"If ObamaCare subsidies on federal exchanges survive their brush with the Supreme Court, it may be because the law is even more coercive without them.
Chief Justice John Roberts, who saved the individual mandate by calling it a tax in 2012, has been seen as the swing vote who will determine whether ObamaCare remains viable in states without their own exchanges. But a second potential swing vote emerged during Wednesday's oral arguments in the
If ObamaCare subsidies on federal exchanges survive their brush with the Supreme Court, it may be because the law is even more coercive without them.
Chief Justice John Roberts, who saved the individual mandate by calling it a tax in 2012, has been seen as the swing vote who will determine whether ObamaCare remains viable in states without their own exchanges. But a second potential swing vote emerged during Wednesday's oral arguments in the King v. Burwell case challenging the legality of tax subsidies issued to 34 states via the federally run Healthcare.gov.
Justice Anthony Kennedy told plaintiffs attorney Michael Carvin: "If your argument is accepted, the states are being told, 'Either create your own exchange, or we'll send your insurance market into a death spiral.'"
Because of other ObamaCare regulatory mandates — requiring insurers to take all comers and offer a rate without regard to one's health — exchanges could be unworkable without subsidies. That's because the population willing to pay the full cost of the policies would most likely be in disproportionately poor health — which could send premiums soaring.”
“In the view of the conservative challengers, spearheaded by the Competitive Enterprise Institute, "the plain language of the statute dictates the result."
That reading reflects the desire of the 2010 Congress that passed the law to provide a strong incentive for states to set up their own exchanges, Carvin argued.
He also took issue with Kennedy's suggestion that the law is less coercive with the subsidies than without, noting that the subsidies trigger the employer mandate penalties.” - ObamaCare Subsidies Ruling May Hinge On 'Coercion', IBD, 03/04/2015
Link to the entire article appears below:
http://news.investors.com/politics-obamacare/030415-742049-supreme-court-obamacare-king-v-burwell-case-oral-arguments.htm
“More than 500,000 people enrolled in health plans offered by nonprofit insurance companies created under the Affordable Care Act.
And with the co-ops receiving an average of $108.7 million from the federal government, taxpayer-backed funding per enrollee topped $17,000.
Twenty-three co-ops received a total of $2.5 billion from the federal government and enrolled more than 520,000 people in plans through September. However, an analysis conducted by The Daily Signal published yesterday found that just one, Maine Community Health Options, was profitable last year.
Using the latest quarterly filings for 22 co-ops, The Daily Signal examined how much money (in federal dollars) co-ops received per consumer who enrolled in a group or individual plan. On average, each co-op received $17,344 from the Centers for Medicare and Medicaid Services per enrollee. Data for New Jersey’s co-op, Health Republic Insurance of New Jersey, was not available.” - Obamacare Co-Ops Cost Taxpayers $17,000 Per Enrollee, dailysignal.com, 02/11/2015
Link to the entire article appears below:
http://dailysignal.com/2015/02/11/much-taxpayer-money-obamacare-co-op-receive-per-enrollee/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=morningbell&mkt_tok=3RkMMJWWfF9wsRoiu6zBZKXonjHpfsX56OgvWa%2BylMI%2F0ER3fOvrPUfGjI4ESsNrI%2BSLDwEYGJlv6SgFQrLBMa1ozrgOWxU%3D
“Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.
A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.” - Mercatus Center, George Mason University, 10/07/2014
Link to the working paper by Casey Mulligan:
http://mercatus.org/publication/affordable-care-act-and-new-economics-part-time-work?utm_source=Email&utm_medium=Hill&utm_campaign=Newsletter
'Taxes? Who wants to think about taxes around Labor Day?
But if you count on your tax refund and you're one of the millions getting tax credits to help pay health insurance premiums under President Obama's law, it's not too early.
Here's why: If your income for 2014 is going to be higher than you estimated when you applied for health insurance, then complex connections between the health law and taxes can reduce or even eliminate your tax refund next year.’
‘The danger is that as your income grows, you don't qualify for as much of a tax credit. Any difference will come out of your tax refund, unless you have promptly reported the changes.
Nearly 7 million households have gotten health insurance tax credits, and major tax preparation companies say most of those consumers appear to be unaware of the risk.
