Arguably the only ‘good thing’ about U.S. Supreme Court Justice John Robert’s decision in July 2012 to not strike down the PPACA was his decision to provide governors a choice to expand their Medicaid rolls to the levels specified in the PPACA. In fact, this part of Robert’s ruling has been referred to by many as the only ‘silver lining’. In the end, however that perception depends upon who you ask. Many taxpayers are against the expansion because it will most certainly massively inflate state budgets all across the country. Many of which already point to Medicaid as their biggest line item.
Whilst the Obama administration touts the fact that the PPACA calls for the aforementioned matching federal funding for those who will be newly eligible for Medicaid in 2014. It is far less vocal about the fact that it only provides the existing or Traditional FMAP percentage match rate for the millions of Americans who were always eligible for Medicaid but either never knew they were or never bothered to enroll. These ‘old eligibles’ will now be required by federal law to maintain ‘minimum essential coverage‘ via Medicaid. Which means that they will all be enrolling in 2014 in order to avoid problems with the IRS. How much will the Traditional FMAP federal percentage match be in 2014? In states like Illinois and others it will be only 50%.
Who picks up the other half? That’s right, the state tax payer. Keep in mind Illinois taxpayers that this new tax increase will be in addition to the 66.66% tax increase Governor Quinn already imposed upon you in January 2011 and the $350 million additional tax increase in May 2012. How much will picking up the other half of the cost to enroll ‘old eligibles’ cost Illinois taxpayers? See the chart below. I’ll bet it’s closer to the CATO institute’s estimate of $10.1 billion.
However, that’s just the cost to Illinois taxpayers. How many people nationwide are ‘old eligibles’? This 2010 articlein the New England Journal of Medicine estimates that number to be 9 million Americans. Total cost to the states to enroll all of these ‘old eligibles’ on to Medicaid nationwide will be $931 Billion according to the Congressional Budget Office’s latest assessment. Keep in mind that those CBO assessments are only for years 2014 through 2022. What many governors are concerned about is what such a new commitment will cost state tax payers after the first 8 years? Well, we know what will happen after the first 6 years because beginning in 2020 the 100% federal Medicaid match rate for newly eligible recipients drops to 90%. This means that state taxpayers will pick up the other 10%. That alone will add billions to state budgets. However, a far more important question governors should be asking is what happens after the first 2 years?
You see the PPACA’s answer to improving Medicaid is to raise the amount the federal government pays to doctors who take MedicAID patients to a level commensurate to what the federal government pays to doctors who take MediCARE patients. Their thought process behind doing so is that more doctors will accept Medicaid under this arrangement because the reimbursement rate will be far higher. There’s only one problem. The federal governmentonly provides funding for this massive increase in Medicaid reimbursement ratios for the first 2 years. Afterward, state tax payers are on the hook for the rest.
This, more than anything else related to Medicaid expansion is a fiscal ticking time bomb for state budgets and one that is not being discussed nearly enough. Furthermore, just wait until hospitals – who are forced to treat emergency patients under EMTALA – start pressuring states for reimbursement of more than $11 billion in annual federal payment cuts for uncompensated care. Hospitals are a powerful lobbying force and they will lobby hard for that money.
GOVERNORS AND EMPLOYERS STUCK BETWEEN A ROCK AND A HARD PLACE
Recently Republican governors John Kasich of Ohio and Jan Brewer of Arizona and Rick Scott of Florida have decided to expand their Medicaid rolls under the PPACA. This has left many conservatives scratching their heads since both governors have been vocal public opponents of the PPACA. A closer look at the choice they faced sheds light on their decision. To understand it, we must first understand specifically how the PPACA expands Medicaid.
Prior to the passage of the PPACA, Medicaid was largely used to provide health care services to children of the indigent, their mothers, the disabled and seniors who spend down all their assets to qualify for long term care services. Under the new law childless adults will also be eligible for Medicaid with incomes at or below 133% of the federal poverty level – FPL. Since the PPACA disregards 5% of one’s income, the actual new eligibility level is 138% above the FPL. Using the Kaiser Family Foundation’s “Health Reform Subsidy Calculator” we can determine that a childless, adult would be eligible for Medicaid in 2014 if their annual income is at or below $15,302. For a family of four, their income would need to be at or below $31,155. This is a significant new burden on the taxpayer. Not only because 15.1 million childless adults would now be eligible for Medicaid but also because prior to the PPACA, Medicaid eligibility levels were set at 100% of the FPL. In 2012, that was $11,170 for an individual and $23,050 for a family of four in 48 contiguous states and D.C. It is this new annual income level ‘eligibility gap’. Specifically, income levels that fall within 100% and 138% of the FPL that creates yet another new problem for employers.
If a governor chooses to expand Medicaid under the PPACA, all of the newly eligible Medicaid recipients would simply be auto-enrolled onto Medicaid via the new ‘Health Insurance Exchanges’. And, since their income levels will be too low to qualify for a ‘Health Insurance Subsidy’. There will be no ramifications to employers if their employee’s annual income levels fall into this new ‘eligibility gap’. These new eligibles would simply enroll in Medicaid and eliminate the risk to their employers of being fined $2,000 annually for each of them under the PPACA “Employer Shared Responsibility” clause.
However, if a governor chooses not to expand Medicaid, employers in their state with 50 or more ‘full time equivalent’ employees would have to provide PPACA approved health insurance for all of their employees with income levels that fall into this new ‘eligibility gap’. Or else, pay a “Shared Responsibility” annual penalty of $2,000 for each employee (excluding the first 30 employees). Many employers will simply pay the annual penalty instead of providing PPACA compliant health insurance since the law mandates that employers can not require employees to pay more than 9.5% of their annual household income in cost sharing to help them pay for their health insurance. For example, if the cost to insure a single employee is $5,000 annually. The employer can not legally require the employee to pay more than $475 each year to help him/her pay for their health insurance coverage. This means the employer’s annual out of pocket cost to insure that employee would be $4,525. In this near future common scenario, paying the $2,000 ‘Employer Shared Responsibility’ penalty just makes better business sense.
Whilst certain Conservative governors may feel pressured to expand Medicaid because of the above scenario. It is crucial that they stick to their principles and not give in to requests from employers who are seeking relief on a micro level. For expanding Medicaid will do nothing but increase health insurance costs to everyone else, further burden taxpayers of other states. And, require employers to pay much more on a macro level as their tax burdens increase to pay for yet another massive entitlement.
I received a phone call at my agency on Friday by a client who is a friend of an attorney in Chicago who is paying $1,000 a month for individual employees on his group health insurance plan and nearly $3,000 a month for employees with dependents. And, he only has 5 employees. This phone call provided the impetus behind the following lengthy but valuable commentary.
Group Health Insurance – pros and cons:
Group health insurance provides ‘Guaranteed Insurability’ under 1996 HIPAA Portability law. This means that at the time of policy purchase – termed the ‘Initial Underwriting’ period – all applicants – regardless of their health history – must be provided ‘Guaranteed Insurability’. Meaning that the insurance company must cover each insured regardless of their medical history, height and weight, smoker status etc. And, depending on how long they have had continuous coverage prior to enrollment, the Group insurance policy either has to cover their preexisting conditions immediately – if they provide proof of continuous prior coverage of at least 18 months or more with no lapse in coverage of more than 63 days. Or, if they can not provide such proof, via a ‘Certificate of Creditable Coverage’ their preexisting conditions must be covered after a short waiting period, no longer than 12 months. That’s the pro part.
The con part is, in most states – like Illinois – the underwriter can increase the base health insurance premium required for that group by 67% based on one or more applicant’s adverse health history such as Cancer, Diabetes, Heart Attack, Heart disease etc. And, they can also increase the premiums by 1.25% each year that the employer owns that group policy. In some states like Indiana, underwriters can increase group premiums by as much as 108%. In other states, it’s as high as 300%.
Now, because all employees insured on a group health insurance policy are insured on the same policy, this 67% ‘Underwriting load’ is applied across the board to the premiums required to insure all those insured on the same group policy. Let’s say you have 5 attorneys insured on a small group policy. 4 are perfectly healthy with no adverse health history, normal height and weight and none are smokers. But, one employee is an overweight, diabetic smoker. Even though the 4 other employees are healthy. All of them will pay up to 67% more for their health insurance because they are on the same group policy as our morbidly obese smoker.
The alternative to Small Group Health insurance:
What is the alternative to this common problem experienced by small employers all across the nation?
Very simple. Consider terminating your group health insurance policy. Here’s why I recommend doing so. Since you have less than 20 employees, you are under no obligation to provide Federal COBRA continuation coverage. And, under the aforementioned 1996 HIPAA Portability law, once your employees lose their group health insurance, they are immediately qualified to purchase another “HIPAA qualified” plan elsewhere on a guaranteed issue basis. Meaning, that they can not be denied coverage regardless of the severity of their preexisting medical conditions. Since we have had High Risk Health Insurance pools or guaranteed issue individual mandates in 45 states for many years, your employees with serious preexisting conditions are automatically qualified to purchase health insurance in one of these High Risk Health Insurance Pools because they have now lost their employer sponsored group health insurance ‘to no fault of their own’.
High Risk Health insurance pools:
A high risk health insurance pool is nothing more than a pool of money that the state of Illinois requires insurers who operate in our state to contribute to in order to cover Federally eligible individuals - those who have lost Group health insurance coverage or have exhausted Federal COBRA coverage. Or, individuals who apply for an individual health insurance policy and are denied coverage due to a preexisting condition. In Illinois our high risk pool is called ICHIP. ICHIP is an acronym that stands for the “Illinois Comprehensive Health Insurance Pool” – www.chip.state.il.us
ICHIP is not Medicaid or any other federal or state entitlement program. It is instead a fully insured major medical health insurance policy issued to an individual applicant. High Risk pools are normally administered by the largest health insurance carrier in the state. In our state, that administrator is Blue Cross Blue Shield of Illinois. As such, all Illinois ICHIP policy holders carry a Blue Cross Blue Shield of Illinois insurance ID card and have access to hospitals, physicians, specialist and other Blue Cross PPO network providers. The difference is that whilst Blue Cross will apply their network PPO discounts to all claims that occur within the Blue Cross network. The ultimate payer of ICHIP policy holder claims is the state of Illinois High Risk health insurance pool - which also receives small Federal grants at certain points.
The process for enrolling in ICHIP:
In Illinois, the process involved for former Group insured applicants with adverse health histories to enroll in our state’s high risk health insurance pool is as follows:
The employer or group policy holder would write a signed ’letter of intent’ on company letterhead to ICHIP stating that is their intent to terminate their group health insurance policy for all employees as of a future date. That letter would be submitted to ICHIP along with that employee’s application. Once the employee is enrolled on ICHIP – again their enrollment is guaranteed – then the group is promptly terminated and the aforementioned ‘Certificate of Creditable Coverage” is submitted to ICHIP as proof that the former Group insured employee has had at least 18 months of prior coverage with no lapse in coverage of more than 63 days. This entitles them to immediate coverage for their preexisting conditions under the aforementioned 1996 Federal HIPAA Portability law
The ICHIP premiums for an individual may be similar or even higher than your current group premium for an individual insured - depending on the deductible you chose. However, the point here is that you are isolating your risk factor by insuring formerly insured group members who have adverse medical histories on ICHIP. This thereby allows you to ’free up’ other formerly insured group members and allows them to apply for individual health insurance policies which are always far less expensive because the rates are based upon the zip code demographic in which the applicant lives. This puts them into a pool of hundreds of thousands instead of only 5 people on one Small Group policy. In other words, your former employees who do not have adverse health histories will no longer be paying significantly more because they are insured on a Small group policy with an ‘underwriting load’ that is based on one person’s adverse health history.
Securing coverage for healthy employees without creating a taxable event:
One of the major problems with the American health insurance system is that we are still operating on out dated World War 2 era policies that allow employers to deduct their Group Health insurance premiums but do not allow individuals and families to do so when they purchase their own individual health insurance policy outside the Group arena. The solution to this is to put in place an FSA – Flexible Spending Account. Doing so allows the employer to pay for each employees health insurance policy premium – in whole or in part – without creating a tax liability for their employees. Doing so does not violate ERISA laws, Department of Labor laws or any insurance laws that exist now or will exist after 2014.
If you would like to begin the exploration process and find out how much premium this intelligent design option will save your company please contact me.
Beginning January 1, 2014 the PPACA (a.k.a. ‘Obamacare’) legislation levies a brand new tax – the “Roberts Tax”. A tax aptly named after U.S. Supreme Court Chief Justice John Roberts who created this new tax all by himself. It is neither an excise tax, nor a capital gains tax or any other kind of defined tax. It is instead a new tax, a tax for doing nothing and it will be levied on nearly all Americans including small and large business owners whether they do offer health insurance to their employees or they do not. To find out if you will pay the ‘Roberts Tax’ see chart below:
The best way to describe this new tax is to imagine walking into a grocery store and the clerk asks if you would like to purchase a pack of gum. You politely decline the offer and are then forced by a new tax law – as defined by John Roberts – to give that clerk a tax for refusing to purchase that pack of gum. This, my fellow Americans, is how unmoored from our Constitution that our Federal Government has become.
It is important to note that this new ‘Roberts Tax’ is a tax that was vehemently denied by President Obama on multiple occasions as being a tax at all. In the interview below with ABC news, President Obama passionately refutes the very definition of a tax, as defined in the dictionary, in order to continue to message this new tax as a ‘fine’ and not a tax.
The reason President Obama so passionately refuted the fact that this new ‘Roberts Tax’ is indeed a tax and instead messaged it as a ‘fine’ is because he made a ‘firm pledge’ (in the video below) to the American people in Dover, New Hampshire, prior to the passage of the PPACA. “I can make a firm pledge. Under my plan, no family, making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” – Barack Obama.
Beginning January 1, 2014, this new ‘Roberts Tax’ will affect nearly all Americans. None more onerously than small business owners with 50 or more full-time employees who do not offer health insurance to their employees. Or, do not offer a health insurance plan that includes the new PPACA mandated “Essential Health Benefits Package“.
