Thursday, March 28, 2013

The President Who Shrank Government

Obamacare or Glitch-o-care? All Schemes Unravel, Just Some Faster Than Others

The tax credits are geared toward low and middle-income Americans who do not have access to affordable health insurance coverage through an employer. The law specifies that employer-sponsored insurance is affordable so long as a worker's share of the premium does not exceed 9.5 percent of the worker's household income.

In its rule making, or final interpretation of the law, the IRS said affordability should be based strictly on individual coverage costs, however.

That means that, even if family coverage through an employer-based plan far exceeds the 9.5 percent cutoff, workers would not be eligible for the tax credits to help buy insurance for children or non-working dependents." - Little hope seen for millions priced out of health overhaul, Reuters, 03/26/2013


Before this IRS ruling, if employee paid/responsibility/share of a group plan premium exceeded 9.5% of one's household income, one could then go to the exchange, price a policy, and receive assistance via subsidy.

Now, you can go to the exchange, but assistance is only for the employee not dependents. For example, the bronze plan is price X for the employee but X+3 for family coverage e.g. a spouse and two children. You received assistance on the X+3 premium before the ruling. After the ruling you receive assistance on X but not the +3.

The assistance is on a sliding scale depending on family income up to 400% of the poverty level i.e. $88.2k for a family of four. There is "twin" assistance: on the premium side AND the deductible/co-insurance side i.e. depending on income, one receives assistance lowering your out-of-pocket expense e.g. deductible and co-insurance equals X, your income is Y, X is then reduced to X - 1.

Link to the Reuters article appears below:

Update 04/07/2013: It's time to delay Obamacare, James Capretta and Yuval Levin, AEI, 04/04/2013

Wednesday, March 27, 2013

The IRS Goes Hollywood: The Star Trek Spoof


The Senate’s top tax-writer wants answers from the IRS about a “Star Trek” spoof that the tax-collecting agency has now apologized for making.

Finance Committee Chairman Max Baucus (D-Mont.) said Wednesday that the video production wasted taxpayer dollars at a time when the federal government was struggling to collect all the revenue it was owed. - Baucus to IRS: How did the 'Star Trek' video happen? Who's responsible?, The Hill, 03/27/2013

Link to the entire article appears below:



Tuesday, March 26, 2013

Obamacare: a voter registration drive?

Are your aware of “Motor Voter”? Sound familiar? The National Voter Registration Act of 1993 also known as the "Motor Voter"?

Welcome to Obamacare, a health insurance application voter registration drive. Huh?

“The online application draft for health care insurance under Obamacare inquires if the applicant would like to register to vote and directs the applicant to a registration page if they answer in the affirmative.

Page 59 of the 61 page draft applicationList of Questions in the Online Application to Support Eligibility Determinations for Enrollment” developed by the Centers for Medicare and Medicaid Services, and first reported by The Washington Examiner, asks applicants “Would you like to register to vote?” The “yes” answer linking to a blank registration form.” - Daily Caller 03/25/2013


Link to the entire article appears below:

Tuesday, March 19, 2013

Shocking! Pew Research Center Finds MSNBC is 85% Opinion and Commentary

“By far the highest percentage of opinion and commentary is on MSNBC (85% to 15% reporting).” - The State of the News Media 2013, an annual report on American journalism, Pew Research Center

Link to the entire report appears below:

Sunday, March 17, 2013

ACA and “Insurance Exchanges”: what are they and what do they look like?

There is much discussion of “insurance exchanges” regarding Obamacare. However, precious little is discussed regarding what is an insurance exchange and what does an insurance exchange look like?

The first thing one needs to consider is that of the 37 million uninsured as of 2010, about 14 million will be herded into Medicaid. That is, 14 million have no need for the insurance exchange as they will be 100% subsidized in the form of Medicaid.

Therefore only 23 million, currently, will be concerned with insurance exchanges. The exchange itself will not be a free market exchange, rather a market place with strict government mandated regulation. That is, you will not have the freedom to choose, rather you will have the opportunity to choose from selections of a third party’s choice.

Some shoppers who apply for coverage through the insurance exchange will be heavily subsidized while others will receive no subsidy. Those receiving no subsidy are still free to use the exchange or to look elsewhere. The prototype application is fifteen pages long and requires the calculation of twenty one steps. You can view the application, along with the sixty pages of description of the fifteen page application (No way! Way!) at the link below:

What is not well publicized is the second cohort of subsidies. A second subsidy? Yes, not only is the premium subsidized for many income groups but out of pocket expense under the plan is subsidized. Stated alternatively, once a plan is selected and the premium subsidized, the consequential health-care expenses create out-of-pocket cost sharing between the insurance plan and insured of which the insured’s out-of-pocket expense is subsidized [lowered].
The insurance exchange will offer four plans with a fifth plan available for applicants under the age of 30. The insurance plans are known as bronze, silver, gold and platinum with the fifth plan for those under age 30 known as the special catastrophic insurance plan. The four plans for those 30 years of age and up [bronze through platinum] find their names and associated coverage based upon the percent of medical costs paid on average.