"More than a third of tax credit recipients will owe some money back, and (that) can lead to some pretty hefty repayment liabilities," said George Brandes, vice president for health care programs at Jackson Hewitt Tax Service.
Two basic statistics bracket the potential exposure:
• The average tax credit for subsidized coverage on the new health insurance exchanges is $264 a month, or $3,168 for a full 12 months.
• The average tax refund is about $2,690.’
‘Concern about the complex connection between the health care law and taxes has increased recently, after the Internal Revenue Service released drafts of new forms to administer health insurance tax credits next filing season.
The forms set up a final accounting that ensures each household is getting the correct tax credit that the law provides. Various factors are involved, including income, family size, where you live and the premiums for a "benchmark" plan in your community.
Even experts find the forms highly complicated, requiring month-by-month computations for some taxpayers.
Note: The following is a link to the IRS draft of form 1095A:
http://www.irs.gov/pub/irs-dft/f1095a--dft.pdf
Taxpayers accustomed to filing a simplified 1040EZ will not be able to do so if they received health insurance tax credits this year.’
Some highlights:
—You may have heard that the IRS cannot use liens and levies to collect the law's penalty on people who remain uninsured. But there is no limitation on collection efforts in cases where consumers got too big a tax credit. If your refund isn't large enough to cover the repayment, you will have to write the IRS a check. "They are not messing around," Brandes said.
—Health insurance is expensive, and with that in mind, the repayment amount the IRS can collect is capped for most people. For individuals making less than $22,980 the IRS can only collect up to $300 in repayments. That rises to $750 for individuals making between $22,980 and $34,470. For individuals making between $34,470 and $45,960, the cap is $1,250.
For families, the cap is double the amount that individuals can be charged, but the income thresholds vary according to household size. An IRS table may help simplify computation, which is based on the federal poverty levels for 2013.
—There is no collection cap for households making more than four times the federal poverty level. They face the greatest financial risk from repayments, because they would be liable for the entire amount of the tax credit they received.
Those income thresholds are $45,960 and above for an individual, $78,120 and above for a family of three, and $94,200 for a family of four. Ciaramitaro says people facing that predicament should try to minimize their taxable income through legal means, such as putting money into an IRA. The IRS says it will work with taxpayers who can't pay in full so they understand their options.’ - Tax refunds may get hit due to health law credits, USA Today, 08/24/2014
Link to the entire article appear below:
http://www.usatoday.com/story/money/personalfinance/2014/08/24/tax-refunds-may-get-hit-due-to-health-law-credits/14529169/
‘The House Ways and Means Oversight subcommittee held a hearing Wednesday about an undercover investigation by the GAO that found it was able to sign up 11 out of 12 fake applicants using false citizenship/immigration and income documents.
“The initial findings are deeply troubling to me,” said subcommittee Chairman Charles Boustany (R-La.). “We’re in an area, where tax credits are being utilized to undermine the program. … These kinds of situations are intolerable, whether you are a Republican or a Democratic.”’ - Ease of fake O-Care sign-ups worries GOP, thehill.com, 07/23/2014
Link to the entire article appears below:
http://thehill.com/regulation/healthcare/213112-ease-of-fake-o-care-sign-ups-worries-gop
Consider these three statements regarding the legislation known as Obamacare:
'Max Baucus (D-Montana), chair of the Senate Finance Committee through which the health bill flowed, insisted that reading the law wasn't necessary. “I don’t think you want me to waste my time to read every page of the healthcare bill,” Baucus said, according to the Flathead Beacon. “You know why? It’s statutory language. ... We hire experts.”' (1)
'Tom Carper (D-Delaware), who also served on the Senate Finance Committee, insisted that the legislative language wasn't important: "I don't expect to actually read the legislative language, because reading the legislative language is among the more confusing things I've ever read in my life."' (2)
'“You’ve heard about the controversies within the bill, the process about the bill, one or the other. But I don’t know if you have heard that it is legislation for the future, not just about health care for America, but about a healthier America, where preventive care is not something that you have to pay a deductible for or out of pocket. Prevention, prevention, prevention—it’s about diet, not diabetes. It’s going to be very, very exciting. But we have to pass the bill so that you can find out what is in it, away from the fog of the controversy.”' - Nancy Pelosi (3)
Hence legislation passed without being closely read yields many unintended consequences one of which is:
“The statute clearly states that subsidies are available only through exchanges established by a state, yet the IRS, in its interpretation, expanded the availability of subsidies to all exchanges – state and federal.