These small business owners are referred to by the Obama administration as ‘Large Employers’. The Obama administration considers a ‘Large Employer’ as one with more than 50 full-time employees in calendar year 2013. Thanks to a ‘new rule’ written by HHS, a full-time employee has now been REDEFINED as one who works 30 hours or more each week (traditionally ‘full time’ employee has been one who works 40 hours per week). Full-time seasonal employees who work for less than 120 days during the calendar year are excluded from any PPACA ‘Robert’s Tax’ calculations. However, the hours worked by part-time employees are included in the calculation of a ‘Large Employer’, each month, by dividing their total number of monthly hours worked by 120.
EXAMPLE:
A ‘Large Employer’ has 35 full-time employees (who work 30 or more hours per week). That ‘Large Employer’ also has 20 part time employees who each work 24 hours per week. This equates to 96 hours each month. These part-time employee hours would be equal to 16 full-time employees. Here’s how that is calculated:
20 employees multiplied by 96 hours = 1920 total hours worked. 1920 hours divided by 120 = 16 full time employees. Isn’t this fun? Oh wait, there’s more!
How the new ‘Robert’s Tax’ a.k.a. “Shared Responsibility Clause” is triggered for “Large Employers”
Beginning in 2014, many employees who are not offered health insurance through their employer and who are not eligible for Medicaid may be eligible for “Advanced Premium Tax Credits” for coverage through a PPACA “Health Insurance Exchange”.
The PPACA empowers the Internal Revenue Service to allot ‘Advance Premium Tax Credits’ to childless adult individuals with incomes surpassing 138% of the Federal Poverty Level and families 400% of the Federal Poverty Level. Using 2012 FPL, this would mean that individuals in 48 contiguous states & D.C. making $42,680 annually and families making $92,200 would now qualify for an ‘Advance Premium Tax Credit’ in state-based PPACA “Health Insurance Exchanges”.
The IRS has released additional ‘guidance’ related to the PPACA “Employer Shared Responsibility” rules. The guidance includes proposed regulations published in the Federal Register on Wed. January 2nd, 2013 and a series of questions and answers published on the IRS website. For the most part the new guidance closely follows previous guidance released by the IRS. However, there are a number of clarifications and some important new information for employers to consider.
Background
Beginning in 2014, an “applicable large employer” may be subject to a “Shared Responsibility Payment” (i.e. Robert’s Tax) under one of two different circumstances:
4980H(a) liability – Applies if an employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage (MEC), and any full-time employee is certified as having received a subsidy (i.e. a premium tax credit or cost sharing reduction) when purchasing individual health insurance through a public Exchange. In this case the employer may be liable for a penalty of $2000 per year times the total number of full-time employees (not counting the first 30).
4980H(b) liability – Applies if the employer does offer its full-time employees (and their dependents) MEC, but the plan is unaffordable or does not provide minimum value, and at least one full-time employee is certified as having received a subsidy when purchasing individual health insurance through a public Exchange. In this case the employer may be liable for a penalty of $3000 per year times the number of full-time employees who are certified to receive, and purchase, subsidized individual health insurance through a public Exchange
An applicable large employer is an employer that employed an average of at least 50 full-time employees during the preceding calendar year. See below for additional details on how related organizations and corporations under common control will be treated for the purpose of this rule.
Transition Rule
The IRS guidance provides transition ‘relief’ for non-calendar year plans. Employers who sponsor non-calendar year plans will not be liable for any 4980(H) liability until the first plan year beginning after January 1, 2014.
To be eligible for this transition ‘relief’, an employer must have maintained the non-calendar year plan as of December 27, 2012 (the day prior to the initial release of the rule). This provision eliminates the opportunity for an employer to change plan years in an attempt to delay being subject to 4980(H) liability.
Offering Coverage to all Full-time Employees – The 95% Rule
As stated above, an employer faces potential penalties under 4980H(a) if it fails to offer minimum essential coverage to all full-time employees. The IRS has previously commented that the penalty should not apply in the case of an employer that intends to offer coverage to all its full-time employees, but fails to offer coverage to a few full-time employees. IRS Notice 2011–36 initially addressed this issue by indicating that the IRS was contemplating a rule stating that an employer offering coverage to “substantially all” of its full-time employees would not be subject to a 4980H(a) assessable payment. In the new guidance the IRS allows a margin of error regarding this requirement, and has introduced a “95%” standard.
An applicable large employer will be treated as offering coverage to its full-time employees if it offers coverage to all but 5% (or if greater, five) of its full-time employees. This rule alleviates employer fears that a small administrative mistake could trigger significant employer penalties.
Entities under Common Control
All entities and organizations treated as a single employer under the rules contained in Code §414 are combined in determining if an employer is an “applicable large employer.” Consequently, a number of smaller organizations (that may not each have 50 FTEs) could be subject to 4980(H) liability if they are considered under common control according to §414 rules.
The new IRS guidance defines each company that is part of a control group as an “applicable large employer member” and applies special rules to each separate member of the control group:
Penalties will apply separately to each member organization of a control group. For example, if one member organization fails to provide MEC to all its full-time employees, the penalty would be based on the number of full-time employees in that particular organization, not the total number of employees in the entire control group.
In calculating the 4980H(a) liability, the “not counting the first 30 rule” would apply proportionality to each member entity. For example, a member entity that accounts for 50% of the total full-time employees in the control group would pay a penalty of $2000 per year times the number of full-time employees in that specific entity not counting the first 15 (50% of 30).
Dependent Coverage
To avoid 4980(H) liability, employers must offer coverage to all full-time employees and their dependents. It is important to note that the cost of the dependent coverage is not used in determining the plan’s affordability under 4980(H). Plan affordability for employer penalty purposes is based only on the amount the employee must pay for self-only coverage.
In what was a surprise to many observers, the requirement to offer coverage to dependents does not apply to spouses. The proposed regulations define an employee’s dependents for purposes of 4980(H) as an employee’s child who is under 26 years of age.
Affordable Coverage Safe Harbors
Employers face potential liability under 4980(H)(b) if the employer coverage is not affordable to an employee.
Coverage is affordable if the employee’s required contribution for self-only coverage does not exceed 9.5% of the employee’s household income.
Household income is defined as the modified adjusted gross income of the employee and any members of the employee’s family (including a spouse and tax dependents) who are required to file an income tax return
Recognizing that employers will generally not know an employee’s household income, the IRS outlined a proposed affordability safe harbor (referred to as the W–2 safe harbor) in prior notices. The proposed regulations provide two additional safe harbors for determining affordability.
W-2 Safe Harbor – An employer will not be subject to an assessable payment if the required employee contribution toward the self-only premium for the employer’s lowest cost coverage that provides minimum value, does not exceed 9.5 % of the employee’s W–2 wages.
Rate of Pay Safe Harbor – An employer can take the hourly rate of pay for each hourly employee and multiply that rate by 130 hours per month to determine a monthly “rate of pay.” The employee’s monthly contribution amount (for the self-only premium of the employer’s lowest cost coverage that provides minimum value) is affordable if it is equal to or lower than 9.5% of the computed monthly wage estimate. For salaried employees, monthly salary would be used instead of hourly salary multiplied by 130.
Federal Poverty Line Safe Harbor – An employer may also rely on a design-based safe harbor using the Federal Poverty Level (FPL) for a single individual. Coverage offered to an employee is affordable if the employee’s cost for self-only coverage does not exceed 9.5% of the FPL for a single individual. For example, in 2012 affordable coverage under this method would have been set at a monthly contribution in the lower 48 states of $88.43 for self-only coverage (FPL is slightly higher in Alaska and Hawaii)
Election Changes under Section 125 Cafeteria Plans
Employees enrolled in a non-calendar year Section 125 Cafeteria plan who are eligible on January 1, 2014 for subsidized coverage when purchasing health insurance through a public Exchange may wish to drop the employer plan during the plan year. However, current Section 125 rules would not permit a mid-plan-year election change in this situation.
The proposed regulations allow an employer to amend their Section 125 plan to permit this change. Interestingly, the rules do not require the employer to allow this election change. Some employers may be inclined not to permit such a change if an employee moving to subsidized individual coverage triggers employer liability under the shared responsibility rules.
Additional Guidance on Definition of Full-Time Employees
In August 2012 the IRS released significant guidance on defining an employee’s full-time status, including an optional look back measurement period and corresponding stability/eligibility period. The new proposed regulations clarify and expand on a number of issues related to these full-time employee rules.
The guidance clarifies that that an employer can use the standard look back measurement period each year to determine the full-time status of all ongoing employees. However, for new employees, an initial measurement period can be applied only to “variable hour” and seasonal employees. A plan may not have a waiting period of more than 90 days for all other employees expected to work 30 hours or more per week.
When determining eligibility for 2014, an employer who plans to use a 12-month measurement and stability period is allowed to use a shorter measurement period in 2013, which will apply to the 2014 stability period. However the 2013 one-time “short” measurement period must be at least 6 months long and begin no later than July 1, 2013.
An employee hired to work an average of at least 30 hours per week cannot be treated as a variable hour employee simply because they are hired into a high turnover position. These employees must be treated as full-time employees and can have no more than a 90-day waiting period before being eligible for coverage.
The guidance clarifies how hours of service must be counted toward an employee’s full-time status, including a requirement to count all paid leave as hours of service
Summary
These new ‘Interim Final Rules’ contain other miscellaneous guidance, including rules of special interest to staffing firms. One such set of “anti-abuse” rules is designed to limit an employer’s ability to use temporary staffing arrangements to avoid 4980(H) liability.
Extra Large Employers
Finally, ‘Extra Large Employers’ that offer health insurance to more than 200 full-time employees must automatically enroll new full-time employees in a plan (and continue covering current employees). Many of these ‘Extra Large Employers’ offer ‘self funded plans’ with ‘stop loss arrangements’ and defined ‘attachment points’. For now, these employers are in luck for they are EXEMPT from many of the more onerous regulations imposed by the PPACA. For an excellent break down of the regulations these employers are required to comply with visit this link. It is this expert’s opinion that among the reported 13,000 pages of additional regulations that have been written since the passage of the PPACA. There will most likely be regulations that change the exemptions that employers who offer ‘self funded’ plans currently enjoy. As insurance companies begin to offer newly designed ‘stop loss’ arrangements with smaller ‘attachment points’ to attract smaller employers. In fact, there is already a ‘PPACA panel’ exploring this as I write this article.
Let’s say you’ve read the above information and your brilliant mind starts devising an easy way out. For example, you decide it would be prudent to split up your company of 50 employees into 2 separate companies with 25 employees each. Great idea! The only problem is the Statist attorneys who helped craft the PPACA already thought of that.
The IRS will still consider both of your companies as one company. That’s because the ‘Robert’s Tax’ relies on “controlled group” provisions. These provisions focus on who controls the company. If you are the named owner of those 2 companies, the IRS will combine all employees under both corporations and hit you with the ‘Robert’s Tax’.
“Controlled group” provisions are meant to prevent skirting around the law” said Christopher Condeluci, a Washington D.C. attorney at the law firm Venable who helped draft the rule for the Senate Finance Committee. “These rules are intended to snuff out this type of abuse,” Condeluci said. “You cannot get around the employer mandate.”
Let’s say your a business owner who employs 50 or more employees at completely different companies. You have 25 employees at a car repair shop and 25 at a restaurant. You would have to provide insurance or pay the “Roberts Tax” at both, even though each or your separate company has less than 50 employees. Again, it’s the named owner of those combined companies that the IRS looks at under ‘controlled group’ provisions.
Worse yet, Married couples may also find themselves impacted by ‘controlled group’ provisions, since IRS law generally assumes an individual owns interest in their spouse’s business. Oh, it’ just keeps getting better doesn’t it?
Get ready for more paperwork and new regulation compliance.
Beginning March 1, 2013, employers must provide employees written notice of the following:
Of the existence of a PPACA “Health Insurance Exchange’
Of their potential eligibility for federal assistance if the employer’s plan is “unaffordable”
And that they may lose the employer’s contribution to health coverage if they purchase health insurance through a PPACA ‘Health Insurance Exchange’.
Besides the 20 new or higher taxes imposed by the PPACA which are listed at the end of this article. The non-partisan Government Accountability Office (GAO) compiled a list of 47 new regulations the IRS is empowered to administer in overseeing the PPACA.
1.) Prohibits group health plans from discriminating in favor of highly compensated individuals.
2.) Establishes a temporary reinsurance program to provide reimbursement for a portion of the cost of providing health insurance coverage to early retirees.
3.) Imposes a penalty on health plans identified in an annual Department of Health and Human Services (HHS) penalty fee report, which is to be collected by the Financial Management Service after notice by the Department of the Treasury (Treasury).
4.) Requires state exchanges to send to Treasury a list of the individuals exempt from having minimum essential coverage, those eligible for the premium assistance tax credit, and those who notified the exchange of change in employer or who ceased coverage of a qualified health plan.
5.) Provides tax exemption for nonprofit health insurance companies receiving federal start-up grants or loans to provide insurance to individuals and small groups.
6.) Provides tax exemption for entities providing reinsurance for individual policies during first 3 years of state exchanges.
7.) Provides premium assistance refundable tax credits for applicable taxpayers who purchase insurance through a state exchange, paid directly to the insurance plans monthly or to individuals who pay out-of-pocket at the end of the taxable year.
8.) Provides a cost-sharing subsidy for applicable taxpayers to reduce annual out-of-pocket deductibles.
9.) Outlines the procedures for determining eligibility for exchange participation, premium tax credits and reduced cost-sharing, and individual responsibility exemptions.
10.) Allows advance determinations and payment of premium tax credits and cost-sharing reductions.
11.) Authorizes IRS to disclose certain taxpayer information to HHS for purposes of determining eligibility for premium tax credit, cost-sharing subsidy, or state programs including Medicaid, including (a) taxpayer identity; (b) the filing status of such taxpayer; (c) the modified adjusted gross income of taxpayer, spouse, or dependents; and (d) tax year of information.
