived in a different zip code) had 15.  In very rural areas (NH, WV), there isn't enough of a customer population for most insurance companies to make a profit.

 

To view the comment, click (or copy and paste in your browser) the link below:
https://ttlc.intuit.com/replies/3351534

 


I never knew about ACA consumer add-on taxes until this was reported today by CBS News
"As Obamacare Deadline Looms, Insurance Companies Pile On The Taxes," CBS News, December 26, 2013 ---
http://newyork.cbslocal.com/2013/12/26/as-obamacare-deadline-looms-insurance-companies-pile-on-the-taxes/

. . .

And there’s more: most insurance companies don’t tell you about the taxes they add to their premiums. The numbers will vary, but one subscriber said their tax amount is $23.14 a month, or nearly $278 annually.;

Other add-ons include:

* A 2 percent premium tax on every health plan.

* A user fee of 3.5 percent to sell through the online marketplace.

* A $2-per-policy fee.

Nonetheless, supporters of the Affordable Care Act claim the neediest will get the best coverage.

“People who make a little more will pay more; people who make a little less will pay less,” Arevalo said.

Critics say most insurers don’t specifically post taxes on invoices, and some question how, in the case Brennan showed earlier, Alabama Blue Cross-Blue Shield was able to be so specific.

Watch the video


Surely Chuck you cannot argue that having premiums and choices of plans vary so drastically across zip codes is fair.
"COST, NUMBER OF HEALTH CARE PLANS VARY WIDELY BY COUNTY," USA Today ---
http://www.usatoday.com/story/news/nation/2013/11/21/affordability-obamacare-plans-varies-state-county/3641821/
Look at the maps!

The variable premiums and deductibles that were somewhat unfair by zip codes before the ACA have exacerbated those and are increasingly unaffordable in some zip codes. The USA Today (December emphasizes this ---
"Lack aid? Many counties have only pricey plans," by Jayne O'Donnell, USA Today, December 26, 2013 ---
http://www.usatoday.com/story/news/nation/2013/12/25/affordability-healthcaregov-plans-usa-counties/4165513/

 More than half of the counties in 34 states using the federal health insurance exchange lack even a bronze plan that's affordable — by the government's own definition — for 40-year-old couples who make just a little too much for financial assistance, a USA TODAY analysis shows.

 Many of these counties are in rural, less populous areas that already had limited choice and pricey plans, but many others are heavily populated, such as Bergen County, N.J., and Philadelphia and Milwaukee counties.

More than a third don't offer an affordable plan in the four tiers of coverage known as bronze, silver, gold or platinum for people buying individual plans who are 50 or older and ineligible for subsidies.

Those making more than 400% of the federal poverty limit — $47,780 for an individual or $61,496 for a couple — are ineligible for subsidies to buy insurance.

The USA TODAY analysis looked at whether premiums for the least expensive plan in any of the metal levels was more than 8% of household income. That's similar to the affordability test used by the federal government to determine whether premiums are so expensive consumers aren't required to buy plans under the Affordable Care Act.

The number of people who earn close to the subsidy cutoff and are priced out of affordable coverage may be a small slice of the estimated 4.4 million people buying their own insurance and ineligible for subsidies. But the analysis clearly shows how the sticker shock hitting many in the middle class, including the self-employed and early retirees, isn't just a perception problem. The lack of counties with affordable plans means many middle-class people will either opt out of insurance or pay too much to buy it.

The prices of exchange plans have shocked many shoppers, especially those who had plans canceled because they did not meet the ACA coverage requirements. But experts are not surprised.

"The ACA was not designed to reduce costs or, the law's name notwithstanding, to make health insurance coverage affordable for the vast majority of Americans," says health care consultant Kip Piper, a former government and insurance industry official. "The law uses taxpayer dollars to lower costs for the low-income uninsured but it also increases costs overall and shifts costs within the marketplace."

Along with underscoring how high rates are in many places, the analysis could portend more problems for the health law's troubled rollout. The Congressional Budget Office projected 7 million people would sign up for the law by the end of 2014 and enrollment is already falling several million short of that goal. Insurers need a lot of relatively healthy people to sign up for insurance to make up for the higher cost of insuring the less healthy. Highly subsidized lower-income consumers who haven't had insurance before often weren't getting regular doctors' visits. If many of those making about $50,000 for an individual or about $62,000 in household income for a couple opt out of the new health care system, it will deprive it of some of the counterbalancing effect needed.

Still, about 95% of consumers live in states where the average premiums are below earlier estimates, says Department of Health and Human Services spokeswoman Joanne Peters.

"The new Marketplace is night and day from what consumers faced in the individual market before the health care law, where they could see unlimited out-of-pocket expenses for plans with limited benefits and high deductibles, if they can even get coverage without being denied for a pre-existing condition," says Peters.

Many ACA-compliant plans will cover prescription drugs, routine care for chronic conditions and primary care visits even before deductibles are met, Peters notes.

But those aren't the plans that are affordable to many middle-class individuals buying insurance. In many cases, catastrophic plans — which USA TODAY excluded from its analysis — may be all that's left for consumers on the exchanges. These high-deductible plans are generally only available for consumers under 30, who are least likely to need to use them, but they can also be purchased by people who don't have other affordable options available in their area. These plans generally require consumers to pay all of their medical costs up to a certain amount — often $6,000 or more — although preventive benefits such as physicals have to be covered under the new law.

President Obama said last week that people whose plans were canceled and think the options on the exchanges are too expensive aren't required to buy insurance or can buy a catastrophic plan through what's known as a "hardship exemption." But most people actually do want insurance, says financial counselor and author Karen McCall.

"Every one of those people, if they have any consciousness and aren't totally self-medicating, would prefer to have insurance," says McCall, author of the book Financial Recovery. "You could go a year and not get any benefit of health insurance, but there is a deep emotional need to know that we have proper insurance."

State and federal exchange officials approve the rates health insurers can offer, and plans are then subsidized to levels that make them affordable for those below 400% of the poverty level. Karen Pollitz, a senior fellow at the Kaiser Family Foundation, acknowledges that catastrophic and even bronze plans would be very difficult for many 40 or 50-something consumers to afford with their $5,000-$6,000 annual deductibles.

"Most people don't have that kind of money in the bank, and I think it's going to create problems for people," Pollitz says.

Although premiums are unaffordable in many places now, protections in the law will prevent the massive jumps in premiums that characterized the individual insurance market before the ACA, she says.

Individual policies before had only the "optics of affordability and no dependability," Pollitz says. "What good is protection if it doesn't work when you need it?"

More than half of the counties in 34 states using the federal health insurance exchange lack even a bronze plan that's affordable — by the government's own definition — for 40-year-old couples who make just a little too much for financial assistance, a USA TODAY analysis shows.

Many of these counties are in rural, less populous areas that already had limited choice and pricey plans, but many others are heavily populated, such as Bergen County, N.J., and Philadelphia and Milwaukee counties.

More than a third don't offer an affordable plan in the four tiers of coverage known as bronze, silver, gold or platinum for people buying individual plans who are 50 or older and ineligible for subsidies.

Those making more than 400% of the federal poverty limit — $47,780 for an individual or $61,496 for a couple — are ineligible for subsidies to buy insurance.

Jensen Comment
If we are going to have affordable health care for all then the premiums should be affordable by all and not my some zip codes suffer much more than people living in other zip codes.


 

  1. The new rules in many states for extending free Medicaid on the bases of only income without tests of assets (such as students having million dollar trust funds) are huge moral hazards for millions of people to get totally free medical service and medications. My wife's long term friend (for over years) has a daughter living across the street in Longview Texas. The daughter put her share of their $200,000 plus house into her husbands name, divorced her husband, quit her job, and is now on welfare and Medicaid for herself and her children. She still lives in the house with her husband and readily admits this was a sham divorce. Her "husband" makes over $70,000. She tells the welfare folks she's living across the street with her parents --- which is a blatant lie.


    In Texas she had to sign off on her ownership of the house. In one of the states relaxing Medicaid rules she should get Medicaid and completely own the house herself. as long as her "former husband" paid the property taxes and other house expenses. In fact she could own a million dollar house and still get Medicaid's free health care.

     
  2. In order to make their premiums lower (with or without subsidies) most people are opting for bronze and silver plans where they must pay 30%-50%) of all medications and medical care. If they get hit with big bills most of these people just do not have the money to pay their deductibles. Either they will forego treatment or pass their bad debts on to doctors and hospitals .

     
  3. The ACA law should have been enacted only after rule enforcement checks were in place. I think the law should not have commenced without having the IRS matching incomes against subsidies and Medicaid expansion.

     
  4. In the past people who defaulted on premiums became uninsured people who were treated in special facilities such as county hospitals funded by taxpayers. Now people who default on premiums get a 90-day grace period where insurance companies pay their medical costs for 30 days and the doctors and hospitals have to pay for their medical care for 60 days.
     
  5. President Obama was smart to delay the employer-provided plans for a year. The main advantage of this is that employees are not yet shocked by how much more they will be paying out-of-pocket for higher premiums, higher co-pays, and hi9gher deductibles.
    "Employees will pay more for health care in 2014: New year likely to bring higher deductibles and co-pays, smaller employer contributions." by Julie Appleby, USA Today, December 19, 2013 ---
    http://www.usatoday.com/story/money/personalfinance/2013/12/19/employee-health-insurance/3958071/

 

Jensen Comment
The problem is that the ACA is just not sustainable unless drastic changes are made. The ACA assumed that wealthier and healthier people were going to pay for almost all the expansion of free Medicaid medical care and subsidized premiums. But the prices that were set are just not affordable to too many people and in order to have medical plans other people are opting for high deductibles that they will not be able to pay in times of expensive medical care needs.  Furthermore, the pricings are too variable and unfair across all the counties of the USA.

The ACA is just not sustainable. It should have been a national health plan from the beginning. Turning it into a national health plan in the future will be an enormous shock to the slowly expanding economy and a disaster to the entitlements disaster.

But I don't really care all that much. I will be dead before the enormous disasters hit.
I just hate the fraud and unfairness that the ACA is exacerbating. It turns out that the preconditions problem for uninsured people was not all that great a problem that could have been solved much more cheaply. The majority of the the problem with uninsured people was that they either could not afford or did not want to afford medical insurance that is now ever more costly to many of these same peopl


"Obama's Mental Health Solution Falls Flat," by Nicole Bailey, Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm

. . .

The Obama administration has expanded mental health care coverage, but the latest research shows that psychiatrists often do not accept insurance at all. When only 43% of psychiatrists accept Medicaid, it is difficult to see how expanded coverage will help mental health patients.

Psychiatrists accept medical insurance less frequently than other specialists across the board, according to the study published in JAMA Psychiatry by researchers from three separate medical schools:
 

  • 55.3% of psychiatrists accepted medical insurance in general, compared to 88.7% of other physicians
  • 54.8% of psychiatrists accepted Medicare, compared to 86.1% of other physicians
  • 43.1% of psychiatrists accepted Medicaid, compared to 73.0% of other physicians

The mainline media seems to avoid the greatest concerns of the Affordable Care Act --- concerns about making hospitals and doctors absorb most of the costs of medical care during the 90-day premium default grace period and the cost of serving patients who afterwards renege on paying the deductible portions that they agreed to pay to get lower premium plans.

The USA now has a dual health care program --- the highest quality health care in the world for the wealthy on Cadillac medical insurance plans and inferior quality health care in the chaos of the Affordable Care Act that will force soaring inflation in health care provider pricings. Your local Congressional representative is signing up for a Cadillac plan paid for by taxpayers.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


the Affordable Care Act:  Limits Placed Upon Choosing Your Own Doctor and Hospital

Jensen Comment
The media along with President Obama led us to believe that medical insurance plans were going to vary only be the amount of the deductibles and age of the applicant. We are now learning more about differences in medical networks of hospitals and doctors. The President kept insisting that we could keep our present doctors. Technically that was not a lie, but what was left unsaid is that to literally keep your favored doctors and hospitals you may have to opt for the more expensive Cadillac plans having "broader network coverage "of physicians and selective hospitals that opted out of serving the lower-priced limited network plans.

Dr. Ezekiel Emanuel --- http://en.wikipedia.org/wiki/Ezekiel_Emanuel

"ObamaCare in Translation Ezekial Emanuel explains what the President really meant about your doctor," The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304014504579246552456954872?mod=djemEditorialPage_h

. . .

Mr. Wallace: "It's a simple yes or no question. Didn't he say if you like your doctor, you can keep your doctor?"

Dr. Emanuel: "Yes. But look, if you want to pay more for an insurance company that covers your doctor, you can do that. This is a matter of choice. We know in all sorts of places you pay more for certain—for a wider range of choices or wider range of benefits. The issue isn't the selective networks. People keep saying, 'Oh, the problem is you're going to have a selective network.'"

Mr. Wallace: "Well, if you lose your doctor or lose your hospital—"

Dr. Emanuel: "Let me just say something. People are going to have a choice as to whether they want to pay a certain amount for a selective network or pay more for a broader network."

Mr. Wallace: "Which means your premiums would probably go up."

Dr. Emanuel: "They get that choice. That's a choice you've always made."

It's nice to hear a central planner embrace choice, except this needs translating too. The truth is that you may be able to pay more to keep your doctor, but only after you choose one of ObamaCare's preferred plans that already costs you more than your old plan that ObamaCare forced you to give up.

Jensen Comment
What Dr. Emanuel failed to mention is that the "broader expensive network" plans are Cadillac plans for which employers lose their tax deductions.

The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are especially popular will be allowed to keep their plans without penalty since tax deductions are not of concern to them.

Having preferred networks of doctors and hospitals is not unheard of in national health care plans. Germany, for example, has both public health insurance plus premium coverage with private insurance. Cuba notoriously has bourgeoisie plans for members of the Communist Party and the wealthy versus  proletariat plans for the poor people.

If you Congressional representative brags about signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that lets them choose their own doctors and hospitals.


President Obama's Blatant Political Payoff:  Unions Get Tax-Free Cadillac Health Plans Unlike the Rest of the USA
Oops Some Selected Corporations Get Breaks as Well
"Unions Get Big ObamaCare Christmas Present As Other Self-Insured Groups Get Scrooged," by Larry Bell, Forbes, December 22, 2013 ---
http://www.forbes.com/sites/larrybell/2013/12/22/unions-get-big-obamacare-christmas-present-as-other-self-insured-groups-get-scrooged/

As a presumed constitutional scholar, Barack Obama should know that while a president has authority to check the Legislative Branch by recommending legislation to be passed by Congress, or through presidential veto, he or she cannot legislate through executive fiat or pick which parts of the law to comply with or decline. Article 2, Section 3, Clause 5 of our Constitution requires that the president “…shall take care that the Laws be carefully executed.” It doesn’t limit those laws or encapsulated provisions to the particular ones that he or she likes.

Speaking before the House Judiciary Committee on December 3, Professor Jonathan Turley of George Washington University observed that the president isn’t taking that “Laws be faithfully executed” oath very seriously, particularly with regard to his signature Affordable Care Act (aka.“ObamaCare”).

Although Turley had voted for Obama and professes to agree with him on health care and other issues, he warned that his power grabs are causing “the most serious constitutional crisis in my lifetime.”

The White House Earns Its Union Label

In addition to delaying and rewriting key ACA provisions and carving out a special subsidy for members of Congress, Obama’s latest constitutional violation will exempt unions from a fee the law imposes upon all large group health plans. That provision which appears in Section 1341 (b)(1)(A)  establishes a reinsurance program to compensate insurers on exchanges in the individual market if they are hit with higher than expected costs to cover those with pre-existing conditions. This will come from insurers and self-insured employers who pay in proportion to the number of people they cover. The target is to raise $25 billion during 2014, amounting to $63 per covered employee. The union exemption would kick in for 2015 and 2016.

As reported in a Wall Street Journal editorial, “The unions hate this reinsurance transfer because it takes from their members in the form of higher premiums and gives to people on the exchanges.”

The union exemption deal will require that insurers who aren’t fully reimbursed by fees along with non-exempted self-insured employers will have to pay more to make up the shortfall. How will they make that up? How else but by passing on higher costs to their customers? The Department of Health and Human Services has confirmed that the fee for other non-exempt plans will be higher as a result.

Responding to union pressure, an exemption buried on page 72,340 of the December 2 Federal Register states: “Our continued study of this issue leads us to believe that this provision may reasonably be interpreted in one of two ways – it may be interpreted to mean that self-insured, self- administered plans must make reinsurance contributions, or it may be interpreted to mean that such plans are excluded from the obligation…upon further consideration of the issue, we believe the statutory language can reasonably be read…”

Yet as Betsy McCaughey points out in an Investor’s Business Daily piece, while Taft-Hartley plans self -insure and self-administer, the weasel-wording is a ruse. She writes:  “That’s a lie. The ACA’s reinsurance provision doesn’t use the word ‘self-insured’ or distinguish between plans that pay their own claims and plans that hire administrators.”

Here, “self-insured” refers to a business which pays directly for its workers’ policy costs and hires an insurer as a third-party administrator to process claims and manage care. “Self-administered” plans go one step farther and manage their benefits in-house. As the Wall Street Journal observes, other than collectively-bargained Taft-Hartley plans, “Almost no business in the real world still follows this old –fashioned practice”. Such insurance covers about 20 million union members, and about four out of five Taft-Hartley trusts.

Eleven Republican senators who see the exemption as blatant congressional circumvention and cronyism by the Obama administration to curry favor with political allies have introduced a bill called the “Union Tax Fairness Act” (S. 1724) to block it. Included are U.S. Senators Orrin Hatch (R-UT), John Thune (R-SD), Lamar Alexander (R-Tenn.), James Inhofe (R-OK), David Vitter (R-LA), Mike Enzi (R-WY), Ron Johnson (R-WS), John Barrasso (R-WY), Tim Scott (R-SC), Saxby Chambliss (R-GA), and Tom Coburn (R-OK).

Senator Hatch commented: Since the overwhelming majority of self-administered health insurance plans are run by unions, let’s call this what it is: a political payback by the administration to its union friends for backing this disastrous law. But the fact is, the White House doesn’t have the authority to change the law on its own and, as this bill makes clear, any attempt at a Big Labor carve-out from ObamaCare must be approved by Congress.”

Senator Thune said: “Unions should not be granted a special exemption from ObamaCare’s reinsurance tax just because the president fears further union backlash on his signature law. These unions agreed to pay this tax when they endorsed ObamaCare, but now that they are finding out what the law means for them and their plans, they want out. Rather than granting special backroom deals to political allies, the administration should support fairness for all by permanently delaying the law for every American.”

Senator Alexander added: The Obama administration should not reward its labor union friends and allies who helped pass the health care law by giving them a carve-out from the law’s worst provisions. This hefty reinsurance fee is one of the many job-killing taxes that helped pay for the passage of the law – the administration should be embarrassed that it would consider exempting their union cronies without providing similar relief to our nation’s employers and faith-based and charitable organizations.”

The unions weren’t the only cronies to get a special ObamaCare break. Insurers who went along with ACA from the beginning in order to expand markets from previously uninsured populations on the taxpayer dole didn’t want any of that same medicine for themselves.

Ten giant health insurance companies, including Blue Cross/Blue Shield, Cigna and Aetna, went to the White House and received waivers allowing them to impose yearly cap limits on health coverage they provide to their own employees. Under ObamaCare, companies which aren’t exempt are required to phase out caps on annual health care benefits by 2014.

Cigna Corp., the largest waiver exemption beneficiary, was allowed to cap benefits for its 265,000 employees. This exception was granted just slightly less than one month before its CEO David M. Cordani told attendees at a November 9, 2010 Reuters Health Summit: “I don’t think it’s in our society’s best interest to expend energy in repealing the law.”

Aetna was granted a waiver on October 1, 2010 allowing it to cap benefits for its 209,423 enrollees. The company’s CEO Mark Bertolini had previously expressed mixed feelings about the legislation. Writing in a March 2010 Op/Ed which appeared in the Hartford Courant shortly after it became law, he said: “When fully implemented, the new law will have a major effect on the market…Individuals and small employers will have more options and choices. The private sector will do what it does best: innovate to solve problems,”

The BCS Insurance Group which notes on their website “We are the premier source for insurance and reinsurance for Blue Cross and Blue Shield plans” received an ObamaCare waiver for its 115,000 enrollees. In fact three divisions of Blue Cross/Blue Shield reportedly received waivers. They include Excellus Blue Cross/Blue Shield (18,860 enrollees), Blue Cross/Blue/Shield of Tennessee (20,205 enrollees), and Mountain State Blue Cross/Blue Shield with 270 enrollees.

HHS waivers from oversight rules were granted to “Medigap” policy providers which exempts them from releasing and explaining health care payment rate increases. According to the Daily Caller, AARP, the largest of these, advocated for ObamaCare to include an attack on their biggest competitor, Medicare Advantage.

AARP was a driving force behind getting ObamaCare through Congress. They conducted a $121 million advertising campaign to push it, plus spent millions more lobbying for it on Capitol Hill. After President Obama called for $313 billion in Medicare cuts to fund his signature program, Medicare Advantage took the big hit.

Broken Premises

Don’t forget that ObamaCare would have encountered the same forgotten fate as HillaryCare had it not been for the support of big unions and insurers. Perhaps recall those throngs of United Federation of Teachers (UFT) and Service Employee International Union (SEIU) members picketing the Supreme Court in favor of its approval carrying signs that read “Protect Working Families, Protect the Law”.

And they already received gratitude. Immediately after the provisions took effect, unions requested and were granted 1,231 waivers exempting 543,812 of their employees compared with only 69, 813 non-union worker exemptions.

Continued in article

Jensen Comment
With most of the millions of signing up "affordable health care" getting free medical care under the expanded Medicaid programs or premiums subsidized by the government, it shouldn't end up as a surprise who will really pay for medical care in the future. That's becoming a no-brainer. Even clever millionaires such as students with trust funds are now eligible for free Medicaid health care.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

 


How to Lie With Naive Politically Correct Estimates

"Affordable Care Act: 17 Million Can Get Subsidies," by Mary Agnes Carey, WebMD News from Kaiser Health News, November 5, 2013 ---
http://www.webmd.com/health-insurance/20131105/17-million-people-eligible-for-premium-subsidies-study-finds

Jensen Comment
Fraud is inevitable and cannot be prevented when it comes to giving out subsidies to to insured that are not legally entitled to such subsidies. Firstly, there's the $2 trillion underground economy where people are receiving income that even the IRS cannot detect --- those folks who work for unreported cash earnings. We're talking about millions of people who do not report any income to the IRS or greatly under report their incomes ---
http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

Secondly, the 17 million reported above does not jive with the estimated 49.5% (of 130 million) of taxpayers who file tax returns but do not pay any income taxes. Some of them have incomes offset by credits such as credits for dependents, but its likely that the nearly all of 50% of taxpayers who pay no qualify, at least on paper, for subsidies ---
http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

Most of those making more than $100,000 pay some income taxes. Bloomberg reports that 98% of those that pay no income taxes have less than $100,000 in earnings. Most are availing themselves of recent tax breaks such as energy credits, tax breaks from employer contributions to medical insurance, increased tax breaks for dependents, and deferred tax breaks such as breaks professors get for employer contributions to TIAA-CREF.

Watch the April 3, 2012 Bloomberg Video ---
http://www.bloomberg.com/video/89503501/

A family of four making less than $98,000 qualifies for a health insurance subsidy from the government.

Hence I think the 17 million estimate is wildly inaccurate unless tens of millions of those eligible for subsidies simply go uninsured because they cannot afford the deductibles even if the premiums with subsidies are affordable.

One added qualifier is the huge unknown (at least to me) number of Medicaid and Medicare recipients who are scoped out of the Affordable Health Care Act. Those on Medicaid do not pay income taxes. Most of those on Medicare do pay income taxes such that the sources of error in estimating the number of others who will actually claim subsidies under the Affordable Health Care Act is probably impossible to estimate within a 10 million range of error or more.

The enormous source of error that cannot be eliminated is that $2 trillion underground cash-only economy that takes place under the noses of the IRS enforcers of taxes.


"NBC News: "Obama Administration knew millions could not keep their health insurance," by Bob Beauprez, Townhall, October 30, 2013 ---
http://finance.townhall.com/columnists/bobbeauprez/2013/10/30/nbc-news-obama-administration-knew-millions-could-not-keep-their-health-insurance-n1733175 

When Obama repeatedly made the claim – "If you like your health plan; you can keep your health plan" – objective observers knew it wasn't so. This morning, the media is buzzing with evidence that Obama knew it was a lie, but deliberately kept spinning the same phony claim for years.

The shock in all this is not that Obama was lying; he has a well established record of that. It's that somebody has uncovered the evidence; the smoking gun. The following is the NBC News account of the mess du jour for the White House and ObamaCare.

Our sources deeply involved in the Affordable Care Act tell NBC NEWS that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”

None of this should come as a shock to the Obama administration….

Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”

That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”

Continued in article

 


"5 Lies the Democrats Told To Sell Obamacare," by John Hawkins, Townhall, June 4, 2013 --- Click Here
http://townhall.com/columnists/johnhawkins/2013/06/04/5-lies-the-democrats-told-to-sell-obamacare-n1612356?utm_source=thdaily&utm_medium=email&utm_campaign=nl

. . .

It sounded great.

Of course, it also sounds great when a Nigerian prince offers to give you millions of dollars to help him get money into the United States. Unfortunately, those Nigerian princes with the funny names won't make you any richer, just as Presidents with funny names won't improve your health care. They'll just tell you lies like these.

1) Obamacare will cut the cost of your health care. If only. When Obamacare goes into effect next year, many Americans can expect STEEP increases in the cost of health care.

President Obama (promised)...that the cost of insurance would go down “by $2,500 per family per year.” ...In fact, the average 25 and 40-year-old will pay double under Obamacare what they would need to pay today, based on rates posted at eHealthInsurance.com (NASDAQ:EHTH). More specifically, for the typical 25-year-old male non-smoker, the average Obamacare “bronze” exchange plan in California will cost between 64 and 117 percent more than the cheapest five plans on eHealth. For 40-year-old male non-smokers, it’s between 73 and 146 percent more.

2) Obamacare will not increase the deficit. Calling for a massive new government program to cut costs is sort of like moving to Death Valley for the reduced air conditioning bills. Alas, it's not so.

Obamacare will increase the long-term federal deficit by $6.2 trillion, according to a Government Accountability Office (GAO) report released today.

Senator Jeff Sessions (R., Ala.), who requested the report, revealed the findings this morning at a Senate Budget Committee hearing. The report, he said, “confirms everything critics and Republicans were saying about the faults of this bill,” and “dramatically proves that the promises made assuring the nation that the largest new entitlement program in history would not add one dime to the deficit were false.”

President Obama and other Democrats attempted to win support for the health-care bill by touting it as a fiscally responsible enterprise. “I will not sign a plan that adds one dime to our deficits — either now or in the future,” Obama told a joint-session of Congress in September 2009. “I will not sign it if it adds one dime to the deficit, now or in the future, period.”

You mean Obama lied to us AGAIN? Who would have ever guessed?

3) "If you like your doctor, you will be able to keep your doctor. Period." Soon, many Americans will be happy if they can find A DOCTOR, much less THEIR DOCTOR.

Eighty-three percent of American physicians have considered leaving their practices over President Barack Obama’s health care reform law, according to a survey released by the Doctor Patient Medical Association.

 

The DPMA, a non-partisan association of doctors and patients, surveyed a random selection of 699 doctors nationwide. The survey found that the majority have thought about bailing out of their careers over the legislation, which was upheld last month by the Supreme Court.

Even if doctors do not quit their jobs over the ruling, America will face a shortage of at least 90,000 doctors by 2020. The new health care law increases demand for physicians by expanding insurance coverage. This change will exacerbate the current shortage as more Americans live past 65.

What good is health care, even the bad health care we'll get through Obamacare, if you can't find a doctor to see you when you're sick?

4) Obamacare will create jobs. That would be true if you added "...at the IRS" to the end of it, but companies have already begun to move millions of workers from full to part time to avoid punitive new costs under Obamacare.

Retailers are cutting worker hours at a rate not seen in more than three decades — a sudden shift that can only be explained by the onset of ObamaCare’s employer mandates.

 

Nonsupervisory employees logged an average 30.0 hours per week in April, the shortest retail workweek since early 2010, Labor Department data out Friday show.

…This reversal doesn’t appear related to the economy, which has been consistently mediocre. Instead, all evidence points to the coming launch of ObamaCare, which the retail industry has warned would cause just such a result.

...One way for employers to minimize the costs of providing “affordable” coverage to modest-wage workers is to shift more work to part-time, defined as less than 30 hours per week under ObamaCare.

So not only are they going to get crummy health care, they're getting their hours cut back, too. Thanks, Obama!

5) If you like your health care plan, you'll be able to keep it. According to Obama, even though the government is about to come crashing into the health care market like a Blue Whale bellyflopping into a pond, it isn't going to have any impact at all on the insurance companies that were already swimming along. Why, if you like your own insurance, then there is nothing to worry about because you can keep it.

Yet, just last week Fox News reported,

New health insurance rules under ObamaCare could lead to a host of personal insurance plans being canceled as early as this fall, a scenario expected to cause consumer confusion.

 

Under the federal overhaul, those policies that cannot meet new insurance plan standards may be discontinued. This means individuals, and some small businesses, that rely on those plans will have to find new ones.

The goal is to ensure that most insurance policies offer a basic set of coverage, as part of the Obama administration's plan to cover most of the nation's 50 million uninsured.

Yet it also seems to run afoul of one of the president's best-known promises on the law: "If you like your health care plan, you'll be able to keep your health care plan."

In fact, state insurance commissioners largely are giving insurers the option of canceling existing plans or changing them to comply with new federal requirements. Large employer plans that cover most workers and their families are unlikely to be affected.

The National Association of Insurance Commissioners says it is hearing that many carriers will cancel policies and issue new ones because administratively that is easier than changing existing plans.

..."You're going to be forcibly upgraded," said Bob Laszewski, a health care industry consultant. "It's like showing up at the airline counter and being told, 'You have no choice, $300 please. You're getting a first-class ticket, why are you complaining?'"

On a personal note, as someone who buys his own insurance, the cost of my policy has gone up $50 a month since Obamacare passed and I expect it to be cancelled this fall, but I guess it's a small price to pay for us little people if it allows Barack Obama to feel like he finally accomplished something "historic."

Obamacare hasn't fully taken effect yet, but when it does, it's only going to get worse. Everything from death panels to unimaginably long waits for surgeries to bureaucrats denying effective, relatively common, currently in use treatments because they are "too expensive" are all coming down the pike. Obamacare is too much of a disaster to truly fix; so the best thing we can do right now is let this nightmare become reality, let people see how bad it is and then insist on a repeal or bust. Either the Democrats live with the disaster they've inflicted on the American people at the ballot box long term or they do the right thing and allow us to repeal this monstrosity before it does even more damage to our country.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


"ObamaCare's Troubles Are Only Beginning:  Be prepared for eligibility, payment and information protection debacles—and longer waits for care," by Michael J. Boskin, The Journal of Accountancy, December 15, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304403804579260603531505102?mod=djemEditorialPage_h

The White House is claiming that the Healthcare.gov website is mostly fixed, that the millions of Americans whose health plans were canceled thanks to government rules may be able to keep them for another year, and that in any event these people will get better plans through ObamaCare exchanges. Whatever the truth of these assertions, those who expect better days ahead for the Affordable Care Act are in for a rude awakening. The shocks—economic and political—will get much worse next year and beyond. Here's why:

The "sticker shock" that many buyers of new, ACA-compliant health plans have experienced—with premiums 30% higher, or more, than their previous coverage—has only begun. The costs borne by individuals will be even more obvious next year as more people start having to pay higher deductibles and copays.

If, as many predict, too few healthy young people sign up for insurance that is overpriced in order to subsidize older, sicker people, the insurance market will unravel in a "death spiral" of ever-higher premiums and fewer signups. The government, through taxpayer-funded "risk corridors," is on the hook for billions of dollars of potential insurance-company losses. This will be about as politically popular as bank bailouts.

The "I can't keep my doctor" shock will also hit more and more people in coming months. To keep prices to consumers as low as possible—given cost pressures generated by the government's rules, controls and coverage mandates—insurance companies in many cases are offering plans that have very restrictive networks, with lower-cost providers that exclude some of the best physicians and hospitals.

Next year, millions must choose among unfamiliar physicians and hospitals, or paying more for preferred providers who are not part of their insurance network. Some health outcomes will deteriorate from a less familiar doctor-patient relationship.

More IT failures are likely. People looking for health plans on ObamaCare exchanges may be able to fill out their applications with more ease. But the far more complex back-office side of the website—where the information in their application is checked against government databases to determine the premium subsidies and prices they will be charged, and where the applications are forwarded to insurance companies—is still under construction. Be prepared for eligibility, coverage gap, billing, claims, insurer payment and patient information-protection debacles.

The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors' appointments and specialist treatment, as more people crowd fewer providers.

Those with means can respond to the government-driven waiting lines by making side payments to providers or seeking care through doctors who do not participate in insurance plans. But this will be difficult for most people.

Next, the Congressional Budget Office's estimated 25% expansion of Medicaid under ObamaCare will exert pressure on state Medicaid spending (although the pressure will be delayed for a few years by federal subsidies). This pressure on state budgets means less money on education and transportation, and higher state taxes.

The "Cadillac tax" on health plans to help pay for ObamaCare starts four years from this Jan. 1. It will fall heavily on unions whose plans are expensive due to generous health benefits.

In the nearer term, a political iceberg looms next year. Insurance companies usually submit proposed pricing to regulators in the summer, and the open enrollment period begins in the fall for plans starting Jan. 1. Businesses of all sizes that currently provide health care will have to offer ObamaCare's expensive, mandated benefits, or drop their plans and—except the smallest firms—pay a fine. Tens of millions of Americans with employer-provided health plans risk paying more for less, and losing their policies and doctors to more restrictive networks. The administration is desperately trying to delay employer-plan problems beyond the 2014 election to avoid this shock.

Meanwhile, ObamaCare will lead to more part-time workers in some industries, as hours are cut back to conform to arbitrary definitions in the law of what constitutes full-time employment. Many small businesses will be cautious about hiring more than 50 full-time employees, which would subject them to the law's employer insurance mandate.

On the supply side, medicine will become a far less attractive career for talented young people. More doctors will restrict practice or retire early rather than accept lower incomes and work conditions they did not anticipate. Already, many practices are closed to Medicaid recipients, some also to Medicare. The pace of innovation in drugs, medical devices and delivery is expected to slow significantly, as higher taxes and even rationing set in.

The repeated assertions by the law's supporters that nobody but the rich would be worse off was based on a beyond-implausible claim that one could expand by millions the number of people with health insurance, lower health-care costs without rationing, and improve quality. The reality is that any squeezing of insurance-company profits, or reduction in uncompensated emergency-room care amounts to a tiny fraction of the trillions of dollars extracted from those people overpaying for insurance, or redistributed from taxpayers.

The Affordable Care Act's disastrous debut sent the president's approval ratings into a tailspin and congressional Democrats in competitive districts fleeing for cover. If the law's continuing unpopularity enables Republicans to regain the Senate in 2014, the president will be forced to veto repeated attempts to repeal the law or to negotiate major changes.


It is exceptionally difficult -- for all practical purposes, impossible," writes Eberstadt, "for a medical professional to disprove a patient's claim that he or she is suffering from sad feelings or back pain. In other words, many people are gaming or defrauding the system. This includes not only disability recipients but health care professionals, lawyers and others who run ads promising to get you disability benefits. Between 1996 and 2011, the private sector generated 8.8 million new jobs, and 4.1 million people entered the disability rolls.
Michael Barone, "Men Find Careers in Collecting Disability," --- Click Here
http://townhall.com/columnists/michaelbarone/2012/12/03/men_find_careers_in_collecting_disability?utm_source=thdaily&utm_medium=email&utm_campaign=nl
 
Jensen Comment
 Even after one or more spine surgeries it is virtually impossible to determine whether remaining pain is real or faked. I can claim first hand that after 15 spine surgeries and metal rods from neck to hip that my wife's suffering is real. However, I know of at least two instances where the disability careers are faked in order to get monthly lifetime disability payments and access to Medicare long prior to age 65. This seems to be one of the unsolvable problems in society that becomes even more problematic when a disability career is easier to enter than a job-like career.


Two  Ivy League Professors Slugging It Out in a Political Arena

Harvard History Professor Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson
Princeton Economics Professor Paul Krugman --- http://en.wikipedia.org/wiki/Paul_Krugman

"Kinds Of Wrong," by Paul Krugman, The New York Times, August 21, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/21/kinds-of-wrong/

Looking at the comments on my Niall Ferguson takedown (see Ezra Klein, Matthew O’Brien, James Fallows, and Noah Smith for more), I found my memory jogged about a point I’ve been meaning to make about the nature of error in economics.

It seems to me that when readers declare that some piece of economics commentary is “wrong”, they often confuse three different notions of wrongness, which are neither intellectually nor morally equivalent.

First, there’s the ordinary business of expressing a view about the economy that the reader disagrees with – e.g., “Krugman is wrong, because the government can’t create jobs”; or, if you prefer, “Casey Mulligan is wrong, because we’re suffering from demand problems, not supply problems.” Obviously it’s OK to say things like this, and sometimes the criticism is correct. (I’m not wrong, but Mulligan is!) But equally obviously, there’s nothing, er, wrong about being wrong in this sense: people will disagree, and that’s legitimate.

Second, and much less legitimate, is the kind of wrongness that involves making assertions that are logically or empirically indefensible. I’d put the Cochrane/Fama claims that government spending can’t increase demand as a matter of accounting in this category; this is a basic conceptual error, which goes beyond mere difference of opinion. And economists who are wrong in this sense should pay a professional price.

That said, I don’t think it’s realistic to expect the news media to be very effective at policing this kind of wrongness. If professors with impressive-sounding credentials spout nonsense, it’s asking too much of a newspaper or magazine serving the broader public to make the judgment that they actually have no idea what they’re talking about.

Matters are quite different when it comes to the third kind of wrongness: making or insinuating false claims about readily checkable facts. The case in point, of course, is Ferguson’s attempt to mislead readers into believing that the CBO had concluded that Obamacare increases the deficit. This was unethical on his part – but Newsweek is also at fault, because this is the sort of thing it could and should have refused to publish.

Now, I don’t expect a publication that responds to daily or weekly news to do New Yorker-style fact checking. But it should demand that anyone who writes for it document all of his or her factual assertions – and an editor should check that documentation to see that it actually matches what the writer says.

Continued in article

"Unethical Commentary, Newsweek Edition," by Paul Krugman, The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:

The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.

Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.

Now, people on the right like to argue that the CBO was wrong. But that’s not the argument Ferguson is making — he is deliberately misleading readers, conveying the impression that the CBO had actually rejected Obama’s claim that health reform is deficit-neutral, when in fact the opposite is true.

More than that: by its very nature, health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. So of course reform comes with a positive number for subsidies — finding that this number is indeed positive says nothing at all about the impact on the deficit unless you ask whether and how the subsidies are paid for. Ferguson has to know this (unless he’s completely ignorant about the whole subject, which I guess has to be considered as a possibility). But he goes for the cheap shot anyway.

Continued in article

Jensen Comment
The CBO assumes that the requirement (just upheld by a Supreme Court decision) that all people in the United States have health insurance or otherwise will have health insurance premiums deducted from their tax refunds that will fund the added cost of covering current poor people needing subsidies for health insurance coverage. This is what Krugman means above when he assumes "the insurance subsidies are fully paid for." This is why the Affordable Health Care Act (ACA) tried to get states to raise the number of people receiving state subsidies for Medicaid. About half the states, however, are refusing to along with the expanded coverage under Medicaid. This means that more higher-end low income people will depend on the ACA "subsidies" instead of Medicaid coverage from federal and state Medicaid funding.

It seems to be a matter of semantics whether these tax return add-ons are a tax or not, but Krugman (probably rightfully) ignores this matter of semantics. But since about half the taxpayers in the U.S. pay no income taxes and over 90% of them are below the median in earnings it's not clear whether enough insurance premiums expected to be collected will really be collected. The CBO may have been planning on an economic recovery that perhaps will never materialize in this new era of global competition with Asia. The CBO expectations of lower unemployment may not materialize (currently there are nearly 13 million unemployed people not counting the many who've simply given up looking for work or received fraudulent Social Security lifetime disability awards). The required subsidies in reality may greatly exceed the added premiums "tax" collected. But nobody, including the CBO, knows what deficits will become.

Also it's not at all clear that the CBO correctly estimated health care claims given the double-digit inflation in the cost of medical services. This is the real Achilles Heel of the Affordable Health Care Act. The costs of actually providing the promised services in the future may greatly exceed expectations.

What may be more subject to dispute is how accurate the CBO is on estimating future costs of bringing on people who have prior conditions that prevent them from currently being able to obtain health care coverage. I'm definitely in favor of providing affordable coverage to these people with prior conditions. But I think the eventual coverage costs will exceed CBO estimates since many of them need high-cost organ transplants and other very expensive medical services.

Professor Krugman has a very loyal crowd of liberal followers who seldom disagree with his liberal politics.
The comment of NS
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/
 

I am very surprised by the hysterical reaction of many readers to Krugman's comment. The point of the argument is what the HBO report says. Does Ferguson lie about the HBO report in his Newsweek article? Either Ferguson or Krugman is correct. I would expect readers disagreeing with Krugman to provide quotations from the HBO report showing that he is wrong and that Ferguson is right.

Instead of that I see a lot of ideological delirium in too many of the comments.

NS, Paris, France

 

Comment of Laurie Wick
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

I cancelled my subscription to Newsweek today. I do not need this kind of uninformed blather in my home. If I feel the need to read/hear totally unfactual, biased reporting, I can just turn on FOX news at any hour of the day or night. Which I will never do.

Laurie Wick

Jensen Comment
Actually, since Tina Brown became editor, Newsweek became a liberal feminist magazine. Niall Ferguson's column is only there for tokenism. The Ferguson cover story is most likely a desperate attempt to recover the millions of conservative subscribers who've defected since Tina Brown took over. One of the recent cover's of Newsweek accuses Candidate Romney of "being a Wimp." Are you sure you want to cancel Newsweek Laurie?

The Comment of J. Philip
The New York Times, August 19, 2012 ---
http://krugman.blogs.nytimes.com/2012/08/19/unethical-commentary-newsweek-edition/

FTA: "health reform that expands coverage requires that lower-income families receive subsidies to make coverage affordable. "

And, exactly,. Mr. Krugman, where do you think those subsidies are gonna come from? You can continue to carry Obama's water that's what you get paid to do, but the rest of us know a TAX when we see one.

