Obamacare Not So Good For Old People

Obamacare Not So Good For Old People

 Seniors should be alarmed that the Medicare budget has lost $500 billion due to President Barack Obama’s healthcare overhaul and something must be done to make Medicare work to avoid its bankruptcy.

Since 60 percent of all Medicare expenditure is spent in the last two months of a person’s life, this is the most difficult problem facing policymakers.

 Under Obamacare, an Independent Payment Advisory Board (IPAB), a group of 15 bureaucrats, is tasked with finding savings in Medicare.  IPAB’s purpose is to limit or deny coverage to certain people.

 All the “smart” pundits mocked Sarah Palin for calling IPAB a “death panel,” since that term brings up dystopian images of judges arbitrarily determining who shall live and who shall die. Although Obamacare does not explicitly call the IPAB a “death panel”, this is exactly what happens in Great Britain today, and the results relating to end of care coverage is nothing short of barbaric.

 Those who are in their last years of their lives are expected to do their part for the national budget, which is to die inexpensively. The NHS law clearly states: ‘Her Majesty’s funds shall not be used to ration and pay for care for the sick.’

 When the British National Health Service was founded on July 5, 1948, expectations were sky-high. The NHS, in the words of one official, would be the “envy of the world.” 62 years later, by all objective measures, the NHS is the worst health-care system in the developed world. Costs have exploded. The NHS uses the most aggressive price controls and rationing procedures in the West, going so far as to assign a price to the “quality-adjusted life year (QALY)” cost that is required to extend it.

As health care costs continue to increase, and as Medicare is forced to cut back on its reimbursements, health care for the elderly will suffer greatly.

 The economist Thomas Sowell has pointed out, “government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? : The sick, the elderly, and the disabled, of course. The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society’, whether they are worthy of health care. Such a system is downright evil.

Health care by definition involves life and death decisions. Human rights and human dignity must be at the center of any health care discussion.”

And, that $500,000,000,000 cut in Medicare will impact the cost of Medicare Advantage “free” plans and Medicare Supplement plans.  More on that next time.  Stay tuned

Supreme Court Rules Obamacare Constitutional as a Tax Penalty Costing $1.76 trillion over 10 yrs

Supreme Court Rules Obamacare Constitutional as a Tax Penalty Costing $1.76 trillion over 10 yrs

Surprise!  The court struck down the mandate pursuant to the Commerce Clause but ruled Obamacare to be constitutional under the Federal Government’s authority to impose and collect taxes.  The IRS is hiring 16,000 agents to enforce collection.

President Obama’s national health care law will cost $1.76 trillion over a decade, according to a new projection released today by the Congressional Budget Office (CBO), rather than the $940 billion forecast when it was signed into law.

Many accounting tricks were employed when the national health care legislation was passed, the most egregious of which was to delay full implementation of the law until 2014, so it would appear cheaper under the CBO’s standard ten-year budget window and, at least on paper, meet Obama’s pledge that the legislation would cost “around $900 billion over 10 years.” When the final CBO score came out before passage, critics noted that the true 10 year cost would be far higher than advertised once projections accounted for full implementation.

The CBO has released new projections from 2013 extending through 2022, and the results are as critics expected: the ten-year cost of the law’s core provisions to expand health insurance coverage has now ballooned to $1.76 trillion. That’s because we now have estimates for Obamacare’s first nine years of full implementation, rather than the mere six when it was signed into law. Only next year will we get a true ten-year cost estimate, if the law isn’t repealed by then. Given that in 2022, we’re likely looking at about $2 trillion over the first decade, or more than double what Obama advertised.

Full list of new Obamacaretax hikes (20 in total)

The total number of new taxes is more like 20, and some have already been in effect in case you haven’t noticed. Taxes on real estate transactions and investment income are included in the list. Of course the biggest taxes are set to begin next year and in 2014. Americans for Tax Reform posted a list of the 20 new Obamacare taxes.

Taxes that are already in effect 2010-2012:

1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new “community health assessment needs,” “financial assistance,” and “billing and collection” rules set by HHS. Bill: PPACA; Page: 1,961-1,971

2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113

3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105

4. Tax on Innovator Drug Companies ($22.2 billion/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980

5. Blue Cross/Blue Shield Tax Hike ($0.4 billion/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004

6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399

7. Medicine Cabinet Tax ($5 billion/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959

8. HSA Withdrawal Tax Hike ($1.4 billion/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959

9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957

Taxes that start next year:

Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned

11. Hike in Medicare Payroll Tax ($86.8 billion/Jan 2013)

12. Tax on Medical Device Manufacturers ($20 billion/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for

13. Raise “Haircut” for Medical Itemized Deduction from 7.5% to 10% of AGI ($15.2 billion/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 billion/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited).   Indexed to inflation after 2013.

15. Elimination of tax deduction for employer-provided retirement Rx drug coverage

16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives

17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax.  The tax penalty will be phased in starting at $95 per year or 1% of income and by 2016 will be the greater of $695 for each uninsured adult or 2.5% of family income up to $12,500.  Don’t worry though. If you are an illegal immigrant, prisoner or part of an Indian tribe, you don’t have to pay.