Should the D.C. Circuit decision (ruling against the IRS) be upheld, the impact would have a ripple effect on the health care law. First, only individuals purchasing coverage through a state exchange would be eligibility for federal subsidies. Those individuals in the federal exchanges would likely face costly premiums and many as a result may be exempt from the individual mandate. Second, since the employer mandate penalties are linked to the availability of the subsidies, employers would not be subject to the penalty in those states that did not establish a state exchange.”
“Aside from amending the law through normal legislative processes, one obvious quick fix would be to get more states to set up state exchanges. But that may a heavy lift. Many states opted to not establish an exchange in part because by 2015 states are required by law to fund the operating expenses of the exchanges on their own. Furthermore, grant funding that was originally included in the law to help states establish state exchanges is gone, and it is highly unlikely Congress would be willing to appropriate additional funds toward this endeavor.” - (4)
One has unread legislation, language repeatedly used specifying subsidies linked to state based exchanges, “experts” and consequential legal proceedings resulting in unintended consequences. What response does one encounter from ACA/Obamacare supporters?
“We feel very strong about the sound legal reasoning of the argument that the administration is making,” White House spokesman Josh Earnest said. “You don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health-care costs regardless of whether it was state officials or federal officials who are running the marketplace.” (5)
The problem with the above argument by Mr. Earnest is dissected nicely by Peter Suderman at Reason.com:
“The reasoning for this ruling was simple: That’s what the law says. The section dealing with the creation of state exchanges and the provision of subsidies states, quite clearly, that subsidies are only available in exchanges "established by a State," which the law expressly defines as the 50 states plus the District of Columbia.
Obamacare’s defenders have responded by saying that this is obviously ridiculous. It doesn’t make any sense in the larger context of the law, and what’s more, no one who supported the law or voted for it ever talked about this. It’s a theory concocted entirely by the law’s opponents, the health law's backers argue, and never once mentioned by people who crafted or backed the law.
It’s not. One of the law’s architects—at the same time that he was a paid consultant to states deciding whether or not to build their own exchanges—was espousing exactly this interpretation as far back in early 2012, and long before the Halbig suit—the one that was decided this week against the administration—was filed. (A related suit, Pruitt v. Sebelius, had been filed earlier, but did not challenge tax credits within the federal exchanges until an amended version which was filed in late 2012.) It was also several months before the first publication of the paper by Case Western Law Professor Jonathan Adler and Cato Institute Health Policy Director Michael Cannon which detailed the case against the IRS rule.
Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the Massachusetts health law that was the model for Obamacare, was a key influence on the creation of the federal health law. He was widely quoted in the media. During the crafting of the law, the Obama administration brought him on for consultation because of his expertise. He was paid almost $400,000 to consult with the administration on the law. And he has claimed to have written part of the legislation, the section dealing with small business tax credits.”
“A video of the presentation, posted on YouTube, was unearthed tonight by Ryan Radia at the Competitive Enterprise Institute, a libertarian think tank which has participated in the legal challenge to the IRS rule allowing subsidies in federal exchanges. Here’s what Gruber says.
What’s important to remember politically about this is if you're a state and you don’t set up an exchange, that means your citizens don't get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this. [emphasis added].”
“And what he says is exactly what challengers to the administration’s implementation of the law have been arguing—that if a state chooses not to establish its own exchange, then residents of those states will not be able to access Obamacare's health insurance tax credits. He says this in response to a question asking whether the federal government will step in if a state chooses not to build its own exchange. Gruber describes the possibility that states won’t enact their own exchanges as one of the potential "threats" to the law. He says this with confidence and certainty, and at no other point in the presentation does he contradict the statement in question.