J. Phillip

Closing Jensen Comment
I wish the Democrats had rammed a national health care plan down our throats in that short window of time 2008-2010 when they controlled the entire executive and legislative branches of the federal government. Instead we ended up with a bastardized public-private ACA that pleases neither the left nor the right. I am inclined to believe that the ACA will always have insurance premiums falling way short of costs of delivering medical services. Whether or not this adds to the deficit is simply a matter of accounting gimmicks the familiar governmental accounting shell game ---
http://www.trinity.edu/rjensen/Theory02.htm#GovernmentalAccounting

Bob Jensen's threads on the ACA are at
http://www.trinity.edu/rjensen/Health.htm


Paul Ryan on the Affordable Health Care Act --- http://www.youtube.com/watch?v=zPxMZ1WdINs

The larger reality is that Medicare cannot and will not continue as it is, as the President used to admit. A sampler of his rhetoric from the town-hall summer of 2009: "Mark my words," he declared in Grand Junction, Colorado, "Medicare in about eight to nine years goes into the red. . . . It is going broke." He added in Portsmouth, New Hampshire, that "What is truly scary—what is truly risky—is if we do nothing" because Medicare is "unsustainable" and "running out of money." In Belgrade, Montana, he said the program must be reformed "to be there for the next generation, not just for this generation."What he rarely mentions is how he plans to fix Medicare under ObamaCare. First the government will do things like arbitrarily commanding providers to deliver the exact same benefits except for $716 billion less. When that doesn't work, as it surely won't, the feds will take control of the case-by-case decisions currently made between patients and doctors and substitute the judgment of technocrats. (See what's already happening in Massachusetts, "RomneyCare 2.0," August 6.)
"The Mediscare Boomerang," The Wall Street Journal, August 16, 2012 ---
http://professional.wsj.com/article/SB10000872396390444772404577587464183295348.html?mod=djemEditorialPage_t&mg=reno64-wsj

 


It's Unethical as it Gets in the Whitehouse
"Axelrod's ObamaCare Dollars Emails suggest the White House pushed business to the presidential adviser's former firm to sell the health-care law," by Kimberly A. Strassel, The Wall Street Journal, June 21, 2012 ---
http://professional.wsj.com/article/SB10001424052702304765304577480871706139792.html?mod=djemEditorialPage_t&mg=reno-wsj

Rewind to 2009. The fight over ObamaCare is raging, and a few news outlets report that something looks ethically rotten in the White House. An outside group funded by industry is paying the former firm of senior presidential adviser David Axelrod to run ads in favor of the bill. That firm, AKPD Message and Media, still owes Mr. Axelrod money and employs his son.

The story quickly died, but emails recently released by the House Energy and Commerce Committee ought to resurrect it. The emails suggest the White House was intimately involved both in creating this lobby and hiring Mr. Axelrod's firm—which is as big an ethical no-no as it gets.

Mr. Axelrod—who left the White House last year—started AKPD in 1985. The firm earned millions helping run Barack Obama's 2008 campaign. Mr. Axelrod moved to the White House in 2009 and agreed to have AKPD buy him out for $2 million. But AKPD chose to pay Mr. Axelrod in annual installments—even as he worked in the West Wing. This agreement somehow passed muster with the Office of Government Ethics, though the situation at the very least should have walled off AKPD from working on White-House priorities.

It didn't. The White House and industry were working hand-in-glove to pass ObamaCare in 2009, and among the vehicles supplying ad support was an outfit named Healthy Economy Now (HEN). News stories at the time described this as a "coalition" that included the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, and labor groups—suggesting these entities had started and controlled it.

House emails show HEN was in fact born at an April 15, 2009 meeting arranged by then-White House aide Jim Messina and a chief of staff for Democratic Sen. Max Baucus. The two politicos met at the Democratic Senatorial Campaign Committee (DSCC) and invited representatives of business and labor.

A Service Employees International Union attendee sent an email to colleagues noting she'd been invited by the Baucus staffer, explaining: "Also present was Jim Messina. . . . They basically want to see adds linking HC reform to the economy. . . . there were not a lot of details, but we were told that we wd be getting a phone call. well that call came today."

The call was from Nick Baldick, a Democratic consultant who had worked on the Obama campaign and for the DSCC. Mr. Baldick started HEN. The only job of PhRMA and others was to fund it.

Meanwhile, Mr. Axelrod's old firm was hired to run the ads promoting ObamaCare. At the time, a HEN spokesman said HEN had done the hiring. But the emails suggest otherwise. In email after email, the contributors to HEN refer to four men as the "White House" team running health care. They included John Del Cecato and Larry Grisolano (partners at AKPD), as well as Andy Grossman (who once ran the DSCC) and Erik Smith, who had been a paid adviser to the Obama presidential campaign.

In one email, PhRMA consultant Steve McMahon calls these four the "WH-designated folks." He explains to colleagues that Messrs. Grossman, Grisolano and Del Cecato "are very close to Axelrod," and that "they have been put in charge of the campaign to pass health reform." Ron Pollack, whose Families USA was part of the HEN coalition, explained to colleagues that "the team that is working with the White House on health-care reform. . . . [Grossman, Smith, Del Cecato, Grisolano] . . . would like to get together with us." This would provide "guidance from the White House about their messaging."

According to White House visitor logs, Mr. Smith had 28 appointments scheduled between May and August—17 made through Mr. Messina or his assistant. Mr. Grossman appears in the logs at least 19 times. Messrs. Del Cecato and Grisolano of AKPD also visited in the spring and summer, at least twice with Mr. Axelrod, who was deep in the health-care fight.

A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.

A basic rule of White House ethics is to avoid even the appearance of self-dealing or nepotism. If Mr. Axelrod or his West Wing chums pushed political business toward Mr. Axelrod's former firm, they contributed to his son's salary as well as to the ability of the firm to pay Mr. Axelrod what it still owed him. Could you imagine the press frenzy if Karl Rove had dome the same after he joined the White House?

Continued in article


"Study: Obama's Health Care Law Would Raise Deficit," SmartPros, April 10, 2012 ---
http://accounting.smartpros.com/x73682.xml

Reigniting a debate about the bottom line for President Barack Obama's health care law, a leading conservative economist estimates in a study to be released Tuesday that the overhaul will add at least $340 billion to the deficit, not reduce it.

Charles Blahous, who serves as public trustee overseeing Medicare and Social Security finances, also suggested that federal accounting practices have obscured the true fiscal impact of the legislation, the fate of which is now in the hands of the Supreme Court.

Officially, the health care law is still projected to help reduce government red ink. The Congressional Budget Office, the government's nonpartisan fiscal umpire, said in an estimate last year that repealing the law actually would increase deficits by $210 billion from 2012 to 2021.

The CBO, however, has not updated that projection. If $210 billion sounds like a big cushion, it's not. The government has recently been running annual deficits in the $1 trillion range.

The White house dismissed the study in a statement late Monday. Presidential assistant Jeanne Lambrew called the study "new math (that) fits the old pattern of mischaracterizations" about the health care law.

Blahous, in his 52-page analysis released by George Mason University's Mercatus Center, said, "Taken as a whole, the enactment of the (health care law) has substantially worsened a dire federal fiscal outlook.

"The (law) both increases a federal commitment to health care spending that was already unsustainable under prior law and would exacerbate projected federal deficits relative to prior law," Blahous said.

The law expands health insurance coverage to more than 30 million people now uninsured, paying for it with a mix of Medicare cuts and new taxes and fees.

Blahous cited a number of factors for his conclusion:

- The health care's law deficit cushion has been reduced by more than $80 billion because of the administration's decision not to move forward with a new long-term care insurance program that was part of the legislation. The Community Living Assistance Services and Supports program raised money in the short term, but would have turned into a fiscal drain over the years.

- The cost of health insurance subsidies for millions of low-income and middle-class uninsured people could turn out to be higher than forecast, particularly if employers scale back their own coverage.

- Various cost-control measures, including a tax on high-end insurance plans that doesn't kick in until 2018, could deliver less than expected.

The decision to use Medicare cuts to finance the expansion of coverage for the uninsured will only make matters worse, Blahous said. The money from the Medicare savings will have been spent, and lawmakers will have to find additional cuts or revenues to forestall that program's insolvency.

Under federal accounting rules, the Medicare cuts are also credited as savings to that program's trust fund. But the CBO and Medicare's own economic estimators already said the government can't spend the same money twice.

Continued in article

 


Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/

In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:

In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country.  We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth.  We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs.  The model implies a typology of medical technology productivity:  (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g.  stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients.  Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.

This paper strikes me as sensible, explanatory, and non-ideological to the max. It would be nifty if the people who work in Washington read it, and thought about it, and maybe even acted on it. (And it would be nifty if the Knicks beat the Celtics too, but I’m not holding my breath for either outcome …)

Here’s a very good paragraph from the paper:

The science section of a U.S. newspaper routinely features articles on new surgical and pharmaceutical treatments for cancer, obesity, aging, and cardiovascular diseases, with rosy predictions of expanded longevity and improved health functioning (Wade, 2009). The business section, on the other hand, features gloomy reports of galloping health insurance premiums (Claxton et al., 2010), declining insurance coverage, and unsustainable Medicare and Medicaid growth leading to higher taxes (Leonhardt, 2009) and downgraded U.S. debt (Stein, 2006). Not surprisingly, there is some ambiguity as to whether these two trends, in outcomes and in expenditures, are a cause for celebration or concern.

And the authors offer good specific examples of what they built their argument on, noting the …

Continued in article


"The Truth About Health Care Reform and the Economy:  Separating economic fact from economic myth," by Veronique de Rugy, Reason Magazine, April 15, 2011 --- http://reason.com/archives/2011/04/15/the-truth-about-health-care-re

Myth 1: Health care reform will reduce the deficit.

Fact 1: Health care reform will increase the deficit.

The Patient Protection and Affordable Care Act includes many provisions that have nothing to do with health care: the CLASS act, a student loan overhaul, and many new taxes. These provisions don't change the health care system. They just raise money to pay for the new law. Strip them away and the law’s actual health care provisions don't lower the deficit—they increase it!

The chart below uses data from Congressional Budget Office (CBO) to clarify the fiscal consequences of health care reform.

. . .

As you can see, from 2012 to 2021, the Congressional Budget Office estimates that the health care act will reduce deficits by $210 billion (note that this estimate differs from the widely cited $143 billion figure used during the lead-up to the passage of the act). During this same time period, however, the actual health care reform provisions of the law will increase deficits by $464 billion.

Of course, one should not evaluate the health care legislation on its fiscal impacts alone. In theory we should get some fiscal benefits. But the key question is how they net out. Still, no matter what you think about the benefits of the health care legislation, it is incorrect to claim that health care reform will save money. It won’t.

Myth 2: The U.S. health care system is a free-market system.

Fact 2: Roughly half of all U.S. health care is currently paid for by the government.

. . .

Even in the absence of the health care reform law, government programs including Medicare and Medicaid already fund almost half of American health care. Roughly a third of the remaining expenditures are funded by private insurers—mainly through subsidized and highly regulated employee plans. Not exactly a free market.

As this chart shows, state and federal entities make up over half of the health insurance market. Of course, the Patient Protection and Affordable Care Act will only increase the share of government involvement in the health care market.

Myth 3: Medicare spending increases life expectancy for seniors. Reductions in Medicare spending will therefore reduce their life expectancy.

Fact 3: Increases in life expectancy for seniors are due to increased access to health care, not to Medicare.

While Medicare spending has certainly decreased seniors’ out of pocket health care expenses (by 1970, Medicare reduced out of pocket expenses by an estimated 40 percent relative to pre-Medicare levels), the program’s effect on mortality is much less clear.

. . .

Continued in article


"Mayberry OMG:  Those false ads cost taxpayers $3.5 million," The Wall Street Journal, March 25, 2011 ---
|http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t

President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.

We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?

It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.

At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.

The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."

How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?


"PolitiFiction True 'lies' about ObamaCare," The Wall Street Journal, December 23, 2010 ---
http://online.wsj.com/article/SB10001424052748703886904576031630593433102.html?mod=djemEditorialPage_t

So the watchdog news outfit called PolitiFact has decided that its "lie of the year" is the phrase "a government takeover of health care." Ordinarily, lies need verbs and we'd leave the media criticism to others, but the White House has decided that PolitiFact's writ should be heard across the land and those words forever banished to describe ObamaCare.

"We have concluded it is inaccurate to call the plan a government takeover," the editors of PolitiFact announce portentously. "'Government takeover' conjures a European approach where the government owns the hospitals and the doctors are public employees," whereas ObamaCare "is, at its heart, a system that relies on private companies and the free market." PolitiFact makes it sound as if ObamaCare were drawn up by President Friedrich Hayek, with amendments from House Speaker Ayn Rand.

This purported debunking persuaded Stephanie Cutter, a special assistant to the President. If "opponents of reform haven't been shy about making claims that are at odds with the facts," she wrote on the White House blog, "one piece of misinformation always stood out: the bogus claim . . ." We'll spare you the rest.

PolitiFact's decree is part of a larger journalistic trend that seeks to recast all political debates as matters of lies, misinformation and "facts," rather than differences of world view or principles. PolitiFact wants to define for everyone else what qualifies as a "fact," though in political debates the facts are often legitimately in dispute.

For instance, everyone can probably agree that Medicare's 75-year unfunded liability is somewhere around $30.8 trillion. But that's different from a qualitative judgment, such as the wisdom of a new health-care entitlement that was sold politically as a way to reduce entitlement spending. But anyway, let's try to parse PolitiFact's ObamaCare reasoning.

Evidently, it doesn't count as a government takeover unless the means of production are confiscated. "The government will not seize control of hospitals or nationalize doctors," the editors write, and while "it's true that the law does significantly increase government regulation of health insurers," they'll still be nominally private too.

In fact—if we may use that term without PolitiFact's seal of approval—at the heart of ObamaCare is a vast expansion of federal control over how U.S. health care is financed, and thus delivered. The regulations that PolitiFact waves off are designed to convert insurers into government contractors in the business of fulfilling political demands, with enormous implications for the future of U.S. medicine. All citizens will be required to pay into this system, regardless of their individual needs or preferences. Sounds like a government takeover to us.

PolitiFact is run by the St. Petersburg Times and has marketed itself to other news organizations on the pretense of impartiality. Like other "fact checking" enterprises, its animating conceit is that opinions are what ideologues have, when in reality PolitiFact's curators also have political views and values that influence their judgments about facts and who is right in any debate.

In this case, they even claim that the government takeover slogan "played an important role in shaping public opinion about the health-care plan and was a significant factor in the Democrats' shellacking in the November elections." In other words, voters turned so strongly against Democrats because Republicans "lied," and not because of, oh, anything the Democrats did while they were running Congress. Is that a "fact" or a political judgment? Just asking.

As long as the press corps is nominating "lies of the year," ours goes to the formal legislative title of ObamaCare, the Patient Protection and Affordable Care Act. For a bill that in reality will raise health costs and reduce patient choice, the name recalls Mary McCarthy's famous line about every word being a lie, including "the" and "and."


"Bachmann Exposes $105 Billion Secret," by Phyllis Schlaffy, Townhall, March 15, 2011 ---
http://townhall.com/columnists/phyllisschlafly/2011/03/15/bachmann_exposes_$105_billion_secret

When ObamaCare was passed by the Senate on Christmas Eve of 2009, senators had less than 72 hours to compare a 383-page package of amendments to the 2,074-page bill. Public outrage over backroom deals (such as the Cornhusker Kickback and the Louisiana Purchase) led to the election of Scott Brown in Massachusetts.

Democrats then cooked up a plan to link the now-2,409-page Senate-passed ObamaCare bill to dozens of amendments contained in a separate 150-page Budget Reconciliation bill that could pass both houses by a simple majority. That's when then-Speaker Nancy Pelosi famously told the then-Democratic majority, "We have to pass the bill so that you can find out what is in it."

When President Obama signed ObamaCare into law, that set in motion a series of funding triggers and money transfers that add up to $105,464,000,000 in pre-authorized appropriations that are scheduled to be paid up through FY2019. In laymen's language, that means writing postdated checks that are guaranteed to be paid out over the next eight years.

This money was divided into dozens of smaller amounts so the big total would not be apparent. For example, Section 2953 of ObamaCare included a pre-funded appropriation of $75 million a year for five years to "educate adolescents" in "adult preparation subjects" such as "stress management" and "the development of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects."

Section 4101(a) of ObamaCare prefunded $200 million a year over four years for the construction of school-based health centers. In Section 4002, a total of $17,750,000,000 will be deposited over 10 years to a discretionary account controlled by the HHS secretary (currently Kathleen Sebelius), who may spend that money "to provide for expanded and sustained national investment in prevention" and to "help restrain the rate of growth in private and public sector health care costs."

Continued in article

Also see http://townhall.com/columnists/terryjeffrey/2011/03/16/congress_must_stop_$1055_billion_in_automatic_obamacare_spending


White did President Obama turn down IBM's offer to, for free, to detect medical fraud?
Video:  Did White House Snub Fraud Fighter?

http://news.yahoo.com/video/politics-15749652/did-white-house-snub-fraud-fighter-22352314

Is Medicare a "Medicare is a good example of a government program that is highly efficient?"

-----Original Message-----
From: AECM, Accounting Education using Computers and Multimedia [mailto:AECM@LISTSERV.LOYOLA.EDU] On Behalf Of Peters, James M Sent: Thursday, September 23, 2010 10:37 AM

To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: accounting basics

I think it is time to push back against all this anti-government rhetoric that just isn't based on observed evidence. Whether goverments work best or markets work best is a function of the task to be performed and the nature of the product. Governments have proven they can provide better health insurance and health care than the private sector. Medicare is a good example of a goverment program that is highly efficient and spends 97% of your tax dollars on health care while private sector firms spend only 70% to 75% of your premium dollars on health care. Some firms reach 80%, but they are the exception. Government run hospitals in the US are now rated as among the best, if not the best in the nation. The Veterans Hospitals have better records of treatment success and lower costs that the vast majority of private hospitals.

Market advocates seem to forget free market theory. Free markets only work when certain, rather restrictive conditions are met. Among the most frequently violated are equal power and knowledge among all market participants. Even Adam Smith in the Wealth of Nations advocated a strong role for governments in keeping markets free. When conditions are right, markets work brilliantly. However, (a rhetorical question) how many market in the industrialize world really meet the conditions of truly free markets? My answer is very few.

Governments do some things much better than markets. The key is recognizing the market conditions that lead to government advantage and letting governments handle those areas. Auditing is a prime candidate for government intervention because of no auditor can truly be objective when they are being paid by the client. The markets cannot function properly in auditing because the true customer, the general public, isn't a party to the transaction. Audits aren't just for the current owners, they are for perpsective owners as well, which means the general public. The general public needs to be represented at the table when auditors are hired.

The other key is to recognize that governments fail when people fail to be informed voters. All governments, like all markets, are not made equal. Some work better than others. In democracies, the effectiveness of the government is a function of the involvement and knowledge of the electorate. Thus, we are all responsible for our own government's success and failures. The fact that America seems to have a disfunctional government right now is that we have a disfunctional electorate that seems to enjoy mindless shouting matches over informed policy dialog. Other nations don't suffer from this disease.

Let's all join John Stewart in Washington DC for the "Return Sanity to America" rally. It is a start to building a government that can live up to its potential.

Jim

September 23, 2010 reply from Bob Jensen

Hi Jim,

If this is your idea of "observed evidence" then I've no hope for you in the academy. For one thing a good academic would be more precise about definitions like “better health care.” For example, some other nations come out “better” in infant mortality because they throw away very premature small babies and don’t count them into survival rates. What does “better” mean in terms of who invents the latest and greatest medications to fight cancer?

Medicare, for example, is one of the least-efficient government programs that arguably has the worst internal accounting controls of all other government programs except, possibly, the defense program. An "efficient" program would have stellar internal controls preventing fraud and error.

President Obama repeatedly asserts that "Medicare and Medicaid are largest deficit drivers" ---
http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/

And Medicare is not a very good example of "government" efficiency since the private sector delivers virtually all the medical services. The Medicare service providers are notoriously inefficient by prescribing billions of dollars in unneeded services, medications, non-existent medical equipment, and lifetime disability benefits to crooks that are not disabled.

I don't care to continue on in the AECM with debates over extreme political dogma since this is truly outside what subscribers expect from the AECM. They wanted to learn more about the PwC re-branding and the future of auditing/assurance services. I doubt that they want to hear a rant about joining a Glenn Beck-bashing by Jon Stewart in Washington DC. Most of us do not support the extremes of Beck or Stewart and certainly do not want the AECM to be a rallying call for either extreme. That is not in the mission of the AECM.

Also I see no need to censor the other subscribers of the AECM if they happen to disagree with Jim Peterson’s political dogma. Even if I were a Glenn Beck supporter (which I’m not) I would not urge AECM subscribers to join me in Beck’s big Washington DC rally (where you would never find me).

It’s a free country, and I suspect you will be among the Glenn Beck bashers at Jon Stewart’s rally for liberals. But I don’t think you should plead with AECM subscribers to join you in this political burning of Beck’s books.

Bob Jensen

 

 


In 2009 President Barack Obama is engineering a universal health care bill by appealing to the with blatant and deceitful estimates of costs in a muddled up system of inclusions of social services that are only remotely linked to health care (such as marriage counseling).

Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.

Some of the blatant lies are as follows:

 

The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):

Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.

So, you can’t try to seek alternatives to lawsuits if you’ve actually done something to implement alternatives to lawsuits. Brilliant! The trial lawyers must be very happy today!

While there is debate over the details, it is clear that medical malpractive lawsuits have some impact on driving health care costs higher. There are likely a number of procedures that are done simply as a defense against future possible litigation. Recall this from the Washington Post:

“Lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits, congressional budget analysts said today — a substantial sum that could help cover the cost of President Obama’s overhaul of the nation’s health system. New research shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but would also spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, wrote in a letter to Sen. Orrin Hatch (R-Utah).”

Longtime readers will recall that we caught Kristof playing similar games with statistics back in January 2005, when he claimed that the U.S. infant-mortality rate was worse than communist Cuba's and much worse than European rates. We pointed out that a central reason U.S. rates are high is that American physicians make heroic efforts to save extremely premature infants, who nonetheless have a mortality rate in excess of 50%. In other countries, these babies are simply discarded and not even counted in the statistics.
Wall Street Journal Editors Newsletter, November 6, 2009

Sampling Only

President Obama tried to sell his health care overhaul in prime time, mangling some facts in the process. He also strained to make the job sound easier to pay for than experts predict.

Note: This is a summary only. The full article with analysis, images and citations may be viewed on the above Fact Check Websites.



Updates on August 31, 2010

"Go To the Back of the CLASS," by Ed Feulner, Townhall, August 17, 2010 ---
http://townhall.com/columnists/EdFeulner/2010/08/18/go_to_the_back_of_the_class

In Washington, politicians often give their bills clever names designed more to obscure than to reveal.

Consider the CLASS Act. It sounds like yet another federal attempt to meddle in local schools. Instead, it stands for “Community Living Assistance Services and Support.”

CLASS was a little-noticed part of the massive Obamacare bill that the president signed in March. It’s supposed to provide affordable long-term care insurance to American workers. In reality, it creates another entitlement likely to increase our exploding federal deficit.

Starting next year CLASS is scheduled to begin enrolling people and collecting premiums. If CLASS was a normal insurance program, it would invest these premiums to build reserves. These reserves would later be tapped to provide benefits for those individuals in need of long-term care services.

But CLASS doesn’t work that way.

Similar to Social Security, all premiums that CLASS collects will be spent immediately. Its trust fund will be filled with government IOUs. Since participants need to pay five years of premiums before they’re eligible to collect any benefits, a sizeable amount of short-term revenue will be raised from CLASS. This aspect was especially useful when lawmakers were trying to find tricks to reduce the projected cost of Obamacare. By including the revenues from CLASS, politicians were able to pretend they’d reduced the cost of the bill by $70 billion.

But even Uncle Sam can’t spend your money twice. It’s impossible to spend the money today on government programs and invest the money to fund eventual benefits.

Eventually 2017 will arrive. That’s when CLASS starts paying benefits. It’s difficult to predict how soon after that the program would dive into the red and pay out more in benefits than it collects in premiums. Actuaries at the Centers for Medicare & Medicaid Services estimate it could be as soon as 2025.

Continued in article

 


Updates on October 31, 2010


"Say NO to Government Subsidies For Frivolous Litigation," by Lisa A. Ricard, Townhall, October 6, 2010 ---
http://townhall.com/columnists/LisaARickard/2010/10/05/say_no_to_government_subsidies_for_frivolous_litigation

Taxes are a major topic of debate in Washington right now. Faced with a massive federal deficit, some politicians have proposed raising taxes on individuals and businesses, despite the obvious negative effects of tax increases on economic growth and job creation. Yet at the same time, some in Washington are actually considering the creation of a new special interest tax break that will hurt economic growth, increase the deficit and fuel increased civil litigation.

The plaintiffs' bar and its allies in Congress and the administration are pushing for the adoption of a nearly $1.6 billion tax deduction for trial lawyers who take contingency fee cases. This proposed deduction would essentially provide a U.S. government subsidy to plaintiffs' lawyers to increase the number of frivolous lawsuits.

For several years, the plaintiffs' bar has been attempting to push this proposed tax break through Congress. With Congress so far unwilling to act, plaintiffs' lawyers have decided on a new approach and are now aggressively lobbying the Treasury Department to bypass Congress and create the deduction through administrative action.

The tax deduction would impose direct costs on the federal government and American taxpayers. According to the Congressional Budget Office, this trial lawyer subsidy would cost nearly $1.6 billion over ten years, all during a time of record federal deficits.

But these direct costs represent just a fraction of the proposal's potential damage. The contingency fee tax break would, in effect, subsidize ever more costly, frivolous litigation against American businesses. By some estimates, the tax deduction could subsidize as much as 40 percent of the initial plaintiffs' expenses for certain cases. With the federal government paying for such a large percentage of the up-front costs of lawsuits, plaintiffs' lawyers will be emboldened to take on the most speculative and frivolous litigation.

And in these troubled economic times, the last thing America needs is more frivolous lawsuits. As a percentage of gross domestic product, the United States spends more than twice as much on litigation as any other industrialized nation, a cost that reached $254.7 billion in 2008 according to a report by Towers Perrin.

Continued in article



December 31, 2014

Mental Health Insurance and Elimination of Preconditions Requirements Will Just Have to Wait until
There's too much worry about election outcomes (especially Presidential election in 2016) and unemployment
 

Some of the mean and politically-motivated predictions about the Affordable Care Act that we could have done without ---
http://www.newrepublic.com/article/117229/obamacare-doom-predictions-quotes-conservatives-and-critics

Jensen Comment
I still think that the Affordable Care Act is a politically-crafted abomination that proves once again that compromise solutions can be terrible solutions due to absurd compromises. The ACA should should be administered by the government, leaving out the private sector insurance companies much like Medicare is administered. Only I would insist on better fraud controls that drag down Medicare.

Private sector insurance companies should be involved only in providing supplemental plans. In this respect I favor the German plan where there is basic public sector insurance coverage for everybody plus optional supplemental plans. Here's how the German system works:
Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance

Having said this, the USA will probably have to live with the ACA as written until it is significantly improved by Congress or the courtsw. Here are a few of my major concerns where improvements are drastically needed.

  • The high-deductible plans having 20% or higher deductibles are terrible. Too many people having these plans will put off paying for medical treatments and medications because ACA-covered people simply cannot or will not pay the high deductibles. People in the USA will literally become sicker and sicker, suffer more, and die sooner.
     
  • There's a 90-day grace period in the ACA where people who default on paying premiums are still covered for the first 30-days by the insurance company and the next 60 days by the doctors and hospitals providing the care is absolutely absurd. The insurance companies will simply pass on these bad debt losses (which may be enormous for surgeries and hospital confinements) into higher premiums for the people who pay their medical insurance billings.

    An enormous number of doctors and hospitals are so afraid of having to provide free care to ACA deadbeats that they are refusing to participate in the ACA medical care networks. For example, in New Hampshire where I live about half the hospitals and many physicians in the state are refusing to care for ACA patients except in dire emergencies where patients cannot be shipped by ambulance to other hospitals.
     
  • Something drastic must be done to reduce the number of uninsured and the number of formerly insured people who tried the ACA for a while and got tired of having to pay for lousy, high deductible health insurance policies. They take their chances as uninsured people who cannot be turned down by emergency rooms (much like the system before the ACA was passed).
     
    • One partial solution is to provide more and more incentives for large and small businesses and other employers to provide medical insurance coverage of employees.

       
    •  Another partial solution is to net health insurance premiums out of unemployment and disability benefits and welfare payments for people who do not qualify for Medicaid.

       
    • Another partial solution is to have the IRS garnish wages of people who are not up to date on paying health insurance premiums and/or cheat on their claims for subsidies on those premiums.

There are no easy answers here. I hope President Hillary Clinton reignites her preferred option of taking the private sector insurance companies out of universal health coverage in a government administered plan that takes us closer and closer to the German system for health care insurance.

I vote for the German system that operates a lot like Medicare for all ages of citizens but with better fraud controls. I used to lean toward the Canadian system, but it's elective medical procedure delays for new hips, knees, and shoulders forces too many Canadians to pay cash for such procedures in the USA. when they grow weary of waiting out Canadian health plan approval.

What bothers me the most are the blatant lies our leaders broadcast to voters just to get a health care bill passed. I would be much less critical if they had flat out been honest about what they really intend for this legislation to cost. One example of a political lie is that Cadillac insurance plans will be taxed. The unions didn't object very loudly because they know full well that by 2018 when the tax is supposed to commence, Congress will have repealed all or most of the Cadillac tax.  The same is true with many other provisions of the legislation that can be altered at taxpayer expense. Also our leaders promised that nearly a half trillion dollars will be saved by reducing third party payments to physicians. Dumb! Dumb! Dumb!

 


Obama Gives Health Plans Added Two-Year Reprieve Plans That Don't Meet ACA Rules Could Stay in Place Through 2016 ---
http://online.wsj.com/news/articles/SB10001424052702303369904579421541748450598?mod=djemalertNEWS


How Physicians and Hospitals Can Try to Collect Bad Debts During Two Months When Medical Care is Mandated snf Insurance Companies Refuse to Pay for Deadbeat  Patient Care

The American Medical Association is protesting an Obamacare provision it argues will leave doctors with the bill for up to two months of unpaid care (out of the so-called 90-day "grace period" of unpaid premiums)
 

One of the Main Reasons Your Doctor and/or Hospital May be Refusing to Participate in the ACA:  Being Forced to Serve Deadbeats at No Pay
In New Hampshire, many of the doctors and 10 or 26 hospitals are refusing to be part of any ACA network of Medical service providers

"American Medical Association: Obamacare sticks doctors with unpaid bills,"  Daily Caller, March 19, 2014 ---
http://dailycaller.com/2014/03/19/american-medical-association-obamacare-sticks-doctors-with-unpaid-bills/

The American Medical Association is protesting an Obamacare provision it argues will leave doctors with the bill for up to two months of unpaid care.

The provision requires insurers to allow patients with federally-subsidized health insurance plans a 90-day grace period to pay their premiums before canceling the coverage. Insurers are on the hook for the first 30 days of care, if the customer never pays up, but doctors will be stuck without payment for any services between 30 and 90 days, until the coverage is canceled.

The American Medical Association was a strong supporter of Obamacare.

“If a patient is being treated for a serious illness, that requires ongoing care,” Dr. Ardis Dee Hoven, president of the AMA, said in a press release Wednesday. “The physician is having to assume the financial risk for this. That’s the bottom line.”

The AMA released new resources Wednesday for its member physicians, offering “step-by-step help for minimizing risk,” while admitting that the Obamacare rule “could pose a significant financial risk for medical practices.”

The doctors’ association spent $22 million lobbying for Obamacare to pass in 2010, the most of any health care organization, and has kept up their spending in the years since while the law’s final regulations have been tinkered with.

The rule’s damaging effect on doctors — especially those with private practices — exemplifies the split between the AMA’s lobbying ambitions and the outlook of the average doctors that do the work.

After Obamacare’s passage, just 13 percent of American physicians agreed with the AMA’s support of the law, according to a survey from physician recruitment firm Jackson & Coker. Surveys have repeatedly found that doctors don’t believe the law will let them help patients and make a living.


Read more: http://dailycaller.com/2014/03/19/american-medical-association-obamacare-sticks-doctors-with-unpaid-bills/#ixzz2wXTlkQDp
 

The new AMA resources for physicians include . . . ---
http://www.ama-assn.org/ama/pub/news/news/2014/2014-03-19-ama-issues-grace-period-guide-to-assist-physicians.page

 

Jensen Comment
What I wonder is what happens to the deadbeat who plays the following game:  Pay the premium once every four months, then get one month of free coverage from the insurance company and two months of free coverage from all health care providers on the network.

However, if you have no assets to make lawsuits worthwhile just get free medical care in emergency rooms just like in years before the ACA.  That way you avoid having to pay a premium once every four months.


Question
Why are many corporations going to drop their health care coverage of employees over the next several years?

"Ezekiel's Prophecy If he's right, ObamaCare's biggest disruptions are yet to come," by James Taranto, The Wall Street Journal, March 27, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702304418404579465480916914144?mod=djemBestOfTheWeb_h&mg=reno64-wsj

Ezekiel Emanual, Rahm's elder brother, is a physician who helped design ObamaCare and has been one of its most intense champions. So you may be surprised to learn that in his new book, "Reinventing American Health Care," he predicts that tens of millions more Americans will lose their medical plans in the coming decade.

In its "You're the Boss" small-business blog, the New York Times quotes his prediction that by 2025, "fewer than 20 percent of workers in the private sector will receive traditional employer-sponsored health insurance." As of March 2013 such benefits were available to 85% of full-time private-sector workers, according to the Bureau of Labor Statistics. If Emanuel is right--and especially if, as he implies, ObamaCare was designed to produce such an outcome--the president's repeated pledge that "if you like your plan, you can keep your plan" was a far more widespread fraud than has yet been realized.

In the next two to three years, Emanuel predicts, "a few big, blue-chip companies will announce their intention to stop providing health insurance. Instead, they will raise salaries substantially or offer large, defined contributions to their workers. Then the floodgates will open." Small businesses will be even more eager to drop coverage.

The main reason Emanuel expects this result is the so-called Cadillac tax, which takes effect in 2018 and has nothing to do with the bailout of General Motors. Rather, it is a levy on what the Times calls "especially generous health plans."

Yet one cannot say ObamaCare was designed with the clear purpose of discouraging employer coverage. It leaves in place the tax exemption for such plans, which Emanuel understatedly acknowledges, in the Times's words, "is a big obstacle to this vision." It also imposes a fine on companies with more than 50 employees that don't insure enough of them. Although the fine for not insuring a worker is considerably less than the cost of insuring one, it's still an incentive to continue coverage.

Continued in article

Jensen
Many of these doomsday forecasts for the ACA are based upon the assumption that the 2010 ACA legislation won't be changed much. However, a Republican majority in the Senate could lead to some major revisions in the ACA, including repeal of the Cadillac Tax and repeal of the way physicians and hospitals must treat deadbeats for free if they renege on keeping their insurance premiums payments up to date.

I don't anticipate total repeal of the the ACA, but there are many disasters in need of legislative repair no matter what the outcomes of the 2014 and 2016 elections.

The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are especially popular will be allowed to keep their plans without penalty since tax deductions are not of concern to them.

Having preferred networks of doctors and hospitals is not unheard of in national health care plans. Germany, for example, has both public health insurance plus premium coverage with private insurance. Cuba notoriously has bourgeoisie plans for members of the Communist Party and the wealthy versus  proletariat plans for the poor people.

If you Congressional representative brags about signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that lets them choose their own doctors and hospitals.

 

Hi Jim,

What keeps employer coverage popular is the tax break for each employee by not making employer contributions to medical plans taxable on a W-2 form. I hate to see the Cadillac tax ruin all this and more!
 
What I see is wrong with losing employer medical coverage is the adverse societal impact (an externality) of taking medical insurance choices away from employers and giving it to each and every cowboy/cowgirl --- this  leads to bad decisions for healthcare in the USA. 


When I was on the insurance committee of my university we tried to make responsible choices keeping in mind the needs of the highest users of medical services among families of colleagues. This led to recommendations for a group policy with relatively low deductibles.
 

When making individual choices most cowboys will opt for the lowest-cost high-deductible options such as 40% deductible Bronz Plans or 30% deductible Silver Plans. The only people choosing the 20%-deductible  Gold Plans will be those with known expensive family preconditions such as heavy diabetes and mental health afflictions and AIDS.


The government is now considering dirt-cheap 50% deductibles which will be very popular among the cowboys who even sign up for any medical insurance.
 

At the moment most of the people signing up for individual ACA exchanges are choosing the lower-cost high deductible plans because these people are relatively poor and their government subsidized premiums for the most crappy plans are relatively cheap.

Sadly, studies show that crappy high deductible coverage leads to delays in seeking health care diagnosis and treatment except in emergencies. These studies show that the cowboys will put off going to the doctor more than the cowgirls. The cowboys favor other options for their spending money --- much of which goes for courting cowgirls, more expensive guns, and " faster horses, younger women, older whiskey, and more money".
 
When corporations start dropping their relatively better coverage having 10% deductibles,  the employee cowboys will be given even more salary to choose their own individual ACA exchange plans. They will be enough increase in salary to consider gold low deductible plans. For cowboys? Yeah Right!

The thing about most cowboys is that they think they will never get sick or fall off their horses or get saddled with a sick kid.
They will choose the highest deductible crap plans and use their added salary money for for cruises, more expensive condos, ski trips, Las Vegas junkets, newer trucks, and whatever modern cowboys like better than health care insurance that they think they don't really need at all..

 

Faster Horses by Tom T. Hall ---
https://www.youtube.com/results?search_query=faster+horses+tom+t+hall&sm=1 
Lyrics

He was an old-time cowboy, don't you understand
His eyes were sharp as razor blades his face was leather tan
His toes were pointed inward from a-hangin' on a horse
He was an old philosopher, of course


He was so thin I swear you could have used him for a whip
He had to drink a beer to keep his britches on his hips
I knew I had to ask him about the mysteries of life
He spit between his boots and he replied
"It's faster horses, younger women,
Older whiskey, and more money
"


He smiled and all his teeth were covered with tobacco stains
He said, "It don't do men no good to pray for peace and rain.
Peace and rain is just a way to say prosperity,
And buffalo chips is all it means to me."


I told him I was a poet, I was lookin' for the truth
I do not care for horses, whiskey,
Women or the loot I said I was a writer,
My soul was all on fire
He looked at me an' he said, "You are a liar."


"
It's faster horses, younger women,
Older whiskey, and more money
"
Well, I was disillusioned, if I say the least
I grabbed him by the collar and I jerked him to his feet
There was something cold and shiny layin' by my head
So I started to believe the things he said
Well, my poet days are over and I'm back to being me
As I enjoy the peace and comfort of reality
If my boy ever asks me what it is that
I have learned I think that I will readily affirm
"It's faster horses, younger women,
Older whiskey, and more money"
"It's faster horses, younger women,
Older whiskey, and more money
.

It ain't no damn expensive ACA medical  insurance plan
that mostly subsidizes sick folks
and fat-cat insurance companies
.

The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

"The Individual Mandate Goes Poof:  The latest delays show that the supposed centerpiece of ObamaCare won't cause the uninsured to buy coverage," by Abby McCloskey And Tom Miller, The Wall Street Journal, March 26, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702303802104579451103019884322?mod=djemMER_h&mg=reno64-wsj

One by one, the myths of the Affordable Care Act have been revealed. When the curtain on open enrollment falls on March 31, the last remaining big myth of ObamaCare will be fully exposed: The individual mandate has failed.

After a last-ditch effort with President Obama himself encouraging "young invincibles" to sign up before the deadline, the administration is scrambling to boost enrollment. On Tuesday, the White House announced that people who applied for coverage on the federal health-insurance exchange will have until mid-April to finish the paperwork.

The mandate was supposed to be the administration's magical elixir for the assorted shortcomings of the Affordable Care Act. Disappointing early enrollment numbers? More people will sign up eventually to avoid mandate penalties. Potential premium spikes for government-approved coverage that must ignore cost differences in the age- and health-related risks of enrollees? Forcing young and healthy individuals to buy coverage will spread out the costs.

But the individual mandate was never strong enough to force millions of Americans to buy insurance they did not want or could not afford. Last week, the Obama administration estimated that five million Americans had signed up thus far for insurance on the exchanges, falling short of original projections by the administration and the Congressional Budget Office that there would be seven million first-year enrollees. Yet even the five million figure needs to be discounted by at least another 20% to account for people who fail to pay for their first month's premium, according to insurers' estimates of early enrollees.

The individual mandate had the least effect on those it was supposed to encourage to gain coverage—the uninsured. McKinsey & Co. surveys found that a little over one-quarter of people signing up for coverage last month were previously uninsured. Goldman Sachs GS +0.35% analysts estimate that about one million uninsured Americans will sign up for the ObamaCare exchanges before open enrollment ends. For perspective, that's about 2% of the 48 million uninsured.

A larger share of the exchange enrollees is likely coming from people whose previous coverage was canceled (due to other ObamaCare rules) or those who found a somewhat better deal for exchange coverage (due to much more generous low-income subsidies). More recent increases in insurance coverage are appearing in health plans outside of the exchanges.

The mandate penalties are too small and limited to be very persuasive. Many uninsured individuals are exempted from them. Either their incomes are lower than the federal income tax filing threshold (roughly $10,150 for a single individual), the minimum essential coverage that ObamaCare requires would be "unaffordable" under the law (costing them more than 8% of their household income), or they fall within a growing list of other exemptions from the mandate.

Even when the CBO was more optimistic about the individual mandate's effects (in April 2010), it expected about two-thirds of the 21 million nonelderly persons still uninsured in 2016 to be exempt from the mandate or its penalties.

Those not exempt face modest fines compared with the out-of-pocket cost of paying premiums for ObamaCare-required insurance. For example, the maximum penalties for a single adult remaining uninsured throughout all of 2014 would amount to the higher of $95 or 1% of household income above the federal income tax filing threshold. This is a fraction of the cost of health insurance for potential enrollees in government exchanges.

The threat behind the penalties is even less believable. The Affordable Care Act explicitly prohibits the Internal Revenue Service from using its most powerful enforcement tools like criminal penalties and levying property—such as wage garnishment.

If the IRS manages to discover someone without required coverage for all or part of a year, it can do little more than collect the penalty by taking it out of any other income tax refunds owed to an uninsured taxpayer. That risk can be limited or avoided by reducing the amounts withheld from one's regular paycheck for income taxes.

For the mandate to have teeth, the size of the penalty would need to be greatly increased, exemptions would need to decrease, and enforcement would need to be stronger. Good luck with convincing congressional Democrats facing midterm elections to commit political suicide.

Even then, a tougher mandate still might not work. The CBO concedes that there is "little empirical evidence concerning individual people's responsiveness to health insurance mandates." In other countries with much higher penalties, such as Switzerland or the Netherlands, health-insurance mandates have had little success in changing the behavior of the uninsured and largely reinforced existing levels of coverage. This was the finding in a November 2007 Health Affairs study by former Obama Health and Human Services official Sherry Glied and two co-authors. They also found mixed results from mandates for auto insurance.