Note: an additional plan can be introduced by each state exchange, at the individual state’s option, what is known as the “basic health plan” for people from 133% to 200% above the federal poverty line.

What does the exchange look like? Two health insurance exchanges already exist: one in Massachusetts and one in Utah. The Utah exchange is more of a free market exchange given current insurance regulation with many insurers participating. Massachusetts, on the other hand, only has five state approved insurers offering coverage.

Since Obamacare is modeled after the Massachusetts plan, that exchange will likely give one a better idea what to expect from Obamacare exchanges. The link below is to the Massachusetts exchange known as the Massachusetts Health Connector:

Wednesday, March 13, 2013

Obamacare Tax at the Veterinarian Office? No way! Way!

‘According to a rule published Friday by the Internal Revenue Service, some medical devices used in veterinary practices will be hit by Obamacare’s 2.3 percent device tax. Many of their manufacturers are expected to hike prices, meaning higher veterinary costs for the nation’s pet owners.

The tax will not hit devices that are used exclusively for veterinary purposes. But a host of such devices are manufactured for use in both human health care and veterinary practices. Those devices’ manufacturers will have to pay the tax.

The IRS rule states:
Section 4191 [of the Internal Revenue Code] limits the definition of a taxable medical device to devices described in section 201(h) of the [Federal Food, Drug, and Cosmetic Act] that are intended for humans, but does not provide that the device must be intended exclusively for humans. Under existing [Food and Drug Administration] regulations, a device intended for use exclusively in veterinary medicine is not required to be listed as a device with the FDA, whereas a device intended for use in human medicine is required to be listed as a device with the FDA even if the device may also be used in veterinary medicine.

According to the FDA, common “dual use” medical devices are “examination gloves, sterile catheters, infusion pumps, etc.” ‘ - Heritage Foundation

The entire article, Obamacare May Hike Your Pet’s Health Care Bills, appears in the link below:


Sunday, March 3, 2013

The Affordable Care Act: the Head Tax and Dump the Spouse Stratagem

Thomas Sowell has written on many occasions that politicos sell their notional propositions on first stage economic consequences. James M. Buchanan spent a career explaining the politico’s self-interest and associated economic consequences. Yes, in the first stage of a politico notional proposition, one might see what appears to be positive economic consequences. How so?

In the very short run particular recipients of government largess may appear to have gained but those gains are short lived as government is nothing more than a transfer agent transferring from A to B. The pie has not grown larger, rather, the pie slices have merely been redistributed. Furthermore, the sponsors of the notional proposition focus attention on the recipients and their “gain” due to government largess (the seen). Meanwhile the unintended cascading negative consequences (the unseen) of the notional proposition begin to crop up causing a cornucopia of intervention-distortion. The notional proposition, generally an intervention that attempts to create supposed perfection merely creates an environment that magnifies serially uncorrelated errors. That "imperfection" is the entry point and "perfection" is the argument.... when in fact perfection become additional imperfection. (1)

Stated alternatively, if you throw enough money at a dead racehorse, even the dead racehorse will get up and do a couple lapses around the track. (2) However, cascading unintended negative consequences occur in the 2nd through n’th stage as the proposition is notionally based not empirically based. Can you say Great Society programs? How about a standing ovation for Social Security? Sweet deals huh?

Occasionally, a political notional proposition is an extra-dead race horse. That horse goes by the moniker of the Affordable Care Act aka Obamacare. Yes, besides being a notional scheme, the scheme is so bad, it can’t even get out-of-the-gate to reach the point of first stage economic consequences. It’s the lame horse that threw a shoe, has a bad case of mange and the jockey is a no-show.

All schemes unravel. If it isn’t one thing, its another. However, the constant unraveling, prior to even achieving first stage economic consequences, makes on think twice regarding how poor a scheme one is examining.

That is, upon examination, cascading negative economic consequences, episode 437, has already been identified … and still counting, and this horse is still in the starting gate. Come to think of it, pretty much any other notional scheme ever devised, at least makes it out of the starting gate to the first turn before unraveling. Not this baby. Obamacare is making Howard Hughes’ Spruce Goose look extremely successful.

Ok. Now what?

It’s a Lou-Lou! Episode 438: one might have forgotten about the Obamacare “head tax”. Huh? Oh yes! The group insurance head tax beginning at $1 to $2 per life covered, escalating to $65 per life covered in 2014. No way! Way. (3)

It gets even better. Obamacare “mandates coverage of employees’ dependent children (up to age 26), but husbands and wives are optional“. Perfect, dump the spouse! Firms are dumping spouse coverage as a cost saving measure. (4)

The framers of Obamacare apparently expected firms to be good sports and merely accept additional costs. That work around and avoidance were merely marginal items and one-off. Sorry, the head tax got those firms thinking and…..we end with….Why your boss is dumping your wife, Market Watch, WSJ, 02/23/2013. The entire article appears in the link below:



(1) What Is Seen and What Is Not Seen, Frédéric Bastiat.

(2) Michael Farr of Farr, Miller and Washington

(3) Why your boss is dumping your wife, Market Watch, WSJ, 02/23/2013:
(4) ibid