12.) Provides nonrefundable tax credits for qualified small employers (no more than 25 full-time equivalents (FTE) with annual wages averaging no more than $50,000) for contributions made on behalf of its employees for premiums for qualified health plans.
13.) Requires all U.S. citizens and legal residents and their dependents to maintain minimum essential insurance coverage unless exempted starting in 2014 and imposes a fine on those failing to maintain such coverage.
14.) Requires every person who provides minimum essential coverage to file an information return with the insured individuals and with IRS.
15.) Imposes a penalty on large employers (50+ FTEs) who (1) do not offer coverage for all of their full-time employees, offer unaffordable minimum essential coverage, or offer plans with high out-of-pocket costs and (2) have at least one full-time employee certified as having purchased health insurance through a state exchange and was eligible for a tax credit or subsidy.
16.) Requires information reporting of health insurance coverage information by large employers (subject to IRC 4980H) and certain other employers.
17.) Offers tax exclusion for reimbursement of premiums for small-group exchange participating health plans offered by small employers to all full-time employees as part of a cafeteria plan.
18.) Subjects new group health plans to certain Public Health Service Act requirements and imposes the excise tax on plans that fail to meet those requirements. (Conforming amendment)
19.) Authorizes IRS to disclose certain taxpayer information to the Social Security Administration (SSA) regarding reduction in the subsidy for Medicare Part D for high-income beneficiaries. (Conforming amendment)
20.) Requires the independent institute partnering with the National Academy of Sciences (NAS) to implement a key national indicator system to be a nonprofit entity under section 501(c)(3).
21.) Imposes a fee through 2019 on specified health insurance policies and applicable self-insured health plans to fund the Patient-Centered Outcomes Research Trust Fund to be used for comparative effectiveness research.
22.) Imposes a 40 percent excise tax on high cost employer-sponsored health insurance coverage on the aggregate value of certain benefits that exceeds the threshold amount.
23.) Requires employers to disclose the value of the employee’s health insurance coverage sponsored by the employer on the annual Form W-2.
24.) Repeals the tax exclusion for over-the-counter medicines under a Health Flexible Spending Arrangement (FSA), Health Reimbursement Arrangement (HRA), Health Savings Account (HSA), or Archer Medical Savings Account (MSA), unless the medicine is prescribed by a physician.
25.) Increases tax on distributions from HSAs and Archer MSAs not used for medical expenses.
26.) Limits health FSAs under cafeteria plans to a maximum of $2,500 adjusted for inflation.
27.) Imposes additional reporting requirements for charitable hospitals to qualify as tax-exempt under IRC 501(c)(3) and requires hospitals to conduct a community health needs assessment at least once every 3 years and to adopt a financial assistance policy and policy relating to emergency medical care.
28.) Imposes a fee on each covered entity engaged in the business of manufacturing or importing branded prescription drugs.
29.) Imposes an annual fee on any entity that provides health insurance for any U.S. health risk with net premiums written during the calendar year that exceed $25 million.
30.) Allows the deduction for retiree prescription drug expenses only after the deduction amount is reduced by the amount of the excludable subsidy payments received.
31.) Increases the threshold for the itemized deduction for unreimbursed medical expenses from 7.5 percent of Adjusted Gross Income (AGI) to 10 percent of AGA (unless taxpayer turns 65 during 2013-2016 and then threshold remains at 7.5 percent).
32.) Denies the business expenses deductions for wage payments made to individuals for services performed for certain health insurance providers if the payment exceeds $500,000.
33.) Imposes an additional Hospital Insurance (Medicare) Tax of 0.9 percent on wages over $200,000 for individuals and over $250,000 for couples filing jointly.
34.) Limits eligibility for deductions under section 833 (treatment of Blue Cross and Blue Shield) unless the organizations meet a medical loss ratio standard of at least 85 percent for the taxable year.
35.) Allows an exclusion from gross income for the value of specified Indian tribe health care benefits.
36.) Allows small businesses to offer simple cafeteria plans—plans that increase employees’ health benefit options without the nondiscrimination requirements of regular cafeteria plans.
37.) Establishes a 50 percent nonrefundable investment tax credit for qualified therapeutic discovery projects.
38.) Requires employers to provide free choice vouchers to certain employees who contribute over 8 percent but less than 9.8 percent of their household income to the employer’s insurance plan to be used by employees to purchase health insurance though the exchange.
39.) Imposes a tax on any indoor tanning service equal to 10 percent of amount paid for service.
40.) Excludes from gross income amounts received by a taxpayer under any state loan repayment or loan forgiveness program that is intended to provide for the increased availability of health care services in underserved or health professional shortage areas.
41.) Increases the maximum adoption tax credit and the maximum exclusion for employer-provided adoption assistance for 2010 and 2011 to $13,170 per eligible child.
42.) Extends the exclusion from gross income for reimbursements for medical expenses under an employer-provided accident or health plan to employees’ children under 27 years.
43.) Imposes an unearned income Medicare contribution tax of 3.8 percent on individuals, estates, and trusts on the lesser of net investment income or the excess of modified adjusted gross income (AGI + foreign earned income) over a threshold of $200,000 (individual) or $250,000 (joint).
44.) Imposes a tax of 2.3 percent on the sale price of any taxable medical device on the manufacturer, producer, or importer
45.) Amends the cellulosic biofuel producer credit (nonrefundable tax credit of about $1.01 for each gallon of qualified fuel production of the producer) to exclude fuels with significant water, sediment, or ash content (such as black liquor).
46.) Clarifies and enhances the applications of the economic substance doctrine and imposes penalties for underpayments attributable to transactions lacking economic substance.
47.) Increases the required payment of corporate estimated tax due in the third quarter of 2014 by 15.75 percent for corporations with more than $1 billion in assets, and reduces the next payment due by the same amount.
What about that Small Employer Health Insurance Tax Credit?
The tax credit is available from 2010 through 2015. For 2010 – 2013 the maximum credit is 35% of qualified premium costs paid by for-profit companies, and 25% for non-profits. The maximum credit is only available to employers with no more than 10 full-time equivalent employees (FTE’s), who are paid average annual wages of $25,000 or less. A reduced credit is available on a phase-out basis for employers with between 10 and 25 FTE’s, who are paid average wages of $25,000 to $50,000. In effect, the credit is reduced by 6.667% for each FTE in excess of 10, and by 4% for each $1,000 in average annual wages paid above $25,000. For example, an employer with 13 full-time equivalent employees who are paid average annual wages of $45,000 will not receive a tax credit. No tax credit is available for employers with 25 or more FTE’s, or who pay average annual wages of $50,000 or more.
In 2014 through 2015, the credit increases to 50% of the amount of qualified premium costs paid by for-profits, and 35% for non-profits, however by then, the employer must participate in a state insurance exchange in order to obtain the credit. [Note: Each state is required to create an insurance exchange by January 1, 2014 which must include an American Health Benefit Exchange, as well as aSmall Business Health Options Program (SHOP) Exchange.]
Have you noticed a common theme regarding the above new PPACA ‘Roberts Tax’ rules and regulations? That’s right, the fine for both the individual and for the employers is a fraction of the cost to purchase and maintain health insurance. This is not only why many employers will have a strong impetus to push their employees off of their health insurance plans but it is also why individuals will gladly pay the ‘Roberts Tax’ of $95 in 2014 (which graduates to $695 by 2016) instead of paying for a far more expensive health insurance plan. Worse yet, since the criminal fines (imprisonment) were removed from the PPACA legislation prior to passage. The only recourse that the Federal Government has to collect the ‘Roberts Tax’ is to hold one’s tax refund. Since nearly half of our nation pays no income taxes, how exactly will the IRS hold a tax refund from someone who pays no income taxes?! So, once again, who’s really going to be paying for all of this? That’s right! The few, the proud, the 53% of us who already pay all of the income taxes.
I discussed the impact of the “Roberts Tax” and other issue pertaining to the impact of the PPACA on Small Business owners for the Fox News Business television network on March 28, 2012:
Now that we’ve discussed the impact of the “Roberts Tax” on Individuals, Taxpayers and Business Owners. Let’s take a closer look at all of the 20 new or higher taxes levied upon taxpayers via the PPACA. Arranged by their respective effective dates, below is the total list of all $569 billion in tax hikes (over the next ten years) in the PPACA, where to find them in the bill, and how much your taxes were scheduled to go up based on initial projections by the CBO – Congressional Budget Office in the year 2010.
Taxes that took effect in 2010:
1. Excise Tax on Charitable Hospitals (Min$/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 bil/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 bil/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
Taxes that took effect in 2011:
7. Medicine Cabinet Tax ($5 bil/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 ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
Tax that took effect in 2012:
9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957
Taxes that take effect in 2013:
10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93
Capital Gains
Dividends
Other*
2012
15%
15%
35%
2013+
23.8%
43.4%
43.4%
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.
11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:
First $200,000
($250,000 Married)
Employer/Employee
12. Tax on Medical Device Manufacturers ($20 bil/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 <$100. Bill: PPACA; Page: 1,980-1,986
13. High Medical Bills Tax ($15.2 bil/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 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389
15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994
16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000
Taxes that take effect in 2014:
17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following
1 Adult
2 Adults
3+ Adults
2014
1% AGI/$95
1% AGI/$190
1% AGI/$285
2015
2% AGI/$325
2% AGI/$650
2% AGI/$975
2016 +
2.5% AGI/$695
2.5% AGI/$1390
2.5% AGI/$2085
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).Bill: PPACA; Page: 317-337
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 bil/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
Taxes that take effect in 2018:
20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/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
2012 updated CBO & JCT projections reflect a doubling of initial PPACA tax projections.
As is the case with nearly all Government data houses, initial projections are rarely on target. Now, less than 2 years after initial 2010 projections. The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) confirm what America already knew – that the Democrats’ health care law is actually a $1.058 trillion tax hike that families and employers simply cannot afford. The recent Supreme Court ruling left in place 21 tax increases enacted as part of that law, a dozen of which – marked with an asterisk (*) below – target Americans earning less than $200,000 per year for singles and $250,000 per year for married couples, in clear violation of the President’s pledge to avoid tax hikes on low- and middle-income taxpayers. According to the new CBO and JCT estimates, the gross tax increases in the law now total $1.058 trillion over 2013-2022. That new amount is nearly twice the “advertised” ten-year tax hike amount claimed when Democrats originally pushed the law through Congress.
Provision
March 2010 Estimate
(‘10-‘19)
June/July 2012
Re-Estimates
(‘13-‘22)
Additional 0.9 percent payroll tax on wages and self-employment income and new 3.8 percent tax on dividends, capital gains, and other investment income for taxpayers earning over $200,000 (singles)/$250,000 (married)
210.2
317.7
“Cadillac tax” on high-cost plans *
32.0
111.0
Employer mandate *
52.0
106.0
Annual tax on health insurance providers *
60.1
101.7
Individual mandate *
17.0
55.0
Annual tax on drug manufacturers / importers *
27.0
34.2
2.3 percent excise tax on medical device manufacturers / importers *
20.0
29.1
Limit FSAs in cafeteria plans *
13.0
24.0
Raise 7.5 percent AGI floor on medical expense deduction to 10 percent *
15.2
18.7
Deny eligibility of “black liquor” for cellulosic biofuel producer credit
23.6
15.5
Codify economic substance doctrine
4.5
5.3
Increase penalty for nonqualified HSA distributions *
1.4
4.5
Impose limitations on the use of HSAs, FSAs, HRAs, and Archer MSAs to purchase over-the-counter medicines *
5.0
4.0
Impose fee on insured and self-insured health plans; patient-centered outcomes research trust fund *
2.6
3.8
Eliminate deduction for expenses allocable to Medicare Part D subsidy
4.5
3.1
Impose 10 percent tax on tanning services *
2.7
1.5
Limit deduction for compensation to officers, employees, directors, and service providers of certain health insurance providers
0.6
0.8
Modify section 833 treatment of certain health organizations
0.4
0.4
Other revenue effects
60.3
222.01
Additional requirements for section 501(c)(3) hospitals
Negligible
Negligible
Employer W-2 reporting of value of health benefits
1 Includes CBO’s $216.0 billion estimate for “Associated Effects of Coverage Provisions on Tax Revenues” and $6.0 billion within CBO’s “Other Revenue Provisions” category that is not otherwise accounted for in the CBO or JCT estimates.
Dr. Jill Vecchio breaks down the impact of the PPACA on employers:
Starting in 2014, the “Patient Protection and Affordable Care Act” mandates that all Individual/Family and Small Group policies sold inside AND outside the new “Health Insurance Exchanges” must include a core set of “Essential Health Benefits” or “EHB’s”. The December 7th 2012 proposed ruling from the Health & Human Service Department directs each state to designate a “Benchmark” health insurance plan that all other major medical plans sold in that state must conform too in design. As of the December 26th 2012 deadline, 22 states have failed to designate a ‘Benchmark Plan’. So, those states (Illinois is one of them) will be required to use the biggest seller in the small-group market in their state as their “Benchmark” plan. In Illinois, that plan is the Blue Cross Blue Shield Blue Advantage Entrepreneur plan.
This is my favorite Small Group plan in Illinois. In fact, nearly all of my small group clients in Illinois currently offer this plan to their employees today. Why? Because it is very rich in benefits. Now, the ONLY way their employees can afford to have this plan is because their employer subsidizes all or nearly all of the premium for them as an added employee benefit. And, using archaic laws passed during WW2 the employer gets to deduct this cost outlay from his tax burden. Since Individual and Family plans (which are not subsidized by an employer) must now conform to the rich benefit structure of these far more expensive Small Group plans, health insurance premiums for individual and families must increase and they will do so EXPONENTIALLY. Most especially since these plans must also conform to the other PPACA mandated benefits outlined in great detail here. Some of which have already been implemented and have played a major role in inflating health insurance premiums to their highest point in recorded history. Resulting in the demise of more than 20 health insurance carriers since the passage of the PPACA on March 23, 2010.