The March 31 deadline to gain coverage in government exchanges will come and go with a whimper, not a bang. Enrollment numbers may rally a bit, but likely still will remain low. Any net gains in coverage will be due primarily to ObamaCare's generous exchange subsidies for lower-income Americans, plus automatic enrollment of income-eligible Medicaid beneficiaries.

The ineffectiveness of the individual mandate is trumped only by its unpopularity. Two-thirds of Americans support getting rid of the individual mandate completely, according to a recent ABC News poll. This month, the House of Representatives voted again to delay enforcement of the individual mandate for a year, with support from 27 Democratic defectors.

The Obama administration already has been forced to delay, drop or revise a host of other requirements in the law, such as the employer mandate, minimum benefits standards, and nondiscrimination rules. Until now, the White House has refused to delay or repeal the unpopular individual mandate because it was supposed to hide the full "on-budget" costs of ObamaCare. Its architects hoped that the mandate could force millions of Americans to pay for the law's expensive coverage and cross subsidies through higher premiums instead of higher taxes. But they always lacked sufficient political support to try to make the mandate powerful enough to accomplish this.

Expect the mandate to turn into even more of a "suggestion" before votes are cast in this November's congressional elections. With the mandate illusion off the table, the Affordable Care Act can no longer hide what it truly is: another unfunded liability for taxpayers


Irony Alert: Union Report Charges ObamaCare with Worsening Inequality---
http://cdn.ralstonreports.com/sites/default/files/ObamaCaretoAFL_FINAL.pdf

The promise of Obamacare was the right one and the hope for extending healthcare coverage to the un-and under-insured a step in the right direction. Yet the unintended consequences will hit the average, hard-working American where it hurts: in the wallet. Currently a national dialogue is emerging by all political parties on the issue of income inequality. That is a debate worth having. The White House and Congressional Democrats are “resetting” the domestic agenda following the negative fallout from the rollout of the ACA. They plan to shift focus from health care to bread and butter issues of income inequality that have eroded the American paycheck for decad

Ironically, the Administration’s own signature healthcare victory poses one of the most immediate challenges to redressing inequality. Yes, the Affordable Care Act will help many more Americans gain some health insurance coverage, a significant step forward for equality. At the same time, without smart fixes, the ACA threatens the middle class with higher premiums, loss of hours, and a shift to part-time work and less comprehensive coverage.

• Transferring A Trillion Dollars in Wealth: Most of the ACA’s $965 billion in subsidies will go directly to commercial insurance companies, one of the largest transfers of public wealth to private hands ever. Since the ACA passed, the average stock price of the big for-profit health insurers doubled, their top executives were paid more than a half billion dollars in cash and stock options, and in the past 2 years, the top 10 insurers have spent $25 billion on mergers and acquisitions.

• Strangling Fair Competition: Before reform, different types of health plans were regulated under different bodies of law. The Obama Administration has blocked many non-profit health funds from competing for the law’s proposed trillion dollars in subsidies by refusing to set fair regulations for different types of plans. The unbalanced playing field will give employers of people covered by these plans powerful incentives to drop coverage.

• Moving to Part Time Work: The Administration’s experts say employers won’t follow the incentives and drop coverage. But they also told the nation that employers would not cut workers’ hours to get below the 30-hour per week threshold for “full time” work, even as 388 employers announced hours cuts since early 2012.

• Cutting People’s Pay: If employers follow the incentives in the law, they will push families onto the exchanges to buy coverage. This will force low-wage service industry employees to spend $2.00, $3.00 or even $5.00 an hour of their pay to buy similar coverage

Making Inequality Worse A Trillion Dollar Wealth Transfer The Congressional Budget Office projects that the federal government will spend at least $965 billion in subsidies to make coverage purchased through the new online marketplaces affordable.

Nearly all of that money will go directly to health insurance companies, one of the largest transfers of wealth from public to private hands in history. This is the heart of the ACA — subsidies to persuade health insurers to make their products affordable to new customers. Even before subsidy checks, the ACA is benefiting for-profit health insurers. The average share prices of the top 5 for- profits — Wellpoint, United, Aetna, Cigna, Humana — have more than doubled since the March 23, 2010 passage of the ACA. At a time of record stock prices, the Big 5’s aggregate share prices have increased almost twice as fast as the Standard and Poor’s 500 index of blue chip stocks. 2 For-Profit Health Insurance Stocks Since Obamacare $965 Billion: Projected insurance subsidies under Obamacare, 10 years $25

Continued in article

Jensen Comment
The report fails to mention that insurance companies will be bearing very little of the bad debts of insured people receiving medical care. These losses are mostly going to be passed on to the physicians, hospitals, and other providers of health care. The bad debts that are covered by insurance companies will be passed on to the public by way of higher premiums.

President Obama prefers that private insurance companies to be third parties in the ACA Act. Like the Clintons he prefers that the ACA be funded and managed by the Federal Government much like Medicare is managed by the Government.  However, in his zeal to get the ACA passed he agreed to an ACA monster that brings the private insurers into the ACA --- a disaster in the making where private insurance companies walk off with guaranteed profits.


Jensen Comment
Many people who are eligible legally or illegally for these new ACA tax credits don't know about them yet and probably won't understand them after they read this section of the ACA code. Chances are that your current tax adviser, like me, does not have clue about these credits that soon will be the law of the land.

"Are ObamaCare's Tax Credits Harmless? The Little Understood Dark Side Of The Subsidies," by Josh Archambault, Forbes, March 17, 2014 ---
http://www.forbes.com/sites/theapothecary/2014/03/17/are-obamacares-tax-credits-harmless-the-little-understood-dark-side-of-the-subsidies/

T-minus 14 days until open enrollment closes for ObamaCare. It is crunch time for thousands as they decide if they want to enroll, and ultimately how much of a tax credit to accept in order to determine their first premium payment amount. Much attention has been lavished on the “positives” of the ACA’s tax credits (also called premium subsidies). White House press releases often highlight the impact of the credits while chiding others for not including them when discussing the new higher premiums under the law. Yet, the new reality of ObamaCare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?

By accepting a tax credit, low-income or lower-middle class families face significant tax ramifications and potential financial risk. Congress has changed the rules twice on consumers for the credits, making the income cliffs steeper, and fully equipping the IRS to claw back overpaid subsidies (unlike the individual mandate penalty).

The flip side of the tax credits is almost unknown to the general public.

Who Exactly Gets The Tax Credits?

The ACA’s tax credits are given directly to the insurance companies, and are calculated on a sliding scale, based on family size, and in theory, to those making between 138% and 400% of the federal poverty level (FPL) in states that have expanded Medicaid eligibility. In states that have not expanded Medicaid, the tax credits are available to those making between 100% and 138% FPL.

However, individuals can claim them by estimating that they will make over 100% FPL even if they end up making 90% FPL in these states, effectively closing the coverage gap we have heard Medicaid expansion supporters and the media complain so loudly about. However, the tax credits are unavailable to those with an “affordable” offer of employer-based insurance, or for those on other forms of government-approved coverage like standard Old Medicaid or Medicare.

Yet, soon to be published research by my colleague Jonathan Ingram will show that the tax credits phase out quickly for those in the exchange, and are therefore unavailable for many young people (18-34) in numerous states making far less than 400% FPL, based on the complex formula used to calculate the subsidies, and the price of the plans available on the exchange. This fact is only making the Administration’s job of convincing young people to sign up even harder.

The credits can only be used in a government-sanctioned ObamaCare exchange. In other words, individuals purchasing private insurance on their own must decide if they want to keep their current insurance plan without a subsidy or drop their coverage to take the tax credit. Since so many states rejected the President’s call to renew policies for those facing cancellations, and the recent extension of that policy, millions of Americans are facing this exact decision of joining an exchange or buying elsewhere by March 31st.

All citizens that take the credit must file a tax return to receive the credits regardless of their income. Failure to do so will result in them being prohibited from seeking a credit in the future. Married couples must file a joint return.

How You Take The Credit Could Determine Exposure

The initial tax credit calculation will be based on an applicant’s income tax return from the previous year, or a best estimate of what it will be next year. The credit can be taken in advance at the beginning of the year. However, individuals who enroll in the ObamaCare exchange will run the risk of having to pay back a significant portion of the tax credit if their life circumstances change (more on this below).

The credit can also be taken on the following year’s return in the form of a refund. However, individuals who make this decision will be responsible for coming up with the full cost of the ObamaCare exchange insurance at the beginning of the year. Individuals and families do have the option of taking a partial credit.

Congress Has Changed ObamaCare’s Tax Credit Rules Twice

Republicans have by and large ignored the tax credit issue unless talking about the budget implications. Perhaps the silence is due to the fact that Congress has voted to change ObamaCare twice to increase the financial risk that families could face when they take the credit.

Since the enactment of ACA, these limits have been amended twice: first under the Medicare and Medicaid Extenders Act of 2010 (P.L. 111-309), and then under the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayment Act of 2011 (P.L. 112-9). Congress changed the payback protection to vanish at the 400% poverty level and increased the payback amounts at 200% and 300% FPL from what they had been before.

The result will be surprise bills from the IRS in the mail come tax time 2015, in the order of a couple hundred dollars all the way up to full value of any subsidy received if a family crosses the 400% FPL threshold. (This could be $10,000-$12,000 for a family of four, as an example.) Just a few dollars of extra income could result in thousands of back taxes to be paid.

Life Change Should Be Reported To The Exchange, Requiring A New Application

Our lives are constantly in flux. Lower and middle-class families rarely find themselves in static work and life environments, but that is exactly what ObamaCare assumes. Even the most common and mundane life changes could significantly impact an individual’s financial situation if he or she decides to take the tax credit. So ObamaCare recommends that individuals report these changes immediately.

Continued in article

Jensen Comment
This suggests to me a possible tax student assignment that might help the IRS. Assign students in a tax course (probably teams of students) the creative task of thinking up how identity thieves filing false tax returns for the refunds can add to those refunds by filing for ACA tax credits. Of course the ID thieves don't have to worry about subsequent penalties since the IRS does not have a clue about who the thieves are that are filing false income tax returns for the refunds.

Better yet expand this to assigning students to write scenarios on all (or at least many)  ways that ID thieves can pad their fake tax returns in general to maximize illegal tax refunds.


A long-delayed correction of a lie
"You Might Lose Your Doctor Under Obamacare," WebMd, March 14, 2014 ---
http://hotair.com/archives/2014/03/14/great-news-80-of-employers-have-or-may-raise-deductibles-thanks-to-obamacare/

Voters in November might be ready to show Democrats what they think about removing choice and hiking costs, as well as their arrogance in determining that a few politicians in Washington know better about their choices than they do. Unfortunately, Barack Obama doesn’t appear to have figured out this problem. In an interview with WebMD, Obama finally acknowledged that, contra his promise, people might not be able to keep the doctors they liked, but that they probably shouldn’t have liked those doctors in the first place.

Jensen Comment
Why won't he still admit the truth. Many of those doctors that "they liked" tend to be so good that they get more than enough business without working for medical clinics and

Here in New Hampshire 10 of the 26 hospitals and many of the best physicians in the state refuse to go on network. One of the main reasons is that patients in default on their health exchange premiums must be treated for 90 days with physicians and hospitals bearing the treatment costs for the last 60 of those 90 days. God forbid that the fat-cat insurance companies or the Federal government take the risks of paying for the free care during those 60-days.


It's important to know that the article below was published by The New York Times and not The Wall Street Journal

The Many Taxes of the Affordable Health Care Act are Badly Hurting Employment Opportunities

"The Affordable Care Act’s Multiple Taxes." by Casey B. Mulligan, The New York Times, February 26, 2014 --- Click Here
http://economix.blogs.nytimes.com/2014/02/26/the-affordable-care-acts-multiple-taxes/?_php=true&_type=blogs&_php=true&_type=blogs&_php=true&_type=blogs&_r=2

The Affordable Care Act contains at least two economically distinct taxes on labor market activity. Even the experts on the law have failed to recognize all of them.

The Affordable Care Act tries to make health insurance affordable by offering means-tested subsidies and tax credits to households so they can make their payments for monthly health insurance premiums and out-of-pocket health expenses like deductibles and copayments for medical services.

This assistance is means-tested because higher-income households get less assistance than lower-income households. As a household’s income rises, it has to pay more for the same coverage. As a matter of economics, it wouldn’t have been much different if the law had given assistance to all households and then paid for it with a new income tax that was capped once household income hits 400 percent of the federal poverty line.

Naturally, income taxes discourage people from doing the things that create income. This is not to say that everyone responds to every tax, just that the average result of an additional income tax is less income.

Economists have long understood and publicized the implicit income taxes that come with attempts to make health care affordable. As my fellow Economix blogger Uwe Reinhardt put it 20 years ago (in an article with Alan B. Krueger) about one specific subsidy plan, health insurance premium assistance “would present millions of low-income American families with total marginal tax rates in excess of 75 percent.” Professor Reinhardt also noted recently that the marginal tax rate implicit in any particular health insurance proposal depends very much on the features of that plan.

The Congressional Budget Office also highlighted this issue as the Affordable Care Act was going through Congress. Daniel P. Kessler, a Stanford professor, also discussed it in a commentary in 2011.

Under the Affordable Care Act, only a small minority of workers is expected to get subsidized coverage. So economists concluded that aggregate labor market effects of the new law would be minimal.

I would agree if the implicit income tax were the only new tax on labor market activity in the new law. But there’s more: The Affordable Care Act also contains a new implicit tax on employment that affects far more people than its implicit income tax does.

Income taxes and employment taxes are not the same, because the income tax is based on income and the employment tax is based on employment. Two households with the same family structure (in number and age of family members) and annual income who live in the same county will not necessarily get the same assistance from the Affordable Care Act. The household that is employed more months of the year is likely to get less assistance (and maybe no assistance) from the new law, because the law requires that, during the months that they are employed, full-time workers get health coverage from their employer before they turn to the new health insurance marketplaces for federal government subsidies.

To put it another way, even if the health insurance subsidies in the Affordable Care Act had been a specific dollar amount that was not phased out with household income, the law would still act as a tax on employment because most workers could not get the assistance during the months they were at work.

This new implicit employment tax will apply to tens of millions of workers who are offered health insurance on their job and to millions of non-employed persons who are considering a position that offers coverage.

(The new employment tax also changes the types of jobs that are created and accepted by workers, but this effect does not prevent the law from reducing employment, as Trevor Gallen and I explain).

As far as I know, before this month the only place that one could read about the Affordable Care Act’s new employment tax was in this paper by David Gamage, in posts I have written for this blog, in my 2012 book or in a 2013 paper. Even though the consequences of the law have been debated at least as far back as 2009, the law’s advocates have yet to acknowledge the new implicit employment tax, let alone estimate the number of people who will face it.

But in a recent paper, the Congressional Budget Office has joined me in explaining that it’s not just the implicit income tax that will contract the labor market. As the paper puts it, “The loss of subsidies upon returning to a job with health insurance is an implicit tax on working,” adding that the effect of the new tax is “similar to the effect of unemployment benefits” (see Page 120).

Once we consider that the new law has an employer penalty, too, the labor market will be receiving three blows from the new law: the implicit employment tax, the employer penalty and the implicit income tax. Regardless of how few economists acknowledge the new employment tax, it should be no surprise when the labor market cannot grow under such conditions.


"Public Sector Cuts Part-Time:  Shifts to Bypass Insurance Law," by Robert Pear, The New York Times, February 20, 2014 ---
http://www.nytimes.com/2014/02/21/us/public-sector-cuts-part-time-shifts-to-duck-insurance-law.html?_r=0

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

Even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.

Continued in article

Jensen Comment
Sadly these part-time jobs are at the lower end of wage earners.


"Public Sector Cuts Part-Time Shifts to Bypass Insurance Law," by Robert Pear, The New York Times, February 20, 2014 ---
http://www.nytimes.com/2014/02/21/us/public-sector-cuts-part-time-shifts-to-duck-insurance-law.html?_r=0

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say.

The cuts to public sector employment, which has failed to rebound since the recession, could serve as a powerful political weapon for Republican critics of the health care law, who claim that it is creating a drain on the economy.

President Obama has twice delayed enforcement of the health care law’s employer mandate, which would subject larger employers to tax penalties if they do not offer insurance coverage to employees who work at least 30 hours a week, on average. But many public employers have already adopted policies, laws or regulations to make sure workers stay under that threshold.

Even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.

Continued in article

Jensen Comment
Sadly these part-time jobs are at the lower end of wage earners.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

 

Jensen Comment
Ironically, what may save medical insurance exchanges is that their policies are so lousy that people, especially those with subsidized premiums, will resist taking advantage of their coverage unless they become severely ill. Forget preventative medicine. Forget mental health treatment. The problem is that 20%-40% deductibles and high co-pays are just too expensive. Many people just will not make a choice to go to a medical center relative to other obligations on their limited budgets --- like housing and heroin and beer and trips to Disneyworld.

Also there's a problem of convenience.
People in New Hampshire that were served by 26 hospitals are reduced to only 16 hospitals participating in the health exchange (there's only one in New Hampshire). This means more time and trouble and costs for same-day surgeries, therapy, consultations with onsite surgeons, etc. For example, a patient possibly needing a bone density scan may have to pay 40% of the hospital's charge, travel 70 miles to a participating hospital, drive in the wintry dark, and possibly stay in a hotel the night before or the night afterwards. These costs and inconveniences add up to a point where people will put off health care unless very serious problems are encountered.

And the millions of people insured under employer plans may see their deductibles and co-payments increase next year.

In New Hampshire and elsewhere there's serious doubt about having a sufficient number of specialists like psychiatrists and dermatologists participating in the ACA. The dream of having better mental health coverage may be just that --- only a dream. Only half of the psychiatrists in the USA previously participated in any insurance coverage in the USA. The ACA fees are so limited it almost certain that the supply of psychiatrists will fall way short of the ACA and other demands.

Perhaps this is why the Governor of Vermont devoted his entire 2014 State of Vermont address to the problems of heroin addiction and expense of treatment. Vermont's generous welfare system attracts a lot of addicts to Vermont.

Another problem for Vermont is that it's high taxes are driving many more physicians and other medical service providers out of the state than attracting them to the state. Yesterday nurse that drew my blood for my annual physical said she had just moved from Vermont. My primary care physician and my eyelid surgery physician recently moved to New Hampshire from Vermont.


Question
Should colleges wanting to avoid having to provide health insurance to adjunct teachers rush to cap their total work hours to less than 30 hours per week in order to avoid the requirements of the Affordable Health Care Act more commonly known as Obamacare? There is considerable ambiguity about how many hours adjuncts "work" outside of class for course preparation and for helping students outside of class (e.g., via email).

"Caps Untouched," by Colleen Flaherty, Inside Higher Ed,  February 25, 2014 ---
http://www.insidehighered.com/news/2014/02/25/some-colleges-consider-changes-adjunct-caps-wake-irs-guidance

When the Internal Revenue Service offered guidance earlier this month on how college and universities should count adjuncts’ hours in relations to the Affordable Care Act, the agency raised at least as many questions as it answered.

Chief among them was whether the guidance would make any real difference in the lives of adjuncts. Would colleges and universities stop capping adjuncts’ workloads to prevent them from qualifying as eligible for benefits under the law? Would institutions that already had done so rethink their caps? And would administrators even follow the guidance, which offers a “safe harbor” formula of 2.25 hours worked for each classroom contact hour, but still allows them to count total hours worked based on a decidedly ambiguous “reasonable” standard?

. . .

Starting about 18 months ago, colleges moved in droves to cap their adjuncts’ course loads ahead of the health care law’s so-called “employer mandate” taking effect. Large employers under the law must offer full-time employees – those who work 30 hours or more per week – health care benefits or face fines, so institutions all over the country moved to lower their course load caps for adjuncts or create them where they hadn’t existed before.

College associations warned institutions that they may be acting too soon, without explicit guidance from the federal government about how to count adjuncts’ total hours worked per week to determine if they were benefits-eligible under the law. Since adjuncts work outside of class to prepare for contact time with students, they said, it was unclear how to count adjuncts’ hours. Different adjuncts groups, college associations and unions proposed various formulas, but there was nothing concrete.

Many of the institutions were working off a kind of “worst case scenario” scenario formula, from the perspective of wanting to provide as few adjuncts health care as possible. Under that formula, which was supported by the American Federation of Teachers and some adjunct groups, one hour of contact time equaled two hours of outside preparation time, for a total of three hours. So Community College of Allegheny County, followed by many other institutions, announced a 10-credit-per-semester cap. It replaced a previous 12-credit cap, essentially meaning that most adjuncts could now teach three courses (nine credits) instead of four per semester in the fall and summer, for 27 hours per week total.

Allegheny did not respond to a request for comment on whether it would rethink its policy in light of the IRS guidance. Various institutions also are staying mum. A spokesman for the College of DuPage, which last year created some full-time positions for adjuncts while capping other adjuncts’ workload at 27 credits per, said the guidance wouldn’t change anything, and showed that the college’s policy is “appropriate within the clarified guidelines.”

The Virginia Community College system, however, is reviewing a course load cap it instituted last year for all adjuncts: 10 credits each in the fall and spring and 7 in the summer, a spokesman said. That cap resulted in sections being taken away from or limited for about 25 percent of the system’s some 7,000 adjuncts at 23 campuses, and could change based on a pending review of the IRS guidance and the Virginia “Manpower Control Program.” The state policy limits adjunct faculty at public institutions to 29 hours per week. Still, at least one college within the system has announced that new course loads of 12 credits and contact hourseach for the fall and spring, and 8 in the summer, soon will be adopted, based on the relatively “relaxed” IRS guidance, The Washington Post reported. The college system spokesman said that announcement was premature.

Josh Ulman, chief government relations officer for the College and University Professional Association for Human Resources, said he expected more and more colleges to follow the IRS model, to be in compliance should the guidelines change going forward.

Randi Weingarten, president of the American Federation of Teachers, said in email that whether or not colleges would follow the guidelines was "simple." Employers that "embrace the sprit of the [law] -- which is rooted in the idea that everyone deserves access to high-quality and affordable healthcare -- will work with us to make it happen. Those who oppose the law or put cutting costs above high-quality education probably won't."

Indiana's Ivy Tech Community College, a large community college system, won’t change the ACA-related course load caps it instituted regardless of the guidance, President Tom Snyder said. Under the new caps, adjuncts can work 12 credit hours per semester, or about 27 hours total based on the IRS formula. Snyder, who recently offered  Congressional testimony on what he saw as the disproportionate impact of the new health care law on community colleges, given their high rates of employment of adjunct faculty, said he would continue to lobby for the possible exemption of colleges from the law. Snyder said the law "penalizes" adjunct faculty who want to teach more hours but must adhere to new course load caps, and the "school misses out on a skilled adjunct." And providing health care to all adjuncts teaching beyond the new caps would be prohibitively expensive, at the cost of $10 million annually, he said. To do that, Ivy Tech would have to downgrade health care plans for everyone else.

No college has yet announced it will offer more adjuncts health insurance as a result of the guidance. That didn’t come as a surprise to adjunct advocates, who often cite health insurance and other benefits as a kind of “last nut” to be cracked in organizing and other advocacy efforts that in many places already have led to better pay and job security, for example.

Because many institutions still recognize adjuncts as working only during contact classroom hours, Kezar said the guidelines “certainly should make more adjuncts qualify.” But, she said, “Institutions that are dead-set against providing them [with health insurance] will find ways around it."

Baime noted that the guidelines offer flexibility to colleges to offer "robust employment" of adjuncts without necessarily providing health insurance. Weingarten said that adjuncts who don't get insurance through their institutions are counting on expanded opportunities for coverage elsewhere in the law.

Ulman said that at the very least, the IRS guidance will make it clearer who might qualify for benefits so that institutions and employees can have more “honest discussions” about coverage.

Maria Maisto, president of the New Faculty Majority, said there was more work to be done to make sure that those kinds of honest discussions were happening on campuses. And given the lack of obvious enforcement mechanism in the guidance, she said, it’s up to adjuncts to demand it.

Despite the tumult of the past 18 months for adjuncts, advocates have said there’s a silver lining, to which the new IRS guidance adds: It’s brought the contingent academic labor issue out of the sector and into the broader policy debate.

Rhoades said the guidance is “official recognition that adjunct faculty work outside the class, as part of contributing to a quality education for the students, and that will create additional pressure on institutions to not just acknowledge that, but to actually remunerate these faculty for that work.”

Kezar agreed, saying, “the legislation and guidance have been really instrumental in bringing adjuncts’ plight to light." She noted Democratic Rep. George Miller’s recent report on adjunct labor issues, which was sparked by Maisto’s November testimony to the House Committee on Education and the Workforce. “He learned all that through the [Affordable Care Act] discussions.”

Ultimately, she said, the debate’s greatest impact “may not be on health care but on drawing attention to the slew of problems related to this work force model that has been grown beyond capacity to serve higher education well.”


"(More) Clarity on Adjunct Hours (including healthcare insurance guidance)," by Doug Lederman, Inside Higher Ed, February 11, 2014 ---
http://www.insidehighered.com/news/2014/02/11/irs-guidance-health-care-law-clarifies-formula-counting-adjunct-hours 

The Obama administration on Monday released its long-awaited final guidance on how colleges should calculate the hours of adjunct instructors and student workers for purposes of the new federal mandate that employers provide health insurance to those who work more than 30 hours a week.

The upshot of the complicated regulation from the Treasury Department and the Internal Revenue Service:

·        On adjuncts, colleges will be considered on solid ground if they credit instructors for 1 ¼ hours of preparation time for each hour they spend in the classroom, and instructors should be credited for any time they spend in office hours or other required meeting time.

·        On student workers, the IRS opted to exclude work-study employment from any count of work hours, but the administration declined to provide an exemption for student workers over all. As a result, colleges and universities will be required to provide health insurance to teaching and research assistants who work more than 30 hours a week.

Adjunct Hours

The issues of how to count the hours of part-time instructors and student workers have consumed college officials and faculty groups for much of the last 18 months, ever since it became clear that the Affordable Care Act definition of a full-time employee as working 30 hours or more a week was leading some colleges to limit the hours of adjunct faculty members, so they fell short of the 30-hour mark.

All that the government said in its initial January 2013 guidance about the employer mandate under the health care law was that colleges needed to use "reasonable" methods to count adjuncts' hours.

In federal testimony and at conferences, college administrators and faculty advocates have debated the appropriate definition of "reasonable," with a focus on calculating the time that instructors spend on their jobs beyond their actual hours in the classroom. The American Council on Education, higher education's umbrella association and main lobbying group, proposed a ratio of one hour of outside time for each classroom hour, while many faculty advocates have pushed for a ratio of 2:1 or more.

In its new regulation, published as part of a complex 227-page final rule in today's Federal Register, the government said that it would be too complex to count actual hours, and it rejected proposals to treat instructors as full time only if they were assigned course loads equivalent or close to those of full-time instructors at their institutions.

The administration continued to say that given the "wide variation of work patterns, duties, and circumstances" at different colleges, institutions should continue to have a good deal of flexibility in defining what counts as "reasonable."

But in the "interest of predictability and ease of administration in crediting hours of service for purposes" of the health care law, the agencies said, the regulation establishes as "one (but not the only)" reasonable definition a count of 2.25 hours of work for each classroom hour taught. "[I]n addition to crediting an hour of service for each hour teaching in the classroom, this method would credit an additional 1 ¼ hours service" for "related tasks such as class preparation and grading of examinations or papers."

Separately, instructors should also be credited with an hour of service for each additional hour they spend outside of the classroom on duties they are "required to perform (such as required office hours or required attendance at faculty meetings," the regulation states.

The guidance states that the ratio -- which would essentially serve as a "safe harbor" under which institutions can qualify under the law -- "may be relied upon at least through the end of 2015."

By choosing a ratio of 1 ¼ hours of additional service for each classroom hour, the government comes slightly higher than the 1:1 ratio that the higher education associations sought, and quite a bit lower than the ratio of 2:1 or higher promoted by many faculty advocates.

David S. Baime, vice president for government relations and research at the American Association of Community Colleges, praised administration officials for paying "very close attention to the institutional and financial realities that our colleges are facing." He said community colleges appreciated both the continued flexibility and the setting of a safe harbor under which, in the association's initial analysis, "the vast majority of our adjunct faculty, under currernt teaching loads, would not be qualifying" for health insurance, Baime said.

Maria Maisto, president and executive director of New Faculty Majority, said she, too, appreciated that the administration had left lots of room for flexibility, which she hoped would "force a lot of really interesting conversations" on campuses. "I think most people would agree that it is reasonable for employers to actually talk to and involve employees in thinking about how those workers can, and do, perform their work most effectively, and not to simply mandate from above how that work is understood and performed," she added.

Maisto said she was also pleased that the administration appeared to have set the floor for a "reasonable" ratio above the lower 1:1 ratio that the college associations were suggesting.

She envisioned a good deal of confusion on the provision granting an hour of time for all required non-teaching activities, however, noting that her own contract at Cuyahoga Community College requires her to participate in professional development and to respond to students' questions and requests on an "as-needed basis." "How does this regulation account for requirements like that?" she wondered.

Student Workers

The adjunct issue has received most of the higher education-related attention about the employer mandate, but the final regulations have significant implications for campuses that employ significant numbers of undergraduate and graduate students, too.

Higher education groups had urged the administration to exempt student workers altogether from the employer mandate, given that many of them would be covered under the health care law's policies governing student health plans and coverage for those up to age 26 on their parents' policies. The groups also requested an exemption for students involved in work study programs.

The updated guidance grants the latter exemption for hours of work study, given, it states, that "the federal work study program, as a federally subsidized financial aid program, is distinct from traditional employment in that its primary purpose is to advance education."

But all other student work for an educational organization must be counted as hours of service for purposes of the health care mandate, Treasury and IRS said.

Steven Bloom, director of federal relations at the American Council on Education, said higher ed groups thought it made sense to exempt graduate student workers, given that their work as teaching assistants and lab workers is generally treated as part of their education under the Fair Labor Standards Act. He said the new guidance is likely to force institutions that employ graduate students as TAs or research assistants -- and don't currently offer them health insurance as part of their graduate student packages -- to start counting their hours.

The guidance also includes a potentially confounding approach to students who work as interns. The new regulation exempts work conducted by interns as hours of service under the health care employer mandate -- but only "to the extent that the student does not receive, and is not entitled to, payment in connection with those hours."

Continued in article

Also see
http://info.ballardspahr.com/rs/vm.ashx?ct=24F7661FD7E00AEDC1D180A5D22E941DDDBE7BB3D38714DD4CF371647BF8D90DDD78034

Jensen Question
How should a university account for a doctoral student who happens to teach 33 hours one semester and works less than 30 hours in all other semesters of the doctoral program? Is the university required to provide health coverage for zero, one, or more years while the student is a full time student in the doctoral program? I assume the university must provide health insurance for one year, but I'm no authority on this issue.

There also is a huge difference in hours of work required for teaching. A doctoral student who only teaches recitation sections under a professor who provides the lecture sections, writes the syllabus, writes the examinations, and essentially owns a course versus a doctoral student who owns only section of governmental accounting with no supervision from a senior instructor.

When I was Chair of the Accounting Department at Florida State University, the wife (Debbie) of one of our doctoral students (Chuck Mulford) had total control of the lectures and 33 recitation sections of basic accounting each semester where most of the recitation "instructors" were accounting doctoral students. Debbie had her CPA license and a masters degree, but she was not a doctoral student. She was very good at this job. The recitation instructors had almost no preparation time and did not design or grade the examinations. They did not own all 33 sections like Debbie owned all 33 sections. It would be a bit unfair to give the recitation instructors as much pay for preparation as the selected doctoral students who taught more advanced courses and essentially owned those courses in terms of classroom preparation and examinations.

Bob Jensen's personal finance helpers are at
http://www.trinity.edu/rjensen/Bookbob1.htm#InvestmentHelpers


ACA advocates promised that more people would be insured but nothing was said about only being half insured.

The lousy 20%-40% high deductible medical insurance plans such as the Gold, Silver, and Bronze Plans my get lousier with a proposed Copper Plan. This should possibly be called the Yugo Plan that will pay half of qualified medical insurance claims..

"Health-Law Backers Push Skimpier 'Copper' Insurance Policies:  The White House Said it Was Weighing the Proposal," by Louise Radnofsky, The Wall Street Journal, February 13, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702303874504579373342002006318?mod=djemCFO_h

Some backers of the 2010 health-care law are pushing to create a new kind of insurance coverage that the measure essentially had ruled out: policies offering lower premiums but significantly higher out-of-pocket costs than those now available.

The plans, dubbed "copper" because they would offer a lower level of coverage than the "gold," "silver" and "bronze" options on the government-run health-care exchanges, would be a departure from the minimum level of coverage that is one of the Affordable Care Act's core principles.

Many plans that offered less coverage were canceled when the health-care law was rolled out because they didn't meet its new requirements. Republicans accused President Barack Obama of backtracking on his promise that the law would allow people to keep their preferred health plans. In the face of an uproar, the Obama administration asked insurers to reinstate some of the millions of canceled policies for one year.

Now, some insurers and a pair of Senate Democrats are trying to change the law permanently so that individuals and small businesses can buy so-called copper plans. The plans likely would have lower premiums, but purchasers would pay more of their ordinary health costs upfront. Greater coverage would kick in for serious, unforeseen health episodes that would require, for example, a hospital stay.

Sens. Mark Begich of Alaska and Mark Warner of Virginia, both Democrats facing close re-election races this year, are sponsoring legislation that would allow people to buy copper plans on the exchanges. Moreover, insurance-industry officials have been talking up the idea with federal officials, though it is unclear whether the administration could make the change through regulations.

The White House said it was weighing the proposal. "The president remains open to all ideas that would genuinely improve the Affordable Care Act and appreciates the careful thought Mr. Begich has given to his legislation," an administration official said.

Copper plans would cover, on average, 50% of medical costs, and while consumers' out-of-pocket expenses would still be capped, that limit likely would be higher than the $6,350 maximum for individuals and $12,700 for families currently set by the law.

People who selected the plan would be allowed tax credits toward the cost of premiums, as they already get for bronze plans, which cover 60% of costs; silver plans, which cover 70%; and gold plans, which cover 80%.

Continued in article

Jensen Comment
We were promised that more people would be insured but nothing was said about only being half insured.


Teaching Case
From The Wall Street Journal Accounting Weekly Review on February 21, 2014

Health Law Already Has Impact on Bottom Lines
by: Noelle Knox
Feb 25, 2014
Click here to view the full article on WSJ.com
 

TOPICS: Earning Announcements, Earnings Forecasts, Financial Statements

SUMMARY: "More than 80 public companies told investors the new health-care rules were, or could be, a financial boost or drag on their quarterly earnings, though they were often uncertain of the magnitude, according to a Wall Street Journal search of earnings-call transcripts for the most recent quarter provided by FactSet... The Congressional Budget Office's most recent estimate of the ACA's budgetary impact is $1.36 trillion between 2014 and 2023...In general, media and advertising companies and staffing and outsourcing firms are clocking gains. Insurance providers are investing heavily now in technology and staffing-and taking a hit to earnings-in anticipation of future gains. And many large employers across industries are spending more on insurance benefits for full-time employees or on training for new, part-time employees...."

CLASSROOM APPLICATION: The article may be used in a financial reporting class to understand the use of financial statement data to investigate impact on specific companies and industries of the new Affordable Care Act (ACA or ObamaCare). The article provides a good comparison of this micro-economic analysis to macro-economic estimates from the Congressional Budget Office (CBO).

QUESTIONS: 
1. (Introductory) How did the Wall Street Journal prepare its analysis for this article?

2. (Advanced) In what two ways are large employers expecting cost increases from the impact of the Affordable Care Act (ACA or ObamaCare)? Which financial statement expense category or categories do you think will show these increases?

3. (Introductory) What types of industries expect increases in revenues from the impact of the Affordable Care Act (ACA or ObamaCare)?

4. (Advanced) To what financial reporting periods do these cost and revenue impacts relate? Why are these impacts being discussed in 2013 earnings call transcripts?
 

Reviewed By: Judy Beckman, University of Rhode Island

"Health Law Already Has Impact on Bottom Lines," by Noelle Knox, The Wall Street Journal, February 25, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702304834704579403072411467200?mod=djem_jiewr_AC_domainid&mg=reno64-wsj

The Affordable Care Act's impact on the bottom line is starting to ripple across corporate America.

More than 80 public companies told investors the new health-care rules were, or could be, a financial boost or drag on their quarterly earnings, though they were often uncertain of the magnitude, according to a Wall Street Journal search of earnings-call transcripts for the most recent quarter provided by FactSet.

The Congressional Budget Office's most recent estimate of the ACA's budgetary impact is $1.36 trillion between 2014 and 2023. The financial effects on businesses are evolving as changes are made to the legislation, including a decision this month to again delay when many smaller companies will face a fine if they fail to offer health insurance.

But some trends are emerging.

In general, media and advertising companies and staffing and outsourcing firms are clocking gains. Insurance providers are investing heavily now in technology and staffing—and taking a hit to earnings—in anticipation of future gains.

And many large employers across industries are spending more on insurance benefits for full-time employees or on training for new, part-time employees who won't necessarily be entitled to company-sponsored coverage.

Several advertising and communications companies, including Emmis Communications Corp. EMMS +2.83% and LIN Media LIN +2.57% LLC, said they will register increases in spending on advertising and outreach campaigns to encourage enrollment through the new state and federal insurance exchanges.

Emmis is forecasting a 12% to 15% increase in health-care advertising this year, and up to 20% of that is expected to come from ACA-related advertising from insurers, hospitals and state-government agencies, Patrick Walsh, chief financial officer at Emmis, said in an interview.

The Indianapolis-based company's two biggest markets are New York and California, both states that have rolled out health exchanges. Mr. Walsh said Emmis's biggest radio stations are the hip-hop-music Power 106 and Hot 97, which target young, urban minorities. "Our audience is an attractive target for the exchanges," he noted.

Oscar Insurance Corp., for example, ran radio ads on Emmis's New York City Hot 97 radio station in conjunction with a Twitter and Facebook campaign to attract customers.

"Right now, the ACA-related spending is showing up in two places, as political advertising or as health-care advertising. But I foresee it becoming a completely new category as the space develops," said Edward Atorino, a media analyst at Benchmark Co. "The bigger markets have national TV covering them, but for the smaller ones, there is a real need to get the information about exchanges out there by telling people about the locations and phone numbers."

At the same time, employment-benefit and IT companies, such as Virtusa Corp. VRTU +4.74% and Automatic Data Processing Inc. ADP +1.85% say they are seeing more business as they help clients comply with the ACA's demands.

Virtusa, an IT consulting and outsourcing company based in Westborough, Mass., said that increased spending from health-care clients helped boost its fiscal-third-quarter operating profit 14% from the previous quarter.

Insurers and health-care providers are streamlining their IT infrastructures and revamping websites to provide more data to customers, said Ranjan Kalia, the company's CFO, adding, "We believe that this is a market driver."

However, he said Virtusa has also had to spend more to bring its own benefit plans for employees into compliance with ACA demands. He estimated Virtusa could spend "a few hundred thousand dollars" more on health care for its 900 U.S. employees when it renews its plans this summer.

Dozens of other large employers also warned investors that the cost of complying with the ACA will be sizable. United Parcel Service Inc., UPS +1.28% Pantry Inc. PTRY +4.13% and J&J Snack Foods Corp. JJSF +1.65% are among the companies that detailed the likely financial hit for broadening benefits coverage.

Pantry, which operates Kangaroo Express convenience stores, said the company hired 800 part-time employees late last year and spent an additional $700,000 on training. The new employees won't be eligible for company-sponsored health-care benefits.

Nevertheless, Pantry will spend up to $8 million more a year on health-insurance costs related to the ACA for its 6,600 full-time employees, said CFO B. Clyde Preslar.

J&J Snack Foods, maker of Super Pretzels and Icee frozen drinks, cautioned shareholders it will spend an additional $600,000, or $0.02 a share, this year on health-insurance coverage for its 3,300 employees.

But repeated changes in the law have made CFO Dennis Moore cautious about the financial impact. "The law keeps changing. That's another unknown. Who knows how many times it's going to change?"

Last week, Wal-Mart Stores Inc. WMT +1.62% said health-care expenses were a "headwind" last year and will continue to be this year. The company said "higher than anticipated" enrollment in its health-insurance program put "pressure on our benefits expense."

Widespread technical problems late last year with the health law's new online marketplaces helped push down enrollment for health-insurance companies offering plans on the government-backed websites, including Cigna Corp. CI +1.34% and WellPoint Inc. WLP +1.83%

In addition, the risk profile of the new enrollees has been skewing toward somewhat older, potentially higher-cost people, which could be a concern for the health plans' future earnings. Indeed, Cigna, Humana Inc. and Aetna Inc. AET +1.65% have all said that they expect to lose money this year on their public-exchange business.

WellPoint said the ACA would have a $100 million "unfavorable impact" on its earnings this year.

Continued in article


My objection to the ACA at the beginning of 2014 is that the health care insurance plans with or without subsidies are awful. The 20%-30% deductibles are too high coupled with the co-payments are more than most insured people can afford.  They will simply avoid going to doctors for preventative care, for diagnoses, and for treatments unless they feel their lives are threatened enough to possibly wipe out their savings for expensive treatments.

Now the Congressional Budget Office is admitting that its own estimates before the ACA was passed was way off base in terms of estimations of job losses and economic impacts.

Even liberals writing for liberal magazines knew the Congressional Budget Office (CBO) optimism for cost and revenue predictions were not credible before the ACA was passed. The CBO's political bias is responsible for much of the mess the USA now finds itself in terms of health coverage.

Fuzzy CBO Accounting Tricks
"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.

EXPRESS:

The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.

The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.

Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

Continued in article

 

For starters, $1 trillion of extra debt-financed spending would cause the government to pay about $300 billion of extra interest in the next decade. Moreover, the CBO's method of estimating the cost of such a program doesn't recognize the incentives it creates for households and firms to change their behavior. The House health-care bill gives a large subsidy to millions of families with incomes up to three times the poverty level (i.e., up to $66,000 now for a family of four) if they buy their insurance through one of the newly created "insurance exchanges," but not if they get their insurance from their employer. The CBO's cost estimate understates the number who would receive the subsidy because it ignores the incentive for many firms to drop employer-provided coverage. It also ignores the strong incentive that individuals would have to reduce reportable cash incomes to qualify for higher subsidy rates. The total cost of ObamaCare over the next decade likely would be closer to $2 trillion than to $1 trillion.
Martin Feldstein, "ObamaCare's Crippling Deficits The higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standard," The Wall Street Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage

 

 

 

The Budget and Economic Outlook: 2014 to 2024 ---
Congressional Budget Office
February 4, 2014

Jensen Comment
Especially note Page 127 regarding the Affordable Care Act impact on employment in the USA.

The Affordable Care Act will also reduce the number of fulltime workers by more than 2 million in coming years, congressional budget analysts said in the most detailed analysis of the law’s impact on jobs. The CBO said the law’s impact on jobs would be mostly felt starting after 2016. The agency previously estimated that the economy would have 800,000 fewer jobs as a result of the law. The impact is likely to be most felt, the CBO said, among low-wage workers. The agency said that most of the effect would come from Americans deciding not to seek work as a result of the ACA’s impact on the economy. Some workers may forgo employment, while others may reduce hours, for a equivalent of at least 2 million fulltime workers dropping out of the labor force.

