Friday, December 25, 2015

ACA/Obamacare: The Cadillac Tax, the Forty Percent Excise Tax, Delayed for Two Years

"The omnibus spending bill recently passed by Congress and signed into law by President Obama delays the onset of the Affordable Care Act (ACA)’s so-called “Cadillac plan tax” for two years. The new law also weakens the effect of the tax (assuming it’s ever collected) by making it deductible, as noted by my Mercatus Center colleague Brian Blase. I agree with former OMB director Peter Orszag’s observation that the delay may simply be a first instance of a “rolling permanent deferral” of the Cadillac plan tax.

The tax has long been on shaky political ground and the new law considerably reduces the chances of its ever taking effect. It is worth understanding what caused the unraveling of the tax, and what lessons can be drawn from this.

The Cadillac plan tax is (was) a 40% excise tax on the amount by which health insurance plan costs exceeded annual thresholds of $10,200 (individuals) or $27,500 (families), starting in 2018. These thresholds were indexed to grow more slowly than historical health cost growth, so that over time more and more plans would be subject to the tax, producing escalating federal revenues necessary to help fund the ACA’s ambitious health entitlement expansion. A key policy intent of the tax was to offset the damaging effects of the longstanding federal tax preference for employer-sponsored insurance (ESI), one of which is to drive excess health cost inflation.

Lesson #1: Save before you spend.

Lesson #2: Don’t assume a favorable future political alignment.

Lesson #3: Be transparent.

Lesson #4: Partisan victories can be short-lived.

Lesson #5: Don’t campaign against necessary policy steps."


- Five Lessons of the Cadillac Plan Tax Failure, Economics 21, Manhattan Institute, 12/22/2015

Link to the entire article appears below:






Saturday, December 19, 2015

ACA/Obamacare: 2016 Premiums are Up an Average of 10%

“Obamacare enrollees will pay more next year, as new data found a roughly 10 percent increase on all types of marketplace plans.

The Robert Wood Johnson Foundation released datasets on average premiums for 2015 and 2016 on Wednesday. The data showed that every tier of Obamacare plans — bronze, silver and gold — raised average premiums by about 10 percent in 2016 from 2015.

Gold plans had the largest increase with 11 percent, while bronze came in with 10 percent and silver with just under 10 percent, the foundation data shows.” - Obamacare enrollees face higher premiums next year, Washington Examiner, 12/16/2015

Link to the entire article appears below:




Sunday, December 6, 2015

U.S. Healthcare Delivery System: We Have Met Canada and We are Them

“Americans like to think that our health care system is very different from “socialized medicine” in Canada. In fact, the two health care systems are far more similar than they are different. In Canada, when people go to the doctor the visit is free. In America, it’s almost free.

On the average, every time Americans spend a dollar at a doctor’s office only 10 cents is coming out of our own pockets. The rest is paid by an employer, an insurance company or government. Like the Canadians, we do not primarily pay for health care with money. We pay with time.

According to a
Merritt Hawkins survey:
The average wait time to see a primary care doctor in the United States is almost three weeks.
In Boston (where we are told there was universal coverage even before there was Obamacare), the average wait is more than two months.

Compare that with how long you have to wait to get your cellphone repaired.

Waiting in the US is becoming more like waiting in Canada and in some cases it can be worse.” - What Everyone Should Know About Rationing By Waiting, Forbes, 11/09/2015

Link the entire article appears below:

Tuesday, December 1, 2015

ACA/Obamacare: Largest US Private Health Insurer Has Second Thoughts About On-Exchange Offerings

‘According to enrollment data, more than 500,000 Americans using the exchanges purchased plans from UnitedHealthcare. Those consumers will have to purchase new plans in 2017 should the insurance company leave the exchanges, Ed Haislmaier, a health policy expert at The Heritage Foundation, told The Daily Signal.

“What we’re seeing is that insurers are re-evaluating whether this is a good market to go into,” he said. “Some are expanding; others are having problems, and they pulled back. Over time, what you’ll probably see is fewer insurers offering coverage in the exchanges. We’re already seeing that, even though United expanded in 2015 and 2016, insurers offering coverage is down. It’s going to take a few years to play out.”

Compared to its competitors, UnitedHealthcare was slow to offer products on the exchange when Obamacare first went into effect in October 2013 and sold plans in just four states—Colorado, Maryland, Nevada, and New York—in 2014, according to the state-run exchanges and federal exchange,

However, the insurer expanded its exchange coverage substantially in 2015 and 2016, selling plans in 22 states during the 2015 open enrollment period and 34 states during this year’s open enrollment period.

Competitors Aetna and Humana, by comparison, are offering coverage on the exchanges in 15 states.

Haislmaier said that insurers like UnitedHealthcare may not have prepared for how much plans sold on the exchanges would cost them.

“What you’re seeing is the market itself, and this is attributable to Obamacare, is turning out to be a market that’s predominately low-income individuals between 100 to 200 percent of the poverty line,” Haislmaier said. “They’re buying coverage, getting a substantial subsidy, but gravitating toward the low cost-sharing plans where they get extra subsidies. The enrollees have more of an incentive to use more health care, and that makes those plans more expensive [for the insurer].”

For insurers to profit from the coverage offered on the exchanges, Haislmaier said, they must narrow networks or raise prices, both of which impact consumers.

“The ones who have not narrowed the networks or have been behind the curve on pricing are having losses and reevaluating participation,” he said.’ - How Obamacare Could Limit Insurance Options for Americans in These 34 States, daily, 11/25/2015