This is why the Kaiser Family Institute reflects an average annual premium for a family purchasing a ‘Qualified Health Plan” to be more than $14,000 a year. Worst part, these consumers will not see this true cost of their ‘Government approved” health insurance because the few, the proud, the 53% of us who still pay income taxes will ASSUME THE ROLE OF THEIR EMPLOYER by subsidizing the majority of the premium for families making up to 400% above the current Federal poverty level. This is why the “LIV’s” – Low Information Voters – will assume that Barack Obama magically made health insurance cheaper. In reality, the person footing the bill for this new and largest entitlement in U.S. history will once again be the few, the proud, the 53% of us who still pay income taxes. And, unlike employers, we will not receive a tax deduction for doing so. If you are a taxpayer, do you know how much you will be paying to subsidize the health insurance premium for millions of Americans who are and who are not poor? Click here. To see the plan that qualifies as a “Benchmark” plan in your state click here.
The worst part about all of this is the fact that as we expand a massive new entitlement to Americans who are and who are not poor, we divert and exhaust revenue that should be going to help those within our nation who are truly indigent. For it is these Americans who need quality health insurance coverage the most. Sadly, even though the President promised “affordable health insurance for all“. These Americans will not be carrying a Blue Cross, Humana or United Healthcare card like other Americans. They will instead receive a government Welfare program called Medicaid. How many Americans will the PPACA add to Medicaid? 17 million according to the CBO.
If you want to see just how expensive “Government approved” health insurance will be in the new health insurance exchanges. Just click on the Kaiser Family Institute’s Exchange Calculator here. Then, enter an income of $50,000 for a family of four. First, look at the “unsubsidized health insurance premium“. This is the actual premium for the health insurance. As you can see, the cost of these policies are extremely expensive. Why? Because the “Affordable Care Act” mandates that all of these Preventative Care benefits must be provided to the policy holder with no copay, deductible or any other out of pocket expense. Add to all of those newly mandated Preventative Care benefits, the recently added “Essential Health Benefits” which will also now be included on all health insurance policies sold within the exchanges.
Still using the calculator, take a look at how much the consumer will actually pay for their health insurance once the few, the proud, the 53% of us who still pay income taxes have subsidized their premium. The “Affordable Care Act” doubles down on what I call “Consumer Detachment Syndrome”. This ‘syndrome’ is a result of WW2 era legislation that tied health insurance to employers. Since many employers pay much of the cost of health insurance for their employees as an added benefit. Many consumers have no idea what health insurance truly costs until they lose their job and receive a COBRA continuation premium that rivals the size of their mortgage payment.
This “Detachment Syndrome” will continue with the “Affordable Care Act” since many consumers will not see these massive new tax payer subsidies when they purchase health insurance in the exchanges. Instead, they will believe that the “Affordable Care Act” magically reduced the cost of health insurance, just like the President promised. And, the burden on the tax payer will continue to increase. Sadly, there are not enough producers to tax to sustain this massive new entitlement for long. This means that the printing and borrowing will continue at the Federal level and the cost of all of this will be passed on to our children and grandchildren. Either way, the “Affordable Care Act” is unsustainable.
States like Massachusetts havealready developed a state -based health insurance exchange. In fact, the exchange in Massachusetts is the prototype that will be used to develop other health insurance exchanges under the PPACA. There’s only one problem, the cost to taxpayers. At last count, the Massachusetts health care overhaul initiated by Mitt Romney has cost taxpayers more than $8 Billion. The Federal tax credits provided to other states who make the catastrophic budgetary mistake to develop a state-based PPACA exchange should be equally staggering.
Still have that calculator open? Enter $30,000 for a family of four and $15,000 for an individual. As you can see, those people will not be getting health insurance. In fact, according to the latest CBO assessment, 17 million of them will receive a Government WELFARE program called Medicaid instead. Medicaid is the worst and most dangerous health care program ever devised by man. Even though the President promised “Affordable Health Insurance for all Americans.”
All governors should REJECT state based health insurance exchanges. Below are the multiple reasons why:
1.) The PPACA legislation (a.k.a. Obamacare) and the recent U.S. Supreme Court decision confirmed that states retain the right to either open a STATE based health insurance exchange or to refuse to do so. If states refuse (20 states now have) then Barack Obama’s administration will usurp our 10th amendment rights and open a FEDERAL exchange in each state.
2.) The PPACA legislation only authorized the I.R.S. to provide tax credits for for those who purchase health insurance in an Obamacare health insurance exchange IF that exchange is a STATE based exchange. NO SUCH AUTHORIZATION WAS GRANTED TO THE IRS IF SUCH AN EXCHANGEis a ‘fall back’ exchange – meaning a FEDERAL exchange.
3.) The PPACA legislation only authorized the I.R.S. to penalize (a.k.a. TAX) employers $2,000 or $3,000 per employee if they qualify for health insurance in an Obamacare health insurance exchange IF that exchange is a STATE based exchange. NO SUCH AUTHORIZATION WAS GRANTED IF SUCH AN EXCHANGE is a ‘fall back’ exchange – meaning a FEDERAL exchange.
And here’s the REALLY good part….
4.) There have been ZERO dollars appropriated by Congress to fund ‘fall back’ exchanges – meaning a FEDERAL exchange.
5.) Spending bills originate in the U.S. House of Representatives. Republicans, as of today, hold a 234 seat MAJORITY in the House.
6.) There are now 30 Republican governors nationwide. Each and every one of them need to be UNITED in resisting state based exchanges.
If no money is appropriated for FEDERAL “fall back” exchanges by the U.S. House of Representatives and Republican Governors stand STRONG and REJECT the establishment of STATE based exchanges. Then STATE based Obamacare exchanges will only survive in the ‘Blue states’.
Then the producers – tax payers and business owners – will begin a migration to “Red states” that have taken proactive action against state based exchanges. And, the “Blue states” will implode upon themselves as massive new costs related to opening and maintaining STATE based exchanges continues and massive new Medicaid enrollment occurs and with it, rationing of care. In the end, God willing, the vision our Founders had for us – where each state retains its sovereignty – will ultimately prevail.
Dean Clancy from FreedomWorks explains more. After you watch this go to www.BlockExchanges.com
As of December 13, 2012 here’s where the numbers stand:
Committed to a state-based exchange: 19 states and Washington, D.C.
Planning for a partnership exchange: 6 states
No to state-based exchange. Defaulting to Federal Exchange: 25 states
It is crucial for all Governors and other state legislators to understand that Obamacare induces states (via lucrative Grants) to open ‘state based’ health insurance exchanges under section 1311. If a state refuses to open a state based health insurance exchange then section 1321 directs the Secretary of HHS to establish and operate exchanges in states that fail to create one.
Here’s the key point: The PPACA (a.k.a. “Obamacare”) authorizes tax credits only in exchanges “established by a state under Section 1311,” and withholds tax credits in states that do not establish a state based exchange. And, instead decide to default to a Federal ‘fall back’ exchange under section 1321. Since the PPACA ties additional “cost-sharing subsidies”and penalties against employers to these tax credits authorized only in a state based exchange, no such penalties to employers would exist in a Federal ‘fall back’ exchange.
In order to ‘fix’ this ‘out’ that states would reserve under this exclusion. On the 2 year anniversary of the passage of the PPACA – May 23, 2012. The Internal Revenue Service finalized a proposed rulethat offers premium-assistance tax credits through Exchanges “established under section 1311 or 1321 of the PPACA – “Affordable Care Act.” Those six characters—”or 1321″—constitute a dramatic rewriting of the statute. By issuing tax credits where Congress did not authorize them, this rule also triggers cost-sharing subsidies and imposes penalties on employers in a Federal “fall back’ exchange. This was an illegal act NOT authorized by Congress and it must NOT STAND.
If you are a business owner or a tax payer who lives in one of the aforementioned ‘undecided’ states. It behooves you to contact your Governor’s office and tell them not to open a state based health insurance exchange.
The burdens taxpayers and business owners will bear in a state that allows a state based exchange.
Besides the massive new burden these STATE based exchanges will place on business owners, there is also the massive administrative costs. Take the state of California for example, who agree early on to open a state based exchange. Their state based exchange will require a minimum of 850 ‘customer service reps’ and a FIRST YEAR start up cost of $706 Million. As is the case with nearly all government financial predictions, that annual cost number will most likely be far higher when everything is implemented and moving ‘Forward’ towards further California fiscal collapse. California is just one example of a state with massive, unsustainable health insurance exchange costs, there are others as well.
For example, the state of Massachusetts already developed a state -based health insurance exchange. In fact, the exchange in Massachusetts is the prototype that will be used to develop other health insurance exchanges under the PPACA. There’s only one problem, the cost to taxpayers. At last count, the Massachusetts health care overhaul initiated by Mitt Romney has cost taxpayers more than $8 Billion. The Federal tax credits provided to other states who make the catastrophic budgetary mistake to develop a state-based PPACA exchange should be equally staggering.
For example, when it comes to Medicaid, there are two kinds of recipients of this tax payer funded entitlement:
1.) ‘New Eligibles’ who will be newly eligible after the PPACA to enroll in Medicaid because of the PPACA’s increase in the eligibility for Medicaid to 133% of the Federal poverty level for an individual and 400% of the Federal poverty level for a family of four. From 2014 to 2017 the Federal Government (Taxpayers) will pay 100% of the cost to ‘insure’ these people and 90% of the cost afterwards. Until the printing press breaks or our credit line from China is forfeited.
AND
2.) “Old Eligibles” who were eligible for Medicaid before the PPACA but did not enroll for whatever reason. The Federal Government (Taxpayers) will pay only 57% of the cost to ‘insure’ these people.
That is a recipe for disaster for any state budget. Most especially since the biggest line item budget on most state budgets is already Medicaid. For the impact of the PPACA Medicaid expansion on governors, taxpayers and employers click here.
To all voters who moved ‘Forward’ with Barack Obama in this last election cycle. I know the President promised that his health care law would guarantee ‘Affordable Health Insurance” for every American. The truth is, your President lied to you. According to the CBO, his health care law will leave27 million of you UNINSUREDafter it’s full implementation. Worse yet, according to the CBO his health care law will place16 to 17 million of you on a Government WELFARE program known as Medicaid. It is important to understand that Medicaid is nothing like private health insurance. Medicaid does not pay medical providers on time. And, when it does it pay – often many months later – it pays a small fraction of what private health insurance pays.
According to the New England Journal of Medicine, Medicaid patients in bankrupt states like Illinois & California wait twice as long to see a doctor or specialist as those with private health insurance. And, often times they aredenied the care they need. The Medicaid system in Illinois is looking more bleak every day. On January 30, 2012, the Civic Federation released its “Budget Roadmap” for the coming fiscal year. In it, they highlight the fact that state officials now believe that the Illinois Medicaid program will have between$21 and $23 billion in unpaid bills by 2017.
Because providers are not getting paid, many Doctors, Specialist and other medical providers will simply stop taking Medicaid altogether,as many in Illinois already have. And, they stopped long before the PPACA.
Below is an excerpt from the November 2012 update from the Illinois HFS (Health & Family Services) department.
“It is estimated that Illinois has approximately 1.1 million people without health insurance. About 50% of them will be able to buy health insurance on the Health Insurance Exchange, and based on their income, individuals will qualify for tax subsidies to help pay for their health insurance. Illinois will have an Exchange, operating as a state-federal partnership the first year. If the legislature adopts authorizing legislation, it will become a state exchange; if not, the federal government will continue to operate it. Enrollment on the Exchange will open on October 1, 2013, with plans effective on January 1, 2014.
The other 50% of uninsured citizens will qualify for Medicaid, if the legislature adopts authorizing legislation. Today, there is a gap in Medicaid coverage: adults without dependent children, no matter how poor, are not eligible for Medicaid. Under the Affordable Care Act (ACA), the federal government is offering generous federal matching funds to the states to cover this newly eligible population: 100% reimbursement for the first three years then phased down to 90% by 2020.
Newly introduced legislation, House Bill 6253, will take advantage of the ACA to provide healthcare under Medicaid to about 342,000 low-income Illinois citizens who are currently uninsured (the remaining 168,000 citizens currently uninsured, are already eligible for Medicaid but have not enrolled yet).Read the rest of the Illinois HFS update here.
When you look at the map below, understand that it was completed in 2011. Three years before 17 million more Americans will be enrolled in our bankrupt Medicaid rolls as a result of the “Patient Protection & Affordable Care Act”.
Their are intelligent alternatives to simply flooding our bankrupt Medicaid rolls with 17 million more Americans. In fact, these alternatives have already been proven successful in states like Florida, Indiana and Louisiana. Sadly, even with these proven reforms, Republican governors like Arizona’s Jan Brewer and Ohio’s John Kasich haven’t learned a thing from these successful reforms. Instead, they have chosen to double down on failure by expanding Medicaid to historic proportions. Worse yet, they want you to pay for their wrong headed decisions via higher taxes and more ‘cost shifting‘. Both of which will do nothing but continue increase the cost of health insurance for everyone else. What did the President say back in 2010? Oh, that’s right. “It’s estimated that your employers premiums will decrease by as much as 3,000%”. – Barack Obama.
Before you dig into the truth about this legislation take a good look at your new health care system brought to by a 100% Partisan Democrat vote. Watch: “Obamacare: The biggest bureaucratic nightmare in world history.”
November 23, 2012 UPDATE Attention young people who voted for Barack Obama’s second term and with it his health care law. Get ready to pay a LOT more for your health insurance as “Community Rating” (a regulatory concept that has failed in every state it has ever been implemented in) is spread across the entire country.
November 18, 2012 UPDATE What drives up the cost of health care and what are SOME doctors doing about it?
November 12, 2012 UPDATE Watch Papa John’s and Applebees franchise owners explain the negative impact of Obamacare on their restaurants. This is just the beginning as this disastrous law unfolds around the country.
November 11, 2012 UPDATE States that have already BLOCKED state based exchanges have already blocked $80 Billion in deficit spending. Other states MUST follow their lead and STARVE the PPACA on the state level.
November 9, 2012 UPDATE The PPACA is still vulnerable! A silver lining in the 2012 General Election results is that there are now 30 GOP governors. 14 states have already passed legislation making the establishment of state based exchanges ILLEGAL in their states. Every other Governor should follow suit. Read why here.