Jensen Comment
Although before the ACA was passed President Obama and and House Majority Leader Nancy Pelosi erroneously promised that the ACA would create millions of new jobs. Now that this does not appear to be the case in 2014. President Obama and his allies MSNBC and  the New York Times try to put a positive spin on this by saying this will allow many people to drop out of the work force by retiring early (before becoming eligible for Medicare). But what they fail to mention is that the loss of 800,000 jobs because of the ACA is hardly a good thing for people needing work. Many of these jobs will be lost when smaller businesses with 50-100 employees scale back the workforce to 50 or less so as not to have to pay the stiff penalty for not providing health insurance to employees. How can you put a favorable spin on this.

Of course most of this document is devoted to good news and bad news items apart from the ACA.

The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. CBO estimates that under current law, the deficit will total $514 billion in fiscal year 2014, compared with $1.4 trillion in 2009. At that level, this year’s deficit would equal 3.0 percent of the nation’s economic output, or gross domestic product (GDP)—close to the average percentage of GDP seen during the past 40 years.

As it does regularly, CBO has prepared baseline projections of what federal spending, revenues, and deficits would look like over the next 10 years if current laws governing federal taxes and spending generally remained unchanged. Under that assumption, the deficit is projected to decrease again in 2015—to $478 billion, or 2.6 percent of GDP. After that, however, deficits are projected to start rising—both in dollar terms and relative to the size of the economy—because revenues are expected to grow at roughly the same pace as GDP whereas spending is expected to grow more rapidly than GDP. In CBO’s baseline, spending is boosted by the aging of the population, the expansion of federal subsidies for health insurance, rising health care costs per beneficiary, and mounting interest costs on federal debt. By contrast, all federal spending apart from outlays for Social Security, major health care programs, and net interest payments is projected to drop to its lowest percentage of GDP since 1940 (the earliest year for which comparable data have been reported).

The large budget deficits recorded in recent years have substantially increased federal debt, and the amount of debt relative to the size of the economy is now very high by historical standards. CBO estimates that federal debt held by the public will equal 74 percent of GDP at the end of this year and 79 percent in 2024 (the end of the current 10-year projection period). Such large and growing federal debt could have serious negative consequences, including restraining economic growth in the long term, giving policymakers less flexibility to respond to unexpected challenges, and eventually increasing the risk of a fiscal crisis (in which investors would demand high interest rates to buy the government’s debt).

After a frustratingly slow recovery from the severe recession of 2007 to 2009, the economy will grow at a solid pace in 2014 and for the next few years, CBO projects. Real GDP (output adjusted to remove the effects of inflation) is expected to increase by roughly 3 percent between the fourth quarter of 2013 and the fourth quarter of 2014—the largest rise in nearly a decade. Similar annual growth rates are projected through 2017. Nevertheless, CBO estimates that the economy will continue to have considerable unused labor and capital resources (or “slack”) for the next few years. Although the unemployment rate is expected to decline, CBO projects that it will remain above 6.0 percent until late 2016. Moreover, the rate of participation in the labor force—which has been pushed down by the unusually large number of people who have decided not to look for work because of a lack of job opportunities—is projected to move only slowly back toward what it would be without the cyclical weakness in the economy.

Beyond 2017, CBO expects that economic growth will diminish to a pace that is well below the average seen over the past several decades. That projected slowdown mainly reflects long-term trends—particularly, slower growth in the labor force because of the aging of the population. Inflation, as measured by the change in the price index for personal consumption expenditures (PCE), will remain at or below 2.0 percent throughout the next decade, CBO anticipates. Interest rates on Treasury securities, which have been exceptionally low since the recession, are projected to increase in the next few years as the economy strengthens and to end up at levels that are close to their historical averages (adjusted for inflation).

Deficits Are Projected to Decline Through 2015 but Rise Thereafter, Further Boosting Federal Debt

Assuming no legislative action that would significantly affect revenues or spending, CBO projects that the federal budget deficit will fall from 4.1 percent of GDP last year to 2.6 percent in 2015—and then rise again, equaling about 4 percent of GDP between 2022 and 2024. That pattern of lower deficits initially and higher deficits for the rest of the coming decade would cause federal debt to follow a similar path. Relative to the nation’s output, debt held by the public is projected to decline slightly between 2014 and 2017, to 72 percent of GDP, but then to rise in later years, reaching 79 percent of GDP at the end of 2024. By comparison, as recently as the end of 2007, such debt equaled 35 percent of GDP (see the figure below).

Continued in article

Note that declines in deficits are still increases in debt as long as they remain spending "deficits.". This is not as bad for a government controlling the money printing presses as it is for entities (citizens, towns, counties, state, and businesses) that cannot print money to avoid bankruptcy.
Bob Jensen's threads on the sad state of governmental accounting and the $100 trillion of debt that is off balance sheet ---
http://www.trinity.edu/rjensen/Entitlements.htm

Meanwhile pray for heavy rains and snow in the Southwest, especially Nevada and Colorado. Years of drought could destroy any lingering optimism in this CBO budget forecast.

Please don't shoot the messenger!


"Calculating the health care individual mandate penalty," by Debra M. Johnson, Journal of Accountancy, January 2014 ---
http://www.journalofaccountancy.com/Issues/2014/Jan/20138935.htm

"Minimum essential coverage and shared-responsibility penalty rules provide transitional relief for individuals," by Sally P. Schreiber, Journal of Accountancy, January 24,  2014 ---
http://www.journalofaccountancy.com/News/20149497.htm


The liberal Slate magazine's positive review of the GOP modification plan for the Affordable Health Care Act
"The End of the Beginning on Obamacare Repeal," by Matthew Yglesias, Slate, January 27, 2014 ---
http://www.slate.com/blogs/moneybox/2014/01/27/gop_health_replacement_plan_the_beginning_of_a_surrender.html

Sens. Tom Coburn, Richard Burr, and Orrin Hatch rolled out an Obamacare replacement plan today that I think offers us a good window into how the health care debate is evolving on Capitol Hill. I recommend Philip Klein's rundown in the Washington Examiner for a clear description of the details, but the view from 50,000 feet is basically that this is the Republican Party stepping away from the idea that it's going to repeal the Affordable Care Act.
Of course, in its official operations the way the bill works is to first repeal Obamacare and then replace it with a new law that happens to retain some of Obamacare's most popular features. For example, "insurers would be barred from imposing lifetime limits on medical claims and required to allow individuals to remain on their parents’ policies until the age of 26." And rather than eliminate the Affordable Care Act's restrictions on insurers charging older people higher premiums than younger people, the senators would simply make the restrictions a bit less strict. And while Coburn/Burr/Hatch don't want to altogether ban insurers from refusing to cover people with pre-existing conditions, they "would require insurers to offer coverage to anybody who has applied as long as they have maintained continuous coverage, regardless of whether they are switching health plans or shifting from employer-based health care to the individual market."

 

In other words, rather than scrapping the main pillars of the Affordable Care Act entirely, they would partially roll them back.
Conversely, while conservative wonks have traditionally favored a big bang approach to eliminating the massive tax subsidies that keep employer-provided insurance together, "in consideration of the backlash against the way that Obamacare has disrupted people’s insurance coverage, the new GOP proposal would maintain the employer health insurance bias."

 

Last but by no means least "[i]nstead of expanding Medicaid, as Obamacare does, the Coburn-Burr-Hatch proposal would reform it to give more flexibility to states and allow Medicaid beneficiaries the option of using their tax credit to purchase private coverage."

 

I don't think the plan as written is fully sound from a structural viewpoint. In particular, the continuous coverage rule is the kind of thing that's easy to write down as a single sentence in a column but difficult to turn into a clear piece of legislation. Turning that into a workable regulation, especially in a world where which insurance plans are available changes from time to time and place to place, would be a whole giant process and you'd have to evaluate a specific proposal. But the key thing about this is that it doesn't envision radically remaking the health care system along free market lines. Relatively to the status quo that existed in 2009, it would constitute modestly remaking the health care system along liberal lines. Most of all, as a political document it reflects an appreciation of the overwhelming political power of the status quo. You can't kick those 25-year-olds off their parents' insurance plan. You can't deny the currently insured the peace-of-mind that comes from knowing that getting sick won't make them uninsurable. You can't change tax policy in a way that's too disruptive. And this plan isn't going to pass in 2014. It's not going to pass in 2015. And it's not going to pass in 2016. By 2017, Medicaid expansion and subsidized exchange plans will be the new status quo. Are the Coburns, Burrs, and Hatches of 2017 really going to be willing to blow that up?

CPA's who advise clients about personal finances and health care insurance should be aware of the following:

The ACA made it possible for some wealthy people to sign up for Medicaid's free medical services, nursing homes, and free medication
"Will You Owe Debt After Death? The Medicaid Surprise," by Morgan Brittany, Townhall, January 27, 2014 ---
http://finance.townhall.com/columnists/morganbrittany/2014/01/27/will-you-owe-debt-after-death--the-medicaid-surprise-n1785111

This was not in the fine print of the Affordable Care Act (that no one read), and there was nothing in it that changed the existing law from 1993. The ACA however, did expand the number of people who are eligible for Medicaid, so now there are more people from the ages of 55 to 65 whose estates could be on the hook for Medicaid expenses after the beneficiary dies.

This sounds like a cash grab to me. Many states have not changed the law to limit the amount of expenses the government can claim are owed for Medicaid, but Oregon and Washington have issued emergency rule changes. In Washington it now says that the state can only recover the cost of nursing home care for the 55-65 age groups.Oregon followed this path as well.However there are 23 other states that have expanded Medicare under Obamacare and they have not changed their estate recovery policies. This could end up with the deceased person’s heirs losing homes, property and other assets.

The 1993 law stated that spouses and children under 21 of the deceased person were exempt from estate recovery, but the rules can vary by state. However, with rule changes running rampant under this administration, there is no guarantee of anything anymore. Laws and rules can be changed on a whim and the public will never even be aware of it.

Just to give you an example of the amount of money that the states could potentially confiscate, in 2004, California collected $44.6 million through estate recovery and MediCal officials say that they expect 1 to 2 million more enrollees by 2015. That could add up to a lot of money. Minnesota collected $25 million in 2004 and is keeping its recovery program in place with no alterations.

Dr. Jane Orient of The Association of American Physicians and Surgeons says; “I think that people are maybe in for a shock when they find out that their heirs are going to be paying for their care, because they got into a system under false pretenses”. Just one more thing that no one told us about Obamacare and the mainstream media is not mentioning even now.

Continued in article

The ACA made it possible in some states for even millionaires to get Medicaid's free medical care, nursing care, and medications.
"Will You Owe Debt After Death? The Medicaid Surprise," by Morgan Brittany, Townhall, January 27, 2014 ---
http://finance.townhall.com/columnists/morganbrittany/2014/01/27/will-you-owe-debt-after-death--the-medicaid-surprise-n1785111 

This was not in the fine print of the Affordable Care Act (that no one read), and there was nothing in it that changed the existing law from 1993. The ACA however, did expand the number of people who are eligible for Medicaid, so now there are more people from the ages of 55 to 65 whose estates could be on the hook for Medicaid expenses after the beneficiary dies.

This sounds like a cash grab to me. Many states have not changed the law to limit the amount of expenses the government can claim are owed for Medicaid, but Oregon and Washington have issued emergency rule changes.In Washington it now says that the state can only recover the cost of nursing home care for the 55-65 age groups.Oregon followed this path as well.However there are 23 other states that have expanded Medicare under Obamacare and they have not changed their estate recovery policies. This could end up with the deceased person’s heirs losing homes, property and other assets.

The 1993 law stated that spouses and children under 21 of the deceased person were exempt from estate recovery, but the rules can vary by state. However, with rule changes running rampant under this administration, there is no guarantee of anything anymore. Laws and rules can be changed on a whim and the public will never even be aware of it.

Just to give you an example of the amount of money that the states could potentially confiscate, in 2004, California collected $44.6 million through estate recovery and MediCal officials say that they expect 1 to 2 million more enrollees by 2015. That could add up to a lot of money. Minnesota collected $25 million in 2004 and is keeping its recovery program in place with no alterations.

Dr. Jane Orient of The Association of American Physicians and Surgeons says; “I think that people are maybe in for a shock when they find out that their heirs are going to be paying for their care, because they got into a system under false pretenses”. Just one more thing that no one told us about Obamacare and the mainstream media is not mentioning even now.

Continued in article


"Covered California clients have trouble finding doctors," by Victoria Colliver, San Francisco Chronicle, January 23, 2014 ---
http://www.sfgate.com/health/article/Covered-California-clients-have-trouble-finding-5169944.php

Think signing up for health insurance through Covered California is hard? Some consumers say the real battle starts when it comes to finding a doctor or hospital that will take a plan purchased through the state-run health exchange.

Sue Kearney of Oakland thought she did her homework. She found the policy she thought was right for her - one from Anthem Blue Cross - and checked the plan's directory of doctors and hospitals to make sure she could get the specialist she wanted. Assured of that, she signed up for the plan in October.

But right before a doctor appointment this month, Kearney learned the physician's medical group will not accept any of Covered California plans.

Kearney, 63, who has a chronic digestive problem that hasn't responded to treatment, ended up paying $200 for the appointment, despite her newly minted coverage. "It's confusing and demoralizing," she said.

Most of the problems with the new health system have focused on online application glitches, long wait times to get help and delays in getting insurance cards and first-month premium bills to new enrollees.

'A lot of confusion'

But now that coverage has started, some people are finding it tough to determine whether their doctor or hospital will accept their coverage. Consumers say the insurer's directory of doctors and hospitals is inaccurate or out of date. In some cases, the doctors don't even know what to tell their patients.

"There's a lot of confusion. The physicians don't know if they're actually participating" in the exchange's networks, said Donald Waters, executive director of the Alameda-Contra Costa Medical Association, which represents 3,100 doctors in the East Bay.

The problem is not limited to California. A study released last month by the consulting group McKinsey found that many plans sold through the federal health law are using "narrow" or "ultra narrow" networks - physician and hospital lists that are limited to lower costs.

In more than two-thirds of all exchange networks analyzed by McKinsey, at least 30 percent of the largest 20 local hospitals were excluded. Insurers say the move to limit the number of doctors and hospitals on a network was necessary to keep the costs of premiums low.

In California, plans offered by Blue Shield through Covered California included just 60 percent of the doctors that participate in the insurer's group plans and just 75 percent of the hospitals. On top of that, Blue Shield is reimbursing doctors and hospitals in Covered California policies up to 30 percent less than those not in the exchange, spokesman Stephen Shivinsky said.

Limited networks

Sy Neilson, spokesman for Sutter Health, one of Northern California's largest health chains, said not all of its hospitals or doctors are participating in Covered California plans. But the hospitals and doctors that are participating are involved in limited networks, he said.

Anthem officials did not respond to requests for comment.

For his part, Peter Lee, Covered California's executive director, acknowledged that consumers may be getting misinformation from the state agency or insurer about whether their providers are participating. But, he said, the exchange is prepared to help those consumers get new plans that more suitably meet their needs.

"If our directory or the directory of the health plan is wrong and a consumer wants to change plans, we'll work with them to make sure they can do so," Lee said in a news call this week.

As for Kearney, she spent much of the past week trying to find a gastroenterologist and a lab to complete the tests ordered by the specialist she paid for. She said Alameda Health System's Highland Hospital - the county hospital - was the only center in her area that would take her, and not until March.

Kearney had even opted for more comprehensive coverage including a PPO, or preferred provider organization plan. "I chose a PPO so I could have had choice," she said. "The thing is, now I have nothing to choose from."

For Alison Berndt of Livermore, making sure her physicians were in her new plan's network is especially important because she was diagnosed with breast cancer in July.

Berndt, 61, selected a more expensive Covered California plan to ensure her five doctors, particularly her plastic surgeon, were in the network because she has yet to go through the reconstructive surgery.

Cutting medications

After she signed up, she called one of the doctors she thought was included on her Anthem policy and received conflicting information from the office staff about whether that was true. She spent a lot of time on the phone and eventually learned she was given misinformation and they were, indeed, accepting her coverage.

Berndt still hasn't been able to sort out a problem getting her drugs covered and has been forced to cut her blood pressure and cholesterol medication in half.

"Every step of the way has been crazy," she said.


With health law, less-easy access in N.H.:  Lone insurer in plan reduces roster of hospitals to keep premiums low," by Tracy Jan, Boston Globe, January 20, 2014 ---
http://www.bostonglobe.com/news/nation/2014/01/20/narrow-hospital-networks-new-hampshire-spark-outrage-political-attacks/j2ufuNSf9J2sdEQBpgIVqL/story.html

When Nancy Petro needs routine tests to make sure her thyroid cancer and high blood pressure have not returned, the retired gas station attendant and general store clerk must now drive an hour over mountainous roads to seek care, even though there is a hospital just minutes from her home in rural northern New Hampshire.

Petro, 62, had been uninsured until January, when she obtained coverage through President Obama's groundbreaking health law. The benefit, just $26 a month, came with a downside, however.

To keep premiums affordable, Anthem Blue Cross and Blue Shield of New Hampshire, the only insurer in the state offering coverage in the new insurance marketplace, radically reduced the hospitals in its network. Petro's local provider did not make the cut. . . .

Of the state's 26 hospitals, 10 are excluded from Anthem's network. Not on the list: Petro's former provider, Upper Connecticut Valley Hospital, where the uninsured receive free or discounted care. The 16-bed facility, located 15 miles from the Canadian border, serves New Hampshire's largest geographic area and its neediest patient population.

 


"District court says premium tax credits are available in federal health care exchanges," by Sally P. Schreiber, Journal of Accountancy, January 16, 2014 ---
http://www.journalofaccountancy.com/News/20149450.htm

In a decision that aids the implementation of a key provision of 2010’s health care reform legislation, the federal district court for the District of Columbia held that the Sec. 36B premium tax credit is available to taxpayers who purchase health insurance through the 34 state health care exchanges that are run by the federal government (Halbig v. Sebelius, No. 13-0623 (PLF) (D.D.C. 1/16/14)).

In May 2012, the IRS issued final regulations interpreting the Patient Protection and Affordable Care Act, P.L. 111-148, as allowing the IRS to grant tax credits to eligible individuals who purchase health insurance on either a state-run or a federally run health care exchange (Regs. Sec. 1.36B-1(k)). The plaintiffs in the case sued to have this regulation struck down, arguing that the IRS’s interpretation was contrary to the plain language of Sec. 36B(b)(2)(A), which provides a credit to eligible individuals who purchase health insurance through “an Exchange established by the State.” They asserted that the regulation therefore exceeded the IRS’s statutory authority and violated the Administrative Procedure Act.

The court applied an analysis from Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), by asking first whether the statute was ambiguous. After looking at the text of the statute, the statutory structure, and the legislative purpose, the court concluded that Sec. 36B(b)(2)(A) is not ambiguous and that Congress clearly intended to make premium tax credits available on all exchanges, whether or not established by a state. As a result, the court held that Regs. Sec. 1.36B-1(k) is a valid interpretation of the law. 

Continued in article

Jensen Comment
Note that these are tax credits that dollar-for-dollar reduce the amount of tax owed before the credit is applied. I assume that this can add to tax credits to where the credits exceed the tax owed, thereby becoming a negative income tax where a taxpayer receives a refund in excess of the tax owed before the credit.

I don't think such credits are available for qualified health insurance purchased outside the exchanges, but I could be wrong on this. For example, President Obama declared it possible for some people to stay on their own individual plans. I think they may not be eligible for the tax credits. But I could be wrong on this.

 


Slightly over 75% of the ACA signups prior to mid*January are over 35 years of age, raising huge concerns about those  prospects18-34 years of age that are vital to funding the ACA. A third of the signups are age 55-64 which adds even more worry that the ACA will operate deeply in the red. At age 65 most people become eligible for Medicare which is funded differently based upon contributions of workers and employers over the years of their working life.

The Administration revealed 79% of the 2.2 million received premium subsidies (not counting Medicaid)  to be paid by taxpayers ---
http://www.businessweek.com/articles/2014-01-13/whos-buying-obamacare-in-three-charts

Most of the people who bought coverage on the exchanges this fall got subsidies to help them afford the premiums. That’s in contrast to the first month of the program, when less than one-third of buyers were subsidized. People earning up to four times the poverty rate—as much as $96,000 a year for a family of four—can get help buying coverage.

Also about 40% of those signed up have not actually paid their first premiums,  some of whom will not pay once they (especially students) learn that they are eligible for Medicaid free coverage. An even larger percentage may default of premiums down the road and still be covered for three months under the ACA provision of carrying defaulters for 90 days with insurance companies paying for their medical care for 30 days and doctors and hospitals paying for their care for an additional 60 days. This could become a game of paying the premium for one month and then getting four months of coverage followed by paying another premium for one month followed by four months of coverage and on and on and on. Paying three monthly premiums may get you 12 months of coverage.

Four million people have additionally signed up for the Medicaid totally free medical services and medicines intended for additional people supposedly who are poor but can have substantial assets, including some millionaires who are long on assets like houses, land, and stocks but short on cash income. I'm totally amazed that millions more students did not immediately sign up for Medicaid since in most instances Medicaid is a better deal than staying on policies of parents where there are copayments and deductibles.

The bottom line is that its probably too soon to tell how good or how bad the sign up process is going for the Affordable Health Care Act.
Millions more will soon be signing up for private plans without taxpayer subsidies, private plans with taxpayer subsidies, and totally subsidized Medicaid plans.

To date about 70% of the 2.2 million people signing up for private plans chose the Silver Plan that has a whopping 30% deductible.

"Older Pool of Health Care Enrollees Stirs Fears on Costs," by Michael D. Shear and Robert Pearson, The New York Times, January 13, 2014 ---
 http://www.nytimes.com/2014/01/14/us/health-care-plans-attracting-more-older-less-healthy-people.html?hp&_r=0

"Health Sign-Ups Skew Older, Raising Fears Over Costs Release of Data Shows Challenge in Persuading Young People to Enroll," by Louise Radnofsky and Christopher Weaver, The Wall Street Journal, January 13, 2014 ---
http://online.wsj.com/news/articles/SB10001424052702304049704579318930612496594?mod=djemCFO_h

Also see
http://www.cbsnews.com/news/obamacare-sign-ups-among-young-adults-off-to-slow-start/

Also see
http://www.cbsnews.com/news/gop-suspicious-of-obamacare-enrollment-figures/


$4,878 Room and Board Charge for One Night in the Hospital:  Those meals must've been fantastic
"This $55,000 Bill Is The Perfect Example Of Our Broken Hospital System," by Lauren F. Friedman, Business Insider, December 30, 2013 ---
http://www.businessinsider.com/redditors-appendectomy-cost-5502931-2013-12
See a copy of the bill itself (note how the charge for aspirin is now hidden)

Jensen Comment
Cost Accounting Student Assignment:  Backflush the line items on this bill to identify possible components and justify the charges
Hint:  Don't forget hospital bad debts and executive salaries and subtle kickbacks to doctors.
For example, it's common for physicians in the Emergency Room to recommend at least one night at $10,000 in ICU when a $4,878 room for one night would probably suffice. This recently happened to my wife.

Bob Jensen's health care messaging updates --- http://www.trinity.edu/rjensen/Health.htm


Questions
Was President Obama correct in promising that the ACA insurance would transfer Medicaid patients from ER rooms to ACA networked physicians?

How does the ACA expansion of Medicaid greatly increase the moral hazard of new Medicare patients?

One of the naive promises made by President Obama was that uninsured people previously seeking free care in Emergency Rooms (ER) would relieve the ER rooms for all the new Medicaid patients who could now have access to network physicians with their new free medical care and medication insurance policies. This was naive because he should have known that previous Medicaid patients preferred ER rooms even when they had  freeMedicaid insurance. He should have known that when Oregon expanded the number of people on Medicaid that demand for ER services increased by 40%.

People receiving free medical care and medications are inclined to favor ER services even when they can have care from network physicians. Reasons are complicated especially when walk-in medical clinics are available. One reason is that walk-in clinics serving Medicaid patients are not usually as close by as hospitals with ER services. The physicians in the ER facilities are likely to not only be MDs, they are sometimes better MDs that the staff of walk-in medical clinics who often hire newly graduated MDs still in residency or physicians assistants. In other words, if you want the best physicians the odds are usually better for ER rooms than networked ACA physicians and walk-in clinics.

When walk-in clinics are not convenient, getting an appointment with a networked physician may take weeks or even months. Top physicians are available 24/7 for emergency patients and non-emergency Medicaid patients. Insured patients not on Medicaid may be discouraged by co-pays of expensive ER services. But Medicaid patients never have to worry about co-payments.

Last night CBS News reported that ER use expanded by 40% due to new Medicaid patients.

 

"Medicaid Expansion Boosted Emergency Room Visits In Oregon," by Julie Royner, NPR, January 3, 2014 ---
http://www.wbur.org/npr/259128081/medicaid-expansion-boosted-emergency-room-visits-in-oregon

Giving poor people health insurance, the belief was, would decrease their dependence on hospital emergency rooms by providing them access to more appropriate, lower-cost primary care.

But a study published in the journal Science on Thursday finds that's not the case. When you give people Medicaid, it seems they use both more primary care and more emergency room services.

"Medicaid coverage increases emergency department use, both overall and for a broad range of types of visits, conditions, and subpopulations," says Amy Finkelstein, an economics professor at MIT and one of the authors of the study. "Including visits for conditions that may be most readily treatable in primary care settings."

In other words, people are going to the emergency department for things that aren't emergencies. This is exactly what policymakers hoped to avoid by giving people health insurance – including the huge increase in Medicaid coverage coming as part of the Affordable Care Act.

And the increase in ER use found in the study was significant – "about 40 percent," Finkelstein said.

This would be a good place to point out this is not just any study. It is the third major paper from something called the Oregon Health Insurance Experiment, which Finkelstein heads along with Katherine Baicker from the Harvard School of Public Health.

The experiment was a rare opportunity to create a randomized controlled experiment – the gold standard of scientific research. It came about almost by accident, thanks to Oregon's decision in 2008 to expand its Medicaid program via a lottery.

The result, said Finkelstein, was that the groups of people with or without insurance were identical, "except for the fact that some have insurance and some don't. You've literally randomized the allocation of insurance coverage."

And that gave researchers the ability to compare the effects of having health insurance — in this case, Medicaid.

The first paper from the research team, published in 2011, was mostly positive. It found that people who got Medicaid coverage were more likely to use health services in general, less likely to suffer from depression, and less likely to suffer financial problems related to medical bills than those who remained uninsured.

The results in the second paper, published last spring, were more equivocal. Researchers found no measurable health benefits in the Medicaid group for several chronic conditions, including hypertension, high cholesterol and diabetes.

It's not clear that the emergency room results will translate nationwide: The study only lasted 18 months and the study population is both more while and more urban than the rest of the nation.

But that's not stopping critics of Medicaid expansion.

"When you make ER care free to people, they consume more of it. They consume 40 percent more of it," says Michael Cannon, head of health policy for the libertarian Cato Institute. "Even as they're consuming more preventive care. And so one of the main arguments for how Obamacare was going to reduce health care costs is just flat out false."

Cannon says the study will likely further hurt President Obama's credibility for vowing that expanding Medicaid would help get people out of emergency rooms. But what's likely to bother the administration even more, he says, is what it may do to the half of the states that have yet to adopt the Medicaid expansion.

"This study is going to make it less likely that the 25 states that decided not to expand Medicaid are going to change their minds and decide to expand Medicaid," Cannon predicts.

But this study doesn't come as much of a surprise to those people who actually run Medicaid programs around the country.

"This is not something that is unexpected and not something that we're not prepared for," says Kathleen Nolan. She's director of state policy and programs for the National Association of Medicaid Directors.

Continued in article

Jensen Comment
The majority of new Medicaid patients will be poor, although it is possible for millionaires to now qualify for Medicaid with devious financial planning such as low income students having million dollar trust funds. The poor patients have incentives to game the ER services for prescription pain medicine. With one network physician or clinic, there will be records as to when prescriptions can be renewed. Given the Administration's track record for implementing databases, I strongly doubt that a Medicaid patient intent upon selling prescription pain killers can be prevented by traveling around to different hospital ER service for prescriptions that would not be granted if the ER physician was aware of the last time a Medicaid patient received such a prescription in another hospital and another and another.

I'm not certain how well pharmacies share prescription data or even if privacy laws even allow CVC and Walgreen and Wal-mart to even share a person's prescription data without receiving permission from the patient.

The moral hazard is greater with poor people in need of selling their pills like they sell food stamps.

Can prescription data be shared between different corporations without patient consent?

And then there's the problem of granting Medicaid to people who do not qualify for Medicaid. For example, an audit in Illinois revealed that have the people on Medicaid did not qualify for Medicaid. This appears to be yet another entitlement going crazy at taxpayer expense.

Bob Jensen's health care messaging updates --- http://www.trinity.edu/rjensen/Health.htm


Over 3,000 Cuban doctors defected from Venezuela in 2013:  Most Cuban doctors defecting to the US over the last 12 months came from Venezuela, ---
http://www.eluniversal.com/nacional-y-politica/131228/over-3000-cuban-doctors-defected-from-venezuela-in-2013

Over the last 12 months some 3,000 Cubans, mostly doctors, have arrived in the United States after deserting one of the Venezuelan government's social programs they staff. This accounts for a 60% increase as compared with 2012.

In 2012 there were about 5,000 refugee Cuban doctors and nurses in the United States coming from all over the world. Through December 1, 2013 this figure had surged to 8,000, 98% of them came from Venezuela.

These are estimates by Dr. Julio Cesar Alfonso, head of the South Florida group Solidarity Without Borders Inc. (SWB), which helps Cuban medical professionals who try to desert the medical programs Havana sells worldwide as "exports of services."

Venezuela hosts the largest contingent of Cuban medical professionals under the cooperation agreement signed by Caracas and Havana in 2003.

By 2012, 44,804 Cubans staffed the seven social programs starting in 2003, according to the last official data released.

"In 2012 we had 5,000 refugee medical professionals in the United States under federal assistance, but that figure has surged so far in 2013 reaching 8,000 doctors, 98% of whom defected from Venezuela because of continuously worsening conditions in that country," Alfonso says.

"Most Cubans who have defected complain about low salaries, late payment, increased workload in the Barrio Adentro neighborhood clinics and CDIs (Comprehensive Diagnostic Centers) across Venezuela, which to some critics amounts to modern-day slavery," Alfonso says.

"Cuban doctors only get USD 300 a month, but the Venezuelan government pays the Castro regime around USD 6,000 per doctor, so individual doctors are paid less than 10% of what Cuba collects," Alfonso says.

Since 2006, Cuban doctors and some other health workers who are serving their government overseas are allowed to request a United States visa under the Cuban Medical Professional Parole (CMPP) Program.

After requesting assistance from the US Embassy in Caracas, most doctors defect to the United States via Colombia, but Brazil is also being used as an alternative transit route to freedom.

Cuban medical professionals are required to produce numerous patient records for the purposes of drafting reports, many of which contain patient data that have been tampered with.

"This is done so that Cuba can show positive reports to the Venezuelan government," Alfonso says.

Jensen Comment
Cuba and Venezuela have done more than nearly all other nations have done more to eliminate income inequality than other nations. Contrary to the lies you hear from Michael Moore, their efforts do not appear to be healthy. Soon the U.S. and parts of Europe may be getting an influx of very skilled French physicians.

Warning:  The numbers in this article need to be validated, but this should not be too difficult to do since the U.S. government has records most of these types of defections as opposed to records on people wading across the Rio Grande. There will also be records on defectors seeking certifications to practice, many of which will probably be in Florida among the many Cuban defectors already located in and around Miami.

 

 


December 31, 2013

The good news, if you want to call it that, is that roughly 1.6 million Americans have enrolled in ObamaCare so far. The not-so-good news is that 1.46 million of them actually signed up for Medicaid . . . New York spent more than $15 billion on Medicaid last year, roughly 30% of all state expenditures. The Kaiser Foundation projects that over the next 10 years, New York taxpayers will shell out some $433 billion for the program. But none of these projections foresaw that so many of ObamaCare’s enrollees would be Medicaid eligible. To be sure, the health-care law’s designers saw the expansion of Medicaid as an important feature of their plan to expand coverage for the uninsured. Still, they expected most of those enrolling in ObamaCare to qualify for private (albeit subsidized) insurance.
Michael D. Tanner, NY Post, December 7, 2013 ---
http://nypost.com/2013/12/07/the-medicaid-time-bomb/
Medicaid --- http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html

Jensen Comment
It's hard to find Medicaid's share of state budgets because the amounts are usually buried in other line items. As best I can tell thus far the Medicaid share of state budgets is approximately a third before the new Obamacare enrollees in Medicaid are factored into the budgets. Medicaid is a great idea, but would be a better idea if more was spent to enforce the rules regarding who qualifies. For example, Russian diplomats received over $5 million in Medicaid benefits by lying about their incomes. A recent audit in Illinois reveals that half the people on Medicaid are not eligible to be on Medicaid. What proportion of the millions of new Medicaid recipients do you think will really qualify for free medical care if the Medicaid rules were enforced?

President Obama hopes to add another 5 million people who are above the poverty line to Medicaid in 2014. 

NYT:  Update on December 11, 2013
Health Exchange Enrollment Improves, But Still Short of Target
http://www.nytimes.com/interactive/2013/10/04/us/opening-week-of-health-exchanges.html?_r=0
What the data does not reveal is the percentage of those signing up for private (non Medicaid and CHIP) plans that are not subsidized. The entire success of the Obamacare plan rests on the number of people who enroll in private plans without premium subsidies and the cooperation of hospitals and doctors with the exchanges that write those policies. To date, 70% of the doctors and many of the best hospitals in California are refusing to sign on because it is feared that Obamacare will be transferring too many losses (bad debts) for unpaid premiums and unpaid deductibles onto the medical service providers.


"More Bad News for ObamaCare," by Allysia Finlay, The Wall Street Journal, December 24, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304020704579278472445817540?mod=djemEditorialPage_h

Many Democrats who voted in favor of ObamaCare figured that voters would warm up to the law once its vaunted benefits and insurance subsidies kicked in. To adapt Nancy Pelosi, Congress had to pass the law for the public to love what's in it. Their hope hasn't panned out.

Opposition to ObamaCare hit a record high this week in a CNN poll, with 62% of respondents saying they oppose the law compared to 35% who favor it. Disapproval registered at 54% in December 2010, a month after Democrats were routed in the midterm elections, and 59% when the law passed in March 2010.

Democrats hoped that letting kids to stay on their parents' insurance until age 26, guaranteed coverage of pre-existing conditions, free preventative care, mandated minimum benefits and a ban on lifetime and annual limits would boost support for the law. Ditto subsidies for consumers earning up to 400% of the poverty line.

But instead, these putative benefits have driven up premiums and deductibles, which in many cases aren't offset by the federal insurance subsidies. Many insurers as a result have restricted provider networks to keep costs down. Worse, the law's mandates have forced insurers to cancel millions of policies altogether and restricted consumers' choice. While the exchange glitches may be due to haphazard planning, these problems are fundamental to the law.

The Obama administration has tried to provide political cover to vulnerable Senate Democrats up for re-election next year—Alaska's Mark Begich, Louisiana's Mary Landrieu and Arkansas' Mark Pryor, among others—with administrative patches like allowing insurers to renew cancelled policies through next year. But the White House fixes haven't improved support for the law. Instead, they underscore that Democrats really didn't know what was in the law when they passed it and didn't much care. And that may help explain why the public has continued to sour on ObamaCare.


Hi Norma,

Due in heavy part that Obamacare is passing both its deductible nonpayment bad debts and its premium non-payment bad debts (two of the three months of a three-month nonpayment grace period), many hospitals like the Andersen Cancer Center and many doctors (70% in California) are refusing to serve patients insured by the exchanges. The TV networks and major newspapers seem to conspire to not report this.
 

You may not be able to choose your doctor or hospital unless you pay cash or go on a high premium Cadillac plan that, in 2015, will cease to be tax deductible by you or your employer..
 
After his gun control initiatives failed in Congress, President Obama unilaterally added very expensive mental health coverage to Obamacare without mentioning that most psychiatrists will refuse to serve patients having any type of insurance..  Psychiatrists are already in short supply in the USA. Nearly half already only serve cash-paying patients and currently won't bill any insurance companies, including Medicare or Medicaid. I think even more will reject the the exchanges.
 
I have a relative who needs psychiatric medications daily. Even though her husband is on a good state university medical insurance plan for coverage of most of her medical needs, she's dependent upon the only (overworked) psychiatrist in the area. That psychiatrist does not accept insurance.
 
Why are there so few psychiatrists?
One reason is that psychiatry is the most dangerous medical specialty. Exhibit A is the recent mass murderer James Holmes in Aurora, Colorado who was booted off campus for threatening his psychiatrist. Personally I think another reason is that doctors do not like going into a specialty having such a low proportion of cure rates and having to be on call 24/7 (usually to prevent suicides).
 
Something will have to be done to prevent passing bad bad debts onto hospitals and doctors.
Now that the GOP has given up on deficit reduction (Sen. Ryan lied by excluding interest on the debt in his budget), perhaps  legislation to Federal coverage of bad debts on to the Federal government along with assurances that doctors can bill at their full rates they charge cash paying patients. The blow to the deficit will be devastating since patients have little incentive to pay their deductibles if the government will pay those deductibles.
 
What we now have is two political parties so desperate to win elections that both are now promising nearly-free medical coverage that will explode the deficit and provide false promises about the quality of medical care in short supply to meet exploding demand.
Medical care will be almost free as long as the government fails to seriously prevent frauds in Medicaid. Medicare phony disability coverage,  and Obamacare subsidies --- all three of which are now frauds out of control due to failed government enforcement
 

U.S. prosecutors have charged 49 current and former Russian diplomats and their family members with participating in a scheme to get health benefits intended for the poor by lying about their income . . . Meanwhile, according to the charges, the family members had their housing costs paid for by the Russian government and spent "tens of thousands of dollars" on vacations, jewelry and luxury goods from stores like Swarovski and Jimmy Choo.
http://www.reuters.com/article/2013/12/05/usa-russia-healthfraud-idUSL2N0JK1AV20131205

The Scam Succeeded
All Russian Diplomats Charged in US Medicaid Fraud Case Have Returned Home
---
http://en.ria.ru/crime/20131225/185920522/All-Russian-Diplomats-Charged-in-US-Fraud-Case-Have-Returned.html
Neither the Russian government nor any of the fraudsters will repay a penny of the fraud.


"Obamacare: Silence of the Insurers," by Jonah Goldberg, Townhall, December 18, 2013 ---
http://townhall.com/columnists/jonahgoldberg/2013/12/18/obamacare-silence-of-the-insurers-n1764535?utm_source=thdaily&utm_medium=email&utm_campaign=nl

When will the insurers revolt?

It's a question that's popping up more and more. On the surface, the question answers itself. We're talking about pinstriped insurance company executives, not Hells Angels. One doesn't want to paint with too broad a brush, but if you were going to guess which vocations lend themselves least to revolutionary zeal, actuaries rank slightly behind embalmers.

Still, it's hard not to wonder how much more these people are willing to take. Even an obedient dog will bite if you kick it enough. Since Obamacare's passage, the administration has constantly moved the goalposts on the industry. For instance, when the small-business mandate proved problematic in an election year, the administration delayed it, putting its partisan political needs ahead of its own policy and the needs of the industry.

But the insurers kept their eyes on the prize: huge guaranteed profits stemming from the diktat of the health insurance mandate. When asked how he silenced opponents in the health industry during his successful effort to socialize medicine, Aneurin Bevan, creator of the British National Health Service, responded, "I stuffed their mouths with gold."

Hence, the insurers were ready on Oct. 1. They rejiggered their industry. They sent out millions of cancellation letters to customers whose plans no longer qualified under the new standards set by the Affordable Care Act. They told their customers to go to the exchanges to get their new plans.

But because President Obama promised Americans "if you like your health care plan, you can keep it," (PolitiFact's "Lie of the Year"), those cancellations became a political problem of Obama's own making.

In response, the president blamed it on the insurance companies or "bad apple" insurers. White House spokesman Jay Carney insisted that it was the insurance companies that unilaterally decided not to grandfather existing plans. (The Washington Post's "Fact Checker" columnist, Glenn Kessler, gave this claim "Three Pinocchios.")

Then, just last week, Health and Human Services Secretary Kathleen Sebelius announced that she was "urging" insurers to ignore both their contracts and the law and simply cover people on the honor system -- as if they were enrolled and paid up. She also wants doctors and hospitals to take patients, regardless of whether they are in a patients' insurance network or even if the patient is properly insured at all. Just go ahead and extend the deadline for paying, she urged insurers; we'll work out the paperwork later.

Of course, urging isn't forcing. But as Avik Roy of Forbes notes, the difference is subtle. Also last week, HHS also announced last week that it will consider compliance with its suggestions when determining which plans to allow on the exchanges next year. A request from HHS is like being asked a "favor" by the Godfather; compliance is less than voluntary.

The irony, as Christopher DeMuth recently noted in the Weekly Standard, is that if the architects of Obamacare had their way, the insurers would have been in even worse shape today. The original plan was for a "public option" that would have, over time, undercut the private insurance market to the point where single-payer seemed like the only rational way to go. If it weren't for then-Sen. Joe Lieberman's insistence that the provision be scrapped, DeMuth writes, "Obamacare's troubles would today be leading smoothly to the expansion of direct federal health insurance to pick up millions of canceled policies and undercut rate increases on terms no private firm could match."

In other words, the insurers knew the administration never had their best interests at heart but got in bed with it anyway.

Continued in article

Jensen Comment
Until recently the enthusiasm of medical insurance companies was understandable since the the losses for deductible portions of contracts were passed on mostly to patients themselves and possibly their doctors. Most medical service bad debts of for default of premium payments were passed on to hospitals and doctors.

Also the big and prosperous insurance companies were allowed to opt out of participating in the more risky health insurance exchanges. Most did opt out such that the government had to make loans for new exchange companies to to become insurers for individuals not covered by their employers. These exchanges are poorly capitalized, and many will probably have to be bailed out by the government if and when they encounter insolvency.

To get more heavily capitalized insurance companies to participate would require higher premium rates and more protection against bad debt losses. But this in turn would raise premiums dramatically and be counter to the whole purpose of Obamacare ---  to get more people insured and using more preventative care options. High premiums and low deductibles could destroy Obamacare by making more rather than fewer people insured.

The silence of the media on astute health care providers is more problematic.
Many of the biggest and best hospitals like the Andersen Cancer Center will not serve patients covered by the exchanges. Over 70% of California's physicians will not serve patients covered by the exchanges (except in the case where emergency treatment is called for).

Has any media source complained that with proper investment planning very wealthy people, especially college students on trust funds, may get free Medicaid medical care and medications.