In early 2013, Gruber told the liberal magazine Mother Jones that the theory advanced by the challengers in this case was "nutty." Gruber also signed an amicus brief in defense of the administration and the IRS rule. But judging by the video it is quite clear that in 2012 he accepted the essence of the interpretation advanced by the challengers.”
"Update: Earlier this week, Gruber was on MNSBC to address the Halbig ruling. He was asked if the language limiting subsidies to state-run exchanges was a typo. His response: "It is unambiguous this is a typo. Literally every single person involved in the crafting of this law has said that it's a typo, that they had no intention of excluding the federal states."
Update 2: The Cato Institute's Michael Cannon, who was instrumental in developing the arguments that laid the groundwork for the legal challenge in Halbig, responds to the video at Forbes:
I don’t mean to overstate the importance of this revelation. Gruber acknowledging this feature of the law is not direct evidence of congressional intent. But Gruber is probably the most influential private citizen/government contractor involved in that legislative process. He was in the room with the people who crafted this bill.
Update 3: Gruber says the statement in the video was "a mistake." Jonathan Cohn of The New Republic got a response from Gruber this morning. Here are a few snippets:
I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.
During this era, at this time, the federal government was trying to encourage as many states as possible to set up their exchanges. ...
At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014. I might have been thinking that if the federal backstop wasn't ready by 2014, and states hadn't set up their own exchange, there was a risk that citizens couldn't get the tax credits right away. ...
But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step. That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o—you know, like a typo.
Update 4: Gruber appears to have made a second "speak-o." In a separate speech, he spoke of the "threat" posed by states declining to build their own exchanges. And he once again explicitly ties the creation of state-based exchanges to the law's tax credits (its subsidies for private health insurance).” (6)
Upon further review, if one trumpets that reading legislation is a non-starter, legislative language is unimportant and that merely passing unread legislation and unimportant legislative language to see what is inside the legislation……then one should not be surprised by the never ending cascade of unintended consequences spawned by the ACA/Obamacare legislation. Political dupery and nitwitery has a price and cost.
A question to ponder regarding the never ending cascade of unintended consequences spawned by the ACA/Obamacare legislation is an old Thomas Sowell expression regarding notional propositions such as Obamacare: What next? Then what?
Updated 07/30/2014: The Flip-Flopping Architect of the ACA, Politico Magazine, 07/28/2014
http://www.politico.com/magazine/story/2014/07/jonathan-gruber-the-flip-flopping-architect-of-the-aca-109466_Page2.html#.U9jrBiUg91s
Notes:
(1) (2) Maybe Democrats Should Have Read Obamacare Before They Passed It, townhall.com, 07/25/2014
http://townhall.com/tipsheet/kevinglass/2014/07/25/obamacare-and-the-problem-with-democrats-refusing-to-read-the-bill-n1865814?utm_source=thdaily&utm_medium=email&utm_campaign=nl
(3) Nancy Pelosi: "We Have to Pass Our Bill So That You Can Find Out What Is In It", gatewaypundit.com, 03/09/2010
http://www.thegatewaypundit.com/2010/03/nancy-pelosi-we-have-to-pass-our-bill-so-that-you-can-find-out-what-is-in-it/
(4) The Obamacare Employer Mandate Could Die in Some States, dailysignal.com, 07/23/2014
http://dailysignal.com/2014/07/23/obamacare-employer-mandate-die-states/?utm_source=heritagefoundation&utm_medium=email&utm_campaign=morningbell&mkt_tok=3RkMMJWWfF9wsRonua%2FJZKXonjHpfsX56OgvWa%2BylMI%2F0ER3fOvrPUfGjI4AT8RmI%2BSLDwEYGJlv6SgFQrLBMa1ozrgOWxU%3D
(5) Federal appeals courts issue contradictory rulings on health-law subsidies, 07/22/2014
http://www.washingtonpost.com/national/health-science/federal-appeals-court-panel-deals-major-blow-to-health-law/2014/07/22/c86dd2ce-06a5-11e4-bbf1-cc51275e7f8f_story.html
(6) Watch Obamacare Architect Jonathan Gruber Admit in 2012 That Subsidies Were Limited to State-Run Exchanges (Updated With Another Admission), reason.com, 07/24/2014
http://reason.com/blog/2014/07/24/watch-obamacare-architect-jonathan-grube
“The Obama administration is struggling to resolve data discrepancies that could jeopardize coverage for millions who sought health insurance on the federal exchange HealthCare.gov, according to a watchdog report on the still-rocky implementation of ObamaCare.