UPDATE October 31, 2012 “The Affordable Care Act is NOT a viable solution. It uses the same perverse reimbursement system currently in place. Bipartisan reforms such as those proposed by Paul Ryan and Senator Ron Wyden should be pursued instead.” – The New England Journal of Medicine
UPDATE October 22, 2012 This is a MUST WATCH & MUST SHARE video on the impact of the PPACA. Please allow yourself one hour to watch: “The Determinators” below:
UPDATE October 19, 2012 Last month, I delivered a short speech during which I discussed the illegal action Barack Obama took earlier this year to delay the destruction of Medicare Advantage until after the November election:
Today, Congressman Darrel Issa issued subpoenas regarding this illegal action. Here is a short video explaining how Barack Obama’s health care law – Obamacare – has scheduled the decimation of the Medicare Advantage program.
September 17, 2012 UPDATESeniors in these 8 states (Illinois is one of them) will suffer the most from Barack Obama’s historic $716 Billion in Medicare cuts.
September 8, 2012 UPDATE In his convention speech in Charlotte, President Obama vowed to block the Republican Medicare reform plan because “no American should ever have to spend their golden years at the mercy of insurance companies.” But back in Washington, his Health and Human Services Department is launching a pilot program that would shift up to 2 million of the poorest and most-vulnerable seniors out of the federal Medicare program and into private health insurance plans overseen by the states. So while he demonized Paul Ryan’s Medicare reform plan, he is directing HHS to implement the same reform idea in 18 states right now.
August 28, 2012 UPDATE On Saturday August 26, 2012 Dr. Rich Ferolo, Dr. Mark Neerhof and I sat down with the French Version of CNN – i>TELE which is owned by Canal Plus Group. They have an audience of 2 million viewers in France, Canada & Switzerland. TRUTH about Obamacare is now INTERNATIONAL. Watch the news report here.
August 26, 2012 UPDATE How the PPACA will ration care to millions of the poor and create an UGLY new profit margin for health insurance. This is PRECISELY how it will happen.
August 20, 2012 UPDATE Today we lost the 21st health insurance carrier since the PPACA was signed. And, like the others, Coventry insurance company was gobbled up by a giant. To see some of the other carriers that have either closed, their doors or ceased offering health insurance visit this link.
August 12, 2012 UPDATEWhen you hear Democrats repeat ad nauseam that “Republicans want to end Medicare as we know it.” Know that they are repeating PolitiFacts’s 2011 “Lie of the Year”. PolitiFact outlines the many reasons why this is lie.
The simple fact is that Democrats have already ‘ended Medicare as we know it” with the PPACA. In fact, according to the Chief Medicare Actuary – Mr. Richard Foster the PPACA cuts $818 billion from Medicare Part A (hospital insurance) from 2014-2023, the first 10 years of its full implementation, and $3.2 trillion over the first 20 years, 2014-2033. Adding in PPACA cuts for Medicare Part B (physicians fees and other services) brings the total cut to $1.05 trillion over the first 10 years and $4.95 trillion over the first 20 years. This is far, far more than just ‘ending Medicare as we know it”.
There will be additional cuts under the PPACA to Medicare Advantage, the private option to Medicare that close to one-fourth of all seniors have chosen for their coverage under the program because it gives them a better deal. Mr. Foster estimates that 50% of all seniors with Medicare Advantage will lose their plan because of these cuts. In fact, one of the biggest fallacies promulgated by the political left is that ‘the PPACA isn’t even implemented until 2014′. In reality, there have been many cuts already made to Medicare since the passage of the PPACA. To see the full timeline of Medicare cuts and taxes that have already been implemented and those that are coming click here.
12 million seniors use Medicare Advantage, under which the government pays private insurers to cover seniors. These seniors have more options, and at times more coverage, than standard Medicare customers. But the Obama administration said Medicare was overpaying the private insurers, and so the architects of the PPACA slashed $136 billion from Medicare Advantage to offset the cost of the PPACA.
The Medicare Advantage cuts were to begin in 2013, which would cause many insurers to pull out of the program, thus driving seniors into regular Medicare. Open enrollment [for 2013 Medicare Advantage] begins Oct. 15, 2012 less than three weeks before voters go to the polls.” So the PPACA would kick seniors out of their Medicare program three weeks before Obama’s re-election.
That, of course, would be politically damaging. So President Obama simply took $8.35 billion from a PPACA research fund for “demonstration projects” and used it to delay the brunt of the Medicare Advantage cuts until after the election. This is not only an abuse of the President’s executive power but it is also another broken promise made by President Obama when he said: “If you like your health care plan, you will be able to KEEP your health care plan, PERIOD.”
Now that Mitt Romney has announced that Congressman Paul Ryan is his choice for Vice President you will see and hear the most vicious attacks on Chairman Ryan for his attempt to save Medicare before the program implodes and nothing is left for anyone. Please read this entire article so that you can arm yourself with the facts when presented with these highly emotional but baseless attacks.
The fact is that if you condemn the Ryan/Wyden Medicare reform plan and endorse the Obamacare health insurance exchanges you are a hypocrite. Firstly, the Ryan/Wyden Medicare reform plan will change nothing, nada, zero for currentMedicare recipients and it will only affect new Medicare recipients. All current seniors and everyone now over 55 would be left entirely untouched for the rest of their lives, unless they chose to enter Paul Ryan’s new system.
Why are Ryan & Wyden proposing a change to Medicare? Because according to the Chief Medicare Actuary (in the 2012 Medicare Trustees report) Medicare will go bankrupt by 2016 if nothing is done to save it. Worse yet, it is currently ILLEGAL to ‘opt out of Medicare’. This means that ‘Millionaires and Billionaires’ who who do not need Medicare are unable to choose not to take Medicare. With Medicare going bankrupt by 2016, why are we giving Medicare to those who do not need it? The Ryan/Wyden bipartisan plan changes that once and for all. Wealthy Americans will be able to opt out of Traditional Medicare. That fact alone should make one want to learn more.
PLEASE NOTE: This NEW bipartisan Medicare proposal plan from Chairman Paul Ryan (R) and Senator Ron Wyden (D) ENDED the “Voucher” proposal. So, when you hear Democrats use the term “voucher” when referencing Paul Ryan’s Medicare reform plan they are either lying or ignorant of his current proposal.
Under Mr. Obama’s ‘health care reform’ plan (a.k.a. Obamacare), Americans UNDER THE AGE OF 65 TODAY will be able to purchase tax payer subsidized health insurance inside Government run health insurance exchanges.
You can not endorse the “Affordable Care Act” and condemn the Ryan/Wyden Medicare reform plan. For a critical component of both plans is identical.
The truth is both Paul Ryan and President Obama propose nearly the same amount of ‘cuts’ to Medicare over the same period of time. The difference is in HOW these ‘cuts’ are made. President Obama simply reduces the “reimbursement ratios” – how much the government pays to doctors and hospitals for their services. Why is this bad? It’s bad because before the PPACA was even passed. Prominent Medical facilities like the Mayo Clinic in Arizona and other medical clinics have already stopped taking Medicare patients because the reimbursement ratios are already too low!
Realizing this, Mr. Ryan employs an entirely different mechanism. Namely, premium support and competitive bidding. Those under the age of 55 today, would still enjoy exactly the same benefits that those on traditional Medicare have today. However, along with the traditional Medicare program they would enjoy the option of choosing among a selection of government-approved private insurance plans. Purchased within a government run health insurance exchange.
You see, Mr. Ryan (R) and Mr. Widen (D) both understand that Medicare will be bankrupt by 2016. As such, they have proposed shifting part of the burden of paying for our senior’s health care costs to the private sector. By offering seniors the option (along with generous financial premium support) of purchasing alternative Medicare coverage options via a government run health insurance exchange.
Did you notice the difference? Under Paul Ryan and Ron Wyden’s plan. Americans under age 55 today will have the option to purchase alternatives to traditional Medicare when they turn 65. Under President Obama’s plan, which is maintaining the status quo, seniors today will have access to Traditional Medicare for a few more years. And, those age 55 and under today, will have access to nothingwhen they turn 65. For Medicare will be bankrupt before they turn 65.
Another crucial difference between Barack Obama’s plan for ‘reforming Medicare’ – (cutting hundreds of billions of dollars in reimbursement rates to doctors, hospitals and home health care) and the Ryan/Wyden plan is that the Ryan/Wyden plan contains NONE of the tax increases below that are coming – courtesy of the “Affordable Care Act”. And, because the Ryan/Wyden plan introduces free market competitive bidding into the Medicare arena, instead of simply slashing reimbursement rates to doctors, hospitals and home health clinics. Mitt Romney can has now vowed to RESTORE the aforementioned $716 Billion in cuts made to Medicare by President Obama if elected in November.
If you think that introducing competitive bidding into the Medicare arena – via health insurance companies – is a ‘radical’ idea. You might want to contact President Obama and ask him why he has directed his Health & Human Services Department to implement the same reform ideas in 18 states right now.
Sadly President Obama has proposed zero options to truly reform Medicare and save it for future generations. Even though SENATOR Obama derided President Bush for the same thing in 2005. Watch him say it here:
He also derided John McCain for the same in 2008. Watch him say it here:
You know that $711 Billion in ‘cuts’ to Medicare that President Obama authorized with his “Affordable Care Act”? Those cuts were made in large part to expand the rolls of Medicaid in order to subsidize the ‘poor’. Many of which have never paid a dime into the Medicare trust fund. Many of which are not poor. You see, President Obama had redefined the term ‘poor’. Just as our former Governor Blagoyevich did in my home state of Illinois, where the “Affordable Care Act” is already moving ‘forward’ at break neck speed.
PPACA Medicaid ExpansionSections 1311, 1321 and 1401 of the Obamacare legislation mandate Federally subsidized “premium tax credits” for “Obamacare insurance exchange” enrollees. Beginning in 2014, Americans who are not offered health insurance through their employer and who are not eligible for Medicaid may be eligible for premium credits for coverage through an “Obamacare health insurance exchange”. The Obamacare legislation massively expands our already bankrupt Medicaid rolls (at an additional cost to state tax payers of at least $118.04 Billion by 2023) to an estimated 16-25 million more Americans. The legislation also calls for extremely generous tax payer funded ‘premium assistance’ to individuals and families with income between 138% and 400% of the Federal Poverty Level.
Using 2012 Federal Poverty Levels, this would mean that individuals in 48 states & D.C. making $42,680 annually and families of four making $92,200 would now qualify for ‘premium assistance’ from the few, the proud, the 53% of us who actually pay income taxes. Just how much assistance? Take a look at the real cost of Government approved health insurance using Kaiser’s new ‘Health Insurance Exchange Calculator’. Then look at the amount the insured will actually pay. Where will the money come from to expand to pay for all of this? No worries, remember it’s all “free”!
Another problem is that Obamacare freezes our state’s (and other states) Medicaid eligibility requirements regardless of the impact on Illinois’ bottom line. PPACA freezes our state’s (and other states) eligibility requirements regardless of the impact on Illinois’ bottom line. Not only is Illinois forced to keep eligibility at that level, but Illinois is also forced to raise payments to primary care physicians. Section 1202 of H.R. 4872 a.k.a. the “Health Care & Education Affordability Reconciliation Act of 2010” (which was used to pass the PPACA) requires that Illinois increase Medicaid reimbursement rates for primary care physicians to the same level as the applicable Medicare reimbursement rates for years 2013 and 2014.
At first this sounds like a good idea however, this requirement, along with the federal funding for it, expires on January 1, 2015. Leaving the state of Illinois tax payer holding the bill to maintain this new physician reimbursement or make drastic cuts. It is crucial to understand that this new burden placed upon the Illinois tax payer is in addition to the already unpaid Medicaid bills piling up in Illinois after lawmakers enacted a budget pushing $2.4 Billion of last year’s bills into this year. On January 30, 2012, the Civic Federation released its “Budget Roadmap” for the coming fiscal year. In it, they highlight the fact that state officials now believe theMedicaid program will have between $21 and $23 billion in unpaid bills by 2017.
Medicaid patients are already suffering from Illinois’ low reimbursement rates and long payment delays. Nursing homes and hospitals are running out of time and moneywhile they wait for reimbursement. Doctors are turning awaypoor patients or making them wait weeks or months or even longer to receive care, just to keep their doors open.
What caused our Medicaid system to become so fiscally unsustainable? During Democrat Governor Rod Blagojevich’s Governorship, our Illinois Medicaid program was expanded far beyond simply providing health insurance for children of the poor (which was the original intent of the bi partisan Federal SCHIP bill). Blago expanded our Medicaid based state health insurance program to include 2 new programs that were designed to ‘supplement’ our “All Kids Covered” (www.allkidscovered.com) program (formerly “Kid Care”). These two new Medicaid based Entitlement programs (still in existence today) are called “Family Care” (www.familycareillinois.com) and “Mom’s & Babies” (www.allkids.com/pregnant.html). These programs go far beyond providing health insurance to children of the poor. In fact, they provide ‘free’ to nearly ‘free’ health insurance coverage for pregnant women and even the Father of a child who is enrolled on our “All Kids Covered” program. The program was also expanded to include coverage for those far beyond the existing Federal poverty levels.
Adding to the rapid bankruptcy of our Illinois Medicaid program was the fact that under Blago’s Governorship, legal residency status was not required on the Illinois’ “All Kids Covered” Medicaid application. It took an investigation conducted by former Chicago Tribune reporter Dennis Byrne to determine just how many illegal aliens were enrolled on our “All Kids Covered” program. The shocking answer was 75%.
Source: http://articles.chicagotribune.com/2010-05-25/news/ct-oped-0525-byrne-20100525_1_uninsured-illinois-children-blagojevich-illegal-immigrants
Sadly, as of August 2012 there are no plans, not even a discussion, to purge our bankrupt Illinois Medicaid rolls of more than 77,000 Illegal Aliens. Not even after Governor Quinn passed the new “Medicaid Reform” bill of 2012. Hey, you know what? This sounds GREAT. Let’s expand this concept EVERYWHERE! That is exactly what the PPACA does.