Jensen Question
I asked the following question on the Turbo Tax Forum Regarding Obamacare Questions:
Question
I'm told that only income, not wealth, will be the deciding factor on eligibility for Medicaid beginning in 2014.
If I'm a full time student having zero income and $10 million trust fund of stock paying no dividends, will I be eligible for Medicaid?

A Turbo Tax expert says that wealth may still be a criterion in the states that rejected the Medicaid expansion. Having valuable assets is no longer a criterion in those states that yielded to Whitehouse pressure and temporary funding to expand Medicaid roles.

I am honestly confused by the assertion that your wealth after 2014 will not affect your eligibility for Medicaid. In does not seem right that students on trust funds should be getting free medical care and medications.

 

"Obama's Mental Health Solution Falls Flat," by Nicole Bailey, Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm

. . .

The Obama administration has expanded mental health care coverage, but the latest research shows that psychiatrists often do not accept insurance at all. When only 43% of psychiatrists accept Medicaid, it is difficult to see how expanded coverage will help mental health patients.

Psychiatrists accept medical insurance less frequently than other specialists across the board, according to the study published in JAMA Psychiatry by researchers from three separate medical schools:
 

  • 55.3% of psychiatrists accepted medical insurance in general, compared to 88.7% of other physicians
  • 54.8% of psychiatrists accepted Medicare, compared to 86.1% of other physicians
  • 43.1% of psychiatrists accepted Medicaid, compared to 73.0% of other physicians

The mainline media seems to avoid the greatest concerns of Obamacare --- concerns about making hospitals and doctors absorb most of the costs of medical care during the 90-day premium default grace period and the cost of serving patients who afterwards renege on paying the deductible portions that they agreed to pay to get lower premium plans.

The USA now has a dual health care program --- the highest quality health care in the world for the wealthy on Cadillac medical insurance plans and inferior quality health care in the chaos of Obamacare that will force soaring inflation in health care provider pricings. Your local Congressional representative is signing up for a Cadillac plan paid for by taxpayers.

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


"70% of California doctors are boycotting California's Obamacare exchanges," Washington Examiner, December 7, 2013 ---
http://www.examiner.com/article/70-of-california-doctors-are-boycotting-california-s-obamacare-exchanges
Note there are still unanswered questions about the accuracy of this number. Most notably, however, is that most exchange will be accepted only by networks of hospitals and physicians who participate in the network. You may not choose your own off-network doctor and hospital unless you buy one of the premium Cadillac plans. President Obama failed to make this clear when he repeated over and over that "You can choose your own doctor."

An estimated seven out of every 10 physicians in deep-blue California are rebelling against the state's Obamacare health insurance exchange and won't participate, the head of the state's largest medical association said.

“It doesn't surprise me that there's a high rate of nonparticipation,” said Dr. Richard Thorp, president of the California Medical Association.

horp has been a primary care doctor for 38 years in a small town 90 miles north of Sacramento. The CMA represents 38,000 of the roughly 104,000 doctors in California.

“We need some recognition that we’re doing a service to the community. But we can’t do it for free. And we can’t do it at a loss. No other business would do that,” he said.

California offers one of the lowest government reimbursement rates in the country -- 30 percent lower than federal Medicare payments. And reimbursement rates for some procedures are even lower.

In other states, Medicare pays doctors $76 for return-office visits. But in California, Medi-Cal's reimbursement is $24, according to Dr. Theodore M. Mazer, a San Diego ear, nose and throat doctor.

In other states, doctors receive between $500 to $700 to perform a tonsillectomy. In California, they get $160, Mazer added.

Only in September did insurance companies disclose that their rates would be pegged to California’s Medicaid plan, called Medi-Cal. That's driven many doctors to just say no.

They're also pointing out that Covered California's website lists many doctors as participants when they aren't.

“Some physicians have been put in the network and they were included basically without their permission,” Lisa Folberg said. She is a CMA’s vice president of medical and regulatory Policy.

“They may be listed as actually participating, but not of their own volition,” said Donald Waters, executive director of the Alameda-Contra Costa Medical Association.

Waters' group represents 3,100 doctors in the East Bay area that includes Oakland, with an estimated 200,000 uninsured individuals.

“This is a dirty little secret that is not really talked about as they promote Covered California,” Waters said. He called the exchange's doctors list a “shell game” because “the vast majority” of his doctors are not participating.

Independent insurance brokers who work with both insurance companies and doctor networks estimate that about 70 percent of California's 104,000 licensed doctors are boycotting the exchange.

Continued in article

Jensen Comment
Five guesses as to what will happen to insurance premiums when millions of people at last are signed up for insurance from the exchanges?

Hint
The answer is not one thing.

  • First will be the raising of premiums to cover added payments to doctors.

     
  • Second will be the raising of premiums to cover the bad debts of hospitals and doctors for the high deductibles and higher premiums that millions of newly insured people will be unable to pay when they are seriously ill.

     
  • Third will be the long delays to make appointments with doctors who are participating in the exchange programs.  Experience with Romneycare in in Massachusetts found that appointment delays went up an average of six weeks.

     
  • Fourth will be the toughing out of individuals who will not seek medical care because of the cost of the deductibles.

     
  • Fifty will be the increased lines in emergency rooms for people to ill or injured to wait a month or two to see a doctor.

"ObamaCare's Troubles Are Only Beginning:  Be prepared for eligibility, payment and information protection debacles—and longer waits for care," by Michael J. Boskin, The Journal of Accountancy, December 15, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304403804579260603531505102?mod=djemEditorialPage_h

The White House is claiming that the Healthcare.gov website is mostly fixed, that the millions of Americans whose health plans were canceled thanks to government rules may be able to keep them for another year, and that in any event these people will get better plans through ObamaCare exchanges. Whatever the truth of these assertions, those who expect better days ahead for the Affordable Care Act are in for a rude awakening. The shocks—economic and political—will get much worse next year and beyond. Here's why:

The "sticker shock" that many buyers of new, ACA-compliant health plans have experienced—with premiums 30% higher, or more, than their previous coverage—has only begun. The costs borne by individuals will be even more obvious next year as more people start having to pay higher deductibles and copays.

If, as many predict, too few healthy young people sign up for insurance that is overpriced in order to subsidize older, sicker people, the insurance market will unravel in a "death spiral" of ever-higher premiums and fewer signups. The government, through taxpayer-funded "risk corridors," is on the hook for billions of dollars of potential insurance-company losses. This will be about as politically popular as bank bailouts.

The "I can't keep my doctor" shock will also hit more and more people in coming months. To keep prices to consumers as low as possible—given cost pressures generated by the government's rules, controls and coverage mandates—insurance companies in many cases are offering plans that have very restrictive networks, with lower-cost providers that exclude some of the best physicians and hospitals.

Next year, millions must choose among unfamiliar physicians and hospitals, or paying more for preferred providers who are not part of their insurance network. Some health outcomes will deteriorate from a less familiar doctor-patient relationship.

More IT failures are likely. People looking for health plans on ObamaCare exchanges may be able to fill out their applications with more ease. But the far more complex back-office side of the website—where the information in their application is checked against government databases to determine the premium subsidies and prices they will be charged, and where the applications are forwarded to insurance companies—is still under construction. Be prepared for eligibility, coverage gap, billing, claims, insurer payment and patient information-protection debacles.

The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors' appointments and specialist treatment, as more people crowd fewer providers.

Those with means can respond to the government-driven waiting lines by making side payments to providers or seeking care through doctors who do not participate in insurance plans. But this will be difficult for most people.

Next, the Congressional Budget Office's estimated 25% expansion of Medicaid under ObamaCare will exert pressure on state Medicaid spending (although the pressure will be delayed for a few years by federal subsidies). This pressure on state budgets means less money on education and transportation, and higher state taxes.

The "Cadillac tax" on health plans to help pay for ObamaCare starts four years from this Jan. 1. It will fall heavily on unions whose plans are expensive due to generous health benefits.

In the nearer term, a political iceberg looms next year. Insurance companies usually submit proposed pricing to regulators in the summer, and the open enrollment period begins in the fall for plans starting Jan. 1. Businesses of all sizes that currently provide health care will have to offer ObamaCare's expensive, mandated benefits, or drop their plans and—except the smallest firms—pay a fine. Tens of millions of Americans with employer-provided health plans risk paying more for less, and losing their policies and doctors to more restrictive networks. The administration is desperately trying to delay employer-plan problems beyond the 2014 election to avoid this shock.

Meanwhile, ObamaCare will lead to more part-time workers in some industries, as hours are cut back to conform to arbitrary definitions in the law of what constitutes full-time employment. Many small businesses will be cautious about hiring more than 50 full-time employees, which would subject them to the law's employer insurance mandate.

On the supply side, medicine will become a far less attractive career for talented young people. More doctors will restrict practice or retire early rather than accept lower incomes and work conditions they did not anticipate. Already, many practices are closed to Medicaid recipients, some also to Medicare. The pace of innovation in drugs, medical devices and delivery is expected to slow significantly, as higher taxes and even rationing set in.

The repeated assertions by the law's supporters that nobody but the rich would be worse off was based on a beyond-implausible claim that one could expand by millions the number of people with health insurance, lower health-care costs without rationing, and improve quality. The reality is that any squeezing of insurance-company profits, or reduction in uncompensated emergency-room care amounts to a tiny fraction of the trillions of dollars extracted from those people overpaying for insurance, or redistributed from taxpayers.

The Affordable Care Act's disastrous debut sent the president's approval ratings into a tailspin and congressional Democrats in competitive districts fleeing for cover. If the law's continuing unpopularity enables Republicans to regain the Senate in 2014, the president will be forced to veto repeated attempts to repeal the law or to negotiate major changes.


I never new about ACA consumer add-on taxes until now
"As Obamacare Deadline Looms, Insurance Companies Pile On The Taxes," CBS News, December 26, 2013 ---
http://newyork.cbslocal.com/2013/12/26/as-obamacare-deadline-looms-insurance-companies-pile-on-the-taxes/

. . .

And there’s more: most insurance companies don’t tell you about the taxes they add to their premiums. The numbers will vary, but one subscriber said their tax amount is $23.14 a month, or nearly $278 annually.

Other add-ons include:

* A 2 percent premium tax on every health plan.

* A user fee of 3.5 percent to sell through the online marketplace.

* A $2-per-policy fee.

Nonetheless, supporters of the Affordable Care Act claim the neediest will get the best coverage.

“People who make a little more will pay more; people who make a little less will pay less,” Arevalo said.

Critics say most insurers don’t specifically post taxes on invoices, and some question how, in the case Brennan showed earlier, Alabama Blue Cross-Blue Shield was able to be so specific.

Watch the video

 


"Obama's Mental Health Solution Falls Flat," by Nicole Bailey, Townhall, December 2, 2013 ---
http://townhall.com/tipsheet/nicolebailey/2013/12/12/obamas-mental-health-solution-falls-flat-n1761910?utm_source=thdailypm&utm_medium=email&utm_campaign=nl_pm

. . .

The Obama administration has expanded mental health care coverage, but the latest research shows that psychiatrists often do not accept insurance at all. When only 43% of psychiatrists accept Medicaid, it is difficult to see how expanded coverage will help mental health patients.

Psychiatrists accept medical insurance less frequently than other specialists across the board, according to the study published in JAMA Psychiatry by researchers from three separate medical schools:

  • 55.3% of psychiatrists accepted medical insurance in general, compared to 88.7% of other physicians
  • 54.8% of psychiatrists accepted Medicare, compared to 86.1% of other physicians
  • 43.1% of psychiatrists accepted Medicaid, compared to 73.0% of other physicians

Continued in article

 


Jensen Comment
Until now the media has has avoided mentioning the really big worries about Obamacare in an effort to present a rosy picture to encourage millions of people to sign up. What goes unmentioned, until the December 8, 2013 article in the WSJ quoted below, is that hospital bad debts with greatly increase due to people patients being unable to pay their deductibles.

December 6, 2013 message from Bob Jensen

Hi Eliot,

When there's no Obamacare there will be a USA National Health Plan that bypasses medical insurance companies. It's possible that we will still have such companies offering private insurance beyond what the USA National Plan covers. This "dual coverage" is how the German health insurance system now works. According to various sources in Germany at the moment (mostly Erika's relatives), the time and a6ttention and service varies in ways that that you might find objectionable. The best doctors give more attention and faster service to German patients with private insurance. For example, waiting for new knees can take much longer without private insurance.

Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance 

Our present USA Medicare system works on a dual basis. Erika and I pay nearly $200 per month (each) for supplemental p private Medicare insurance that eliminates the Medicare deductibles (co-insurance) and does such things as pay for the added cost of private hospital rooms. Of course Medicare costs us hundreds more each month such that the supposedly "free" Medicare costs us each nearly $400 per month. Erika pays all our bills such that I don't know the exact amounts. She allows me to carry one check if I promise not to use it.

Thus far I've fortunately paid much more into the Medicare system since my 2006 retirement than I've withdrawn. Erika sadly has withdrawn over $1 million from the system.

We've gone beyond the point of no return for Obamacare, although I think the Obamacare is so complicated and unjust that it will evolve into a national health care plan perhaps something like that in Germany. The Canada system is not a very good model, because it varies between provinces and has long delays for elective procedures such as new knees and hips. Canada has a dual system where the poor wait and the rich come to the USA for faster service.

Personally I think the evolution of Obamacare into a USA National Health Plan will be inevitable.

Obamacare is a disaster in terms of the size of the deductibles for plans that are affordable. Obamacare is a disaster in terms of the cheating that will become commonplace for the subsidies. Obamacare will be a disaster for insurance companies and health providers who will have to absorb enormous losses such as bad debt losses. Obamacare is a disaster in that we probably won't even note a significant difference in the crowds lining up in emergency rooms seeking free diagnostics, treatments, and drugs.

There will be frustrating years of turmoil in the USA health system until a USA National Health Plan finally evolves.

Respectfully,
Bob Jensen


I might note that the premium subsidies paid my Uncle Sam are a new thing and will probably become a larger scam than anything we've known in healthcare fraud prior to 2014. But let's ignore the new scam in town and the IRS refusal to enforce the subsidy rules.

Of course the hospitals and physicians will send in the debt collection agencies. But the millions of plans that were wiped out of the system in 2013 had much lower deductibles and often higher premiums. The premiums beginning in 2014 are cheaper in many instances because the deductible amounts were greatly increased such as the new Bronz plans where insurance companies only pay 60%.

Nobody seems to be talking about it, but when those big hospital bills hit the fan the people opting for the lowest premiums (and high deductibles) are the people least able to pay the deductibles for huge medical bills.

Yes I do think the problem of bad debts for huge deductibles will be a bigger, and bigger problem beginning in 2014 because the options for plans with enormous deductibles have been increased so greatly beginning in 2014.

What was a huge bad debt problem for hospitals and physicians in 2013 will become a monster bad debt problem after 2013. The problem is not so much with the premium amounts as it is the deductible amounts.

But don't look for the media to even whisper the future bad debt monster for medical providers.

Respectfully,
Bob Jensen


Hi Zafar,
 
A major portion of the medical cost for the "uninsured" currently  gets passed on to taxpayers since people that have no insurance are passed on to hospitals that are subsidized by taxpayers to cover the uninsured such as in San Antonio where most uninsured patients are passed on to the huge Bexar County Hospital that is heavily funded by county property taxes. The Bexar County Hospital portion of my property tax bill exceeded $1,000 per year when I lived in San Antonio.
 
Of course since that $1,000 gave me about a $400 tax break on my Federal income tax return, the Federal Government was in essence paying for 40% of my share of paying for the uninsured served at the Bexar County Hospital.
 
The bad debt  losses that currently hit hospitals not subsidized by property taxpayers are for "insured" patients who do not have sufficient coverage to pay entire billings beyond what their insurance will pay. The new exchange insurance plans with enormous deductibles such as the Bronz plans that only pay 60% will greatly increase the losses to hospitals for "insured" patients who cannot pay their 40% share of the hospital and physician billings..
 
My point is that a huge portion of medical care costs that are now paid by property  taxpayers for "uninsured" patients will no longer be paid by taxpayers because those patients are now "insured" with low premium, high-deductible plans where many of  those patients cannot afford the deductibles for hospital bills. Taxpayers in San Antonio with high property taxes may cheer the savings that must in the future  be choked on by the hospitals that are not property tax funded. 
 
In other words, somebody pays for hospital patients' bad debts. The "uninsured" are now heavily subsidized by county and city property taxpayers. Giving the uninsured insurance with low premiums and high deductibles is really a transfer payment from property taxpayers to whomever will pay for the added bad debts of defaulted deductibles.

I don't think this system is sustainable until there is USA National Health Program.
 
Respectfully,
Bob Jensen

 

The American Hospital Association, which represents for-profit and nonprofit hospitals and other health-care providers, concurred that the higher deductibles "will likely lead to an increase in hospital bad debt," said Ashley Thompson, its deputy director for policy.

"High Deductibles Fuel New Worries of Health-Law Sticker Shock Some Lower-Cost Plans Carry Steep Deductibles, Posing Financial Challenge," by By Leslie Scism and Timothy W. Martin, The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303330204579246211560398876?mod=ITP_pageone_0

. . .

The health law makes tax credits available to help cover insurance premiums for people with annual income up to four times the poverty level, or $45,960 for an individual. In addition, "cost-sharing" subsidies to help pay deductibles are available to people who earn up to 2.5 times the poverty level, or about $28,725 for an individual, in the exchange's silver policies.

As enrollment picks up on HealthCare.gov, many people with modest incomes are encountering a troubling element: deductibles so steep they may not be able to afford the portion of medical expenses that insurance doesn't cover. Christopher Weaver discusses. Photo: Getty Images.

But those limits will leave hundreds of thousands or more people with a difficult trade-off: They can pay significantly higher premiums for the exchange's silver, gold and platinum policies, which have lower deductibles, or gamble they won't need much health care and choose a cheaper bronze plan. Moreover, the cost-sharing subsidies for deductibles don't apply to the bronze policies.

That means some sick or injured people may avoid treatment so they don't rack up high bills their insurance won't cover, according to consumer activists, insurance brokers and public-policy analysts—subverting one of the health law's goals, which is to ensure more people receive needed health care. Hospitals, meantime, are bracing for a rise in unpaid bills from bronze-plan policyholders, said industry officials and public-policy analysts.

Because all health plans now are required to provide certain minimum benefits, "consumers may be tempted to shop on premium alone, not realizing that the out-of-pocket costs can have a dramatic effect upon the annual costs of health care," said Kevin Coleman, head of research and data at HealthPocket.

Mr. Coleman said he expects the high deductibles will "produce some reduction in medical-service use" for enrollees who don't qualify for subsidies.

. . .

The American Hospital Association, which represents for-profit and nonprofit hospitals and other health-care providers, concurred that the higher deductibles "will likely lead to an increase in hospital bad debt," said Ashley Thompson, its deputy director for policy.

It isn't known how many bronze policies have been bought so far because the exchanges aren't releasing that level of detail, HealthPocket's Mr. Coleman said.

December 6, 2013 message from Bob Jensen

Hi Eliot,

When there's no Obamacare there will be a USA National Health Plan that bypasses medical insurance companies. It's possible that we will still have such companies offering private insurance beyond what the USA National Plan covers. This "dual coverage" is how the German health insurance system now works. According to various sources in Germany at the moment (mostly Erika's relatives), the time and a6ttention and service varies in ways that that you might find objectionable. The best doctors give more attention and faster service to German patients with private insurance. For example, waiting for new knees can take much longer without private insurance.

Health Insurance in Germany --- http://www.toytowngermany.com/wiki/Health_insurance 

Our present USA Medicare system works on a dual basis. Erika and I pay nearly $200 per month (each) for supplemental p private Medicare insurance that eliminates the Medicare deductibles (co-insurance) and does such things as pay for the added cost of private hospital rooms. Of course Medicare costs us hundreds more each month such that the supposedly "free" Medicare costs us each nearly $400 per month. Erika pays all our bills such that I don't know the exact amounts. She allows me to carry one check if I promise not to use it.

Thus far I've fortunately paid much more into the Medicare system since my 2006 retirement than I've withdrawn. Erika sadly has withdrawn over $1 million from the system.

We've gone beyond the point of no return for Obamacare, although I think the Obamacare is so complicated and unjust that it will evolve into a national health care plan perhaps something like that in Germany. The Canada system is not a very good model, because it varies between provinces and has long delays for elective procedures such as new knees and hips. Canada has a dual system where the poor wait and the rich come to the USA for faster service.

Personally I think the evolution of Obamacare into a USA National Health Plan will be inevitable.

Obamacare is a disaster in terms of the size of the deductibles for plans that are affordable. Obamacare is a disaster in terms of the cheating that will become commonplace for the subsidies. Obamacare will be a disaster for insurance companies and health providers who will have to absorb enormous losses such as bad debt losses. Obamacare is a disaster in that we probably won't even note a significant difference in the crowds lining up in emergency rooms seeking free diagnostics, treatments, and drugs.

There will be frustrating years of turmoil in the USA health system until a USA National Health Plan finally evolves.

Respectfully,
Bob Jensen


I might note that the premium subsidies paid my Uncle Sam are a new thing and will probably become a larger scam than anything we've known in healthcare fraud prior to 2014. But let's ignore the new scam in town and the IRS refusal to enforce the subsidy rules.

Of course the hospitals and physicians will send in the debt collection agencies. But the millions of plans that were wiped out of the system in 2013 had much lower deductibles and often higher premiums. The premiums beginning in 2014 are cheaper in many instances because the deductible amounts were greatly increased such as the new Bronz plans where insurance companies only pay 60%.

Nobody seems to be talking about it, but when those big hospital bills hit the fan the people opting for the lowest premiums (and high deductibles) are the people least able to pay the deductibles for huge medical bills.

Yes I do think the problem of bad debts for huge deductibles will be a bigger, and bigger problem beginning in 2014 because the options for plans with enormous deductibles have been increased so greatly beginning in 2014.

What was a huge bad debt problem for hospitals and physicians in 2013 will become a monster bad debt problem after 2013. The problem is not so much with the premium amounts as it is the deductible amounts.

But don't look for the media to even whisper the future bad debt monster for medical providers.

Respectfully,
Bob Jensen


Jensen Comment
Until now the media has has avoided mentioning the really big worries about Obamacare in an effort to present a rosy picture to encourage millups upon millions of people to sign up. What goes unmentioned, until today's article in the WSJ quoted below, is that hospital bad debts with greatly increase due to people patients being unable to pay their deductibles.

December 6, 2013 message from Bob Jensen

Hi Zafar,
 
A major portion of the medical cost for the "uninsured" currently  gets passed on to taxpayers since people that have no insurance are passed on to hospitals that are subsidized by taxpayers to cover the uninsured such as in San Antonio where most uninsured patients are passed on to the huge Bexar County Hospital that is heavily funded by county property taxes. The Bexar County Hospital portion of my property tax bill exceeded $1,000 per year when I lived in San Antonio.
 
Of course since that $1,000 gave me about a $400 tax break on my Federal income tax return, the Federal Government was in essence paying for 40% of my share of paying for the uninsured served at the Bexar County Hospital.
 
The bad debt  losses that currently hit hospitals not subsidized by property taxpayers are for "insured" patients who do not have sufficient coverage to pay entire billings beyond what their insurance will pay. The new exchange insurance plans with enormous deductibles such as the Bronz plans that only pay 60% will greatly increase the losses to hospitals for "insured" patients who cannot pay their 40% share of the hospital and physician billings..
 
My point is that a huge portion of medical care costs that are now paid by property  taxpayers for "uninsured" patients will no longer be paid by taxpayers because those patients are now "insured" with low premium, high-deductible plans where many of  those patients cannot afford the deductibles for hospital bills. Taxpayers in San Antonio with high property taxes may cheer the savings that must in the future  be choked on by the hospitals that are not property tax funded. 
 
In other words, somebody pays for hospital patients' bad debts. The "uninsured" are now heavily subsidized by county and city property taxpayers. Giving the uninsured insurance with low premiums and high deductibles is really a transfer payment from property taxpayers to whomever will pay for the added bad debts of defaulted deductibles.

I don't think this system is sustainable until there is USA National Health Program.
 
Respectfully,
Bob Jensen

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


Question
What happens if Obamacare insured individuals or companies go into default on premiums while the insureds keep piling on the medical bills on the pretense that they are still insured?

"Obamacare's Perilous Protection Plan for Debtors," by Michelle Malkin, Townhall, December 6, 2013 --- Click Here
http://townhall.com/columnists/michellemalkin/2013/12/06/obamacares-perilous-protection-plan-for-debtors-n1758399?utm_source=thdaily&utm_medium=email&utm_campaign=nl

 


Obamacare:  Limits Placed Upon Choosing Your Own Doctor and Hospital

Jensen Comment
The media along with President Obama led us to believe that medical insurance plans were going to vary only be the amount of the deductibles and age of the applicant. We are now learning more about differences in medical networks of hospitals and doctors. The President kept insisting that we could keep our present doctors. Technically that was not a lie, but what was left unsaid is that to literally keep your favored doctors and hospitals you may have to opt for the more expensive Cadillac plans having "broader network coverage "of physicians and selective hospitals that opted out of serving the lower-priced limited network plans.

Dr. Ezekiel Emanuel --- http://en.wikipedia.org/wiki/Ezekiel_Emanuel

"ObamaCare in Translation Ezekial Emanuel explains what the President really meant about your doctor," The Wall Street Journal, December 8, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304014504579246552456954872?mod=djemEditorialPage_h

. . .

Mr. Wallace: "It's a simple yes or no question. Didn't he say if you like your doctor, you can keep your doctor?"

Dr. Emanuel: "Yes. But look, if you want to pay more for an insurance company that covers your doctor, you can do that. This is a matter of choice. We know in all sorts of places you pay more for certain—for a wider range of choices or wider range of benefits. The issue isn't the selective networks. People keep saying, 'Oh, the problem is you're going to have a selective network.'"

Mr. Wallace: "Well, if you lose your doctor or lose your hospital—"

Dr. Emanuel: "Let me just say something. People are going to have a choice as to whether they want to pay a certain amount for a selective network or pay more for a broader network."

Mr. Wallace: "Which means your premiums would probably go up."

Dr. Emanuel: "They get that choice. That's a choice you've always made."

It's nice to hear a central planner embrace choice, except this needs translating too. The truth is that you may be able to pay more to keep your doctor, but only after you choose one of ObamaCare's preferred plans that already costs you more than your old plan that ObamaCare forced you to give up.

Jensen Comment
What Dr. Emanuel failed to mention is that the "broader expensive network" plans are Cadillac plans for which employers lose their tax deductions.

The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/

Jensen Comment
Non-profit organizations, especially labor unions, for whom Cadillac plans are especially popular will be allowed to keep their plans without penalty since tax deductions are not of concern to them.

Having preferred networks of doctors and hospitals is not unheard of in national health care plans. Germany, for example, has both public health insurance plus premium coverage with private insurance. Cuba notoriously has bourgeoisie plans for members of the Communist Party and the wealthy versus  proletariat plans for the poor people.

If you Congressional representative brags about signing up for Obamacare ask if he or she has a Cadillac Obamacare plan that lets them choose their own doctors and hospitals.

 


Question
What happens if Obamacare insured individuals or companies go into default on premiums while the insureds keep piling on the medical bills on the pretense that they are still insured?

"Obamacare's Perilous Protection Plan for Debtors," by Michelle Malkin, Townhall, December 6, 2013 --- Click Here
http://townhall.com/columnists/michellemalkin/2013/12/06/obamacares-perilous-protection-plan-for-debtors-n1758399?utm_source=thdaily&utm_medium=email&utm_campaign=nl

I heard about the latest problem this week from an eye doctor friend who received a letter from a Colorado-based insurer informing her that she's essentially on the hook for Obamacare's payment grace period for debtors. The optometrist is bracing for a flood of similar letters from other insurers. Like countless other independent providers, she's extremely concerned about the potential liability, uncertainty and fraud the rule imposes on her business.

Here's the raw deal: The Affordable Care Act created a 90-day grace period before insurers can drop patients who fall behind on premiums. So, delinquents who obtain tax-subsidized health insurance through an Obamacare health insurance exchange have three months to settle up their bills prior to their policy being canceled. As written, the law puts insurers on the hook for the grace period.

But the bureaucrats at the Centers for Medicare and Medicaid Services decided to issue a rule in March making insurers responsible only for paying claims during the first 30 days of the debtors' grace period. Who's on the hook for the other two months? Well, customers are entrusted to foot the bills for additional services. But if they blow off the payments, it's up to physicians and hospitals to collect.

In real-world practice, this means providers will be eating untold costs. Several large hospital associations raised red flags over the issue this summer. In August, the Missouri Hospital Association noted that the regulatory shift "unduly burdens physicians, hospitals and other health care providers" by making them directly collect payments from patients, which "puts them at an unfair and significant risk for providing uncompensated care to patients."

Emillie J DiChristina of Practicefirst Medical Management Solutions spelled out the financial risks for clients on the company's blog: "This leaves providers in a potentially bad place as they have a high potential for accruing bad debt on services provided between 31 and 90 days of the allowed grace period." Can you spell f-r-a-u-d? People could "go on and off" insurance plans, Tampa Bay health care lawyer Bruce Lamb told me, and game the system by bailing on payments and exploiting Obamacare protections against denial of coverage.

Or as MHA officials put it: "We also are very concerned that some disreputable individuals will learn they can manipulate the system and win a full year's insurance coverage on only nine months of premiums. Knowing they are entitled to three months of grace period coverage, dishonest persons could stop paying premiums on the ninth month, enjoy free coverage during the 90-day grace period, have their coverage terminated, and then re-enter the exchange market where the Affordable Care Act's guaranteed issue mandate would prohibit another plan from denying them coverage."

Think such nefarious behavior won't occur? Then you haven't been paying attention to the data manipulators and con artists in the Obamacare navigator program. As I reported earlier this year, the seedy nonprofit Seedco secured multimillion-dollar navigator contracts in Georgia, Maryland, Tennessee and New York to recruit Obamacare recipients into the government-run exchanges -- despite settling a civil fraud lawsuit for faking at least 1,400 of 6,500 job placements under a $22.2 million federally funded contract with New York City a year ago.

Additionally, investigative journalist James O'Keefe and his Project Veritas team have caught Obamacare navigators on tape advising health insurance exchange customers to under-report their income and lie about their health status in order to cheat the system.

CMS has made no effort to repeal its cost-shifting rule or to do anything to address the concerns of providers who will be left holding the bag. As one hospital rep told me: "It's potentially catastrophic." Private practices are already being hit hard with slashed reimbursements, the electronic medical records mandate, ICD-10 medical diagnostic code changes, and increasing federal intrusions on how they provide care. In yet another entry on the laundry list of Obamacare's unintended consequences, this regulation will hurt patients by dissuading doctors from participating in exchange plans.

Continued in article

Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


The Cadillac Tax: A Game Changer for U.S. Health Care:  Can you explain this tax to your students?
Do you understand the Cadillac Tax provision of the Affordable Healthcare Act that will have a monumental 2018 impact on healthcare coverage of employees who are now covered by employer plans --- plans now costing the government over $250 billion per year? But not for long!

Do you understand the Cadillac Tax provision?
Me neither. As Nancy Pelosi said years ago, Congress passed the ACA before anybody in the USA had a chance to study all the surprises in this the enormous bill.

If you're covered presently on your employer's plan you should most certainly learn about the Cadillac Tax provision that kicks in in 2018.

"The Cadillac Tax: A Game Changer for U.S. Health Care." by Jonathan Gruber (MIT), Harvard Business Review Blog, November 15. 2013 ---
http://blogs.hbr.org/2013/11/the-cadillac-tax-a-game-changer-for-u-s-health-care/



Case Studies in Primary Health Care ---
http://ocw.jhsph.edu/index.cfm/go/viewCourse/course/casestudiesinphc/coursePage/index/coursePage/index/


"Illinois's Fake Pension Fix:  The most dysfunctional state government lives down to its reputation," The Wall Street Journal, December 2, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702303670804579233901035185122?mod=djemEditorialPage_h

Democrats in Illinois have dug a $100 billion pension hole, and now they want Republicans to rescue them by voting for a plan that would merely delay the fiscal reckoning while helping to re-elect Governor Pat Quinn. The cuckolded GOP seems happy to oblige on this quarter-baked reform.

Legislative leaders plan to vote Tuesday on a bill that Mr. Quinn hails as a great achievement. But the plan merely tinkers around the edges to save a fanciful $155 billion over 30 years, shaves the state's unfunded liability by at most 20%, and does nothing for Chicago's $20 billion pension hole.

Most of the putative savings would come from trimming benefits for younger workers. The retirement age for current workers would increase on a graduated scale by four months for 45-year-olds to five years for those 30 and under. Teachers now in their 20s would have to wait until the ripe, old age of 60 to retire, but they'd still draw pensions worth 75% of their final salary.

Salaries for calculating pensions would also be capped at $109,971, which would increase over time with inflation. Yet Democrats cracked this ceiling by grandfathering in pensions for workers whose salaries currently top or will exceed the cap due to raises in collective-bargaining agreements.

Democrats are also offering defined-contribution plans as a sop to Republicans who are desperate to dress up this turkey of a deal. These plans would only be available to 5% of workers hired before 2011. Why only 5%? Because if too many workers opt out of the traditional pension, there might not be enough new workers to fund the overpromises Democrats have made to current pensioners.

At private companies, such 401(k)-style plans are private property that workers keep if they move to a new job. But the Illinois version gives the state control over the new defined-contribution plans and lets the legislature raid the individual accounts at anytime. That's a scam, not a reform.

Even under the most optimistic forecasts, these nips and tucks would only slim the state's pension liability down to $80 billion—which is where it was after Governor Quinn signed de minimis fixes in spring 2010 to get him past that year's election.

Safely elected in January 2011, Democrats then raised the state's 3% flat income tax rate to 5% and its corporate rate from 7.3% to 9.5%, the fourth highest in the country. All $7 billion a year in new revenues have gone to pension payments, which will leave a huge new hole in the budget when the supposedly temporary tax hikes are phased out in 2015.

The truth is that Democrats will never let the tax increases expire, and state Senate President John Cullerton all but admitted as much in October. Mr. Quinn won't rule out another tax hike, which means round two is a certainty in 2015 if he wins re-election next year. The difference is that this time Democrats will kill the flat income tax and impose a progressive rate scheme that will make future tax hikes politically easier.

It's a sign of their desperation that the state's business lobbies are supporting the reform as the best they can hope for. Others want special tax breaks to offset the 2011 tax hike. Archer Daniels Midland ADM +1.49% (Decatur) and Office Max (Naperville) have threatened to move their corporate headquarters if the state doesn't guarantee $75 million in tax breaks. But Mr. Quinn has refused to approve more gifts for the legislature's corporate cronies until lawmakers pass something on pensions.

Democrats hold comfortable majorities in the legislature and don't need GOP votes. Yet they are demanding Republican support so they won't be the only targets of union wrath. Mr. Quinn watered down the reforms to reduce opposition from the teachers and other government unions, but the unions are still promising to go to court to block the changes if they pass.

GOP leaders who are rounding up votes must be feeling especially charitable this holiday season because they're making an in-kind contribution to Mr. Quinn, who will claim a bipartisan victory as he runs for re-election. While GOP gubernatorial candidate Bruce Rauner has denounced the pension legislation as window-dressing, his Republican primary challengers aren't as savvy. State Senator Bill Brady, who lost to Mr. Quinn in 2010, is supporting the bill while treasurer Dan Rutherford says it is too hard on unions. Such me-too thinking is why the Illinois GOP has become a useless minority.

Continued in article

"Audit reveals half of people enrolled in Illinois Medicaid program not eligible," by Craig Cheatham, KMOV Television, November 4, 2013 ---
http://www.kmov.com/news/just-posted/Audit-reveals-half-of-people-enrolled-in-IL-Medicaid-program-not-eligible-230586321.html?utm_content=buffer824ba&utm_source=buffer&utm_medium=twitter&utm_campaign=Buffer

The early findings of an ongoing review of the Illinois Medicaid program revealed that half the people enrolled weren’t even eligible.

The state insisted it’s not that bad but Medicaid is on the federal government’s own list of programs at high risk of waste and abuse.

Now, a review of the Illinois Medicaid program confirms massive waste and fraud.

A review was ordered more than a year ago-- because of concerns about waste and abuse. So far, the state says reviewers have examined roughly 712-thousand people enrolled in Medicaid, and found that 357-thousand, or about half of them shouldn't have received benefits. After further review, the state decided that the percentage of people who didn't qualify was actually about one out of four.

"It says that we've had a system that is dysfunctional. Once people got on the rolls, there wasn't the will or the means to get them off,” said Senator Bill Haines of Alton.

A state spokesman insists that the percentage of unqualified recipients will continue to drop dramatically as the review continues because the beginning of the process focused on the people that were most likely to be unqualified for those benefits. But regardless of how it ends, critics say it's proof that Illinois has done a poor job of protecting tax payers money.

“Illinois one of the most miss-managed states in country-- lists of reasons-- findings shouldn't surprise anyone,” said Ted Dabrowski.

Dabrowski, a Vice-President of The Illinois Policy Institute think tank, spoke with News 4 via SKYPE. He said the Medicaid review found two out of three people recipients either got the wrong benefits, or didn't deserve any at all.

We added so many people to medicaid rolls so quickly, we've lost control of who belongs there,” said Dabrowski.

Continued in article

 

 


From the CFO Journal's Morning Ledger on November 25, 2013

Corporate health-care plans may get hit by a wave of new participants
Many companies are betting that the insurance requirement in the Affordable Care Act will bring people into their plans who have previously opted out,
the WSJ’s Theo Francis reports. Towers Watson figures that about half of the usual opt-outs will sign up for next year—meaning an enrollment increase of about 7% or 8%, and a corresponding increase in costs of about 5%. In response, companies are raising workers’ premium contributions, steering them toward high-deductible plans and charging them more to cover family members.

Employers have been pushing more of the cost of providing health insurance on to their workers for years, Francis notes. Some are making employees pick up a bigger share of the premiums for coverage of family members. Employees this year are responsible for an average 18% of the cost of individual coverage, but 29% of the cost of family coverage, according to a survey by the Kaiser Family Foundation and the Health Research & Educational Trust. Gannett, for example, has replaced the two plans for families it used to offer its workers with a single high-deductible plan that requires employees to pay the first $3,000 of medical costs each year. Ryder has taken a similar path, replacing one of its two insurance options with a high-deductible plan. And it’s encouraging employees to choose the new option in part by raising the cost of more-traditional coverage.

Haverty Furniture, which has stores in 17 Southern and Midwestern states, expects health-care costs to rise by about $2 million, or 20%, next year. It expects the bulk of that to come from enrollment increases, so it’s raising premiums, deductibles and copayments in response, CFO Dennis Fink said. “We do think our per capita cost is going up, but the bigger piece is just people who’ve chosen not to have coverage.”


"Companies Prepare to Pass More Health Costs to Workers Firms Brace for Influx of Participants in Insurance Plans Who Had Earlier Opted Out," by Theo Francis, The Wall Street Journal, November 24, 2013 ---
http://online.wsj.com/news/articles/SB10001424052702304607104579212351200702342?mod=djemCFO_h

Companies are bracing for an influx of participants in their insurance plans due to the health-care overhaul, adding to pressure to shift more of the cost of coverage to employees.

Many employers are betting that the Affordable Care Act's requirement that all Americans have health insurance starting in 2014 will bring more people into their plans who have previously opted out. That, along with other rising expenses, is prompting companies to raise workers' premium contributions, steer them toward high-deductible plans and charge them more to cover family members.

The changes as companies roll out their health plans for 2014 aren't solely the result of the ACA. Employers have been pushing more of the cost of providing health insurance on to their workers for years, and firms that aren't booking much sales growth due to the sluggish economy are under heavy pressure to keep expenses down.

Some are dealing with rising expenses by making employees pick up a bigger share of the premiums for coverage of family members. Employees this year are responsible for an average 18% of the cost of individual coverage, but 29% of the cost of family coverage, according to a survey of employee health plans by the Kaiser Family Foundation and the Health Research & Educational Trust.

"We have seen employers do more cost-shifting, if you will, for an employee to pay a higher portion of the cost of dependent and spouse coverage," said Tracy Watts, U.S. health-care reform leader at Mercer, a benefits consulting unit of Marsh & McLennan MMC -0.27% Cos.

Between 15% and 20% of eligible workers nationwide tend to skip insurance, benefits consultants say.

Towers Watson TW -1.25% & Co., a benefits consulting firm, figures that about half of the usual opt-outs will sign up for next year—meaning an enrollment increase of about 7% or 8%, and a corresponding increase in costs of about 5%.

Haverty Furniture, HVT -2.76% an Atlanta-based retail furniture chain with stores in 17 Southern and Midwestern states, expects health-care costs to rise by about $2 million, or 20%, next year.

The company expects the bulk of that to come from enrollment increases, and it is raising premiums, deductibles and copayments in response, Chief Financial Officer Dennis Fink said.

"We do think our per-capita cost is going up, but the bigger piece is just people who've chosen not to have coverage," he said.

A quirk of the Affordable Care Act could make it more appealing for companies to raise rates for family coverage than for individuals, said Vivian Ho, a Rice University health-care economist.

Starting in 2015, companies employing 50 or more people must offer affordable health-care coverage to anyone working 30 hours a week or more.

But affordability is measured using the cost of individual coverage, capping the cost at 9.5% of income, Ms. Ho said.

Raising family rates could help companies recoup costs without running afoul of that limit, she said. Starting now, instead of next year, would allow a more gradual change.

U.S. Department of Health and Human Services spokeswoman Joanne Peters said that the health-reform law is keeping a lid on health-care costs overall, and makes it easier for employers to offer coverage. "Since the Affordable Care Act became law, health-care costs have been slowing and premiums are increasing by the lowest rates in years," she said.

Gannett Co. GCI +0.11% , which owns more than 80 newspapers and 23 television stations, expects one factor in its increased health costs to be the addition of more employees to its insurance plans due to the ACA rules, according to a person familiar with the company's projections.

To address an overall increase in costs, Gannett has replaced the two plans for families it used to offer its workers with a single high-deductible plan that requires employees to pay the first $3,000 of medical costs each year, according to workers at the Indianapolis Star, one of the company's papers. For those with individual coverage, who make up a little over half of Gannett's insurance pool, the figure is $1,500.

The company also scrapped a sliding scale that let lower-income workers pay lower premiums. For some employees, the result was a 60% jump in monthly premiums for family coverage, to $575 from about $360.

Gannett said more than half of its employees will see premiums fall by 12%.

United Parcel Service Inc. UPS -0.16% made headlines in August when it said that it would bar spouses from its nonunion health plan if they could get coverage at their own jobs. The company said it expected to see an increase in its health-care costs in part from adding employees to its plan who currently opt out.

About 6% of employers ban coverage for spouses who can get it elsewhere, and another 6% impose an explicit surcharge for covering a spouse, according to Mercer. American Electric Power Co. AEP -0.02% , for example, began imposing a $50 monthly surcharge this year to cover spouses with access to insurance at their own workplace. AEP said 92% of its employees usually sign up for coverage, so it doesn't expect a surge of new enrollment.