Though the system's troubles have faded from the headlines since the problem-plagued launch last October, a report from the health department inspector general provided the first independent look at widespread issues the government is having effectively fact-checking the information applicants are putting in the system.
According to the report, the administration was unable to resolve 2.6 million so-called "inconsistencies" out of a total of 2.9 million such problems from October through December 2013.
The government needs to determine applicants' eligibility in order to verify they can enroll and, in some cases, get government subsidies. Without that step, coverage could be jeopardized. Critics fear these issues also could cause chaos during the 2015 tax-filing season, as many would have to pay back subsidy money they were not entitled to.” - ObamaCare coverage for millions in jeopardy as watchdog finds widespread data flaws, fox news, 07/01/2014
http://www.foxnews.com/politics/2014/07/01/report-obamacare-data-problems-affecting-millions/
Keeping the above news report in mind for a moment, consider the following:
“Many of the inequities present in Obamacare stem from Section 1401 of the law, which establishes eligibility for subsidized insurance in government-run exchanges.[5] Obamacare’s formulae for allocating federal premium and cost-sharing subsidies include several “cliffs.” At these cliffs, individuals and families will actually benefit more by working less because additional earnings could cause them to lose thousands of dollars in taxpayer-funded subsidies.
For example, Obamacare subsidizes insurance premiums for individuals with incomes of up to 400 percent of the federal poverty level (FPL), which is just over $62,000 for a couple in 2013.[6] According to the Kaiser Family Foundation’s subsidy calculator, a married couple, each 50 years old, making a combined $60,000 per year would receive a taxpayer-funded insurance subsidy of up to $5,081.[7] The couple would qualify for this subsidy because their combined income would be just below 400 percent of the FPL. However, if the couple earned an additional $2,500—raising their income just above 400 percent of the FPL—they would receive no subsidy at all. Even though they receive $2,500 more in cash compensation, the couple would actually be worse off financially because they would lose more than $5,000 in federal insurance subsidies.
Similar cliffs occur elsewhere in Obamacare’s subsidy structure. As income approaches 400 percent of the FPL, the percentage of income that households are expected to devote to insurance premiums rises, and the premium subsidies under Section 1401 fall. Individuals with rising income also face the loss of federal cost-sharing subsidies established under Section 1402 of the law, which reduce out-of-pocket expenses including co-payments and deductibles. These effects are particularly acute at certain cliffs established in the statute—for instance, 150 percent, 200 percent, and 250 percent of the FPL—but they also pervade the entire subsidy structure. Overall, University of Chicago economist Casey Mulligan has concluded that Obamacare will help raise effective marginal tax rates by more than 10 percentage points.[8]
The subsidy formulae in Obamacare and the disincentives to work compound an existing system of tax credits and welfare programs that places families of low and modest incomes in a “poverty trap.” Testifying before two subcommittees of the House Ways and Means Committee in June 2012, Urban Institute fellow Gene Steuerle explained how the phaseouts of various income-linked programs—such as food stamps, housing assistance, and cash welfare benefits under the Temporary Assistance to Needy Families program—create very high effective marginal tax rates.” - How Obamacare Undermines American Values: Penalizing Work, Marriage, Citizenship, and the Disabled, Chris Jacobs, heritage.org, 11/21/2013
http://www.heritage.org/research/reports/2013/11/how-obamacare-undermines-american-values-penalizing-work-marriage-citizenship-and-the-disabled#_ftnref8
Upon Further Review
The reverse tax cliffs of Obamacare would likely work the same as marginal income tax cliffs in regards to tax avoidance. Tax avoidance techniques are well known. There are legal tax avoidance techniques and there are illegal tax avoidance techniques. The point being, individuals will rationally avoid tax.
For instance, James and Jane Goodfellow face/approach a marginal income tax cliff. The Goodfellow’s could merely take the months of November and December off and earn zero income during those months and avoid the tax cliff. The Goodfellow’s could continue earning income and deploy legal tax avoidance techniques. Finally the Goodfellow’s could continue earning income and deploy illegal tax avoidance techniques such as underreporting of income.