The PPACA simply repeats the same mistakes already made by our now bankrupt (and deeply in debt) Illinois Medicaid program. However, it does so, on a national level. It increases Medicaid eligibility to almost every American with incomes below 138% of the federal poverty level (under the age of 65). This means that a family of four with an income as high as $87,000 would receive ‘premium tax credits’. What does this mean in dollars and cents? A reportreleased by the Centers for Medicare and Medicaid Services shows the impact this massive expansion will have: “This expansion, together with greater participation by individuals eligible under current rules, is projected to add 14.9 million people to enrollment in 2014 and 25.9 million people by 2020—26 percent and 44 percent, respectively, compared to pre-Obamacare estimates.”
This means that by 2020, Medicaid enrollment will reach 85 million, or approximately one in every three Americans. Currently one in every five Americans are on Medicaid. This level of Government dependency distorts the original purpose of the Medicaid program, which was intended to serve as a safety net for only the truly indigent.
As a result of the expansion, the report shows, Medicaid spending between 2011 and 2020 will increase under the PPACA by $619 billion. The federal government will initially pay for most of the new spending, totaling $572 billion. But the expansion will increasingly strain state budgets as well, since the federal contribution decreases rapidly leaving the state tax payer holding the bill. In fact, this massive expansion of Medicaid will bring total state Medicaid spending to $2.3 trillion through 2020. Illinois’ share will be another $10 Billion by the year 2020.
Source:http://illinoispolicy.org/blog/blog.asp?ArticleSource=4660
Besides creating a state budgetary crisis like our nation has never experienced before. This massive expansion creates a much more serious problem. A problem that places our nation’s seniors in great peril.
I spoke about these 2 studies as well as who will bear the massive COST of paying to insure 25 million more Americans on Government approved health insurance at the 2011 Chicago Tax Day Tea Party:
IPAB – Independent Payment Advisory Board:
Perhaps nothing in the PPACA legislation embodies the top-down, command-and-control nature of Progressive healthcare more than the Independent Payment Advisory Board (IPAB), a 15-member panel of “experts” to be appointed by the President. There are three particular features of the IPAB that illustrate this fact: The IPAB will control all healthcare spending, public and private. The IPAB has been awarded near-dictatorial power. And the IPAB is designed to be a nearly immutable entity.
The IPAB Will Control Everything
While the IPAB has several duties, the chief amongst these is to impose a final, insuperable cap on healthcare spending.
Obamacare hands the IPAB the authority to cap not only public healthcare spending, but also private healthcare spending (thus demonstrating, once again, that Progressives do indeed mean to restrict private healthcare spending). This particular feature of the IPAB is one of the more difficult-to-tease-out aspects of the Obamacare legislation, so it is fitting that the IPAB acquired this sweeping authority in a suitably convoluted and sneaky way.
Anyone who paid attention to the remarkable process that brought us our new and transformational healthcare system might recall that Obamacare was not passed in the usual manner. It began typically enough; there were separate House and Senate bills, each of which passed in their respective chambers (though without any Republican votes). Normally, the next step would be to send those two bills to a Joint Conference to hash out the differences, and then off to a final vote. This did not happen with Obamacare.
The main hangup occurred in the Senate. There, the President needed 60 votes to assure final passage of his bill. And in the way of negotiating for those necessary 60 votes, five or six Democrat Senators went behind closed doors to cobble together a list of amendments to the original Senate Bill – the so-called Managers’ Amendments. It is in the Managers’ Amendments that one can find such famous niceties as the bribes paid to Nebraska and Louisiana in order to entice their respective Senators to support the bill. Some of the deals made behind closed doors were so outlandish that even the Managers themselves (according to many reports at the time) did not expect them to survive the Joint Conference that everyone assumed would take place.
The original Senate bill, before the Managers’ Amendments were added, never created anything called an Independent Payment Advisory Board. Rather, in Section 3403 it created the Independent Medicare Advisory Board, whose powers (appropriately) were limited only to federally funded healthcare programs, such as Medicare. It was the Managers’ Amendments which re-empowered the IMAB, and re-christened it as the IPAB.
Specifically, Section 10320 (in the Managers’ Amendments portion of the legislation) grants the IPAB, beginning in 2015, the authority to limit all healthcare expenditures, that is, all healthcare expenditures, and not just expenditures by Medicare or government-run programs.
To emphasize this expanded authority, Section 10320 changes the name of the “Independent Medicare Advisory Board” to the “Independent Payment Advisory Board.” It directs the IPAB, at least every two years, to “submit to Congress and the President recommendations to slow the growth in national health expenditures” for private healthcare programs. Furthermore, it designates that these “recommendations” may be implemented by the Secretary of HHS or other Federal agencies “administratively” (that is, without any action by Congress).
The justification for this mind-boggling expansion of the IPAB’s authority, to the extent that any justification was offered, appeared to be that controlling private healthcare expenditures will directly impact Medicare, since the “target” Medicare growth rate (which the IMAB was originally charged with achieving) will be determined by overall healthcare expenditures. Therefore, it is necessary to control all healthcare expenditures, public and private. (More practically, if Medicare patients are subjected to arbitrary cost-cutting measures that do not affect younger Americans, we Old Farts are likely to become inconveniently rowdy.)
Once the Managers had devised sufficient paybacks in the Managers’ Amendments to get the needed 60 votes, and the Senate bill finally passed, President Obama and his Congressional allies, Mr. Reid and Ms. Pelosi, determined that allowing the new law to go to Joint Conference would be counterproductive. Support among Democrats in the Senate was so tenuous that party leaders realized the bill would never survive another Senate vote after a Joint Conference. It would be easier, they calculated, to ram the Senate bill, fully intact including the Managers’ Amendments, through the House of Representatives, employing the always-useful reasoning that passing the law right then was a manifest emergency. So that is what they did. And while the vote was also a much closer call than Democrat leaders would have liked, the Senate bill finally passed in the House. And in this way, to the astonishment of many, the Senate bill, Managers’ Amendments and all, became law.
However convoluted the process may have been, the fact is that Obamacare grants the IPAB, a non-elected entity within the federal government, the authority to limit all healthcare spending, including private spending.
The IPAB’s Authority Is Nearly Dictatorial
A quick reading of Section 3403 might leave one with the impression that the IPAB is a sort of Mr. Rogers of healthcare – a mild-mannered, friendly, always-helpful, but ultimately undemanding agent for good. This is the impression imparted by the first few paragraphs of the Section, which paint the new entity as an “advisory” board, whose main task is to develop “proposals” and “advisory reports,” which “proposals” and “advisory reports” would solely consist of various “recommendations,” that ought to be “considered” for the purpose of cost reduction.
Nothing could be further from the truth. This language is simply another example of supplying a new law, which is far more radical than the authors would like people to know, with a soothingly misleading introductory paragraph. The IPAB is actually designed to be as all-powerful as it’s possible to be.
Each year, once the Medicare’s Chief Actuary determines that the projected per capita growth rate for Medicare exceeds the designated target growth rate (which is an inevitability), the IPAB is required to submit a plan which will cut healthcare costs sufficiently to bring the growth rate back in line; which is to say, the IPAB will determine what will be paid for and what will not. Then, the Secretary of HHS is required to implement the IPAB’s plan in its entirety, without exception – unless Congress acts to block implementation. However, the ability of Congress to do so is severely limited. The representatives of the people are forbidden from taking any action “that would repeal or otherwise change the recommendations of the Board,” unless it: a)votes to halt the IPAB mandates with a SUPER MAJORITY of the Senate; and b: devises its own specific cost cutting scheme that will achieve equivalent results. If Congress had the will to do such a thing, however, we never would have needed Obamacare in the first place.
Most worrisome is the fact that if these 15 unelected bureaucrats can not make their quota of necessary cuts, the decision as to how to do so falls, for the first time in U.S. history, to one person. That person is the acting director of HHS – Health & Human Services. That title is currently held by none other than Kathleen Sebellius. A radical left wing, pro abortion, pro eugenics, Liberal.
So, in practice, the cost-cutting “recommendations” which the IPAB will “propose” for “consideration” by the Secretary and by the Congress will be implemented in their entirety, automatically, without revision, and will be backed by the full authority of the Federal government. For all practical purposes, the IPAB will become a new agency of the executive branch with near-dictatorial authority to cut healthcare spending, public and private, where and when and for whom it sees fit.
The IPAB Is Designed To Be Immutable
Section 3403 also contains some remarkable language that likely has never been seen before in American legislative history. To wit: “It shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection.”
So the designers of Obamacare, recognizing that the arbitrary cost cutting that the IPAB will impose on all those ACOs and other integrated healthcare teams (as they happily toil away in the new healthcare worker’s paradise) is sure to create significant political blowback, has sought to immunize the IPAB from any revisionary lawmaking that might result. And as astounding as it may sound, the IPAB and all its designated dictatorial functions are designed by law to be in force for perpetuity. Our Congress has passed legislation that purports to bind all future Congresses from altering it in any way.
We have heard from the President and others that the IPAB is a very important feature of our new healthcare system. This “immutability clause” ought to convince us just how important they believe it to be. This clause necessarily implies that the IPAB is not only the most important innovation in Obamacare, but indeed, it apparently is most important legislative provision ever written. We know this because no other provision has ever received such extraordinary protections from any future alterations whatsoever.
One can only bask in the utter audacity of our Progressive leaders, who are so sure they know what’s best for us that they were willing to engage in all manner of legislative legerdemain to pass Obamacare, not only against the apparent expressed will of the people, but also (as it turns out) against the objections of any future American Congress that is sent to Washington by those people.
Not even our Constitution itself – a document that attempted to establish a government for all time – was as audacious as this. For the Constitution, at least, provided a mechanism for its own alteration.
Source: The Covert Rationing Blog
It’s important to understand that IPAB was modeled after state run health plans like the one in Oregon. Here’s how well that plan is serving the sick and elderly in the state of Oregon. Caution: do not watch this clip without monitoring your blood pressure. Watch: Oregon health plan denies woman cancer medications but offers assisted suicide.
The Complete Lives System It’s crucial to understand the individuals who helped Barack Obama craft Obamacare. One of them is none other than the brother of the current Mayor of Chicago. Dr. Ezekiel Emmanuel. As a Eugenist, he designed something called the “Complete Lives System”. This ‘system’ was designed for government ‘officials’ to decide the ‘appropriate’ amount of health care you should receive based on your age and your ‘value to society’ based on age. The image below is what “Dr. Emmanuel” refers to as the “Reaper Curve”. Take a good look at it, because depending on your age, the future of the American health care system, under systems like this may look very bleak for you. Why? Read about the twisted ‘science’ behind this kind of thinking here in the Wall Street Journal. As you are reading, remember one thing. Dr. Emmanuel was appointed to two key positions in the Obama administration, prior to the passage of Obamacare. Health-policy adviser at the Office of Management and Budget and a member of the Federal Council on CER - Comparative Effectiveness Research - funding for CER & IPAB were provided in the ‘Stimulus’ bill.
UNFUNDED LIABILITIES: Before Obamacare passed into law, our nation’s unfunded liabilities (promises made to future recipients) were $65 Trillion (Medicare – $38 trillion, Medicaid – over $20 trillion, Social Security – $7 trillion). AFTER Obamacare, our unfunded Liabilities total $82 Trillion. That is an additional $17 trillion. Keep in mind that these unfunded liabilities are in addition to our $16 Trillion national debt ($5 Trillion of that, was incurred by Barack Obama). See the disturbing numbers here.
I sat down with Carol Ann Parisi in the Champion News Talk Radio studio to discuss this in great detail below:
August 11, 2012 UPDATE BEFORE the PPACA, our nation’s unfunded liabilities (promises made to future recipients) were $65 Trillion (Medicare – $38 trillion, Medicaid – over $20 trillion, Social Security – $7 trillion). AFTER the PPACA, our unfunded Liabilities total $82 Trillion. That is an ADDITIONAL $17 TRILLION. Keep in mind that these unfunded liabilities are IN ADDITION to our $15 Trillion national debt ($5 Trillion of that, was incurred by Barack Obama). See the disturbing numbers here.
August 10, 2012 UPDATE My speech at the Americans For Prosperity “Hands Off My Health Care Rally” in Belvidere, Illinois.
August 9, 2012 UPDATE Every story President Obama told about Preexisting Conditions was a LIE. Click here for a break down of all the lies he told including the lie he told about his own mother’s supposed health insurance plan.
The biggest lie President Obama told about preexisting conditions was the story of Otto Raddatz. Here’s the truth:
The truth is there were state based solutions for individuals with preexisting conditions for 15 years before the PPACA was signed into law. That’s right state based solutions. Find out the truth at TruthAboutPreExistingConditions.com I spoke the truth about preexisting conditions at the 2010 Tax Day Tea Party in Daley Plaza in Chicago:
August 8, 2012 UPDATE The Obamacare ‘Preexisting Condition’ plan has been lauded by the left as a necessary part of health care reform. In my latest piece at AmericanThinker.comI addressed why it was completely unnecessary.
August 7, 2012 UPDATE Why are health insurance premiums so expensive? And, why have health insurance premiums continued to increase after the passage of the PPACA? Find out the truth at this link.
This, by the way, is more uninsured than there were BEFORE the PPACA:
If you have heard me speak at any event in the last 3 years you know that I have repeatedly warned that millions of Americans would LOSE their health insurance once the PPACA is implemented due to the onerous MLR’s (Medical Loss Ratios) mandated by the PPACA and the more than 100 new mandates placed on every health insurance plan purchased after March 23, 2010. All of this government intervention simply drives up the cost of health insurance for the premium payer (for 90% of American’s this is their employer) and causes smaller health insurance carriers to fold. All of this leaves the consumer with fewer options and higher premiums. Thanks to a recent Gallup poll we now know that 4.5 MILLION Americans have lost their health insurance since the PPACA was signed into law on March 23, 2010. This, of course, is EXACTLY the OPPOSITE of what President Obama promised us. Click here to read more about this disturbing and predictable news.