In another shift this year, companies have become increasingly aggressive about steering employees toward plans in which they pay more of the initial costs for their care in exchange for lower premiums.

Trucking and logistics company Ryder System Inc. R +0.42% has replaced one of its two insurance options with one such high-deductible plan. Ryder is encouraging employees to choose the new option in part by raising the cost of more traditional coverage.

These changes are expected to keep Ryder's total premium cost lower even as it keeps the share of employee premiums that it pays steady at about 70%, executives said. They accompany earlier decisions to close Ryder's plan to spouses who can get insurance elsewhere.

Continued in article

 

 


Three very smart coders who say the HealthCare.gov site was designed wrong from get go.
What users first want is a listing of exchange alternatives before feeding in any personal data.
 

"S.F. programmers build alternative to HealthCare.gov," CBS News, November 8, 2013 ---
http://www.cbsnews.com/8301-18563_162-57611592/s.f-programmers-build-alternative-to-healthcare.gov/

(CBS News) On Friday, President Obama had this to say about problems with the Obamcare website during a speech in New Orleans: "I promise you, nobody's been more frustrated. I wanted to go in and fix it myself, but I don't write code."

 But plenty of programmers do write code. And three of them have created their own website that addresses some of the most annoying problems with HealthCare.gov.

 In a San Francisco office shared with other tech start-ups, three 20-year-olds saw HealthCare.gov as a challenge.

With a few late nights, Ning Liang, George Kalogeropoulos and Michael Wasser built "thehealthsherpa.com," a two-week-old website that solves one of the biggest problems with the government's site.

They got it completely backwards in terms of what people want up front," said Liang. He added: "They want prices and benefits, so that they could make the decision."

Liang showed CBS News how it worked. "You come to our website and you put in your zip code -- in this case a California zip code. You hit 'find plans,' and you immediately see the exchange plans that are available for that zip code."

They have plenty of experience working at places like Twitter and Microsoft before setting out to build their own Internet companies. But this project is a public service.

"There was no thought of, 'How do we make money this time?'" said Wasser. "It was like, 'This is a problem that we know we can solve in a really short period of time. So let's just do it.'"

Using information buried in the government's own website built by high-priced government contractors, they found a simpler way to present it to users.

"That's the great thing about having such a small team," said Kalogeropoulos. "You sit around a table and say, 'Okay, how does this work?' There's no coordination meetings, there's no planning sessions. It's like, 'Well, let's read the document and let's implement this.'"

And the features keep on coming. CBS News looked at the team's website Thursday and pointed out that the tax subsidy wasn't in there, which is supposed to be one of the most complicated parts of the HealthCare.gov site. But as Liang explained: "Yes, we added this last night...the subsidy calculation is fairly complicated, but it wasn't too bad."

You can't actually enroll on the HealthSherpa site, but they do provide contact information for companies offering the plans. Users who find a plan they like can go directly to the insurance companies without ever using HealthCare.gov.

 Health Sherpa --- http://www.thehealthsherpa.com/
This site is unbelievably easy. It does discuss subsidy options. But it is not so great regarding discussion of the real sticking point of these plans ---
the deductibles that will probably be the main reason many individuals will go uninsured --- if they can't afford the deductibles.

I advise reading the top line to apply for "Updates" via email.

I also have questions regarding deductibles.

Plan Type

Select the metal levels you prefer.

I cannot find zip codes that offer Platinum or Catastrophic options. Where are these available?
Or is this merely a defect in the database to date?

Also it seems that only HMOs are available in most zip codes that I explored.
This can be a problem for people who want to choose their doctors or even choose getting an MD-certified doctor.

I am having considerable luck finding Obamacare answers on the Turbo Tax Forum for Obamacare. You should first search the Q&A for your question and answer. If it is not there you can ask a question for free provided you register (no obligation). .
--- Click Here
https://ttlc.intuit.com/health-care?cid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare&srid=sr3_73548907_go&adid=healthcare&skw=how%20to%20apply%20for%20obamacare&kw={searchQuery}&ven=gg&&_sr_adpos=1t1&&_sr_usid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare
 

Income is somewhat well defined.
The Turbo Tax Forum provided the following link ---
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf 

Is tax exempt income also exempt in terms of applying for subsidies?
No it is not exempt  according to a link provided in the Turbo Tax Forum Answer ---
http://laborcenter.berkeley.edu/healthcare/MAGI_summary13.pdf


How are highly variable capital gains and losses factored into the calculation?
They must be included in the income calculation, although these can sometimes be timed in or out temporarily (such as wait for next year to sell at a gain and this year at a loss) or use a deferral strategy such as rolling capital gains on a residence put into another (newer to you) residence. Gains on long-term deferrals such as pension plans are exempt.

Is income to be estimated income for last year, this year, or next year, or some type of average?
Unclear, but I think your last filed tax return is the desired choice. Some ethical adjustments are recommended by me such as when you became employed this year it is unethical to claim a future subsidy on a very outdated tax return.

The High Cost of Dying
The undisputed most expensive coverage in Medicare is the cost of dying where dependents of a dying parent will keep that parent in intensive care (at $10,000 or more per day) as long as Medicare picks up the full tab. CBS Sixty Minutes even did a module on this "scandal" where hospitals salivate over keeping a Medicare patient in ICU for a very, very long time.

On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/
This is one huge cost difference between most national health care plans and the USA plans beginning in 2014. The USA plans will bear the enormous "cost of dying." But this is mitigated for non-Medicare and non-Medicaid insurance coverage if that coverage carries a relatively high deductible. Dependents may let Grandma slip away if her estate must pay $4,000 of the $10,000 per day it takes to keep her on life extending machines. In this respect Obamacare differs from Medicare and Medicaid.

This is a link forwarded to me from the Turbo Tax Forum ---
http://www.hhs.gov/healthcare/facts/timeline/timeline-text.html

Regulating Annual Limits on Insurance Coverage. Under the law, insurance companies’ use of annual dollar limits on the amount of insurance coverage a patient may receive will be restricted for new plans in the individual market and all group plans. In 2014, the use of annual dollar limits on essential benefits like hospital stays will be banned for new plans in the individual market and all group plans.

 

There should be a Website hot button to a Glossary on  Health Sherpa. No such luck! Maybe someday.

Obamacare database of questions and answers from TurboTax --- Click Here
https://ttlc.intuit.com/health-care?cid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare&srid=sr3_73548907_go&adid=healthcare&skw=how%20to%20apply%20for%20obamacare&kw={searchQuery}&ven=gg&&_sr_adpos=1t1&&_sr_usid=ppc_gg_nb_stan_dk_us-_hv-healthcare-Obamacare
You do not have to be a TurboTax user to use this free site. The answers are from tax experts as well.

Explore Answers About

Facts about Obamacare
 

Obamacare Application
 

Obamacare Health Plan
 

Apply for Obamacare
 

Obama Health Care Plan
 

Copy of Health Care Bill
 

Obama Healthcare Plan
 

Obamacare Application Form
 

The Obama Healthcare Plan
 

Obama Free Health Care Plan
 

Patient Protection and Affordable Care Act
 

Health Care Reform Act 2010

 

Health Sherpa --- http://www.thehealthsherpa.com/
This site is unbelievably easy. It does discuss subsidy options. But it is not so great regarding discussion of the real sticking point of these plans ---
the deductibles that will probably be the main reason many individuals will go uninsured --- if they can't afford the deductibles.


A Bait and Switch Question

  • This is a serious question that I hope will not be taken as political.

    Has President Obama just played a bait and switch game on the Obamacare health exchanges?

    The exchanges posted their deals for individuals at their own Websites and various other Websites, including Healhcare.gov. Then belatedly President Obama announced changes to required mental health coverage that could increase the cost of that particular coverage ten fold.
    "Mental Health Coverage Expanded to Most Insurance Plans," by Alex Wayne, Bloomberg Businessweek, November 8, 2013 ---
    http://www.bloomberg.com/news/2013-11-08/u-s-said-to-announce-new-rule-for-mental-health-coverage.html

    Will the exchanges be required to honor their original deals or will they be allowed in retrospect to increase the premiums for the mental health component in those deals now being signed by individuals?

    A second question concerns the years it will take to generate enough psychiatrists to meet the spike in demand ignited by this executive order, but that's another matter entirely.

    I'm not arguing against having this extended coverage. Personally a young member of my family will benefit enormously the rest of her life from this executive order for extended coverage. Her daily medications cost a fortune.

    Another question concerns the extent to which executive orders can be expanded. For example, can the President suddenly declare that all colleges and universities receiving Federal assistance be required to provide free tuition, room, and board to all students whose parents earn less than $50,000 per year?

    Because his mental healthcare executive order will create enormous shortages of psychiatrists can the President declare that medical schools will be free to students majoring in psychiatry --- without having to get Congressional approval of added funding for this purpose?

    In other words what are the limits to "executive orders" for lame duck presidents?

    It seems to me that we are facing an enormous constitutional question concerning balance of powers.


    And by the way, this favor harms all other taxpayers. The IRS assesses the reinsurance tax in annual tranches; it must collect $12 billion in 2014, $8 billion in 2015 and $5 billion 2016. So the smaller pool of ordinary people without a union card will pay a larger individual share of the same overall amount.
    "ObamaCare's Union Favor:  The White House may let Big Labor dodge a reinsurance," The Wall Street Journal, November 18, 2013 ---
    http://online.wsj.com/news/articles/SB10001424052702303309504579182061106839366?mod=djemEditorialPage_h

    The Affordable Care Act's greatest hits keep coming, and one that hasn't received enough attention is a looming favor for President Obama's friends in Big Labor. Millions of Americans are losing their plans and paying more for health care, and doctors are being forced out of insurance networks, but a lucky few may soon get relief.

    Earlier this month the Administration suggested that it may grant a waiver for some insurance plans from a tax that is supposed to capitalize a reinsurance fund for ObamaCare. The $25 billion cost of the fund, which is designed to pay out to the insurers on the exchanges if their costs are higher than expected, is socialized over every U.S. citizen with a private health plan. For 2014, the fee per head is $63.

    The unions hate this reinsurance transfer because it takes from their members in the form of higher premiums and gives to people on the exchanges. But then most consumers are hurt in the same way, and the unions have little ground for complaint given that ObamaCare would not have passed in 2010 without the fervent support of the AFL-CIO, the Teamsters and the rest.

    The unions ought to consider this tax a civic obligation in solidarity with the (uninsured) working folk they claim to support. Instead, they've spent most of the last year demanding that the White House give them subsidies and carve-outs unavailable to anyone else.

    But don't expect ObamaCare favors unless you helped to re-elect the President. In an aside in a Federal Register document filed this month, the Administration previewed its forthcoming regulation: "We also intend to propose in future rulemaking to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years."

    Allow us to translate. "Self-insured" means that a business pays for the medical expenses of its workers directly and hires an insurer as a third-party administrator to process claims, manage care and the like. Most unions as well as big corporations use this arrangement.

    But the kicker here is "self-administered." That term refers to self-insured plans that don't contract with the Aetnas and Blue Shields of the world and instead act as their own in-house benefits manager.

    Almost no business in the real world still follows this old-fashioned practice as both medicine and medical billing have become more complex. The major exception is a certain type of collectively bargained insurance trust known as Taft-Hartley plans. Such insurance covers about 20 million union members, and four out of five Taft-Hartley trusts are self-administered.

    There's no conceivable rationale—other than politics—for releasing union-only plans from a tax that is defined as universal in the Affordable Care Act statute. Like so many other ObamaCare waivers, this labor dispensation will probably turn out to be illegal.

    And by the way, this favor harms all other taxpayers. The IRS assesses the reinsurance tax in annual tranches; it must collect $12 billion in 2014, $8 billion in 2015 and $5 billion 2016. So the smaller pool of ordinary people without a union card will pay a larger individual share of the same overall amount.

    Count all of this as one more illustration of the way that ObamaCare has put politicians in control of health care. Some people get taxed but others don't, some people get subsidies but others don't, and some have to pay more so Mr. Obama can deliver favors to his political constituents.

    As you might imagine, The New York Times does not even mention this pending labor union exemption when it explains the Affordable Care Act Re-insurance Fund:
    "A Closer Look at the Reinsurance Fee," by Robert Pear,
    The New York Times, October 15, 2013 ---
    http://www.nytimes.com/news/affordable-care-act/2013/10/15/a-closer-look-at-the-reinsurance-fee/?_r=0

    The reinsurance tax is one of several measures intended to stabilize premiums in the individual insurance market as major provisions of the health care law take effect in January. The fees, to be charged from 2014 to 2016, will provide money to insurers that incur high claims for consumers in the individual insurance market, both inside and outside the new exchanges, or marketplaces. Insurers are apprehensive that some of their new customers, having been uninsured for years, will have costly existing conditions.

    The fees are to be paid by insurers in the individual, small group and large group markets, as well as by employers that serve as their own insurers.

    A delay in the implementation of the tax is popular with both employers and labor unions, many of which provide health coverage to members, because it would put off significant new costs.

    The government set the fee for 2014 at $63 per covered life, or $5.25 a month. Insurers and some self-insured employers may have to pay not only for subscribers and employees, but also for spouses and children who are covered.

    The total amount of fees to be collected over three years is $25 billion. Of that amount, $20 billion will go to the reinsurance program and $5 billion to the Treasury.

    “The primary purpose of the reinsurance program is to stabilize premiums in the individual market from 2014 through 2016,” the Obama administration said when it proposed the rules in December 2012. “The reinsurance program is designed to protect against issuers’ potential perceived need to raise premiums due to the implementation of the 2014 market reform rules, specifically guaranteed availability.’’

    The tax, the administration said, should alleviate the concerns of insurance companies about the risk of “high-cost claims from newly insured individuals.’’

    Jensen Comment
    Political favors are like that on both sides of the aisle. This one is just a bit more blatant without a justifiable reason.

    It will be interesting to watch Big Ed  try to squirm around this one. Even though he's employed by MSNBC, Ed Shultz draws hundreds of thousands in promotion fees from labor unions. At the same time he's an effective champion for the common man who will be footing the bill for this gift to labor unions. My guess is that, like The New York Times, he will not even mention this pending labor union exemption on the Ed Show.

    “U.S. labor unions paid MSNBC ‘Ed Show’ host Ed Schultz  roughly $200,000 in 2011, and roughly $337,000 in 2005-2012, according to Department of Labor documents.”

    Also see
    http://www.politico.com/story/2013/10/obamacare-reinsurance-fee-spending-deal-98328.html


    Teaching Case on Cost Accounting in a Medical Revolution and Those 500% Mark Ups
    From The Wall Street Journal Accounting Weekly Review on November 21, 2013

    What Care Costs. Really.
    by: Melinda Beck
    Nov 18, 2013
    Click here to view the full article on WSJ.com
     

    TOPICS: Cost Management, Cost-Basis Reporting, Health Care, Managerial Accounting

    SUMMARY: Brent C. James is "...Chief Quality Officer for Intermountain Healthcare, a...network of 22 hospitals and 185 clinics in Utah and Idaho. Dr. James has been using electronic records to improve care and cut costs since the 1980s." In this interview-format article, he discusses the medical field push to a cost-based system, away from a current system of charging for services performed regardless of necessity of the procedure. The article gives classic examples of establishing standard costs for materials and labor such as management engineers "who go around and stopwatch how much time it takes a technician to set up a lab test. They measure how much glassware and reagent the test consumes to process...."

    CLASSROOM APPLICATION: The article may be used in a management accounting class to introduce standard costs, particularly the process of establishing standard costs.

    QUESTIONS: 
    1. (Introductory) Who is Brent C. James? What "medical revolution" may he be starting?

    2. (Advanced) Define the term "standard cost." What measurement techniques are described I the article to establish standard costs for hospital products and services?

    3. (Introductory) What does Dr. James say is the reason has it taken until now for hospitals to establish cost management systems?

    4. (Advanced) What is "transparency"? How has Dr. James's hospital network's management pledged to provide transparency?

    5. (Advanced) Are patients at Dr. James's hospital network going to seeing the cost data his team is compiling? Explain your answer.
     

    Reviewed By: Judy Beckman, University of Rhode Island

    "What Care Costs. Really," by Melinda Beck, The Wall Street Journal, November 18, 2013 ---
    http://online.wsj.com/news/articles/SB10001424052702304561004579135434122969634?mod=djem_jiewr_AC_domainid

    Brent C. James may be starting another medical revolution.

    As chief quality officer for Intermountain Healthcare, a Salt Lake City-based network of 22 hospitals and 185 clinics in Utah and Idaho, Dr. James has been using electronic records to improve care and cut costs since the 1980s.

    His data-driven clinical-management systems have been emulated around the world. He estimates that they save at least $250 million and 1,000 lives a year at Intermountain alone.

    Now, Intermountain is building an ambitious new data system that will also be able to track the actual cost of every procedure and piece of equipment used in its hospitals and clinics, a function that is standard in many industries but not in health care.

    Dr. James shared his vision and the challenges ahead with The Wall Street Journal. Cost Clarity

    WSJ: You've described your new data system as a "cost master," in contrast to the "charge master" that many hospitals use to set prices. What's the difference?

    DR. JAMES: In a charge master, what you're seeing is the old phenomenon called "mark it up to mark it down." Hospitals will make an initial estimate of what something costs, and then they'll mark it up—sometimes 400% to 500%. Insurance brokers measure success in the size of the discount they get. That's how you end up with $17 pieces of gauze. It loses all connection to reality.

    In a cost-master system, you have empirical, fact-based costs. We have eight management engineers, for example, who go around and stopwatch how much time it takes a technician to set up a lab test. They measure how much glassware and reagent the test consumes to process, and how much time it takes on the analyzing machine. The engineers load all that information into the cost master and they get the true cost of running that lab test. They do similar cost measurements on every item contained in our cost master.

    We figure we have about 5,000 clinical terms and upward of 25,000 total items in our cost master. Once I get those costs, I can manage them the way I would if I were building an automobile or a washing machine.

    These are not new systems. They've been around for a long time in other industries. All we're doing is shifting them over to health care. Truth is, Intermountain has run this sort of activity-based costing since 1983. It just wasn't integrated into clinical documentation through an electronic medical record [EMR]. With a link to the EMR, maybe we'll be able to move health care out of the dark ages.

     

    WSJ: How will knowing what everything costs change the way you deliver care?

    DR. JAMES: If you know the true cost of providing care, you can ask yourself whether doing one thing is really more important than doing something else.

    Our mission statement is: the best medical result at the lowest necessary cost. We think there is enough waste in health care that we can dramatically improve our costs. But to do that, I've got to be able to measure and manage those costs.

    A Money Loser?

    WSJ: In fee-for-service medicine, hospitals lose money when they cut costs and unnecessary care. How do you get around that?

    DR. JAMES: That's why Intermountain made the decision several years ago to shift our business, over time, to capitated care.

    In the past, the way to make money was to do more. Figure out how to do more surgeries, even if they're unnecessary. Add that famous physician to try to attract more patients. It creates a medical arms race. Imagine instead that I get a per-member, per-month payment for a population of patients. I no longer have a strong financial incentive for doing more. If I find a way to save money by taking out waste, all the savings come back to me and my patients. At the same time, I make measures of quality outcomes transparent. That way patients can know they are getting good care, and know what it will cost them.

     

    WSJ: What impact do you expect this to have on the health-care industry?

    DR. JAMES: The whole health-care world is shifting to having the care provider take over the financial risk. In that world, your survival depends on being able to manage your costs. We happened, by luck and circumstance, to get going on it early on. Suddenly this is becoming a race, with some very capable groups entering the fray—but it's a race toward excellence.

    Total Transparency

    WSJ: Will patients be able to see your actual costs?

    DR. JAMES: We made a commitment from senior management that we will be completely transparent.

    We have already started to post prices for things that many patients buy directly, such as lab tests and imaging exams [such as X-rays]. We will soon add things like routine office visits and simple procedures, like screening colonoscopy. Later we will add major treatments like delivering a newborn, or surgery to implant an artificial knee joint.

    While we will post prices on our website, probably the most effective sharing of cost information will happen through our insurance partners' websites. We believe that patients will mostly want to know what their own out-of-pocket costs will be, given that they've already paid for their health insurance. That's true even if your "insurance plan" is the care delivery group.

    Finally, remember that some care delivery is impossible to price as a package deal in advance. For example, treatment of major automobile trauma is so unique that it's impossible to predetermine a standard price.

     

    WSJ: How much will the new system cost?

    DR. JAMES: Several hundred million dollars. But I could pay for it in one year, if I can use it to get significantly more waste out.

    Continued in article


    The President made one sorry excuse that riles my feathers.
    Yesterday he made the claim that "government is incapable of creating high quality Websites." That just has not been true over the past two decades. The Federal government created some of the finest Websites in the world. Exhibit A is the IRS Website. Exhibit B is the OLAP implementation of FedScope over 15 years ago ---
    http://www.fedscope.opm.gov/index.asp

    OLAP --- http://www.trinity.edu/rjensen/XBRLandOLAP.htm#OLAPextended

     

    "A Health Care Fix," NYT Editorial Board, The New York Times, November 15, 2013 ---
    http://www.nytimes.com/2013/11/15/opinion/a-health-care-fix.html?hp&rref=opinion&_r=0

    . . .

    The White House had no estimates on how many consumers whose policies were canceled might want reinstatement as opposed to buying something better, often with the help of subsidies. It is also unclear how the temporary fix might affect the overall goal of upgrading the benefits covered and keeping premiums affordable.

    If a relatively small population of people get extensions, as some experts think likely, the effect on premiums in the overall health insurance market may be minimal. Even so, this disturbing reversal is caused by the incompetence of the administration in ushering in reforms that millions have been waiting for.

     

    "The politics behind Obama’s health-care ‘fix’," by Stephen Stromberg, The Washington Post, November 14, 2013 ---
    http://www.washingtonpost.com/blogs/post-partisan/wp/2013/11/14/the-politics-behind-obamas-health-care-fix/

    Is President Obama’s “fix” to the health-care rollout more about politics than substance? (Yoon S. Byun/The Boston Globe)

    (Yoon S. Byun/The Boston Globe)

    Probably, but not for the reasons that some Republican commentators spun up shortly after news of the plan leaked out.

    Obama’s plan is to allow insurance companies to extend certain health-care policies that don’t meet the Affordable Care Act’s minimum standards, offering a one-year reprieve to people upset about the cancellation notices their insurers sent them over the past several weeks.

    “Why only a year?” Sean Hannity asked of the president’s plan. “Because he wants to get past the midterms.”

    “One year from now is when an election occurs, and conveniently, the delay would occur right after the election,” said Republican National Committee spokesman Sean Spicer. “So all of these 2014 Democrats that are running for the hills right now would get a one-year reprieve until after their election.”

    Actually, the political timing could be worse for the Democrats under the president’s plan. Federal law requires insurers to give customers 90 days’ notice before canceling their insurance policies. That is why so many cancellation letters have gone out over the past couple months; insurance companies have been sending notice that plans up for renewal at the beginning of next year will terminate then instead. Under the president’s new policy, renewed plans would presumably expire on the same date, just shifted forward a year. So one would expect a similar wave of cancellation letters to hit right before next November’s midterm elections, not right after.

    That possibility could encourage the White House to offer another extension next year, before the wave would hit, in which case Hannity and Spicer’s accusation would be a plausible explanation for the second time shift.

    The calendar could also indicate that the White House doesn’t expect many people will end up renewing their noncompliant plans under its new scheme. Even though the Obama administration has given permission, state regulators might not allow it, insurance companies might not want to revive plans they were in the process of winding down and lots of customers might move on to different policies anyway. The practical effect of the president’s “fix” is likely to be small.

    For now, the desired political effect seems to be twofold. First, it might relieve some of the pressure Democrats in Congress feel to approve worse “fixes” that would undermine the new health-care insurance system. Second, it might enable Democrats to shift blame onto state regulators or insurance companies for this year’s cancellations. The first is understandable. The second is not.

    "ObamaCare's Nonfix:  Americans still can't keep their health plans, but Democrats get political cover," WSJ Editorial Board,  The Wall Street Journal, November 15, 2013 ---
    http://online.wsj.com/news/articles/SB10001424052702304243904579197892755143418?mod=djemEditorialPage_h

    . . .

    Now these mass cancellations are proving to be unpopular, and Democrats are panicking, so Mr. Obama is offering a temporary stay of execution. He is instructing his health regulators to suspend eight complicated rules that all insurance plans had to meet and had caused the market implosion.

    There is less reprieve here than Mr. Obama claims. It's hard to un-cancel insurance. The rules Mr. Obama is repudiating were written in 2010, and insurers have been adapting to them for years. They will now have to scramble to revive the policies they can while throwing all of their actuarial assumptions out the window.

    The faux reprieve also lasts for only one year and applies only to anyone who was covered in 2013. The insurers are essentially being asked to agree to accept losses on behalf of a rump group of policy holders in a legacy business that would then turn into a pumpkin in 2015.

    Continued in article

     

    Jensen Comment
    The President's plan seems to be a ploy to buy time and votes rather than fix the fundamental problem. The fundamental problem is that all the expensive additions to required coverage are making the plans too expensive for buyers of medical insurance until the government picks up the lion's share of the tab (nationalize those deductibles?) after the 2014 wipe out of Republicans (Obama hopes) in the next election.

    This is a real test of confrontational political power of President Obama (where the other side is comprised of scumbags) versus the Johnson era of backroom politics (where everybody on both sides of the fence is honorable).

    Johnson ushered in the Voting Rights Act, Aid to Education, Attack on Disease, Medicare, Medicaid, Urban Renewal, Beautification, Conservation, Development of Depressed Regions, a wide-scale fight against poverty ---
    http://en.wikipedia.org/wiki/Lyndon_B._Johnson

    Obama ushered in Obamacare. Yeah Right! With a total of 29 apologies (according to ABC News) to the public for his fumbles in connecting people to the exchanges.

    I think those "honorable "representatives in back rooms probably accomplish more that public media wars among scumbags on both sides of the fence.

    PS
    The President made one sorry excuse that riles my feathers.
    Yesterday he made the claim that "government is incapable of creating high quality Websites." That just has not been true over the past two decades. The Federal government created some of the finest Websites in the world. Exhibit A is the IRS Website. Exhibit B is the OLAP implementation of FedScope over 15 years ago ---
    http://www.fedscope.opm.gov/index.asp

    OLAP --- http://www.trinity.edu/rjensen/XBRLandOLAP.htm#OLAPextended


    Why not give HMO Obamacare, Medicare and Medicaid patients the worst doctors?
    "
    Report: UnitedHealth Drops Thousands Of Doctors From Insurance Plans," by Zeba Siddiqui, Reuters, November 15, 2013 ---
    http://www.businessinsider.com/unitedhealth-drops-thousands-of-doctors-from-insurance-plans-2013-11 


    "Affordable Care Act holds opportunities, challenges for internal auditors," by Ken Tysiac, Journal of Accountancy, November 7, 2013 ---
    http://journalofaccountancy.com/News/20139066.htm


    How to Lie With Naive Politically Correct Estimates

    "Affordable Care Act: 17 Million Can Get Subsidies," by Mary Agnes Carey, WebMD News from Kaiser Health News, November 5, 2013 ---
    http://www.webmd.com/health-insurance/20131105/17-million-people-eligible-for-premium-subsidies-study-finds

    Jensen Comment
    Fraud is inevitable and cannot be prevented when it comes to giving out subsidies to to insured that are not legally entitled to such subsidies. Firstly, there's the $2 trillion underground economy where people are receiving income that even the IRS cannot detect --- those folks who work for unreported cash earnings. We're talking about millions of people who do not report any income to the IRS or greatly under report their incomes ---
    http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

    Secondly, the 17 million reported above does not jive with the estimated 49.5% (of 130 million) of taxpayers who file tax returns but do not pay any income taxes. Some of them have incomes offset by credits such as credits for dependents, but its likely that the nearly all of 50% of taxpayers who pay no qualify, at least on paper, for subsidies ---
    http://www.cs.trinity.edu/~rjensen/temp/TaxNoTax.htm

    Most of those making more than $100,000 pay some income taxes. Bloomberg reports that 98% of those that pay no income taxes have less than $100,000 in earnings. Most are availing themselves of recent tax breaks such as energy credits, tax breaks from employer contributions to medical insurance, increased tax breaks for dependents, and deferred tax breaks such as breaks professors get for employer contributions to TIAA-CREF.

    Watch the April 3, 2012 Bloomberg Video ---
    http://www.bloomberg.com/video/89503501/

    A family of four making less than $98,000 qualifies for a health insurance subsidy from the government.

    Hence I think the 17 million estimate is wildly inaccurate unless tens of millions of those eligible for subsidies simply go uninsured because they cannot afford the deductibles even if the premiums with subsidies are affordable.

    One added qualifier is the huge unknown (at least to me) number of Medicaid and Medicare recipients who are scoped out of the Affordable Health Care Act. Those on Medicaid do not pay income taxes. Most of those on Medicare do pay income taxes such that the sources of error in estimating the number of others who will actually claim subsidies under the Affordable Health Care Act is probably impossible to estimate within a 10 million range of error or more.

    The enormous source of error that cannot be eliminated is that $2 trillion underground cash-only economy that takes place under the noses of the IRS enforcers of taxes.


    "Obamacare Leaves Doctors On the Hook for Deadbeats: The Affordable Care Act doles out three months of free health care to individuals who choose to default on their premiums; providers and insurers pick up the tab," by Tori Richards, Reason.com, November 7, 2013 ---
    http://reason.com/archives/2013/11/09/obamacare-leaves-doctors-on-the-hook-for

    Tucked inside nearly 11,000 pages of the Affordable Care Act is a little-known provision that doles out three months of free health care to individuals who choose to default on their premiums.

    People who receive the federal subsidy to be part of Obamacare will be allowed to incur a three-month “grace period” if they can’t pay their premiums and then simply cancel their policies, stiffing the doctors and hospitals.

    Their only repercussion is that they have to wait until the following year’s open enrollment if they want coverage on the exchange.

    “It will help break the system,” said Rep. Louie Gohmert, R-Texas, one of a core group of Republicans who oppose Obamacare. “This is a huge piece of evidence to show this can’t work, you will break the system and bankrupt people involved.

    “The hospitals, doctors and insurance companies will be left holding the bag. There will be disagreements over who will pay for what. Lawyers will get involved because we are talking about a lot of money,” he said.

    Under Section 156.270 of the Affordable Care Act, the insured needs to pay a premium for just one month before qualifying for the three-month grace period. The insurance company must pay the claims during the first month of the grace period; during the second and third month doctors and hospitals are left to collect unpaid bills.

    This loophole wasn’t lost on some unnamed individuals who queried the Department of Health and Human Services during an open comment period for the new law in 2011.

    While officials at HHS did not respond to requests for comment on this story, they did offer a glimpse into their thinking in a March 27, 2012, report contained in the Federal Register.

    “HHS will continue to explore options for incentivizing appropriate use of the grace period,” the register said.  “HHS will monitor this issue moving forward and will continue to work on the development of policies to prevent misuse of the grace period.”

    Experts say the federal government has given people the green light to commit fraud.

    “In a sense, it legalizes fraud,” said Wesley J. Smith, a senior fellow at the Discovery Institute of Human Exceptionalism and a frequent critic of the Affordable Care Act. “It legalizes putting your burdens on the insurance companies’ shoulders and never paying your premiums. The government wants people to be irresponsible and apparently they want the whole system to descend into chaos.”

    In Massachusetts, where a variation of Obamacare already exists, the problem already has emerged, said Devon Herrick, senior fellow with the National Center for Policy Analysis.

    “People are signing up and getting care and bailing out,” Herrick said. “I was talking to an insurance agent a few years ago (in Massachusetts). She said once a week she would get a call from a college girl who discovers she’s pregnant and wants health insurance. That’s an example of a condition that you can schedule.”

    Some medical professionals are bracing themselves for the worst.

    The Texas Medical Association is educating its members about the loophole and receiving feedback from worried doctors. Many in that state operate on a shoestring budget, sometimes taking out loans to stay in business.

     

    November 10, 2013 reply from Bob Jensen

    Hi Bob
    Who picks it up now?
    Elliot

    November 10, 2013 reply from Bob Jensen

    I think that the patient eventually loses coverage for non-payment these days. If people, before Obamacare, could keep their coverage while not paying premiums what's the incentive to pay premiums?
     
    One time my wife fell out of a tree in San Antonio. The silly thing decided to cut a limb that she knew I had arranged for a tree service to remove the next day. She got impatient --- grrrr!  The North East Baptist Hospital (where she worked as an OR nurse before her back surgeries took command of her life)  was less than a block down the street. When I got home I took her to the ER down the street because I thought she needed X-rays. 
     
    To make a long story shorter, while we both were in the waiting room of the NE Baptist  Hospital ER an ambulance wheeled in patient on a stretcher who supposedly had a heart attack. The first thing the ER checked on was if he had insurance. He did not have insurance. Next a physician checked his vital readings. It was decided that he was stable enough to be put back in the ambulance with orders to take him to the huge downtown Bexar County Hospital  that had a contract with Bexar County to treat uninsured patients --- including many, many pregnant women who crossed the Rio Grande shortly before giving birth in the Bexar County Hospital.
     
    In another instance I know a neighbor woman who overdosed on pills and parked her car in the parking lot outside the NE Baptist Emergency Room. When she was discovered unconscious and needing her stomach pumped she was rushed by ambulance downtown to the Bexar County Hospital that saved her life and stole her purse --- a Bexar County Hospital ER nurse was caught later using this woman's  credit cards.
     
    That Elliot is what happens in a city if the patient has no medical insurance. Bob Jensen's Bexar County Property taxes included over a thousand dollars a year paid for uninsured to be treated in the Bexar County Hospital.

    The physicians and hospitals often do not treat uninsured patients through normal channels. They ship them off to "approved" hospitals that have tax-supported emergency rooms. The emergency rooms treat the patients who often endure the long waits of maybe a day in the waiting rooms unless there is a life-threatening emergency. The ER can eventually admit the patient to the hospital, and the hospital can take legal action to get what it can out of the uninsured patients.
     
    I don't know how this system will change for the uninsured under Obamacare.
    My guess is that the Bexar County Hospital will need more money to treat uninsured patients even though the insurance companies may have a somewhat harder time dumping customers who default on their premiums. An increasing number of babies born at the Bexar County Hospital will return south of the Rio Grande as USA Citizens thanks to the 14th  Amendment to the U.S. Constitution and the taxpayers of Bexar County.
     
    I'm not exaggerating when I say that a lot of people, including professors, who work in Bexar County reside outside the county just to save on property taxes. I don't mean to sound like a redneck, but that is the way it works. Many of us also lived in Bexar County and paid higher taxes thinking that this was a fair thing to do.
     
    PS
    In Boston hospitals like the New England Baptist hospital where Erika had many of her spine surgeries dropped its ER service entirely so it was no use for ambulances to bring in emergency patients to New England Baptist Hospital. It would be too costly to treat dire emergencies pro bono without a contract with the City of Boston to pay for uninsured patients. I think most of Boston's ER patients are shipped to Mass. General Hospital supported by Boston's property owners.
     
    Respectfully,
     
    Bob Jensen

     

    November 10, 2013 reply from Elliot Kamlet

    OK.  So as we all know,  someone always pays. It seems like arguments can be made for different constituencies picking up the tab.   Frankly I don't know the most "fair" approach but is the new reality of who pays worse than what you just described we have now?

    November 11, 2013 reply from Bob Jensen

    The myth is that insurance companies pay for bad debt customers in the long run. As with all costs in the long run they are passed on to customers or taxpayers if the companies do not go bankrupt.
     
    I don't think Obamacare envisions letting its exchanges, most of whom are financed with new low-interest government loans, go bankrupt. So bad debts will be passed on somewhat with increased premiums to customers. However, the lion's share will eventually be charged to income taxpayers --- the 50% of taxpayers who actually pay some income taxes.
     
    Alternatively, the government will bypass taxpayers with more Treasury bond borrowing or simply print money through a complicated process we know as Quantitative Easing.
     
    Who pays in the long run with more government borrowing and printing of money to pay its bills? That's a no brainer.
     
    The difference between Obamacare and national health Insurance is that even the poor and the middle class are sharing in some of taxes collected to pay for their national health insurance. In the USA the 50% paying no income taxes are paying for the premium costs net of premium subsidies.

    However, where non-Medicaid patients are getting hit hardest is in those deductibles that may ruin Obamacare unless taxpayers shovel in more to reduce those deductibles.
     

    Plan Type

    Select the metal levels you prefer.

    Bad debt expenses, premiums, premium subsidies, and deductible expenses are four things.

    The biggest "thing" will be the millions that remain uninsured who turn up at hospital ERs with no insurance after Obamacare is in full force. My understanding is that local property taxpayers will still pay the lion's share of those ER services, although some of the non-reimbursed expenses will be passed on to paying patients just like they are today. This a major reason why hospital rooms costing less than $50 per day when I was a kid are now well over $1,000 per day and going up and up and up.

    Respectfully,
    Bob Jensen


    Saving Our Top Medical Schools
    "Saving Academic Medicine from Obsolescence," by Benjamin P. Sachs, Ralph Maurer, Steven A. Wartman and Marc J. Kahn, Harvard Business Review Blog, November 8, 2013 ---
    http://blogs.hbr.org/2013/11/saving-academic-medicine-from-obsolescence/

    The United States spent 17.9% of the GDP on healthcare in 2012. Academic medicine, which makes up, approximately, 20% of these costs ($540 billion), is under profound threat. Teaching hospitals and medical schools are faced with declining clinical revenue, dwindling research dollars and increasing tuition costs. To meet these challenges, we believe academic medicine must embrace disruptive innovation in its core missions: educating the next generation of health professionals, offering comprehensive cutting-edge patient care, and leading biomedical and clinical research.  Medical schools and academic health centers will need to significantly adapt in each of these areas in order to ensure the long-term health of the medical profession. The following are a few examples of disruptive innovations Tulane School of Medicine has embraced.         

    Medical information doubles roughly every five years, making it impossible for physicians to stay current. Computing power has also increased to the point that machines like IBM’s Watson, first programed to play chess and Jeopardy, are now used to diagnose and recommend treatment for patients.  Mary Cummings, one of the first women aviators to land a plane on an aircraft carrier, faced a similar situation when she left the navy; a computer was replacing many of the skills she had acquired in order to fly.  Today, as the Director of the Human and Automation Lab at MIT, she poses an important and related question: “Are we in Medicine teaching the next generation of physicians skills or are we teaching them expertise?”  If we are teaching the former, then academic medicine faces obsolescence. However, if we emphasize the latter, our mission is durable. Skills equip people to respond to specific well-understood circumstances; expertise provides the capability to respond to highly complex, dynamic and uncertain environments.

    At Tulane University School of Medicine, we believe that the focus of medical education should be on how we teach; because what we teach will be largely out of date by the time students finish their training. The expertise required for the next generation of physicians is to be lifelong learners, team players, educators and problem solvers. We teach expertise through an “inverted” learning model. Students are expected to have reviewed the subject material before class. During class-time the students work in small groups to solve problems and explain to their colleagues issues they did not understand. Master teachers are still needed to facilitate students’ synthesis of material in a collaborative discussion-oriented environment, but this structure has the advantage of allowing investment in the areas where hands-on teaching adds value while providing cost savings in the areas where it does not. The organization that is likely to play a major role in providing on-line medical education is the Kahn Academy under Dr. Rishi Desai. A newly established three and a half year program for medical students with PhDs in the biomedical sciences leverages these adult learning principles. This program shortens the time to get a degree and so reduces the cost of tuition.

    Business models for patient care, a key source of revenue for medical schools, are also undergoing enormous change. Driven by the need to lower costs, and aided by new technologies, patient care is moving from the hospital to the outpatient setting and ultimately to wherever the patient happens to be located.  For example, when the ACA (Affordable Care Act) is fully implemented in 2014 with a substantial increase in Medicaid recipients, the need for more primary care, as experienced in Massachusetts, will overwhelm the available capacity to provide such care.

    One solution to this problem is moving the majority of primary and secondary healthcare delivery into the community.  After Hurricane Katrina, Tulane partnered with a network of Federally Qualified Health Centers in order to provide services to low and middle-income patients in community-based clinics designated as medical homes. These not only provide less expensive care, but also provide the kind of experiential learning necessary to teach expertise to trainees.  Expansion into telemedicine, which has been shown to reduce the cost of Medicaid in California and has had a dramatic impact in the United Kingdom on patients with diabetes, heart failure, and chronic obstructive pulmonary disease, will further reduce costs while improving the quality of care.

    Yet another driver of disruption in academic medicine is the changing nature of how research is performed.  It has been estimated that for every research grant dollar received by an academic health center, the institution must spend an additional 25 to 40 cents to support that research.  Given declining clinical revenues and the relative flattening of the NIH budget, the ability to garner research funding is increasingly competitive and difficult to sustain. For most medichttp://www.trinity.edu/rjensen/HigherEdControversies.htmal schools, this makes traditional research models inefficient and some institutions that have traditionally been primarily research focused will have to change their emphases.

    An additional disruptive technology in research is using “big data,” large data sets that can be analyzed in distributed and cloud computing environments. In 2011, the 3-dimensional structure of a retrovirus protease was finally determined after eluding scientists for over a decade.  The configuration was not discovered by a computer, by a single scientist or even by a group of scientists working in a laboratory.  Rather, the structure was determined by a group of gamers working in the cloud with a program called Foldit that was developed by computer scientists at the University of Washington in only three weeks. The ability to collaborate without physical interaction using a variety of skill sets challenges the definition and funding models of research (not to mention who gets credit), but has vastly superior economies of scale.

    Continued in article

    Jensen Comment
    One thing about top university hospitals is that they are being overwhelmed with patients. I'm most familiar with the great Dartmouth (Hitchcock) University Hospital that serves New Hampshire and surrounding states, including Canada. Yes Canada since Canada's National Health plan might delay some elective surgeries (think new knees and hips) for months or even years. All hospitals, including Hitchcock, like Canadians who pay up front cash at full prices. 

    It seems to Erika and me that getting access to some of the Hitchcock's specialty services is getting harder and harder. One way of cutting down on demand is for those specialty departments (Ophthalmology, Dermatology, etc.) to insist upon referrals from doctors/hospitals and refusing patients who are not given strong referrals. And when you finally get in you may not see a full-qualified doctor. My wife has had great service from Cardiology and Ophthalmology and poor service from Gastrology where she never has been able to get access to a real MD.  Dermatology put off her appointment for seven months. The Orthopedics Department refused to do her spine surgeries --- which is how we ended up with a top surgeon in Boston. I forgive Hitchcock for this since no hospital, including a university hospital, can be expected to have a nationally-acclaimed surgeon in every department ---
    http://www.trinity.edu/rjensen/Erika2007.htm

    Erika spent a few nights in Hitchcock's hospital (after a heart attack) and was not impressed with that hospital relative to the New England Baptist Hospital in Boston and San Antonio's North East Baptist Hospital and several other hospitals in San Antonio. One problem at Hitchcock is the pod design that greatly increases the noise level in the patient rooms. It saves steps for the nurses but prevents patients from sleeping nights.