Meanwhile, John and Mary Public face/approach a reverse tax cliff regarding Obamacare. The Public’s could merely take the months of November and December off and earn zero income during those months and avoid the reverse tax cliff. The Public’s could continue earning income and deploy legal tax avoidance techniques. Finally the Public’s could continue earning income and deploy illegal tax avoidance techniques such as underreporting of income.
Returning to the 2.6 million unresolved “inconsistencies” in Obamacare applications and the 04/15/2015 tax day disaster of many subsidy payments needing returned by Obamacare subsidy recipients: Did Obamacare applicants put the cart before the horse regarding tax avoidance techniques? How so?
On the ACA/Obamacare web site it asks a very vague question regarding income: “What is your household's expected income for 2014?” If one answers the preceding question assuming tax avoidance techniques deployed one would give a different answer than if one answers the preceding question assuming no tax avoidance techniques deployed.
Consider for a moment that a clever person experiments regarding changing the answer to “income” upon the ACA/Obamacare web site (regardless of the anticipation of tax avoidance techniques deployed and consequential reportable income). By changing the income the person will see the subsidy rise or fall and hence the consequential price required to be paid for a particular insurance plan rise or fall. Is it possible the clever person tells other clever people of their experiment?
In the final analysis, are the “inconsistencies” really inconsistencies or merely a product of the ACA application design? Stated alternatively, if one turns loose Johnny Insurance Applicant on a malfunctioning web site with no verification of data input, would one expect “inconsistencies”?
‘"I can't afford to go out and buy insurance while trying to start a business," said Willmus, of Colorado Springs, Colo. "Obamacare will allow me to be more comfortable at risking what I own." ’
‘Craig Mason, 59, said he has felt tied to his job as an engineer at a large defense contractor because he and his wife needed health insurance. A diabetic, he couldn't get affordable coverage on the individual market.
Now, however, he's thinking of leaving his employer in a few years to focus more on his side job, repairing and building guitars and other string instruments. He also wants to spend more time with his three grandchildren.
"I want to try something different," said Mason, a Germantown, Md., resident. "I don't want to be tied to a large corporation. The Affordable Care Act may be just the vehicle to bridge the gap until I'm eligible for Medicare." ’ - I'm quitting my job. Thanks Obamacare! yahoo.com, 02/25/2014
Apparently Ms. Willmus and Mr. Mason attribute their good fortune to Obamacare or The Affordable Care Act. Ostensibly the entity by the name Obamacare or Affordable Care Act is an exogenous entity that bestows low cost health insurance by its own means. Yes, the proverbial pixie dust generator!
Ms. Willmus and Mr. Mason have forgotten that other taxpayers are the means. That exogenous taxpayers are coercively made to cause the good fortune of a recipient class which Ms. Willmus and Mr. Mason have chosen to join. How very nice indeed!
Link to the Yahoo article appears below:
http://finance.yahoo.com/news/im-quitting-job-thanks-obamacare-120600325.html
Consider these excerpts from an article recently appearing in the Wall Street Journal:
‘In all, 25% of the people enrolling in private plans through the online portals since their launch in October were between the ages of 18 and 34, according to the data. Through the end of December, that proportion was 24%, according to a previous report from the federal government.
That is well short of the percentage of young people who might have registered in the exchanges. Insurers say they need strong enrollment from younger people. who are likely to be healthier, to balance out the likely higher costs racked up by older, sicker people.
Kaiser Family Foundation, a health-policy think tank, has said census data suggest that about 40% of people for whom the exchanges were intended are in the 18-34 age group.’
‘The Congressional Budget Office initially estimated that 7 million people would use exchanges in 2014; the nonpartisan agency has since revised that number downward to 6 million to take into account the technical problems that stopped many from signing up in the first weeks of the exchanges' launch.
Actuaries have warned that if the participants in the exchange end up incurring bigger medical claims than they had anticipated, insurance premiums will jump in future years. Older people and women typically have higher costs, though not always, they say.