August 5, 2012 UPDATE According to the most recent CBO (Congressional Budget Office) and the JCT (Joint Committee on Taxation) assessment in July 2012. The PPACA adds $1.08 Trillion in new tax increases. In fact, 21 tax increases will be enacted as part of that law, a dozen of which – target the middle class. Namely, Americans earning less than $200,000 per year for singles and $250,000 per year for married couples. Even though the President made the following promise to the all of us:
Arguably those most onerously affected by these new PPACA taxes will be those who pay the lion’s share of all income taxes in this country – business owners. To find out how small and large business owners will be impacted by the new PPACA taxes visit this link.
Worse yet, the total cost over the first decade for the PPACA has more than tripled from the original $960 Billion initial assessment that President Obama used to ‘sell’ the PPACA to the American people. Now, we know the truth. The actual first decade cost of the PPACA, according to the Congressional budget office will be $2.6 Trillion. Just a wee bit off!
August 3, 2012 UPDATE Sadly, it’s not just the taxes that will affect business owners. Do you remember when “Nostrildamus” (that’s what I call Henry Waxman) called for a congressional hearing in order for John Deere and Caterpillar (among other companies) to prove that the PPACA will cost them millions beginning in 2013? Strangely enough, after John Deere and Caterpillar sent electronic documentation proving these additional costs, Mr. Waxman terminated that congressional hearing. Shortly afterwards Lloyds of London published a piece listing more than 80 companies that will taking millions of dollars in losses due to the PPACA. See all 80 companies and their losses here.
August 2, 2012 UPDATE This is a MUST WATCH Congressional hearing on the unprecedented power that the Internal Revenue Service has now been given under the PPACA. There are two parts:
July 25, 2012 UPDATE Today the Congressional Budget Office (CBO) & the U.S. Joint Committee on Taxation (JCT) confirmed what America already knows – that the Democrats’ health law is a trillion-dollar tax hike that families and employers simply cannot afford. See their joint report here. The recent Supreme Court ruling left in place 21 tax increases enacted as part of that law, a dozen of which target Americans earning less than $200,000 per year for singles and $250,000 per year for married couples, in clear violation of the President’s pledge to avoid tax hikes on low- and middle-income taxpayers. According to the new CBO and JCT estimates, the gross tax increases in the law now total $1.058 trillionover 2013-2022. That new amount is nearly twice the “advertised” ten-year tax hike amount claimed when Democrats originally pushed the law through Congress just two years ago.
July 16, 2012 UPDATE Many Americans have forgotten all of the broken promises and outright lies told by Barack Obama and his surrogates about the PPACA. Now, there is a convenient slideshow that has them all archived in one place. Click here here to view it.
July 14, 2012 UPDATE Do you remember when Barack Obama made this promise about the PPACA? ”Now I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see ANY form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not ANY of your taxes.” – Barack Obama:
Well, President Barack Obama LIED once again. Here are SEVEN brand NEW PPACA taxes on citizens making LESS than $250,000 a year.
July 10, 2012 UPDATE WATCH these doctors discuss how they will be CLOSING THEIR PRACTICES by 2014 if the PPACA is not repealed in 2013 via a new Senate and a new President:
July 5, 2012 UPDATE My interview with Chicago’s own Jonathan Hoenig (“Capitalist Pig”) and Bruce Wolf on “the Big 890″ WLS AM radio in Chicago:
July 3, 2012 UPDATE Below are videos of my in studio appearance on Champion News Talk Radio on AM560 WIND radio in Chicago the morning of the SCOTUS ruling on the PPACA.
July 1, 2012 UPDATE Listen to my in depth interview with the infamous “BigFurHat” of www.IownTheWorld.com on Obamacare, the Supreme Court ruling and what it means for all of us:
June 28th, 2012 UPDATE The ruling today by Chief Justice Roberts was an illegal betrayal unlike any we have seen by a Supreme Court justice in 70 years. For those of you who FOOLISHLY believe that “We need time to tell if what Justice Robert’s did was right.” Here’s the TRUTH. The U.S. Supreme Court has ONE JOB and ONE JOB ONLY. That job is to UPHOLD and PROTECT the U.S. Constitution. NOT TO CREATE BRAND NEW TAXING POWERS OUT OF THIN AIR. This is PRECISELY what Robert’s did. There is NO POWER TO TAX “INACTIVITY”. It exists NO WHERE in the ENUMERATED POWERS ‘We The People’ GRANTED to Congress.
This new taxing power Justice Robert’s created is neither a direct tax, an excise tax, a capital gains tax or ANY OTHER kind of taxing power that Congress is ALLOWED under our Constitution. It is a NEW power, written, devised and PASSED into LAW by ONE MAN. The power to tax you for doing NOTHING. There were FOUR Justices who voted to strike down the ENTIRE LAW today – Scalia, Kennedy, Thomas & Alito. The swing vote and a TRAITOR to all Americans was Chief Justice Roberts. To understand why Justice Robert’s decision was so OFFENSIVE, ILLEGAL and TYRANNICAL read this assessment by journalist Robert Moon.
One more comment about today’s ruling. Today, the U.S. Supreme Court CONFIRMED what I have been saying for 4 years straight. Barack Obama is a LIAR. For he PROMISED that his ‘fine’ for not purchasing health insurance is NOT a TAX.
It is this NEW TAX, a TAX FOR DOING NOTHING that WILL RESULT in the LARGEST TAX HIKE on the MIDDLE CLASS in U.S. history. According to the CBO: Obamacare Will Increase Taxes on Middle-Class by $4.2 Billion – $4,667 per Taxpayer:
And how will this new tax for doing nothing affect you? Here’s a nice breakdown. Tax payers (as usual) pay for it all:
Regarding “Silver Linings” from today’s decision. There are three. The first is that before today’s decision, states were being threatened to either implement the massive expansion of Medicaid (that PPACA requires) or lose all Federal matching funds for Medicaid in their state. The Supreme Court ruled that this will NOT be allowed. This means that states can now refuse to open PPACA exchanges without fear of losing all Federal Medicaid funding. This is why Governors like Scott Walker and Rick Perry are not saying NO. Read the letter Governor Rick Perry sent to HHS.
Why did Governor Perry send that letter? Because he knows EXACTLY what the PPACA will look like nationwide. The PPACA will add 25 million people onto our already bankrupt Medicaid rolls. This will exacerbate an already serious problem with health care access. Texas doctors are already refusing Medicare & Medicaid due to low pay and red tape.
June 4, 2012 UPDATE The HHS contraceptive ‘mandate’ is WORSE than you think. Share this video
May 31, 2012 UPDATE Must WATCH. “Obamacare and the road to serfdom” h/t John Stossel & Dr. Lee Hieb.
May 8, 2012 UPDATE Why a law called the “Patient Protection and Affordable Care Act” neither ‘protects’ patients nor makes care more ‘affordable’. Thank you Dr. Elizabeth Lee Vliet for this excellent article.
April 22, 2012 UPDATE I spoke the truth about the PPACA at U.S. Congressman Joe Walsh’s health care town hall:
March 28, 2012 UPDATE I discussed the impact of the PPACA on small business for Fox News today:
March 26, 2012 UPDATEThe CBO – Congressional Budget Office – finally releases the TRUE cost of the PPACA. Only a few years LATE, how convenient.
March 22, 2012 UPDATE All of the Obamacare “Broken Promises” (a.k.a. LIES) documented in one video:
March 20, 2012 UPDATE Does Obama’s ‘contraception’ mandate REALLY ‘save women’s health’? What is the TRUTH? Get the facts here.
March 12, 2012 UPDATE Starting in 2014, section 1303 of the PPACA legislation will force you to pay for abortions. The exact opposite of what the President promised Michigan Democrat Bart Stupak in order to garner his support.
March 12, 2012 UPDATE New study shows employers passing on massive health insurance premium increases onto their employees. Read study here. My own clients have received premium increases as high as 46% since the passage of the PPACA and we’ve lost more than 20 health insurance carriers as well. To see my client’s actual renewal notices as well as the names of each insurance company we’ve lost since the PPACA was signed into law click this link.
March 9, 2012 UPDATE ATTENTION Active Duty and Retire Military members! Barack Obama is moving you IN TO the new PPACA health insurance beginning after the 2012 General Election (of course). How will this affect you? This will cause your Tricare premiums to INCREASE between 30 percent and 78 percent for the first year. After that, the plan will impose five-year increases ranging from 94% to 345% – more than 3 times current levels.
February 29, 2012 UPDATEHow much will the new PPACA ‘exchanges’ cost the already BANKRUPT State of Illinois? The bargain price of only $90 MILLION a year!
February 27, 2012 UPDATEDr. Jill Vecchio gives an excellent break down of the PPACA legislation in the following 7 short videos. These are a MUST watch.
February 2, 2012 UPDATENew Medicaid report shows the PPACA will further bankrupt already bankrupt States like Illinois and California. Oh and here’s the BEST part! Starting in 2014 the PPACA starts TAXING ITSELF!
February 1, 2012 UPDATE Catholic Church denounces PPACA “forced Contraception & Abortion pill” health insurance coverage mandate. Read the details here.
It began when the U.S. Health & Human Services Department attempted to mandate that all health insurance policies in this country include new “Preventative Care” benefits as of 8/1/2011. Included in their idea of “Preventative Care” is not ONLY “Contraceptives” that prevent conception which many Christians are NOT opposed to, but also two separate and deadly Abortifacient drugs.
Many Christians are not opposed to “Contraceptive” drugs that prevent the fertilization of the human egg (thus preventing conception, or the beginning of a human life). What the vast majority of Christians are diametrically OPPOSED to is Aborting a human life after conception. This is why the Family Research Council wrote a strongly worded letter to HHS on August 1, 2011 when they first attempted to violate our religious beliefs. You can read that letter here.
Since very few people, besides myself, even knew this was occurring as part of the new health care law it went largely unnoticed. That is, until the Catholic church was notified that they ALSO must comply with this ‘Interim Final Ruling. THEN more than 400 Catholic organizations including the Pope himself RIGHTFULLY condemned the Obama administration for this new usurpation of their 1st Amendment rights. You can read more about the more than 400 Catholic organizations who are pushing back here.
You see, this is FAR MORE than just about “Contraception”. This is about the Government FORCING all Americans including all Christians and ALL Catholics to not ONLY pay for Abortions with U.S. Tax Dollars but to purchase health insurance that includes coverage for Abortions whether it violates their religious beliefs or NOT.
This is an UNPRECEDENTED violation of our 1st Amendment rights and the only response thus far from the Tyrannical Obama administration is “You have one year to comply”. In other words, you have one year to abandon your fundamental religious beliefs and succumb to our rules.
This will NOT stand in America and I can guarantee you all one thing. The Obama administration will walk this ruling back and they will do so quickly or face the wrath of millions of Christians and all TRUE Catholics at the polls in November. This is also why Joe Biden and Bill Daley BOTH practicing Catholics WARNED Obama about this ruling BEFORE it was made http://www.politico.com/politico44/2012/02/biden-daley-warned-president-about-contraception-decision-113881.html
January 23, 2012 UPDATE George Will breaks down just how bad the PPACA will be for States and how this issue will soon be addressed in the Supreme Court. This is a must read!
December 1, 2011 UPDATE New study from the Galen Institute provides empirical data to support nearly every statement I’ve made in every speech I’ve made for the last two years. “A Radical Restructuring of Health Insurance.”
October 31st, 2011. UPDATE Remember those “tax payer subsidies” to purchase health insurance through the new PPACA exchanges? Turns out those subsidies provide a huge financial disincentive for Americans to get married. In fact, divorcing or staying single will be a far more lucrative option after 2014. Click here for more on this.
October 15, 2011 UPDATE Today the Obama Administration made the following statement: “For months opponents of health reform have falsely claimed that the Affordable Care Act would lead to the taxation of health care benefits. The claim wasn’t true when the rumor first surfaced, it isn’t true today and it won’t be true tomorrow. ” Click here to read why that statement is a bald faced LIE.
September 23, 2011 UPDATE New study shows waiting times to see a Doctor are about to go WAY up. Read details.
September 19, 2011 UPDATEThis report was released by Investors Business daily that revealed that under Section 1311 & 1321 of the PPACA, people who buy health insurance through a federally run exchange will NOT eligible for ANY premium subsidies. Since employers will be incentivized to terminate their health insurance plans and dump their employees into the new PPACA health insurance exchanges (exactly like Massachusetts) this will leave millions of Americans with a hefty health insurance premium. When that happens, it will indeed INCREASE the number of American Uninsured instead of DECREASE the number of American Uninsured. Just as I said it would.
August 1, 2011 UPDATE Second wave of PPACA “Preventative Care” mandates begin including “free” “Morning After” Abortion pills. Reuters reports.
June 21, 2011 UPDATEThe CBO (Congressional Budget Office) 2011 “Long Term Outlook Budget Outlook” published 6/21/2011 states that not only will the PPACA not reduce health care costs, but the PPACA’s rapid expansion of Medicaid to nearly 30 million more Americans will drive health care costs to an all time high in the coming decades. Click here to Read the new CBO study.
May 26, 2011 UPDATE There are now 3,095,593 Americans “waived” from the PPACA. Click here to find out who.
March 22, 2011 UPDATEWatch me debate a Liberal “Progressive” on the PPACA at Rep. Randy Hultgren’s Office. This is a half hour long street debate well worth your time. Every talking point is dismantled and replaced with facts.
January 15, 2011 UPDATEThere are MANY lies coming from the Main Stream Media about the costs related to repealing the PPACA. Do NOT believe these lies. Here are the REAL numbers. Repealing the PPACA will save $2.5 Trillion and Medicare will no longer be ROBBED of $4.95 Trillion over the next 2 decades.
January 6, 2011 UPDATEClick Here to read the new Congressional report entitled “Obamacare: The Budget-Busting, Job-Killing Health Care law.”
For 2010 updates on the PPACA a.k.a. “Obamacare”click here.