    Hopefully, we will never have to seek out psychiatric services from Dartmouth Hitchcock. That must be a nightmare given the increased demand amidst huge shortages of psychiatrists.

    Bob Jensen's threads on higher education controversies ---
    http://www.trinity.edu/rjensen/HigherEdControversies.htm


    One of the many real scandals of the Affordable Healthcare Act
    Most Obamacare exchange insurance companies offer inferior policies, many of which come from newly-formed sham insurance companies started up on shoe-string government loans --- companies without any prior experience in the insurance business or any other type of business. Guess who will get stuck with the bills when those poorly capitalized and inexperienced new "insurance" companies declare bankruptcy? This is really a no-brainer question.

    "Top Hospitals Opt Out of Obamacare," USA Today, October 30, 2013 ---
    http://health.usnews.com/health-news/hospital-of-tomorrow/articles/2013/10/30/top-hospitals-opt-out-of-obamacare

    Americans who sign up for insurance on the state exchanges may not have access to the nation's top hospitals, Watchdog.org reports.

    The Obama Administration has been claiming that insurance companies will be competing for your dollars under the Affordable Care Act, but apparently they haven't surveyed the nation's top hospitals.

    Americans who sign up for Obamacare will be getting a big surprise if they expect to access premium health care that may have been previously covered under their personal policies. Most of the top hospitals will accept insurance from just one or two companies operating under Obamacare.

    [CHART: Which Top Hospitals Take Your Insurance Under Obamacare?]

    "This doesn't surprise me," said Gail Wilensky, Medicare advisor for the second Bush Administration and senior fellow for Project HOPE. "There has been an incredible amount of focus on the premium cost and subsidy, and precious little focus on what you get for your money."

    Regulations driven by the Obama White House have indeed made insurance more affordable – if, like Health and Human Services Secretary Kathleen Sebelius, you're looking only at price. But responding to Obamacare caps on premiums, many insurers will, in turn, simply offer top-tier doctors and hospitals far less cash for services rendered.

    Watchdog.org looked at the top 18 hospitals nationwide as ranked by U.S. News and World Report for 2013-2014. We contacted each hospital to determine their contracts and talked to several insurance companies, as well.

    The result of our investigation: Many top hospitals are simply opting out of Obamacare.

    Chances are the individual plan you purchased outside Obamacare would allow you to go to these facilities. For example, fourth-ranked Cleveland Clinic accepts dozens of insurance plans if you buy one on your own. But go through Obamacare and you have just one choice: Medical Mutual of Ohio.

    And that's not because their exchanges don't offer options. Both Ohio and California have a dozen insurance companies on their exchanges, yet two of the states' premier hospitals – Cleveland Clinic and Cedars-Sinai Medical Center – have only one company in their respective networks.

    A few, like No. 1-rated Johns Hopkins in Maryland, are mandated under state law to accept all insurance companies. Other than that, the hospital with the largest number of insurance companies is University Hospitals Case Medical Center in Cleveland with just four. Fully 11 of the 18 hospitals had just one or two carriers.

    "Many companies have selectively entered the exchanges because they are concerned that (the exchanges) will be dominated by risky, high-using populations who wanted insurance (before Obamacare) and couldn't afford it," said Wilsensky, who is also on the board of directors of UnitedHealth. "They are pressed to narrow their networks to stay within the premiums."

    Consumers, too, will struggle with the new system. Many exchanges don't even list the insurance companies on their web sites. Some that do, like California, don't provide names of doctors or hospitals.

    The price differences among hospitals "can be pretty profound," said Joe Mondy, spokesman for Cigna insurance. "When you are doing a cost comparison with doctors, you should look up the quality of the hospital as well. Hospital 'Y' could be great at pediatrics and not great at surgery."

    Insurers operating in the exchanges are apparently hesitant to talk about the trade-off between price and quality. Two of the nation's largest insurers – Wellpoint and Aetna – refused to respond to a dozen calls and emails placed over the course of a week.

    Wellpoint and Aetna's decision to not educate the public on its choices doesn't sit well with two experts.

    "There is no reason to keep that quiet. It's not going to be a good secret for very long when people want to use the plans," Wilensky said.

    "In many cases, consumers are shopping blind when it comes to what doctors and hospitals are included in their Obamacare exchange plans," said Josh Archambault, senior fellow with the think tank Foundation for Government Accountability. "These patients will be in for a rude awakening once they need care, and get stuck with a big bill for going out-of-network without realizing it."

    All of this represents a larger problem with the Affordable Care Act, said Archambault, who has extensively studied the law.

    "It reflects deeper issues in implementation," he said. "Some hospitals and doctors don't even know if they are in the network."

    Just look at Seattle Children's Hospital, which ranks No. 11 on the U.S. News & World Report best pediatric hospital list. When Obamacare rolled out, the hospital found itself with just two out of seven insurance companies on Washington's exchange. The hospital sued the state's Office of Insurance on Oct. 4 for "failure to ensure adequate network coverage."

    Continued in article

    Jensen Comment
    Of course this is correctable when Congress forces all accredited hospitals to accept insurance receivables from exchange companies that are likely to go bankrupt. Or the Congress can guarantee the payments from these unstable startup companies. But try getting this legislation past the "defeated" Republicans in Congress.

    The only hope for Obamacare is probably in the hands of the American voters who might kill and bury the Republican Party in the 2014 and 2016 elections. Will the nation be better off with a one-party system? Probably so if you talk to most college professors.


    "Yes, People Are Losing Their Insurance Under Obamacare." by John Tozzi,  Bloomberg Businessweek, October 29, 2013 ---
    http://www.businessweek.com/articles/2013-10-29/yes-people-are-losing-their-insurance-under-obamacare?campaign_id=DN103013

    . . .

    The Affordable Care Act sets standards that private insurance companies must follow. Health plans must pay for at least 60 percent of their members’ medical costs on average. They also have to provide 10 areas of coverage, called essential health benefits, such as hospitalization, mental health treatment, and maternity care. Plans that don’t meet these standards generally can’t be sold after 2013, unless they’re grandfathered (more on that below). Insurers are ending these plans and pushing people to buy more comprehensive policies, some of which may also have higher premiums. For low- and middle-income people, the law provides subsidies to make health coverage more affordable.

    . . .

    What about “grandfathered” plans?
    Health plans that existed before Obamacare was passed in 2010 could avoid some of the new standards if they didn’t change much else. It’s up to insurers and employers to decide whether they want to keep offering so-called grandfathered plans. But plans that significantly increased what people have to pay or changed the benefits offered in the last three years would lose their grandfathered status, and they have to follow the new rules starting in 2014. The grandfather option also gives some political cover to the White House, because it puts the decision to terminate a plan on insurance companies, not the government.

    Continued in article


    "NBC News: "Obama Administration knew millions could not keep their health insurance," by Bob Beauprez, Townhall, October 30, 2013 ---
    http://finance.townhall.com/columnists/bobbeauprez/2013/10/30/nbc-news-obama-administration-knew-millions-could-not-keep-their-health-insurance-n1733175 

    When Obama repeatedly made the claim – "If you like your health plan; you can keep your health plan" – objective observers knew it wasn't so. This morning, the media is buzzing with evidence that Obama knew it was a lie, but deliberately kept spinning the same phony claim for years.

    The shock in all this is not that Obama was lying; he has a well established record of that. It's that somebody has uncovered the evidence; the smoking gun. The following is the NBC News account of the mess du jour for the White House and ObamaCare.

    Our sources deeply involved in the Affordable Care Act tell NBC NEWS that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”

    None of this should come as a shock to the Obama administration….

    Buried in Obamacare regulations from July 2010 is an estimate that because of normal turnover in the individual insurance market, “40 to 67 percent” of customers will not be able to keep their policy. And because many policies will have been changed since the key date, “the percentage of individual market policies losing grandfather status in a given year exceeds the 40 to 67 percent range.”

    That means the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

    Yet President Obama, who had promised in 2009, “if you like your health plan, you will be able to keep your health plan,” was still saying in 2012, “If [you] already have health insurance, you will keep your health insurance.”

    Continued in article


    Jensen Question
    Will the Affordable Health Care Act taxpayer subsidies also help with the deductibles?

    On television the other night a woman who succeeded in signing up for Obamacare said the only plan she could afford cost her $140 per month with a $13,500 deductible.

    I don't know if this is better or worse than she can get on the market these days, but this does not seem especially affordable to me unless she has substantial savings and very low probability of filing large claims.  I think the subsidy only helps with the $140 monthly payments and not the deductibles. I could be wrong about this. The bottom line is that the people who can least afford the premiums are even less able to afford the higher deductibles.

    Will the subsidies also help with the deductibles or do they only help her with her $140 monthly payments if she qualifies for a subsidy?

    Subsidies are available to an insured person or family making 0% to 400% of the government-defined poverty threshold of declared (not including underground) revenue. But people on Medicaid are not required to buy added medical insurance and are covered free of charge jointly by the federal and state governments.

    One of the purposes of the Affordable Health Care Act is to sign up people with mental illnesses and other chronic conditions or pre-conditions that are not presently covered for them in currently available medical insurance plans. It does not seem to me that plans with $13,500 deductible gives them much improvement unless they have access to income or savings to cover such huge deductibles. The Affordable Health Care medical insurance plan should have been a national health care plan from the start. Oh Canada!

    It's very hard to provide help with deductibles since those that choose higher deductibles so they can have lower premiums might unfairly be getting government help relative to those that pay higher monthly premiums to get lower deductibles.

    It's a bit analogous to a fast food restaurant that allows refills on small cups of soda. Why would any body who eats inside the restaurant pay more for a large cup of soda?

    On Piers Morgan Live Tuesday, guest Bill Maher openly admitted Obama “lied” about Americans keeping their insurance plans, but insisted that he had to because of unified Republican opposition—and the increasingly “stupider” American public
    http://www.truthrevolt.org//news/bill-maher-obama-had-lie-stupider-americans
    Does this mean lying is a remedy for stupidity?
    Actually, throughout history lying by a political candidate is rationalized if leads to one side's political goals? On occasion political leaders do believe or are led to believe their own lies which makes the lies less less onerous than intentional lying. A more common form of "lying" is to tell the truth without filling in some crucial assumptions. For example, President Obama claims that he told the truth about individuals keeping their former health insurance plans. What he left out was the part about the parts of the law that made many individual plans illegal because they did not cover such things as maternity and mental health. He knew that many plans would be revoked but failed to mention this in his promotional speeches before the law was passed.

    Another example of huge lies were those expounded by FDR, before Lend-Lease became official in 1941, about the USA's neutrality in the earliest days of WW II. In the eyes of President Roosevelt a majority of Americans were just too stupid to realize the global threat of the Third Reich.

    The problem with lying to stupid people is that they don't always remain stupid enough over time to believe it when a liar later on when he or she is telling the truth or lying. They just don't believe most anything coming out of the mouth of a liar. Then again many people believe what they want to believe and deny what they want to deny. We no longer value truth and integrity in our political leaders. We only cheer when the other guy's oxen get gored to put meat on our table

     

    Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm


    "Tax Realities for Self-Employed Who Get Obamacare Subsidies," by Karen E. Klein, Bloomberg Businessweek, October 10, 2013 ---
    http://www.businessweek.com/articles/2013-10-10/tax-realities-for-self-employed-who-get-obamacare-subsidies 


    From the CFO Journal's Morning Ledger on October 15, 2013

    Some small businesses are finding that if they don’t have a handle on the health-care law’s cost and impact, they may have a harder time getting a loan, Maxwell Murphy reports on CFOJ. To qualify for some loans, especially for growth capital, more companies are being required to provide assurances that they will be in compliance with the law by 2015. “To raise capital, if you’re in a growth mode, you want a [CFO] who exudes credibility,” says Christian Oberbeck, CEO of the lender Saratoga Investment.

    Among the small businesses that will be affected by the law, a survey of roughly 1,300 executives this summer by the U.S. Chamber of Commerce found just 30% said they were ready to comply. About 27% said they would cut hours to reduce full-time employees and 23% planned to replace full-time workers with part-timers. Those options might not help their loan applications, Mr. Oberbeck says, because firing workers and cutting hours can damage a business. He also says he would question a business plan that risks running afoul of the spirit of the law.

    Executives weighing their options also might have to wait awhile for any relevant data to come from the new public health-care exchanges created by the law. The exchanges have been beset by glitches and other problems, at both the federal and state levels. “It’s tougher to lend money to those companies until we see how the ACA will play through,” says Art Penn, managing partner at PennantPark Investment Advisers, a middle-market lender.


    From the CFO Journal's Morning Ledger on October 15, 2013

    Opening the Black Box: Five Questions for Your Tax Executive

    The complexities of federal, international, state and other taxes often leave CFOs wanting to deal with the tax function at arm's length. Doing so, though, may increase finance risk and dilute the value the tax function can bring. CFOs' discussions with tax executives should be more frequent, focused and strategic, and the place to start is by engaging them in targeted conversations, from succession planning to technology to compliance processes.

    Read More at CFO Journal »

     


    "Providing High-Quality Health Care to Americans Should Trump Politics," by Gregory Curfman and Stephen Morrissey, Harvard Business Review Blog, Harvard Business Review Blog, October 1, 2013 ---
    http://blogs.hbr.org/2013/10/providing-high-quality-health-care-to-americans-should-trump-politics/

    Jensen Comment
    Like it or not government and politics of government are at the heart and center of rationing most scarce essential goods and services as well as protecting the quantity and quality of non-scarce resources.

    Inequities are likely to arise when health care is is rationed by market pricing. However, scarce medical care services and medications will have inequities under any other rationing system.

    Your statement leads to the classic question of how very scarce goods and services can be rationed in ways other than market pricing. For example, socialism is replete with examples where health care is rationed according to power with the socialist party elite receiving the best health care available while the masses receive pretty lousy health care as in Cuba today and the Soviet Union in history.

    The fact of the matter is that scarce goods and services would not be "scarce" if they did not have to be rationed in some way. Socialist economist Oskar Lange proposed an economic theory that prices to ration scarce goods and services could be derived in the absence of markets --- http://en.wikipedia.org/wiki/Oskar_Lange 

    The fact of life is that scarce goods and services must be rationed by some means whatever the political and economic system. In nationalized health care systems like Canada the access to critical life saving services is available to virtually everybody, but access to elective surgeries for things like knee replacements may be delayed for months or years, thereby forcing Canadians to suffer in pain a very long time relative to the millions who have received rather speedy replacements in the USA.

    In England the national health play a few decades ago would not pay for kidney dialysis of older people. For many who cannot otherwise afford dialysis this is a prescription of death by age rationing. Rationing improved somewhat in recent years, but providing dialysis and kidney transplants is still problematic in most of Europe. The U.S. Provides twice as many kidney transplants per million people.

    In the USA it's not just the wealthy who receive speedy knee replacements.Rather low-waqe professors and factory workers get such replacements rather quickly and from the best surgeons if their employers provide health insurance to supplement low wages. But the high price for such insurance coverage must be borne by all members of the insurance plan.

    The very poor on Medicare and Medicaid can also get new knees rather quickly.

    The problem in the present health insurance system is that there are too many uninsured.who are not poor enough for Medicaid, not old or disabled enough for Medicare, and are either unemployed or their employers do not pay for health coverage. The main goal of the Affordable Health Care Act is to remedy that inequity. But much of the cost will be borne by taxpayers since the providers of scarce medical services and medications are still going to command high prices and the uninsured will not be able to afford decent health insurance unless it is heavily subsidized by employers and/or taxpayers.

    Market rationing may be imperfect for health care, but every other alternative known to mankind is also inequitable in some way for scarce medical services and medications. The countries having the best of both worlds are typically those nations with gazillions in oil revenues (e.g., Norway and Kuwait), small populations that are not poor (e.g., Switzerland), and nations without low income minorities to abuse (e.g., Finland and Denmark)..


    "The Business End of Obamacare," by James Surowiecki, The New Yorker, October 14, 2013 ---
    http://www.newyorker.com/talk/financial/2013/10/14/131014ta_talk_surowiecki

    Of the countless reasons that congressional Republicans hate the Affordable Care Act enough to shut down the government, the most politically potent is the claim that it will do untold damage to the economy and cripple small companies. Orrin Hatch has said that Obamacare will be “devastating to small business.” Ted Cruz argues that it is already “the No. 1 job killer.” And the vice-president of the National Federation of Independent Businesses called it simply “terrible.” So it comes as some surprise to learn that Obamacare may well be the best thing Washington has done for American small business in decades.

    The G.O.P.’s case hinges on the employer mandate, which requires companies with fifty or more full-time employees to provide health insurance. It also regulates the kind of insurance that companies can offer: insurance has to cover at least sixty per cent of costs, and premiums can’t be more than 9.5 per cent of employees’ income. Companies that don’t offer insurance will pay a penalty. Republicans argue that this will hurt companies’ profits, forcing them to stop hiring and to cut workers’ hours, in order to stay below the fifty-employee threshold.

    The story is guaranteed to feed the fears of small-business owners. But the overwhelming majority of American businesses—ninety-six per cent—have fewer than fifty employees. The employer mandate doesn’t touch them. And more than ninety per cent of the companies above that threshold already offer health insurance. Only three per cent are in the zone (between forty and seventy-five employees) where the threshold will be an issue. Even if these firms get more cautious about hiring—and there’s little evidence that they will—the impact on the economy would be small.

    Meanwhile, the likely benefits of Obamacare for small businesses are enormous. To begin with, it’ll make it easier for people to start their own companies—which has always been a risky proposition in the U.S., because you couldn’t be sure of finding affordable health insurance. As John Arensmeyer, who heads the advocacy group Small Business Majority, and is himself a former small-business owner, told me, “In the U.S., we pride ourselves on our entrepreneurial spirit, but we’ve had this bizarre disincentive in the system that’s kept people from starting new businesses.” Purely for the sake of health insurance, people stay in jobs they aren’t suited to—a phenomenon that economists call “job lock.” “With the new law, job lock goes away,” Arensmeyer said. “Anyone who wants to start a business can do so independent of the health-care costs.” Studies show that people who are freed from job lock (for instance, when they start qualifying for Medicare) are more likely to undertake something entrepreneurial, and one recent study projects that Obamacare could enable 1.5 million people to become self-employed.

    Even more important, Obamacare will help small businesses with health-care costs, which have long been a source of anxiety. The fact that most Americans get their insurance through work is a historical accident: during the Second World War, wages were frozen, so companies began offering health insurance instead. After the war, attempts to create universal heath care were stymied by conservatives and doctors, and Congress gave corporations tax incentives to keep providing insurance. The system has worked well enough for big employers, since large workforces make possible the pooling of risk that any healthy insurance market requires. But small businesses often face so-called “experience rating”: a business with a lot of women or older workers faces high premiums, and even a single employee who runs up medical costs can be a disaster. A business that Arensmeyer represents recently saw premiums skyrocket because one employee has a child with diabetes. Insurance costs small companies as much as eighteen per cent more than it does large companies; worse, it’s also a crapshoot. Arensmeyer said, “Companies live in fear that if one or two employees get sick their whole cost structure will radically change.” No wonder that fewer than half the companies with under fifty employees insure their employees, and that half of uninsured workers work for small businesses or are self-employed. In fact, a full quarter of small-business owners are uninsured, too.

    Obamacare changes all this. It provides tax credits to smaller businesses that want to insure their employees. And it requires “community rating” for small businesses, just as it does for individuals, sharply restricting insurers’ ability to charge a company more because it has employees with higher health costs. And small-business exchanges will in effect allow companies to pool their risks to get better rates. “You’re really taking the benefits that big companies enjoy, and letting small businesses tap into that,” Arensmeyer said. This may lower costs, and it will insure that small businesses can hire the best person for a job rather than worry about health issues.

    Continued in article

    Jensen Comment
    The New Yorker is a liberal (er progressive) magazine that generally backs anything said or done by President Obama. But The New Yorker was also among the first magazines to warn of deceptions early on in the Affordable Health Care Act.

    Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.
    John Cassidy, The New Yorker, March 2010

    Fuzzy CBO Accounting Tricks
    "ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker, March 2010 ---
    http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html

    This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.

    EXPRESS:

    The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.

    The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.

    The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.

    Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.

    LOCAL:

    For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.

    Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.

    The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.

    The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”

    Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.

    My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.

    Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.

    Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)

    If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

    So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.

    The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.

    Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)

    In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.

    Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.

    The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.

    The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.

    At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.  

    Read more: http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html#ixzz0jrFSFK3j


     

     



    September 30. 2013

    "Germany Is Exporting Its Grandmas (to Poland)," by Naomi, Kresge, Bloomberg Business Week, September 26, 2013 ---
    http://www.businessweek.com/articles/2013-09-26/germany-exports-its-seniors-to-nursing-homes-abroad

    Jensen Comment
    Canada's approach to elderly grandmas who are only slightly impaired is to haul. at taxpayer expense, in portable Granny Cabins behind the homes of their children. When the time comes when Granny is no longer able to care for herself adequately in her Granny Cabin the cabin is hauled off for another grandma. I don't know if the same applies to a Grandpa Cabin, but I suspect the program is gender neutral. Usually grandpa kicks the bucket before grandma.

    In the USA Medicare does not pay for nursing home care or Grandma Cabins. The only patients who get taxpayer-funded nursing home care are the very poor on Medicaid. Most nursing care in the USA is funded by family savings until the patients become so ill that hospitalization is required. A major Medicare expense is keeping terminally ill people alive in hospitals, often in intensive care units costing over $10,000 per day. No other nation spends as much keeping terminally ill patients artificially live on machines.

    On November 22, 2009 CBS Sixty Minutes aired a video featuring experts (including physicians) explaining how the single largest drain on the Medicare insurance fund is keeping dying people hopelessly alive who could otherwise be allowed to die quicker and painlessly without artificially prolonging life on ICU machines.
    "The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009 ---
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/   

     


    It's becoming chaos in the labor market as Obamacare deadlines approach. I certainly do not advocate ending or defunding the Affordable Health Care Act. But some delays may be desirable in order to stop the epidemic of conversion of full-time workers to part-time workers and the epidemic of dropping employer health insurance coverage.
     
    We should legislate greater penalties for companies and non-profit organizations who drop employee medical insurance coverage.
     
    We should also legislate greater penalties for individuals who simply opt out of health insurance. This will become an epidemic leading to long lines for medical services at emergency rooms and inferior health care as more and more hospitals simply close their emergency rooms.

    From the CFO Journal's Morning Ledger on September 26, 2013

    Companies drop cheapest health plans. The U.S. arm of Sweden’s Securitas plans to discontinue its lowest-cost health plans and steer roughly 55,000 workers to new government-sponsored insurance exchanges for coverage next year, in the latest sign of the fraying ties between employment and health care, writes the WSJ’s Scott Thurm. Securitas is among more than 1,200 employers that offer the kind of bare-bones health plans that must be phased out beginning Jan. 1. Nearly four million people are enrolled in these so-called mini-med plans, which cap benefits to participants, sometimes at as little as $3,000 a year. Other big employers, including Darden Restaurants, Home Depot and Trader Joe’s will stop offering health insurance to part-time workers, and will direct those employees to the state exchanges. Darden, Home Depot and Trader Joe’s previously offered mini-meds to their part-timers.

    From the CFO Journal's Morning Ledger on September 11, 2013

    CFOs are relying more on part-time workers
    That’s partly due to the looming rollout of the Affordable Care Act, but it’s also a reaction to lingering uncertainty about the economy,
    according to the latest Duke University/CFO Global Business Outlook Survey. The third-quarter survey findings were pretty positive overall, though the U.S. Business Optimism Index edged down to 58 on a scale of zero to 100 after shooting above 60 in Q2. In a nutshell: Profits are expected to jump by more than 10%, capital spending is seen rising by nearly 5% and full-time employment is anticipated to increase by 2%. And 59% of CFOs say they’ve increased the proportion of their workforce made up of temporary and part-time workers or shifted toward outside advisers and consultants.

    Among the companies making that shift, 38% say it’s due to health-care overhaul, while 44% say it’s down to extreme economic uncertainty. “Another trend that is affecting the growth in domestic employment is the hiring by U.S.-based companies of full-time employees in foreign countries,” says John Graham, professor of finance at Duke Fuqua School of Business and director of the survey. “More than one in four U.S. CFOs say their firms have hired full-time employees in other countries, and that number is expected to accelerate.” (Prof. Graham discusses the findings in this video.)

     

    From the CFO Journal's Morning Ledger on September 4, 2013

    A new approach to health-care benefits is gaining momentum ahead of the Affordable Care Act rollout. A growing number of employers plans to give workers a fixed sum of money and let them choose a plan from an online marketplace, the WSJ’s Anna Wilde Matthews reports.

    More health-industry players are launching such private exchanges, which are separate from the government-operated marketplaces being created in each state. And insurers are creating their own versions. Aetna plans to launch a “proprietary” marketplace model next year. WellPoint already has one, and UnitedHealth Group‘s Optum health-services arm owns an exchange operator.

    Sears Holdings and Darden Restaurants adopted this approach last year. The idea has been gaining the most traction among small and midsize employers, but interest is growing among companies of all sizes, Matthews writes. Bob Evans Farms, which owns about 560 restaurants and has about 34,000 employees including part-timers, will start directing workers to an exchange from Xerox's Buck unit that’s set to launch next January.

    From the CFO Journal's Morning Ledger on August 22, 2013

    Health-care law fuels part-time hiring
    U.S. businesses are hiring, but three out of four of the nearly one million hires this year are part-time and many of the jobs are low-paid, writes Reuters’s Lucia Mutikani.
    Executives at several staffing firms told Reuters that the Affordable Care Act, which requires employers with 50 or more full-time workers to provide health-care coverage, was a frequently cited factor in requests for part-time workers. A memo that leaked out from retailer Forever 21 last week showed it was reducing a number of full-time staff to positions where they will work no more than 29.5 hours a week, just under the law’s threshold. “They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

     


    "Prices Set for New Health-Care Exchanges Younger Buyers May Face Higher Insurance Premiums," by Louise Radnofsky, The Wall Street Journal, September 25, 2013 ---
    http://online.wsj.com/article/SB10001424052702303983904579095731139251304.html?mod=djemCFO_h

    U.S. officials for the first time disclosed insurance prices that will be offered through new federally run health-care exchanges starting Oct. 1, showing that young, healthy buyers likely will pay more than they do currently while older, sicker consumers should get a break.

    The plans, offered under the health-care overhaul to people who don't get insurance through an employer or government program, in many cases provide broader coverage than current policies.

    Costs will vary widely from state to state and for different types of consumers. Government subsidies will cut costs for some lower-income consumers.

    Across the country, the average premium for a 27-year-old nonsmoker, regardless of gender, will start at $163 a month for the lowest-cost "bronze" plan; $203 for the "silver" plan, which provides more benefits than bronze; and $240 for the more-comprehensive "gold" plan.

    But for some buyers, prices will rise from today's less-comprehensive policies. In Nashville, Tenn., a 27-year-old male nonsmoker could pay as little as $41 a month now for a bare-bones policy, but would pay $114 a month for the lowest-cost bronze option in the new federal health exchanges. More

    Shutdown Unlikely to Hit Health Law's Rollout

    Likewise, the least-expensive bronze policy would rise to $195 a month in Philadelphia for that same 27-year-old, from $73 today. In Cheyenne, Wyo., the lowest-cost option would be $271 a month, up from $82 today.

    The Affordable Care Act marks a fundamental shift in the way insurers price their products. Carriers won't be allowed to charge higher premiums for consumers who have medical histories suggesting they might be more expensive to cover because they need more care. They will have to treat customers equally, with limited variation in premiums based on buyers' ages or whether they smoke.

    Insurers also will have to offer a more generous benefits package that includes hospital care, preventive services, prescription drugs and maternity coverage.

    For consumers used to skimpier plans—or young, healthy people who previously enjoyed attractive rates—that could mean significantly higher premiums.

    The benefits are greater for people who previously were rejected for coverage because they were ill, or who were charged higher premiums. They are expected to find better coverage through the exchanges for the first time.

    The concern for supporters of the law, and the administration, is whether enough healthy people sign up to balance the likely higher costs incurred by the sick and newly covered.

    The data, which the administration was set to release Wednesday, cover 36 states where the federal government is operating insurance exchanges because state officials have declined to do so themselves. Fourteen states are operating exchanges on their own.

    The Obama administration called the rates a good deal for consumers.

    "The prices are affordable," said Gary Cohen, a top regulator at the Department of Health and Human Services.

    "Because of the Affordable Care Act, the health insurance that people will be buying will actually cover them in the case of them getting sick. It doesn't make sense to compare just the number the person was paying, you have to compare the value people are getting," Mr. Cohen added.

    Critics of the health law long have argued that the price changes represent a dramatic increase in premiums, and Senate Republicans repeated those arguments during a floor debate Tuesday.

    "Obamacare hasn't even been fully implemented yet, but we can already see the train wreck headed our way. Premiums are skyrocketing," said Senate Minority Leader Mitch McConnell (R., Ky.).

    Republicans are trying to repeal the law and have tied the issue to a bill to extend government funding beyond the Sept 30 end of the fiscal year. Sen. Ted Cruz (R., Texas) spoke on the Senate floor for hours into Tuesday night in what he said was a battle to block the law from taking effect.

    Continued in article

    Jensen Comment
    In my opinion we would be far better off if Congress had passed a national health insurance plan back in 2009 when the Democrats controlled the legislative and executive branches of Federal government. Instead we are left with a mess where the largest medical insurance companies are avoiding the state insurance exchanges. In some states there's almost no pricing competition such as in West Virginia where only one company offers the exchange insurance for individuals.

    An enormous problem is that both profit and non-profit organizations, including government agencies, are dropping their employee medical insurance plans and/or are shifting more and more into use of part-time workers. Many like Walgreen will instead offer cash allowances to full-time employees and force all employees to shop for their own medical insurance. There will be differences what employees are charged in the various states. I don't know that Walgree and the other companies will make allowances for state pricing differentials.

    Many young people benefit by being able to remain on the plans of their parents until age 26. High medical risk patients will have access that previously was denied or very high priced from insurance companies. Taxpayers will be paying for more poor people not eligible for Medicaid, although many states have resisted expanding their Medicaid roles.

    Meanwhile the U.S. Congress will keep its free gold-plated medical insurance for lifetime coverage of current and former legislators. Too bad legislators can legislate the Affordable Health Care act without having to participate in that act.

    Hopefully, health care in the USA will not be thrown entirely into chaos by failing to fund Obamacare at this late date. It would probably be best, however, if we could somehow adopt a national health care plan better than the one in Canada (which varies between provinces).


    From the CFO Journal's Morning Ledger on September 19, 2013

    Big insurers skip health exchanges
    When the consumer marketplaces for insurance go live Oct. 1, don’t expect to see much of familiar names like Cigna or Aetna, writes the WSJ’s Timothy W. Martin. The
    biggest health insurers are eschewing many of the exchanges out of concern that many of the individuals who will purchase coverage need it because they have chronic illnesses or other medical conditions that are expensive to treat. Their expected absence creates an opening for small regional players such as Molina Healthcare, Centene and Magellan Health Services to grab market share across multiple states in the rollout of the new federal health law.

    Jensen Comment
    Only one company will participate in West Virginia’s new individual health insurance marketplace.Media outlets report that Highmark Blue Cross Blue Shield and Carelink/Coventry applied and were accepted to participate in the individual marketplace. But Carelink/Coventry later decided to withdraw ---
    http://times-news.com/local/x789528391/Insurance-market-in-W-Va-will-have-one-company

    "Insurance market in W.Va. will have one company Carelink/Coventry withdraws leaving Highmark Blue Cross Blue Shield," Associated Press, Cumberland Times-News, September 12, 2013 ---
    http://times-news.com/local/x789528391/Insurance-market-in-W-Va-will-have-one-company 

    Only one company will participate in West Virginia’s new individual health insurance marketplace.

    Media outlets report that Highmark Blue Cross Blue Shield and Carelink/Coventry applied and were accepted to participate in the individual marketplace. But Carelink/Coventry later decided to withdraw.

    “We came to this decision (not to participate in the marketplace) as part of our ongoing review of Aetna’s overall company strategy, including the impact of the Coventry acquisition which closed in May, after the original exchange filings were submitted for both companies,” Walt Cherniak, a spokesman for Aetna, Carelink/Coventry’s parent company, told the Charleston Gazette.

    “We are taking a measured, multi-year approach to exchanges. In 2014 we are focusing on the markets where we can be most competitive and deliver the greatest value to our customers,” Cherniak said.

    Highmark plans to offer 11 different plans in the individual market and four plans in the state’s small business marketplace, the Charleston Daily Mail reported.

    “We do intend to make good on our commitment to continue to participate. We’ll be there and enrolling people in the West Virginia plan,” Highmark CEO William Winkenwerder said in a conference call Wednesday.

    The health insurance marketplace is part of the Affordable Care Act. Enrollment begins Oct. 1. Coverage will begin Jan. 1, 2014.

    Perry Bryant, executive director of West Virginians for Affordable Health Care, said that he hopes more companies over time will participate in the marketplace.

    “If we had more competition, you’d probably see more competitive premiums. Nobody knows what the premiums are yet, but will there be affordable prices despite lack of competition? We just don’t know yet,” Bryant said.


    "Preventive health services with no deductible qualify as high-deductible health plans," by Sally P. Schreiber, Journal of Accountancy, September 10, 2013 ---
    http://www.journalofaccountancy.com/News/20138694.htm


    From the CFO Journal's Morning Ledger on September 18, 2013

    Walgreen is joining the ranks of big companies shaking up their health-care benefits. The drugstore chain today is expected to unveil a plan to provide payments to eligible employees for the subsidized purchase of insurance starting in 2014, the WSJ reports. The plan will affect roughly 160,000 employees, and will require them to shop for coverage on a private health-insurance marketplace.

    It isn’t clear how much money the move might ultimately save Walgreen or whether its workers will face higher costs. Mark Englizian, Walgreen’s vice president of compensation and benefits, said the submitted bids for monthly premiums for the private exchanges were roughly equal to its current 2013 rates—meaning some savings could come from the fact the bids didn’t factor in year-over-year increases.

    But it’s another example of how dramatically the insurance landscape is shifting ahead of the rollout of the Affordable Care Act. IBM and Time Warner are both planning to move thousands of retirees from their own company-administered plans to private exchanges. Sears and Darden Restaurants said last year they would send employees to a private exchange. And last month, UPS said it would end benefits for 15,000 employee spouses who are able to get coverage through their own employers. By 2017, nearly 20% of American workers could get their health insurance through a private exchange, according to Accenture Research. And a recent report by the National Business Group on Health said that 30% of large employers are considering moving active employees to exchanges by 2015, Reuters notes.

     


    "Labor Unions: Obamacare Will 'Shatter' Our Health Benefits, Cause 'Nightmare Scenarios'," by Avik Roy, Forbes, July 15, 2013 ---
    http://www.forbes.com/sites/theapothecary/2013/07/15/labor-leaders-obamacare-will-shatter-their-health-benefits-cause-nightmare-scenarios/

    Labor unions are among the key institutions responsible for the passage of Obamacare. They spent tons of money electing Democrats to Congress in 2006 and 2008, and fought hard to push the health law through the legislature in 2009 and 2010. But now, unions are waking up to the fact that Obamacare is heavily disruptive to the health benefits of their members.

    Last Thursday, representatives of three of the nation’s largest unions fired off a letter to Harry Reid and Nancy Pelosi, warning that Obamacare would “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week that is the backbone of the American middle class.”

    The letter was penned by James P. Hoffa, general president of the International Brotherhood of Teamsters; Joseph Hansen, international president of the United Food and Commercial Workers International Union; and Donald “D.” Taylor, president of UNITE-HERE, a union representing hotel, airport, food service, gaming, and textile workers.

    “When you and the President sought our support for the Affordable Care Act,” they begin, “you pledged that if we liked the health plans we have now, we could keep them. Sadly, that promise is under threat…We have been strong supporters of the notion that all Americans should have access to quality, affordable health care. We have also been strong supporters of you. In campaign after campaign we have put boots on the ground, gone door-to-door to get out the vote, run phone banks and raised money to secure this vision. Now this vision has come back to haunt us.”

    ‘Unintended consequences’ causing ‘nightmare scenarios’

    The union leaders are concerned that Obamacare’s employer mandate incentivizes smaller companies to shift their workers to part-time status, because employers are not required to provide health coverage to part-time workers. “We have a problem,” they write, and “you need to fix it.”

    “The unintended consequences of the ACA are severe,” they continue. “Perverse incentives are causing nightmare scenarios. First, the law creates an incentive for employers to keep employees’ work hours below 30 hours a week. Numerous employers have begun to cut workers’ hours to avoid this obligation, and many of them are doing so openly. The impact is two-fold: fewer hours means less pay while also losing our current health benefits.”

    What surprises me about this is that union leaders are pretty strategic when it comes to employee benefits. It was obvious in 2009 that Obamacare’s employer mandate would incentivize this shift. Why didn’t labor unions fight it back then?

    Regulations will ‘destroy the very health and wellbeing of our members’

    The labor bosses are also unhappy, because of the way Obamacare affects multi-employer health plans. Multi-employer plans, also called Taft-Hartley plans, are health insurance benefits typically arranged between a labor union in a particular industry, such as restaurants, and small employers in that industry. About 20 million workers are covered by these plans; 800,000 of Joseph Hansen’s 1.3 million UFCW members are covered this way.

    Taft-Hartley plans, they write, “have been built over decades by working men and women,” but unlike plans offered on the ACA exchanges, unionized workers will not be eligible for subsidies, because workers with employer-sponsored coverage don’t qualify.

    Obamacare’s regulatory changes to the small-group insurance market will drive up the cost of these plans. For example, the rules requiring plans to cover adult children up to the age of 26, the elimination of limits on annual or lifetime coverage, and the mandates that plans cover a wide range of benefits will drive premiums upward.

    But the key problem is that the Taft-Hartley plans already provide generous and costly coverage; small employers now have a more financially attractive alternative, which is to drop coverage and put people on the exchanges, once the existing collective bargaining agreements are up. That gives workers less reason to join a union; a big part of why working people pay union dues is because unions play a big role in negotiating health benefits.

    So the labor leaders are demanding that their workers with employer-sponsored coverage also gain eligibility for ACA subsidies. Otherwise, their workers will be “relegated to second-class status” despite being “taxed to pay for those subsidies,” a result that will “make non-profit plans like ours unsustainable” and “destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”

    ‘The law as it stands will hurt millions of Americans’

    The leaders conclude by stating that, “on behalf of the millions of working men and women we represent and the families they support, we can no longer stand silent in the face of elements of the Affordable Care Act that will destroy the very health and wellbeing of our members along with millions of other hardworking Americans.”

    President Obama, of course, pledged that “if you like your plan, you can keep your plan.” But the labor leaders say that, “unless changes are made…that promise is hollow. We continue to stand behind real health care reform, but the law as it stands will hurt millions of Americans including the members of our respective unions. We are looking to you to make sure these changes are made.”

    Continued in article

     


    "Do we need a new law to prevent fraud in Obamacare?" by Steven Mintz, Ethics Sage, September 17, 2013 ---
    http://www.ethicssage.com/2013/09/do-we-need-a-new-law-to-prevent-fraud-in-obamacare.html


    From the CFO Journal's Morning Ledger on September 11, 2013

    CFOs are relying more on part-time workers
    That’s partly due to the looming rollout of the Affordable Care Act, but it’s also a reaction to lingering uncertainty about the economy,
    according to the latest Duke University/CFO Global Business Outlook Survey. The third-quarter survey findings were pretty positive overall, though the U.S. Business Optimism Index edged down to 58 on a scale of zero to 100 after shooting above 60 in Q2. In a nutshell: Profits are expected to jump by more than 10%, capital spending is seen rising by nearly 5% and full-time employment is anticipated to increase by 2%. And 59% of CFOs say they’ve increased the proportion of their workforce made up of temporary and part-time workers or shifted toward outside advisers and consultants.

    Among the companies making that shift, 38% say it’s due to health-care overhaul, while 44% say it’s down to extreme economic uncertainty. “Another trend that is affecting the growth in domestic employment is the hiring by U.S.-based companies of full-time employees in foreign countries,” says John Graham, professor of finance at Duke Fuqua School of Business and director of the survey. “More than one in four U.S. CFOs say their firms have hired full-time employees in other countries, and that number is expected to accelerate.” (Prof. Graham discusses the findings in this video.)

    Another key finding is that finance chiefs are starting to think more about their competitors and less about their legislators, CFO’s David Owens writes. The survey shows that “price pressure from competitors” overtook “federal government agenda/policies” on the list of external concerns for respondents. Bill Velasco, controller for the Engineered Products Division at Flowserve, a supplier of industrial and heavy machinery, tells Owens that price competition is heating up, but it’s still unclear who gets the credit—or the blame. “We know the pressure is coming,” he says, “but I don’t know how much is being generated by activity in the market, and how much comes from customers asking us to be more efficient.” 

    Read the full results of the survey here.

     

    Bob Jensen's universal health care messaging --- http://www.trinity.edu/rjensen/Health.htm

     


    From the CFO Journal's Morning Ledger on September 4, 2013

    A new approach to health-care benefits is gaining momentum ahead of the Affordable Care Act rollout. A growing number of employers plans to give workers a fixed sum of money and let them choose a plan from an online marketplace, the WSJ’s Anna Wilde Matthews reports.

    More health-industry players are launching such private exchanges, which are separate from the government-operated marketplaces being created in each state. And insurers are creating their own versions. Aetna plans to launch a “proprietary” marketplace model next year. WellPoint already has one, and UnitedHealth Group‘s Optum health-services arm owns an exchange operator.

    Sears Holdings and Darden Restaurants adopted this approach last year. The idea has been gaining the most traction among small and midsize employers, but interest is growing among companies of all sizes, Matthews writes. Bob Evans Farms, which owns about 560 restaurants and has about 34,000 employees including part-timers, will start directing workers to an exchange from Xerox's Buck unit that’s set to launch next January.

    From the CFO Journal's Morning Ledger on August 22, 2013

    Health-care law fuels part-time hiring
    U.S. businesses are hiring, but three out of four of the nearly one million hires this year are part-time and many of the jobs are low-paid, writes Reuters’s Lucia Mutikani.
    Executives at several staffing firms told Reuters that the Affordable Care Act, which requires employers with 50 or more full-time workers to provide health-care coverage, was a frequently cited factor in requests for part-time workers. A memo that leaked out from retailer Forever 21 last week showed it was reducing a number of full-time staff to positions where they will work no more than 29.5 hours a week, just under the law’s threshold. “They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

     

     


    From the CFO Journal's Morning Ledger on August 22, 2013

    UPS is delivering a big change to employee health-care benefits. The company is cutting off health benefits to working spouses of thousands of employees starting in 2014 and it says the health-care overhaul is partly to blame, the WSJ reports. UPS said in an internal memo to employees last month that rising costs for coverage of chronic and other health conditions, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health-care benefits to our employees at an affordable cost.”

    The change applies to working spouses who can get health-care coverage through their own employers and doesn’t apply to spouses who can’t get their own coverage, or the spouses of unionized employees, who make up the bulk of the company’s work force. The change will affect about 15,000 spouses—slightly less than half of the 33,000 spouses covered today under its health plan for nonunionized workers.