The key question is how costs will compare to expectations," said Ross Winkelman, a fellow of the Society of Actuaries. "Age is a useful, but imperfect predictor of costs. Enrollment at the oldest ages seems to be outpacing expectations, which will clearly raise some concerns."
Administration officials declined Wednesday to discuss concerns about the balance of risk in the new insurance marketplaces.’
‘Other supporters of the law have said they are banking on getting young people in as the deadline for getting coverage this year nears.
"We are doing everything we can in the next six weeks to make sure young people know they can get free or reduced-cost coverage," said Aaron Smith, the executive director of the advocacy organization Young Invincibles.
The group has planned more than 100 events around the country for the coming Presidents Day weekend, including an enrollment event in Miami and a pub-crawl in Austin, Texas.’ - Young Remain Slow to Sign Up On New Exchanges [print edition] 02/13/2014 (appearing in the on-line edition as: Health Exchanges Hit 3.3 Million Enrollees Through January) (1)
One might want to further examine the position of Aaron Smith, executive director of the advocacy organization Young Invincibles, regarding: "We are doing everything we can in the next six weeks to make sure young people know they can get free or reduced-cost coverage."
The first concern a young person might examine is the following from the healthcare.gov web site:
“People under 30 and people with hardship exemptions may buy a "catastrophic" health plan. This type of plan mainly protects you from very high medical costs.”
“If you buy a catastrophic plan in the Marketplace, you can’t get lower costs on your monthly premiums or lower out-of-pocket costs based on your income. Regardless of your income, you pay the standard price for the catastrophic plan.” (2)
Therefore, if you are young, age 29 or under, you can purchase a catastrophic plan but you do not qualify for a subsidy. Hence someone picked winners and losers in the subsidy game and young people wanting the lower cost catastrophic plan are the losers. Very nice indeed!
An additional concern a young person might want to examine is the price of the catastrophic plan. Similar plans were roughly 25% less expensive before 01/01/2014 and ACA pricing. The increased price is subsidizing older insured’s. Hence the young indirectly or directly subsidize non-catastrophic coverage purchasers (those over 30) yet themselves can not qualify for a catastrophic plan subsidy. The subsidizer can’t obtain a subsidy. A one-way subsidy street. Sweet! (3)
Notes:
(1) Young Remain Slow to Sign Up On New Exchanges [Health Exchanges Hit 3.3 Million Enrollees Through January], WSJ, and wsj.com, 02/13/2014 and 02/12/2014, respectively.
http://online.wsj.com/news/articles/SB10001424052702303704304579379042898603278
(2) Can I buy a “catastrophic” plan?, healthcare.gov
https://www.healthcare.gov/can-i-buy-a-catastrophic-plan/
(3) Where's The Outrage From Young Americans About Obama's Health Reforms?, forbes.com, 07/31/2012
http://www.forbes.com/sites/scottatlas/2012/07/31/wheres-the-outrage-from-young-americans-about-obamas-health-reforms/
"Sen. Ron Johnson (R-Wis.) is planning to sue the Obama administration over the federal contributions that lawmakers and their staffs get for health insurance
A provision in the Affordable Care Act forces lawmakers and aides to buy insurance plans created by the healthcare law or sold on ObamaCare exchanges.
The Office of Personnel Management (OPM) said last year that the federal government would continue to help members of Congress and staffers offset the costs of those plans, as the government does for other federal employees.
But Republicans like Johnson say that policy gives lawmakers and congressional aides special treatment unavailable to others who have to seek insurance on ObamaCare exchanges.
Johnson said last week that he believes the OPM rule broke the law, and that he thinks the lawsuit can help rein in what he sees as a pattern of executive overreach from President Obama.
“The American people have an expectation — Wisconsinites have an expectation — that members of Congress should be subjected to the letter of the law just like they’re held to the letter of the law,” Johnson said, according to the Oshkosh Northwestern." - Johnson to sue over O-Care contributions, the hill.com. 01/05/2013
Link to the entire article appears below:
http://thehill.com/blogs/healthwatch/health-reform-implementation/194450-ron-johnson-to-sue-over-obamacare
Updated 01/09/2013. No Washington Exemption, a petition web site, a project of Independent Women's Voice.
http://nowashingtonexemption.com/