Under section 1311 of the “Patient Protection & Affordable Care Act”, tax ‘credits’ can only be provided to those who purchase health insurance in a ‘state-based’ exchange. And, since the $2,000 (or $3,000) per employee tax on employers is tied to those tax ‘credits’. No employer can be legally penalized in a state that refuses to open a ‘state based’ exchange. The HHS deadline for Governor’s to declare their refusal or agreement to open a ‘state based’ exchange expired on November, 16, 2012.
ATTENTION Ohio Conservatives: An additional HHS deadline of December 15, 2012 was recently granted to Governors who are still undecided on opening a ‘state based’ exchange. And, an HHS deadline of February 15, 2013 was granted to those Governor’s who wish to purse a ‘state-federal Partnership’ exchange because they are not prepared to open a ‘state-based’ exchange by the required HHS deadline of September 1, 2013. Ohio Governor John Kasich has selected this third deadline of February 15, 2013 and is moving “Forward” with Obamacare in Ohio. Even though the media reported that he has rejected a ‘state-based’ exchange. The truth is Mr. Kasich is pursing a “state-federal partnership” exchange. A “state-federal partnership” exchange IS a ‘state-based’ exchange. In fact, a ‘state-federal Partnership’ exchange is exactly what our Illinois Statist Governor Pat Quinn is opening right here in Madiganistan. If you are an Ohio Conservative I suggest you contact every memberof Governor’s Kasich’s staff since he seems to be ‘hard of hearing’. Click here for each of their phone numbers and email addresses.
As of November 28, 2012 here’s where each Governor stands on opening a ‘state based’ exchange:
Opening a ‘state based’ exchange: 18 states and Washington, D.C.
Planning for a partnership exchange: 6 states
Have REJECTED to a ‘state-based’ exchange: 17 states
Undecided: 8 states – including Florida, Idaho, New Jersey, Oklahoma, Pennsylvania, Tennessee, Montana and West Virginia. PLEASE NOTE: Indiana’s Governor elect Mike Pence has rejected a state-based exchange.
The phrase “Consumer Driven Tax Qualified Health Insurance” is being tossed around quite a bit nowadays especially since the tax advantages of owning Tax Qualified Health Insurance has been significantly increased under the former Bush administration. Effective December 20, 2006 President George W. Bush signed the Health Opportunity Patient Empowerment Act of 2006, enhancing Americans access to tax-advantaged health care savings. The law, part of the Tax Relief & Health Care Act of 2006, provides new opportunities for health savings account participants to build their funds. To read the new adjustments Click here
For the 2009 & 2010 IRS H.S.A COLA (Cost of Living Adjustments) click: 2010 IRS HSA COLA
One of the most popular (and lowest priced) types of Consumer Driven Tax Qualified Health Insurance plans is the HSA qualified HDHP. HSA stands for “Health Savings Account”, more commonly referred to as a “Medical IRA”. HDHP stands for High Deductible Health Plan. Health Savings Accounts are a unique way to attractively manage your health insurance costs. They were originally named MSA’s or Medical Savings Accounts designed by Senator Bill Archer (R) of Texas. Bill’s project was to find a way to reduce the cost of health insurance for the self employed without sacrificing quality coverage for a major medical illness. Bill’s brilliant idea was to eliminate the parts of a Traditional Health Insurance Plan that cost the consumer the most money. These expensive benefits include outpatient doctor “co pays” and outpatient prescription “co pays”. Bill approached Congress with a proposal that stated in essence that if you remove those two features and keep the major medical coverage in place you could conceivably cut the cost of your health insurance premium considerably. He was absolutely right!
To illustrate how Bill’s idea works in the real world. We will use a real world example. Tony & his wife are currently paying $1,134 a month for Cobra continuation coverage from a previous group plan. In comparison, the monthly premium for an HSA qualified HDHP (High Deductible Health Plan) which covers each insured family member up to $5 million dollars is less than half of the premium that they are paying now ($481.64 monthly to be exact). This is a yearly savings of $7,828.32 or a monthly savings of $652.36. This is a significant difference. However the insured has to give up all of their outpatient co pays. Is this worth it? This was the question posed to Senator Bill Archer (R) when he approached Congress back in the late 1990′s. His answer to Congress was simply “make it worth it”.
In other words, he asked Congress to make it worth it to the insured. Their response was two fold. And it is these two primary reasons that make HSA’s a “no-brainer” for every self employed prospective insured and for their corresponding employees. The first thing Congress did was to state that if a policy holder buys a major medical health insurance policy (HDHP) with a yearly family deductible between $2,200 per family (not per person) or as high as $5,800 per family we will call that an HSA qualified health insurance plan (HDHP).
They further said that in order to make giving up outpatient co pays more attractive to the insured we will allow anyone who has an HSA qualified health insurance plan (HDHP) the option to open a tax favored HSA (Health Savings Account) with their local bank or financial brokerage house. Since the insured is saving a considerable amount of money each month by giving up their out patient co pays, we will allow them to take that extra premium that they would have normally given the insurance company for the “privilege” of a co pay and put it into a 100% tax deductible account that will grow tax deferred at an interest rate adjusted by the Fed.
In addition to depositing the amount you save in insurance premiums, you may also deposit in your HSA an amount equal to what the IRS allows for that given year. For the year 2009 the maximum contribution a family can make to their HSA account is $5,950. In addition, any family member who is 55 years of age or older can deposit an additional $1,000 annually (more on the age 55 allowance below). This means that the total amount that Tony and his wife (in our example above) can deposit per calendar year is $7,950 and they can take a 100% tax deduction for that contribution similar to an IRA.
Furthermore, if they do incur medical expenses that arise throughout the course of the year that are subject to the deductible (i.e. prescriptions, doctor’s office visit charges, etc.) the IRS will allow them to pull out that money that they put into their optional tax deductible, tax deferred HSA savings account to pay for those expenses. When they use their HSA money to pay for those expenses the IRS will allow them to write those expenses off at a 100% tax deduction. The list that the IRS allows them to spend their HSA money on is very liberal and includes things like dental, orthodontics, eyeglasses, radiokeratonomy (Lasik corrective eye surgery), alternative medicines etc. Click the hyperlink to see the list of allowable expenses and disallowed expenses on the HSA section of the IRS web site here: http://www.irs.gov/publications/p502/index.html
Arguably the most attractive tax advantage to owning an HSA is the fact that the money left over in the HSA account that was not used on medical expenses at the end of the year is “rolled over” into the next year and awarded a higher rate of tax deferred interest. The insured also has the option to roll those unused funds into no load mutual funds, thereby building an extra tax deferred retirement account with money they would have normally given to the insurance company each and every year whether or not they had any claims that year!
It should also be noted that with not having a “co pay” with your plan does not mean that your outpatient doctor visits and outpatient prescription drugs will not be a covered expense. With most HSA qualified HDHP’s these charges are a fully covered expense just as they would be with a Traditional Health Insurance Plan. The only difference is these charges will be subject to the “aggregate” family deductible.
Being “subject to deductible” does not mean that you will pay full price for these charges either. If you stay within the vast PPO network that most reputable carriers offer (www.phcs.com) your outpatient doctor office visit charges will be discounted by as much as 40%. Your prescriptions will also be discounted significantly as well by staying within the Rx prescription network.
Let’s break that down in plain english. Let’s say your doctor’s office charges you $100 for a “sick visit”. If you use a PPO provider (typically PHCS or MultiPlan) those office charges will be “re-priced” down to roughly $60. Now compare that to a Traditional plan which provides you with a $25 “co pay”. The difference to you is $35 out of pocket for that doctor’s office visit. But is that all you are really saving?
Not if you add in the monthly premium savings between the two plans. The typical monthly premium savings between a Traditional plan and an HSA qualified plan for a family is $200 to $300 monthly or more. Let’s split the difference at $250 less monthly. This equates to an annual savings of $3,000.
Now let’s take that $3,000 annual savings and deposit it into a tax deferred, tax deductible interest bearing account. Let’s go a step further and imagine you find an HSA account that bears you NO interest AT ALL (which is not that hard to imagine in this economy). You’re still saving $3,000 annually and you’re deducting that amount from your adjusted gross income. This means less reportable income which means less taxes.
Now lets imagine you have no major medical claims in year two and you deposit the same amount. Now in year three you have a worse case scenario occur. Now you have $9,000 to help pay your “aggregate” family deductible. Moreover, since deductibles with HSA qualified HDHP’s include only one “aggregate” deductible for the entire family there will be no other risk to any other family member for the rest of that year. Unlike Traditional Health Insurance Plans which typically require each of three separate family members to pay their own calendar year deductible if they end up in the hospital (or need an MRI, CT, Nuclear Medicine Scan etc.)
The best way to explain the unique advantages of these types of plans is to look at the maximum out of pocket risk a family is exposed to with a Traditional Health Insurance plan and compare it to the maximum out of pocket expenses that a family would be exposed to with an HSA qualified HDHP. The out of pocket assumptions below assume that your Traditional plan requires each of three family members to satisfy their own deductible and coinsurance out of pocket expense each calendar year. Some plans only require two family members to satisfy their own deductible and coinsurance out of pocket expense each calendar year. Either way, for the same premium, your out of pocket risk will reduced significantly with any HSA qualified HDHP available on the market today.
Current Maximum Annual out of pocket risk with the average Traditional Health Insurance Plan
Annual deductible: $2,500 (for one family member)
+
Annual deductible: $2,500 (for 2nd family member)
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Annual deductible: $2,500 (for 3rd family member)
Total Family Deductible: $7,500 (Total Annual Deductible Risk per family per year)
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Annual coinsurance out of pocket $2,000 – (20% of the first $10,000 in bills) for one family member.
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Annual coinsurance out of pocket: $2,000 – (20% of the first $10,000 in bills) for 2nd family member.
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Annual coinsurance out of pocket: $2,000 (20% of the first $10,000 in bills) for 3rd family member. Total Family Coinsurance Risk: $6,000 (Total Annual Coinsurance Risk per family per year)
By adding $7,500 in total deductible risk per family to
the extra $6,000 in total coinsurance out of pocket risk per family. We arrive at a total per family risk of:
$13,500 each calendar year.
The average monthly premium for a family of four for this type of Traditional Health Insurance plan is $673.99
In contrast, if we compare that total calendar year per family annual risk to that included with an HSA qualified HDHP with a $7,000 total “common” family calendar year deductible. Here’s what that looks like:
Calendar Year “Common Family” Deductible: $7,000 (to be satisfied aggregately by all family members)
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Annual coinsurance out of pocket risk: $0(100% coverage after “common” family deductible is satisfied)
Total Family out of pocket expense per year: $7,000 (Total coinsurance risk per family is $0. Plan pays 100%)
The average monthly premium for a family of 4 with an HSA qualified HDHP would be $430.77.
The premium savings per month between both products is $243.22 or $2,918.64annually.And we actually reduce the total annual per family risk by almost HALF.
In addition, once you have an HSA qualified Health Insurance plan. The IRS allows you to open the aforementioned ”Medical IRA”, more commonly referred to as an “HSA” (Health Savings Account) if you choose to do so.This is an option. It is however a very good option to select because not only can you deposit the premium difference between both plans ($2.918.64) in to the optional Medical IRA (at the bank of your choice). But you can also add an additional amount of $3,031.36 this year (even more if your over the age of 55) in to a 100% tax deductible, tax deferred, interest bearing Medical IRA. It behooves you to do so for the following reasons:
1.) Unlike any other IRA, a Medical IRA (HSA) allows you to withdraw funds at any time with no penaltyfor “qualified medical expenses“. Most importantly, when you withdraw your HSA funds to pay for any of the qualified medical expenses on that list, those expenses themselves become 100% tax deductible.
2.) Here’s the key point though. If you have just ONE year without any significant claims andyou even partially fund your Medical IRA, then if the worse case scenario occurs, you will have those funds available and be able to withdraw them with no penalty and use that money to help pay your $7,000 “common” family deductible. In year 2 (with no major claims) you are that far ahead of the risk management game. In fact, no other kind of Health Insurance actually allows you to lower your risk the longer you own it by hedging money you would have otherwise given an insurance company for a Traditional plan.
I say this because, there is no other kind of IRA that you can withdraw from at any time with no penalties and then use those withdrawals to pay for medical costs and receive a 100% tax deduction for those expenditures. In fact, the longer you own an HSA qualified HDHP, the lower your risk becomes since the more years that pass, the larger your balance in your HSA account becomes. This is so because each year your remaining balance rolls over and continues to earn tax deferred interest.
The longer you look at HSA qualified HDHP’s the more sense they make. This is why they have caught on like wildfire and will continue to do so. The only inhibitor to the spread of HSA’s is lack of education (as is the case with any other financial vehicle). In fact, they even work to lower costs for Government workers! The “Whole Foods” supermarket chain chose HSA qualified Health Insurance. It worked so well for them that they were recently featured on the ABC 20/20 episode entitled “Sick In America” hosted by John Stossel:
Now you can help fund your HSA account by purchasing every day items! Click www.myhsarewards.com
To learn more about HSA’s and the recent federal legislation that has made them even more attractive to people over the age of 55 click: http://www.treas.gov/offices/public-affairs/hsa/about.shtml to read all about them on the Federal Governments HSA educational web site. To learn more about H.S.A.’s in a power point presentation format please click here: http://www.hsacenter.com/and click on the informative videos on the right.
If you are an employer and are considering HSA qualified plans for your employees consider this. An individual’s employer can make contributions that are not taxed to either the employer or the employee. The combined income and payroll tax deductibility leads to discounts for health insurance of over 40 % in some cases relative to other forms of insurance. For more details for the employer http://www.treas.gov/offices/public-affairs/hsa/faq_employer-participation.shtml
For the best interest rates you will find just about anywhere on a Health Savings Account please click:HERE
Eight of the best priced HSA qualified HDHP’s are featured at the bottom of the page here. Please “Contact Us” with questions about HSA qualified HDHP’s. If you have a C.P.A. or tax advisor please feel free to ask he or she about the advantages of owning an HSA as well.
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