    The shift is a sign of corporate America’s increasing willingness to make deep changes to benefits once taken as a given by workers, according to Bloomberg. “The feeling is drastic times call for drastic measures,” says Rich Fuerstenberg, a partner at benefits consultant Mercer. “What employers are adopting today are strategies that were considered crazy or out of the mainstream just a few years ago.”

    Jensen Comment
    Another article I read estimated that about 15,000 spouses will lose their UPS benefits.


    "Study: Tax Credits for Obamacare Expected to Average $2,700," by Gail Perry, AccountingWeb, August 20, 2013 ---
    http://www.accountingweb.com/article/study-tax-credits-obamacare-expected-average-2700/222274

    . . .

    Tax credits will be available to subsidize premiums for people who buy their insurance in the new marketplaces, do not have access to other affordable coverage, and have incomes between 100 percent and 400 percent of the federal poverty level (between about $11,500 and $46,000 for a single person, and $24,000 and $94,000 for a family of four).

    An estimated 48 percent of people who currently have individual market coverage will be eligible for tax credits, according to the study. Tax credits among those eligible will average $5,548 per family, and subsidies will average $2,672 across all families now purchasing their own insurance. Many people who are now uninsured also will be eligible for subsidies in the new marketplaces, and their tax credits will likely be higher on average because they have lower incomes than those who now buy their own coverage.

    There are many reasons why premium costs in the individual insurance market will change under the ACA before tax credits are applied. For instance, insurance companies will be prohibited from discriminating against people with pre-existing conditions, leading to higher enrollment of people with expensive health conditions. More young, healthy people may also enroll due to the ACA's individual mandate and premium subsidies.

    Furthermore, insurance providers will be required to meet a minimum level of coverage that will raise premiums for people buying skimpier coverage today, but also lower their out-of-pocket costs on average when they use those services. Premiums before and after the law goes into effect are not necessarily comparable, as health plans in the new marketplaces will be required to cover a broader range of services than are found in many current individual market policies, and the health needs of people who will enroll are likely to be different.

    The Kaiser Family Foundation also has developed a health reform subsidy calculator that estimates the premiums and tax credits available to people next year through the insurance marketplaces based on their income levels, family size, ages, and tobacco use.

    About the study:

    Based on data from the Congressional Budget Office (CBO) and the federal government's Survey of Income and Program Participation, the Kaiser Family Foundation analysis estimates the average impact of the Affordable Care Act on the individual market by quantifying how current enrollees will fare once relevant provisions of the health law are implemented. Premium data released by states to date suggest that the CBO premium projection is reliable. While subsidies and premiums will vary widely depending on each enrollee's personal characteristics, the analysis focuses on averages to provide an indication of how much overall assistance the law will provide to people buying their own coverage today.

    Related articles:

     

    Jensen Comment
    Note that a tax credit is much more lucrative than a tax deduction. For example, a deduction for home mortgage interest and medical expenses is subject to various adjustments to where each dollar of deduction may results in a much lower net tax benefit. Each dollar of credit, however, may be a full one dollar of benefit in the pocket of a taxpayer. And for some credits like the earned income credit, taxpayers having zero tax to pay can receive cash back from the government for the credit. It's a lot like getting a tax-free government paycheck without being a government employee. Nobel Economist Milton Friedman might have called it a negative income tax. He proposed replacing the the welfare system with a negative income tax system.

     


    August 14, 2013 message from Scott Bokacker regarding the Affordable Care Act implementation

    This looks like a pretty good collection -

    http://www.leavitt.com/newsandevents/healthcarereform.aspx

    There is one item that is not listed on that page -

    http://www.leavitt.com/newsandevents/healthcarereform.aspx?eid=2427266716788910805

    That one will be relevant if you are an employer required to give notice to employees.

    Repeal Obamacare? Too late.

    Scott Bonacker CPA – McCullough and Associates LLC – Springfield, MO

     


    Howard Dean, a physician, is the former Governor of Vermont and Chairman of the Democratic Party who launched an unsuccessful campaign to become President of the United States --- http://en.wikipedia.org/wiki/Howard_Dean

    In the earlier parts of the article he chastises Republicans and some Democrats who want to derail the Affordable Healthcare Act at this late stage. Then he explains a part of the Affordable Healthcare Act that truly needs amending.

    "The Affordable Care Act's Rate-Setting Won't Work:  Experience tells me the Independent Payment Advisory Board will fail," by Howard Dean. The Wall Street Journal, July 28, 2013 ---
    http://online.wsj.com/article/SB10001424127887324110404578628542498014414.html?mod=djemEditorialPage_h

    . . .

    That said, the law still has its flaws, and American lawmakers and citizens have both an opportunity and responsibility to fix them.

    One major problem is the so-called Independent Payment Advisory Board. The IPAB is essentially a health-care rationing body. By setting doctor reimbursement rates for Medicare and determining which procedures and drugs will be covered and at what price, the IPAB will be able to stop certain treatments its members do not favor by simply setting rates to levels where no doctor or hospital will perform them.

    There does have to be control of costs in our health-care system. However, rate setting—the essential mechanism of the IPAB—has a 40-year track record of failure. What ends up happening in these schemes (which many states including my home state of Vermont have implemented with virtually no long-term effect on costs) is that patients and physicians get aggravated because bureaucrats in either the private or public sector are making medical decisions without knowing the patients. Most important, once again, these kinds of schemes do not control costs. The medical system simply becomes more bureaucratic.

    The nonpartisan Congressional Budget Office has indicated that the IPAB, in its current form, won't save a single dime before 2021. As everyone in Washington knows, but less frequently admits, CBO projections of any kind—past five years or so—are really just speculation. I believe the IPAB will never control costs based on the long record of previous attempts in many of the states, including my own state of Vermont.

    If Medicare is to have a secure future, we have to move away from fee-for-service medicine, which is all about incentives to spend more, and has no incentives in the system to keep patients healthy. The IPAB has no possibility of helping to solve this major problem and will almost certainly make the system more bureaucratic and therefore drive up administrative costs.

    To date, 22 Democrats have joined Republicans in the House and Senate in support of legislation to do away with the IPAB. Yet because of the extraordinary partisanship on Capitol Hill and Republican threats to defund the law through the appropriations process, it is unlikely that any change in the Affordable Care Act will take place soon.

    The IPAB will cause frustration to providers and patients alike, and it will fail to control costs. When, and if, the atmosphere on Capitol Hill improves and leadership becomes interested again in addressing real problems instead of posturing, getting rid of the IPAB is something Democrats and Republicans ought to agree on.

    Mr. Dean, governor of Vermont from 1991 to 2002 and a former chairman of the Democratic National Committee, is a strategic adviser to McKenna Long & Aldridge LLP.


    "California Unveils Health Plans to Mixed Reactions," by Kathleen Doheny, WebMD, July 10, 2013 ---
    http://www.webmd.com/health-insurance/news/20130708/california-exchange-carriers-premiums-announced


    "Unworkable ObamaCare Opaque rules, big delays and rising costs: The chaos is mounting," by Governors Bobby Jindal and Scott Walker, The Wall Street Journal, July 25, 2013 ---
    http://online.wsj.com/article/SB10001424127887324110404578626452647631608.html?mod=djemEditorialPage_h

    Remember when President Obama famously promised that if you like your health-care plan, you'll be able to keep your health-care plan? It was a brilliantly crafted political sound bite. Turns out, the statement is untrue.

    Aside from that small detail, the slightly larger problem is that the Obama administration doesn't have a health-care plan. Yes, the White House has a law with thousands of pages, but the closer we get to Oct. 1, the day government-mandated health-insurance exchanges are supposed to open, the more we see that the administration doesn't have a legitimate plan to successfully implement the law.

    Unworkable. That word best describes ObamaCare. Government agencies in states across the country, whether red or blue, have spent countless hours and incalculable dollars trying to keep the ObamaCare train on its track, but the wreck is coming. And it is the American people who are going to pay the price.

    Fifty-five working days before the launch of the ObamaCare health-insurance exchanges on Oct. 1, the administration published a 600-page final rule that employers, individuals and states are expected to follow in determining eligibility for millions of Americans. Rather than lending clarity to a troubled project, the guidelines only further complicated it.

    If the experience of those working with the ObamaCare implementation at the state level had been taken into account, progress might have been possible, but the administration has treated states with mistrust. Perhaps that's because we can see that the federal government is repeating mistakes of the past and we know that outcomes rarely reflect what Washington has promised.

    Adding to this mounting problem, the guidance that President Obama has offered to date has been inconsistent, arbitrary and frustrating—contributing further to the grave uncertainty that surrounds this law. But not everything about it is uncertain: In February, the nonpartisan Congressional Budget Office reported that seven million Americans will lose their employer-based health insurance as a result of ObamaCare.

    On July 12, three of the country's largest unions sent a letter to Democratic leaders in Congress stating that ObamaCare would shatter not only hard-earned health benefits, but also destroy the 40-hour workweek that is the backbone of the American middle class. ObamaCare defines full-time employment as 30 hours per week. No wonder these unions are alarmed: They are widely credited with helping to get the votes to pass this unworkable law.

    The administration, recognizing that ObamaCare is a ticking bomb, earlier this month announced that it would delay until 2015 the requirement that businesses offer health-care insurance to their employees or pay a fine. Yet the administration didn't also grant relief to individuals.

    Think about that for a moment: The Obama team, for now, has spared employers but not employees. The day of reckoning for businesses is put off, but not for everyday citizens. Many Americans may wonder: On what authority does the administration arbitrarily decide which aspects of a law not to enforce and which ones to keep?

    As governors, we have been expressing concern about the unworkability of ObamaCare since its passage in 2010. We have seen the trouble the law poses for our own state economies. The most recent evidence: The government now says that it will not verify the eligibility of individuals who apply for subsidized insurance on the health-care exchanges.

    Governors have firsthand experience with implementing public-assistance programs. We know how important it is to care for our most vulnerable citizens and to ensure that people are healthy and able to work. We also know that a one-size-fits-all approach like ObamaCare simply doesn't work. It only creates new problems and inequalities. That's why if you look at all 50 states, you'll see 50 unique ways of handling Medicaid.

    Health-care premiums are going up. Many businesses have stopped hiring, to avoid reaching the limit of 50 full-time employees where they are required to offer health benefits. Those businesses that are hiring often take on part-time workers to stay under the full-time cap. Older individuals seeking work are finding that companies are reluctant to take a chance on their potential health-care costs.

    These are just a few of the problems resulting from a program that wasn't thought through before it was rushed into law. No wonder we hear that the Obama attack machine is gearing up to blame everyone but the law itself for the chaos that lies ahead.

    This law was a bad idea from the start, and the American public never supported it. The Obama team, taking advantage of an unusual two-year window when Democrats controlled all branches of government, foisted upon the country a liberal hodgepodge of unworkable notions that will wreak havoc on American health care. Delaying implementation of ObamaCare, not just the employer mandate, is a reasonable idea. But an even better one would be a complete repeal.

    Mr. Jindal is the governor of Louisiana. Mr. Walker is the governor of Wisconsin.


    "Here's What Happens If You Don't Sign Up For Obamacare," by Mandi Woodruff, Business Insider, July  1, 2013 ---
    http://www.businessinsider.com/heres-what-happens-if-you-dont-sign-up-for-obamacare-2013-7

    The $2.7 Trillion Medical Bill Colonoscopies Explain Why U.S. Leads the World in Health Expenditures (NYT) ---
    http://www.nytimes.com/2013/06/02/health/colonoscopies-explain-why-us-leads-the-world-in-health-expenditures.html?pagewanted=all&_r=1&

    MERRICK, N.Y. — Deirdre Yapalater’s recent colonoscopy at a surgical center near her home here on Long Island went smoothly: she was whisked from pre-op to an operating room where a gastroenterologist, assisted by an anesthesiologist and a nurse, performed the routine cancer screening procedure in less than an hour. The test, which found nothing worrisome, racked up what is likely her most expensive medical bill of the year: $6,385.

    That is fairly typical: in Keene, N.H., Matt Meyer’s colonoscopy was billed at $7,563.56. Maggie Christ of Chappaqua, N.Y., received $9,142.84 in bills for the procedure. In Durham, N.C., the charges for Curtiss Devereux came to $19,438, which included a polyp removal. While their insurers negotiated down the price, the final tab for each test was more than $3,500.

    “Could that be right?” said Ms. Yapalater, stunned by charges on the statement on her dining room table. Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.”

    In many other developed countries, a basic colonoscopy costs just a few hundred dollars and certainly well under $1,000. That chasm in price helps explain why the United States is far and away the world leader in medical spending, even though numerous studies have concluded that Americans do not get better care.

    Whether directly from their wallets or through insurance policies, Americans pay more for almost every interaction with the medical system. They are typically prescribed more expensive procedures and tests than people in other countries, no matter if those nations operate a private or national health system. A list of drug, scan and procedure prices compiled by the International Federation of Health Plans, a global network of health insurers, found that the United States came out the most costly in all 21 categories — and often by a huge margin.

    Americans pay, on average, about four times as much for a hip replacement as patients in Switzerland or France and more than three times as much for a Caesarean section as those in New Zealand or Britain. The average price for Nasonex, a common nasal spray for allergies, is $108 in the United States compared with $21 in Spain. The costs of hospital stays here are about triple those in other developed countries, even though they last no longer, according to a recent report by the Commonwealth Fund, a foundation that studies health policy.

    While the United States medical system is famous for drugs costing hundreds of thousands of dollars and heroic care at the end of life, it turns out that a more significant factor in the nation’s $2.7 trillion annual health care bill may not be the use of extraordinary services, but the high price tag of ordinary ones. “The U.S. just pays providers of health care much more for everything,” said Tom Sackville, chief executive of the health plans federation and a former British health minister.

    Colonoscopies offer a compelling case study. They are the most expensive screening test that healthy Americans routinely undergo — and often cost more than childbirth or an appendectomy in most other developed countries. Their numbers have increased manyfold over the last 15 years, with data from the Centers for Disease Control and Prevention suggesting that more than 10 million people get them each year, adding up to more than $10 billion in annual costs.

    Largely an office procedure when widespread screening was first recommended, colonoscopies have moved into surgery centers — which were created as a step down from costly hospital care but are now often a lucrative step up from doctors’ examining rooms — where they are billed like a quasi operation. They are often prescribed and performed more frequently than medical guidelines recommend.

    The high price paid for colonoscopies mostly results not from top-notch patient care, according to interviews with health care experts and economists, but from business plans seeking to maximize revenue; haggling between hospitals and insurers that have no relation to the actual costs of performing the procedure; and lobbying, marketing and turf battles among specialists that increase patient fees.

    While several cheaper and less invasive tests to screen for colon cancer are recommended as equally effective by the federal government’s expert panel on preventive care — and are commonly used in other countries — colonoscopy has become the go-to procedure in the United States. “We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

    In coming months, The New York Times will look at common procedures, drugs and medical encounters to examine how the economic incentives underlying the fragmented health care market in the United States have driven up costs, putting deep economic strains on consumers and the country.

    Hospitals, drug companies, device makers, physicians and other providers can benefit by charging inflated prices, favoring the most costly treatment options and curbing competition that could give patients more, and cheaper, choices. And almost every interaction can be an opportunity to send multiple, often opaque bills with long lists of charges: $100 for the ice pack applied for 10 minutes after a physical therapy session, or $30,000 for the artificial joint implanted in surgery.

    The United States spends about 18 percent of its gross domestic product on health care, nearly twice as much as most other developed countries. The Congressional Budget Office has said that if medical costs continue to grow unabated, “total spending on health care would eventually account for all of the country’s economic output.” And it identified federal spending on government health programs as a primary cause of long-term budget deficits.

    ¶¶ While the rise in health care spending in the United States has slowed in the past four years — to about 4 percent annually from about 8 percent — it is still expected to rise faster than the gross domestic product. Aging baby boomers and tens of millions of patients newly insured under the Affordable Care Act are likely to add to the burden.

    With health insurance premiums eating up ever more of her flat paycheck, Ms. Yapalater, a customer relations specialist for a small Long Island company, recently decided to forgo physical therapy for an injury sustained during Hurricane Sandy because of high out-of-pocket expenses. She refused a dermatology medication prescribed for her daughter when the pharmacist said the co-payment was $130. “I said, ‘That’s impossible, I have insurance,’ ” Ms. Yapalater recalled. “I called the dermatologist and asked for something cheaper, even if it’s not as good.”

    The more than $35,000 annually that Ms. Yapalater and her employer collectively pay in premiums — her share is $15,000 — for her family’s Oxford Freedom Plan would be more than sufficient to cover their medical needs in most other countries. She and her husband, Jeff, 63, a sales and marketing consultant, have three children in their 20s with good jobs. Everyone in the family exercises, and none has had a serious illness.

    Like the Yapalaters, many other Americans have habits or traits that arguably could put the nation at the low end of the medical cost spectrum. Patients in the United States make fewer doctors’ visits and have fewer hospital stays than citizens of many other developed countries, according to the Commonwealth Fund report. People in Japan get more CT scans. People in Germany, Switzerland and Britain have more frequent hip replacements. The American population is younger and has fewer smokers than those in most other developed countries. Pushing costs in the other direction, though, is that the United States has relatively high rates of obesity and limited access to routine care for the poor.

    A major factor behind the high costs is that the United States, unique among industrialized nations, does not generally regulate or intervene in medical pricing, aside from setting payment rates for Medicare and Medicaid, the government programs for older people and the poor. Many other countries deliver health care on a private fee-for-service basis, as does much of the American health care system, but they set rates as if health care were a public utility or negotiate fees with providers and insurers nationwide, for example.

    “In the U.S., we like to consider health care a free market,” said Dr. David Blumenthal, president of the Commonwealth Fund and a former adviser to President Obama. ”But it is a very weird market, riddled with market failures.”

    Consider this:

    Consumers, the patients, do not see prices until after a service is provided, if they see them at all. And there is little quality data on hospitals and doctors to help determine good value, aside from surveys conducted by popular Web sites and magazines. Patients with insurance pay a tiny fraction of the bill, providing scant disincentive for spending.

    Continued in article

     

    Does Medical Care Cost Too Much in the United States? Posner ---
    http://www.becker-posner-blog.com/2013/06/does-medical-care-cost-too-much-in-the-united-states-posner.html

    Does Medical Care Cost Too Much in the United States? Becker ---
    http://www.becker-posner-blog.com/2013/06/medical-competition-and-the-cost-of-medical-care-becker.html

     

     



    April 1-June 30, 2013

    The Unaffordable Health Care Act
    "Coverage may be unaffordable for low-wage workers," by Ricardo Alonso-Zaldivar, Yahoo News, June 13, 2013 ---
    http://news.yahoo.com/coverage-may-unaffordable-low-wage-workers-151922273.html

    It's called the Affordable Care Act, but President Barack Obama's health care law may turn out to be unaffordable for many low-wage workers, including employees at big chain restaurants, retail stores and hotels.

    That might seem strange since the law requires medium-sized and large employers to offer "affordable" coverage or face fines.

    But what's reasonable? Because of a wrinkle in the law, companies can meet their legal obligations by offering policies that would be too expensive for many low-wage workers. For the employee, it's like a mirage — attractive but out of reach.

    The company can get off the hook, say corporate consultants and policy experts, but the employee could still face a federal requirement to get health insurance.

    Many are expected to remain uninsured, possibly risking fines. That's due to another provision: the law says workers with an offer of "affordable" workplace coverage aren't entitled to new tax credits for private insurance, which could be a better deal for those on the lower rungs of the middle class.

    Some supporters of the law are disappointed. It smacks of today's Catch-22 insurance rules.

    "Some people may not gain the benefit of affordable employer coverage," acknowledged Ron Pollack, president of Families USA, a liberal advocacy group leading efforts to get uninsured people signed up for coverage next year.

    "It is an imperfection in the new law," Pollack added. "The new law is a big step in the right direction, but it is not perfect, and it will require future improvements."

    Andy Stern, former president of the Service Employees International Union, the 2-million-member service-sector labor union, called the provision "an avoidance opportunity" for big business. SEIU provided grass-roots support during Obama's long struggle to push the bill through Congress.

    The law is complicated, but essentially companies with 50 or more full-time workers are required to offer coverage that meets certain basic standards and costs no more than 9.5 percent of an employee's income. Failure to do so means fines for the employer. (Full-time work is defined as 30 or more hours a week, on average.)

    But do the math from the worker's side: For an employee making $21,000 a year, 9.5 percent of their income could mean premiums as high as $1,995 and the insurance would still be considered affordable.

    Even a premium of $1,000 — close to the current average for employee-only coverage — could be unaffordable for someone stretching earnings in the low $20,000's.

    With such a small income, "there is just not any left over for health insurance," said Shannon Demaree, head of actuarial services for the Lockton Benefit Group. "What the government is requiring employers to do isn't really something their low-paid employees want."

    Based in Kansas City, Mo., Lockton is an insurance broker and benefits consultant that caters to many medium-sized businesses affected by the health care law. Actuaries like Demaree specialize in cost estimates.

    Another thing to keep in mind: premiums wouldn't be the only expense for employees. For a basic plan, they could also face an annual deductible amounting to $3,000 or so, before insurance starts paying.

    "If you make $20,000, are you really going to buy that?" asked Tracy Watts, health care reform leader at Mercer, a major benefits consulting firm.

    And low-wage workers making more than about $15,900 won't be eligible for the law's Medicaid expansion, shutting down another possibility for getting covered.

    It's not exactly the picture the administration has painted. The president portrays his health care law as economic relief for struggling workers.

    "Let's make sure that everybody who is out there working hard and doing the right thing, that they're not going to go bankrupt because they get sick, that they're going to have health care they can count on," Obama said in a Chicago appearance last summer during the presidential campaign. "And we got that done."

    White House senior communications advisor Tara McGuinness downplayed concerns. "There has been a lot of conjecture about what people might do or could do, but this hasn't actually happened yet," she said. "The gap between sky-is-falling predictions about the health law and what is happening is very wide."

    The administration believes "most businesses want to do right by their employees and will continue to use tax breaks to provide quality coverage to their workers," she added. Health insurance is tax deductible for employers, and the health law provides additional tax breaks to help small businesses.

    Virtually all major employers currently offer health insurance, although skimpy policies offered to many low-wage workers may not meet the requirements of the new law. Companies affected have been reluctant to telegraph how they plan to comply.

    "It clearly isn't going to be a morale-boosting moment when you redo your health plan to discourage participation," said Stern, the former labor leader, now a senior fellow at Columbia University. "It's not something most want to advertise until they are sure it's the right decision."

    The National Retail Federation's top health care expert said there's no "grand scheme to avoid responsibility" among employers. "That is a little too Machiavellian," said Neil Trautwein.

    Nonetheless, he acknowledged it's "a possible outcome" that low-wage workers could find coverage unaffordable because of the wrinkle in the law.

    Continued in article


    Belatedly The New York Times Fesses Up on the Obamacare Mess
    By David Brooks, April 2013

    David Brooks    
    Implementation got off to a bad start because the Obama administration didn’t want to release unpopular rules before the election. Regulators have been working hard but are clearly overwhelmed, trying to write rules that influence the entire health care sector — an economic unit roughly the size of France. Republicans in Congress have made things much more difficult by refusing to provide enough money for implementation.

    By now, everybody involved seems to be in a state of anxiety. Insurance companies are trying to put out new products, but they don’t know what federal parameters they have to meet. Small businesses are angry because the provisions that benefited them have been put on the back burner. Health care systems are highly frustrated. They can’t plan without a road map. Senator Max Baucus, one of the authors of the law, says he sees a “huge train wreck” coming.

    I’ve been talking with a bipartisan bunch of health care experts, trying to get a sense of exactly how bad things are. In my conversations with this extremely well-informed group of providers, academics and former government officials, I’d say there is a minority, including some supporters of the law, who think the whole situation is a complete disaster. They predict Obamacare will collapse and do serious damage to the underlying health system.

    But the clear majority, including some of the law’s opponents, believe that we’re probably in for a few years of shambolic messiness, during which time everybody will scramble and adjust, and eventually we will settle down to a new normal.

    What nobody can predict is how health care chaos will interact with the political system. There’s a good chance that Republicans will be able to use unhappiness with what is already an unpopular law to win back the Senate in 2014. Controlling both houses of Congress, they will be in a good position to alter, though not repeal, the program.

    The law’s biggest defenders will then become insurance companies and health care corporations. Having spent billions of dollars adapting to the new system, they are not going to want to see it repealed or replaced.

    The experts talk about the problems that lie ahead in cascades. First, there is what you might call the structural cascade. Everything is turning out to be more complicated than originally envisioned. The Supreme Court decision made the Medicaid piece more complicated. The decision by many states not to set up exchanges made the exchange piece more complicated. The lines of accountability between, for example, state and federally run exchanges have grown byzantine and unclear.

    A law that was very confusing has become mind-boggling. That could lead people to freeze up. Insurance companies will hesitate before venturing into state exchanges, thereby limiting competition and choice. Americans are just going to be overwhelmed and befuddled. Many are just going to stay away, even if they are eligible for benefits.

    Then there is the technical cascade. At some point, people are going to sit at computers and enroll. If the data process looks like some 1990s glitchmonster, if information doesn’t flow freely, then the public opinion hit will be catastrophic.

    Then there is the cost cascade. Nearly everybody not in the employ of the administration agrees this law does not solve the cost problem, and many of the recent regulatory decisions will send costs higher. A study in California found that premiums could increase by an average of 20 percent for people not covered by federal subsidies. A study by the Society of Actuaries found that by 2017 costs could rise by 32 percent for insurers covering people in the individual exchanges, and as high as 80 percent in states like Ohio.

    Then there is the adverse selection cascade. Under the law, young healthy people subsidize poorer, sicker and older people. But the young may decide en masse that it is completely irrational for them to get health insurance that subsidizes others while they are healthy. They’ll be better off paying the fines, if those are even enforced, and opting out. Without premiums from the young, everybody else’s costs go up even higher.

    Then there is the provider concentration cascade. The law further incentivizes a trend under way: the consolidation of hospitals, doctors’ practices and other providers. That also boosts prices.

    Over all, it seems likely that in some form or another Obamacare is here to stay. But the turmoil around it could dominate politics for another election cycle, and the changes after that — to finally control costs, to fix the mind-boggling complexities and the unintended consequences — will never end.

    Regulatory regimes can be simple and dumb or complex and sprawling. When you build complex, it takes a while to work through the consequences.

     


    Halifax Health To Pay Between $350-$600 Million In Whistleblower Suit --- Click Here
    http://standuptofraud.com/site/2013/06/05/1266halifax-health-to-pay-whistleblower-suit/?goback=.gde_3453910_member_247082893


    Overview Of The New 3.8% Investment Income Tax, Part 3: Gains From The Sale Of Property
    [Forbes, Part 1, Part 2.] Part 3]


    So when did the USA lawmakers ever want to impose their own laws (like minimum wage) and professional ethics on themselves and their employees?
    "Lawmakers, aides may get Obamacare exemption," by John Bresnahan and Jake Sherman, Poliico, April 24, 2013 ---
    http://www.politico.com/story/2013/04/obamacare-exemption-lawmakers-aides-90610.html#.UXiYUajBcrc.twitter

    Jensen Comment
    What's that old saying ---
    "Do as I say, not as I do."


    Obamacare Tax "Surprise" High Earners for May Have Failed to See Coming

     

    For married taxpayers filing jointly: $250,000.

    •For married taxpayers filing separately: $125,000.

    •For all other taxpayers: $200,000.



    "Overview Of The New 3.8% Investment Income Tax, Part 1," Forbes, April 26, 2013 ---
    http://www.forbes.com/sites/anthonynitti/2013/04/26/overview-of-the-new-3-8-investment-income-tax-part-1/

    Beginning January 1, 2013, Obamacare – through the enactment of Section 1411 — will impose upon certain high earners a brand spankin’ new 3.8% tax on their “net investment income.” This additional tax has been the source of much confusion and misinformation for taxpayers and tax advisors alike.

    Much of the uncertainty is to be anticipated; after all, Section 1411 is not an amendment, expansion, or alteration of preexisting law. Rather, this is brand new statute, which means there are no judicial precedents or administrative rulings available to help interpret the legal language.

    But this new statute presents hurdles beyond what we typically see with recently enacted legislation; specifically, the vagaries of a term as critical to its implementation as “net investment income” is to Section 1411.

    In my honest opinion (man, I wish there was a shorthand way to write that), the determination of what does and does not constitute “net investment income” for purposes of Section 1411 will vex tax advisors more than any other issue in 2013. So as a public service, I thought I’d take advantage of this post-April 15th downtime to put together a handy, four-part overview of the new investment income tax, focusing primarily on answering the question, “What IS net investment income?”

    Before we begin unraveling that mystery, however, let’s address the basic mechanics of Section 1411.

    Beginning January 1, 2013, taxpayers will pay an additional 3.8% Medicare tax on the lesser of:

    1. The taxpayer’s “net investment income,” or
    2. The taxpayer’s “modified adjusted gross income” (if the taxpayer does not have foreign earned income excluded under Section 911, this will be identical to adjusted gross income)” less the “applicable threshold;” specifically:

    •For married taxpayers filing jointly: $250,000.

    •For married taxpayers filing separately: $125,000.

    •For all other taxpayers: $200,000.

    There are two very important distinctions to be made about the math behind this lesser of calculation that should serve to dispel two popular misconceptions about the new tax:

    First, because this is a “lesser of” rather than “greater of” computation, the tax cannot apply unless an individual’s modified adjusted gross income exceeds the applicable threshold. If the taxpayer’s MAGI does not exceed the applicable threshold, the second component of the “lesser of” calculation will always be zero, and the last time I checked, zero will always be the lesser of two positive numbers. Thus, right from the start, we can eliminate from the reaches of Section 1411 all married filing jointly taxpayers with MAGI less than $250,000, married filing separately taxpayers with MAGI less than $125,000, and all other taxpayers with MAGI less than $200,000.

    Secondly, just because an individual’s MAGI exceeds the applicable threshold does not necessarily sentence the taxpayer to paying the 3.8% tax on all of their net investment income. Again, this is due to the mechanics of the “lesser of” calculation.

    Example: Hansel, a single taxpayer, earns $195,000 in compensation and $30,000 of dividend and interest income during 2013. These are his only items of income or loss.

    Hansel is subject to the 3.8% Medicare tax on the lesser of:

    1. Net investment income, or $30,000, or

    2. MAGI ($225,000) less the applicable threshold ($200,000) or $25,000.

    Thus, despite the fact that Hansel has both net investment income and MAGI in excess of his applicable threshold, he does not owe the 3.8% on all of his investment income. Rather, he owes the tax on the lesser of the two components, or $25,000.

    But let’s not kid ourselves; it’s not the mechanics or mathematics behind Section 1411 that will be the bane of the tax advisor’s existence during 2013, it’s the understanding of what constitutes “net investment income.” And for clarity on that issue, we must look to our only source of guidance on the topic.

    In late November, the IRS released long-awaited proposed regulations under Section 1411. While the proposed regulations are not effective until tax years beginning after December 31, 2013, they may be relied on until final regulations are issued, which is expected to happen sometime during 2013.

    The definition of “net investment income” is first introduced in Prop. Reg. Section 1.1411-4(a)(1), which breaks those items constituting “net investment  income” into three subparagraphs:

    (i)  Gross income from interest, dividends, annuities, royalties, rents, substitute interest payments, and substitute dividend payment.  (one little i income)

    (ii)  Other gross derived from a trade or business described in Prop. Reg. Section 1.1411-5 (two little i income); and

    (iii)  Net gain attributable to the disposition of property (three little i income).

    In parenthesis following each of the three types of income, you will find the term the tax community has begun to use to describe the income as part of its general parlance. As you can see, the term relates to which subparagraph the income is found in, and is as good a way as any to present the types of net investment income in this overview. So today, we take on “one little i income” – the interest, dividends, rent, etc… found in Prop. Reg. Section 1.1411-4(a)(1)(i) — and we’ll examine “two little i” and “three little i” income in subsequent posts.

    One Little i Income, In General

    While the Section 1411 regulations are full of surprises, the items that constitute net investment income under Prop. Reg. Section 1.1411-4(a)(1)(i) are not among them; in fact, these are the items we all anticipated to be included in net investment income before promulgation of the proposed regulations. As mentioned above, they include:

    • Interest
    • Dividends
    • Annuities
    • Royalties
    • Rents
    • Substitute interest and dividend payments (even though these amounts are not categorically “interest” and “dividends’” for income tax purposes.

    The preamble to the regulations offers additional detail. For example, gross income from dividends includes any item treated as a divided for purposes of chapter 1 of the Code (the income tax provisions). This includes:

    • Constructive dividends
    • Amounts treated as distributions under Section 1248(a), relating to the gain from the sale of stock in a controlled foreign corporation, and
    • Amounts distributed by an S corporation that are treated as a dividend by virtue of the fact that the distribution is deemed to have come from earnings and profits accumulated in prior C corporation years.

    Exceptions

    In general, any interest, dividends, etc… listed under Prop. Reg. Section 1.1411-4(a)(1)(i) will constitute net investment income. However, the regulations and preamble note four exceptions to this general rule:

    1. Interest earned on state and local bonds that is exempt from income tax under Section 103 is excluded from the definition of net investment income for purposes of Section 1411.
    2. Net investment income does not include distributions from a qualified plan described in Sections 401(a), 403(a), 403(b), 408, 408A or 457(b).
    3. Interest paid to an employee by an employer under a nonqualified deferred compensation plan is not considered net investment income.
    4. Any “one little i income” earned in the “ordinary course of a trade or business” is not included in net investment income. This is an important exclusion that warrants further examination.

    Assume you own an interest in an S corporation, partnership, or sole proprietorship. Assume further that interest and dividends are earned in the activity and are either allocated to you on a Schedule K-1 (in the case of an S corporation or partnership) or reported by you on Schedule C (in the case of a sole proprietorship).

    Naturally, you might assume that the interest and dividends are to be included in net investment income as “one little i income,” and nine times out of ten, you’d be correct. However, under the “ordinary course of trade or business exception” the interest and dividends, despite generally meeting the definition of net investment income under “one little i,” can be excluded from the computation of net investment income if four tests are met:

    Continued in article

    Jensen Comment
    Investors who do not get hit with this tax every year may bet blind sided in a year when they (or their estates) dispose of some property such as rental property or a farm investment.


    Remember those tiresome and frequent adds on television from "The Scooter Store"

    "Scooter Store Files For Bankruptcy After Overbilling Medicare At Least $47 Million," by Laura Northrup, Consumerist, April 15, 2013 ---
    http://consumerist.com/2013/04/15/scooter-store-files-for-bankruptcy-after-fbi-raid-and-medicare-fraud-allegations/

    If you watch daytime TV or have been stuck watching daytime TV while visiting your parents, surely you’re familiar with The Scooter Store. The power wheelchair vendor has had some trouble lately, including accusations of Medicare and Medicaid fraud, a raid by the FBI, and even a lawsuit from the company’s hometown, of New Braunfels, Texas. The company laid off most of its employees, and plans to deal directly with health care providers, rather than blanketing the airwaves and selling directly to consumers.

    Those investigations came after a a scathing investigative piece by CBS News about the company.  (Warning: the video at that link plays automatically.) Former salesmen and doctors who prescribed chairs in the past explained the company’s tactics: contact doctors’ offices incessantly to wear them down and convince them to prescribe scooters and power chairs whether the patient really needed one or not, and to depend on bureaucratic incompetence and error to get them approved by Medicare and Medicaid.

    That got the attention of the federal government, and led to a raid by the Federal Bureau of Investigation. The company’s CEO insists that The Scooter Store itself wasn’t accused of fraud. Just a few weeks later, the company furloughed all employees, then permanently laid off about 1,000.

    An independent audit found that the company had overbilled Medicare and Medicaid somewhere between $46.8 million and $87.7 million. The company had agreed to pay back $19.5 million. The Centers for Medicare and Medicaid Services is one of the largest creditors listed in the company’s bankruptcy petition, which details about $50 million in debt.

    Just a few short years ago, in 2009, the city of New Braunfels gave the Scooter Store economic development money to convert a former Kroger store into their sparkling new headquarters. On Friday, the city filed a lawsuit to to get $2.6 million of that money back.

    Continued in article

    Jensen Comment
    Milking Medicare and Medicaid seems to be the rule rather than the exception.

    Bob Jensen's Fraud Updates ---
    http://www.trinity.edu/rjensen/FraudUpdates.htm

     

     

     

     

     




    January 1-March 31. 2013

    "Which Governments Spend the Most Per Capita on Government Healthcare: France, Italy, the United States, Sweden, Canada, Greece, or the United Kingdom?" by Daniel J. Mitchell, Townhall, February 22, 2013
    http://www.townhallmail.com/fnbzdpfbzzgwdbzbwbdhfwcnnywnnbyfrrhpldgnrnybys_msycbpyncdb.html

     

    See bar chart at
    http://www.cs.trinity.edu/~rjensen/temp/HealthCostPerCapita.jpg

    . . .

    There are three big reasons why there’s more government-financed healthcare spending in the United States.

    1. Richer nations tend to spend more, regardless of how they structure their healthcare systems.

    2. As you can see at the 1:18 mark of this video, the United States is halfway down the road to a single-payer system thanks to programs such as Medicare and Medicaid.

    3. America’s pervasive government-created third-party payer system leads to high prices and costly inefficiency.

    So what’s the moral of the story? Simple, notwithstanding the shallow rhetoric that dominates much of the debate, the United States does not have anything close to a free-market healthcare system.

    That was true before Obamacare and it’s even more true now that Obamacare has been enacted.

    Indeed, it’s quite likely that many nations with “guaranteed” health care actually have more market-oriented systems than the United States.

    Avik Roy argues, for instance, that Switzerland’s system is the best in the world. And the chart above certainly shows less direct government spending.

    And there’s also the example of Singapore, which also is a very rich nation that has far less government spending on healthcare than the United States.

    Continued in article

    Jensen Comment
    Articles like this are controversial and misleading. Firstly, we may be comparing apples and kangaroos when it comes to the terms "health care" and "cost." Much of the USA health care "cost" gets buried in other accounts like "research" and "education." The many research universities in the USA are contributing tuition and state taxpayer money to fund biomedical science faculty and other science and engineering faculty who are doing medical research and development in one way or another. But these costs are treated as "education"  and "research" costs rather than medical costs.

    An enormous proportion of what the USA includes in costs of medical care is really the cost of fraud that other nations, especially those with either free market or nationalized coverage, avoid much more efficiently and effectively. The frauds are especially high in Medicare billings for our aged and disabled such as billings for nonexistent medical equipment and $6,384 cost of an aspirin administered inside a hospital.

    Much of what gets billed as "medical care" in the USA is the massive cost of malpractice insurance, costs which nations like Canada with national health care cover much more efficiently and effectively by leaving out the lawyers salivating over punitive damages.

    In the USA and Mexico much of the cost of geriatric and disability care is borne by patient savings and family earnings that does not pass through governmental or third-party insurance "medical care" accounts.. In nations with nationalized medicine like Norway such costs are more apt to be called "medical costs."

    In the USA most patients like me bear their own eye care and dental billings out-of-pocket and are not captured in governmental "medical care" accounts. In many other nations the costs of these services pass through governmental accounts.

    The USA spends (usually under Medicare) hundreds of billions on patients that are terminally ill, often extending their lives uselessly for weeks or a few months in intensive care and cardiac care units. Most other nations save this money by letting nature run its course for dying patients and/or facilitating euthanasia. CBS Sixty Minutes ran a module on this under the title "The High Cost of Dying" in the USA.
    http://www.cbsnews.com/news/the-cost-of-dying-end-of-life-care/

    Similar discrepancies arise for extremely premature and/or underweight new babies that are not saved in most nations outside the USA.

    The above comparison of nations by Daniel Mitchell is mostly an example of the many attempts (such as poverty and unemployment) to make international comparisons on variables that are inconsistently defined and subject to enormous measurement error and variation between nations

     

    "Sandwich Generation: What are our Ethical Obligations to Care for our Aged-Parents and Children?" by accounting professor Steven Mintz, Ethics Sage, January 25, 2013 ---
    http://www.ethicssage.com/2013/01/sandwich-generation.html

    Bob Jensen's threads on health care are at
    http://www.trinity.edu/rjensen/Health.htm


    A tax in sheep's clothing
    "Employers Blast Fees (that won't cover their workers) From New Health Law," by Janet Adamy, The Wall Street Journal, March 14, 2013 ---
    http://online.wsj.com/article/SB10001424127887324392804578358540464713464.html?mod=djemCFO_t

    . . .

    The fees will hit most large U.S. employers, and several have been lobbying to change the program, contending the levy is unfair because it subsidizes individually purchased plans that won't cover their workers. Boeing Co. BA -0.15% and a union health plan covering retirees of General Motors, GM +0.32% Ford Motor Co. F +0.22% and Chrysler, among other groups, have asked federal regulators to exclude or shield their insurance recipients from the fee.

    Insurance companies, which helped put the fee in the law, say the fee is essential to prevent rates from skyrocketing when insurers get an influx of unhealthy customers next year. The fee is part of a new insurance landscape created by the health law that will forbid insurers from denying coverage to people with pre-existing conditions.

    The $63 fee will apply to plans covering millions of Americans in 2014. It applies to employers that assume the risk for workers' medical bills, and many private plans sold by insurers. The fee will be smaller for 2015 and 2016, though regulators haven't set those amounts.

    Few noticed the fee when the 2010 Affordable Care Act passed. Employers have spent recent months trying to peel it back, but final regulations published Monday in the Federal Register left it largely intact.

    "It's caught most employers, if not all employers, by surprise," said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, which represents large employers. "They're very upset about it."

    The fee comes on top of other costs employers expect to face. Proponents of the law say it eventually will lower employers' health costs by expanding insurance coverage to 30 million Americans, meaning employers won't subsidize their unpaid medical bills.

    Continued in article


    The Health Care Market is Not a Market

    "Video:  Inside ‘Bitter Pill’: Steven Brill Discusses His TIME Cover Story," Time Magazine, February 22, 2013 ---
    http://healthland.time.com/2013/02/20/bitter-pill-inside-times-cover-story-on-medical-bills/

    Simple lab work done during a few days in the hospital can cost more than a car. A trip to the emergency room for chest pains that turn out to be indigestion brings a bill that can exceed the price of a semester at college. When we debate health care policy in America, we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?

    Steven Brill spent seven months analyzing hundreds of bill from hospitals, doctors, and drug companies and medical equipment manufacturers to find out who is setting such high prices and pocketing the biggest profits. What he discovered, outlined in detail in the cover story of the new issue of TIME, will radically change the way you think about our medical institutions:

    · Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer—Medicare—from even trying to negotiate the price of drugs.

    · Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.

    · Cancer treatment—at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson—has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.

    · Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

    Brill concludes:

    The health care market is not a market at all.
    It’s a crapshoot. Everyone fares differently based on circumstances they can neither control nor predict. They may have no insurance. They may have insurance, but their employer chooses their i