18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all  employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

Combined score of individual and employer mandate tax penalty: $65 billion/10 years

19. Tax on Health Insurers ($60.1 billion/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year.  Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

There is even another tax coming in 2018:

20. Excise Tax on Comprehensive Health Insurance Plans ($32 billion/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

Obamacare at the Supreme Court

The US Supreme Court will rule on the constitutionality of the Patient Protection and Affordable Care Act (PPACA), so-called Obamacare, by the end of June 2012. 

The key issue is the mandate that everybody buys health insurance or pays a penalty that is scheduled to increase thru 2016 when it will equal the cost of a private health insurance policy.  If this provision is stricken from the law, the rest of the law becomes somewhat inoperable because folks who are uninsured could defer their decision to get insured until they have a major health event and then get guaranteed coverage to pay for their care.  This would result in higher insurance company costs and drive up rates for existing policy holders to pay for care that the previously uninsured did not contribute.

Alternately, the Court could strike down the whole law.  If it does, the big question for Congress is what to do next?   Many of the good provisions of PPACA such as free Preventive Care have already been effectuated by the Health & Human Services Administration (HHS) regulations.  The insurance companies have already built them into policies issued since 9/23/2011 and some into earlier issued “grandfathered” plans which everybody enjoys, but are not happy with the resulting premium increases.  Congress will have to amend the law either way.

Yes, there are many good things that Congress can do to fix health insurance such as “tort reform” to cut off greedy law firms extorting outrageous huge settlements that drive up insurance costs for the rest of us.  A lot can be done in other areas to drive down costs.  We’ll see.

Californians, unlike the rest of the US, has already established plans to replicate Obamacare if the US Supreme Court strikes it down.   At this time it appears that there will be options to participate in CaliforniaCare or continue to buy traditional health insurance. 

As your agent, I am prepared to help with either one.

Call me at 562 596-0215 or email me at Ev@EverettKnell.com for help with any questions.

It’s Official: More than Half Won’t Be Able to Stay in Their Employer Health Plan.

If you listened to the campaign rhetoric during the 2008 election, you could be forgiven for thinking that health reform would mainly mean insuring people who cannot afford insurance on their own; in the process there would be no tax increases or benefit cuts for the middle class; and, as President Obama repeatedly stated, “If you like the plan you are in, you can keep it!”

Turns out, the reality is 180 degrees different. Things are likely to change least for low-income people. About 18 million of them will be herded into Medicaid. But with no new doctors or nurses, they will find it more difficult to access care than ever before and, according to a new NCPA brief analysis, will likely show up at hospital rooms in increasing numbers.

Middle-class families who already have insurance will see the biggest change.

Within the next few months, senior citizens will begin receiving notices that their Medicare Advantage plans are being cancelled, and for those who continue in Medicare Advantage, they will see premium increases and benefit cuts. Over the next decade, 7.4 million Medicare Advantage enrollees will lose coverage they would have otherwise had.
By September, between one and two million Americans with limited benefit insurance will lose coverage because their insurance doesn’t comply with the “no lifetime limit on benefits” regulation in ObamaCare.

What about “Grandfathered” Health Plans?

According to the Administration, health reform would grandfather some health plans and, therefore, spare them from onerous, cost-increasing regulatory burdens. Unfortunately, the news isn’t good on that front. Under a “mid-range” estimate, more than half of all workers will not be in grandfathered plans within three years.

Under the most likely scenario, 87 million Americans will no longer be able to retain their current health plan. In fact, the number could be as high as 117 million. Small businesses will be especially hard hit and as many as 80 percent will lose their grandfathered status by 2013.

From the Administration’s own statements, it now appears that “grandfathering” was never intended to be a long-term phenomenon. Eventually, all firms will lose their grandfathered status and, in turn, employees will lose the plans they liked.

…And You Could Be Dropped Anyway.

As NCPA President John C. Goodman’s recent editorial in The Wall Street Journal made clear, even if you are in a grandfathered plan, your employer could drop your coverage anyway. Although estimates vary, the number of workers estimated to lose their employer-provided insurance is incredible. Consider:

  • The Congressional Budget Office (CBO) predicts that between nine and ten million workers will lose their coverage.
  • The Medicare Chief Actuary predicts that fourteen million employees will be dropped.
  • Former CBO Director Douglas Holtz-Eakin estimates the number at thirty-five million.

So, what’s the bottom line?

Because of ObamaCare, the United States could experience a complete restructuring of the economy, with firms dissolving and emerging solely based on government subsidies. Of course, that will means that millions of American workers won’t be able to keep the plan they have now.

Educate Your Friends & Family!

ObamaCare isn’t just a health care bill. It’s a law that increases deficit spending, constricts your access to care, destroys your private health insurance coverage and fundamentally changes your relationship with your doctor. Fight ObamaCare through education.

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