“For Democratic lawmakers who were hesitant to sign onto the sweeping 2010 health care law, one of the most powerful selling points was that the Affordable Care Act would actually reduce the federal budget deficit, despite the additional costs of extending health insurance coverage to the uninsured.
Four years after enactment of what is widely viewed as President Barack Obama’s key legislative achievement, however, it’s unclear whether the health care law is still on track to reduce the deficit or whether it may actually end up adding to the federal debt. In fact, the answer to that question has become something of a mystery.
In its latest report on the law, the Congressional Budget Office said it is no longer possible to assess the overall fiscal impact of the law. That conclusion came as a surprise to some fiscal experts in Washington and is drawing concern. And without a clear picture of the law’s overall financing, it could make it politically easier to continue delaying pieces of it, including revenue raisers, because any resulting cost increases might be hidden.
Charles Blahous, a senior research fellow at George Mason University’s free market-oriented Mercatus Center, calls the CBO’s inability to estimate the net effect of the law “a real problem.”
“The ACA’s financing provisions were assumed to be effective so as to get a favorable score out of CBO upon enactment, but no one is keeping track of whether they’re being enforced,” says Blahous, a public trustee for Social Security and Medicare. “We receive occasional updates on the gross costs of the law, but none on whether the previously projected savings provisions are producing what was originally projected.”
As a result, Blahous says, “there’s no barrier to continually rolling back the financing mechanisms without the effect on the ACA’s finances ever being fully disclosed.”
When Congress passed the health care law in 2010, the CBO estimated it would reduce the deficit by more than $120 billion over a decade, compared to the agency’s current-law baseline projection of spending, revenue and the deficit. That meant the health care law would, in effect, pay for itself and deliver an additional fiscal bonus.
The CBO based its estimate on the assumption that the law, which included hundreds of billions of dollars’ worth of Medicare cuts and tax increases to pay for health care subsidies, would be implemented as written. Now, after a chaotic start and a series of delays or adjustments in various provisions of the act, including an employer mandate that was expected to bring in new tax revenue, it’s unclear to what extent those promised savings are being realized.” - Fiscal Diagnosis Only Gets Tougher for Health Care Law, rollcall.com, 06/04/2014
Link to the entire article appears below:
http://www.rollcall.com/news/-233551-1.html?zkPrintable=true
Update: CBO throws in the towel on scoring ObamaCare, thehill.com, 06/04/2014
http://thehill.com/policy/healthcare/208314-cbo-to-stop-measuring-certain-o-care-effects
“Oregon has received the Obama administration’s approval for a 30-day extension of its Obamacare exchange’s open enrollment period, officials announced Wednesday.
State officials had requested the federal government’s approval for the extension, which has come the day after news broke that the Obama administration will be extending its own deadline for exchange enrollment for anyone who claims they began their application prior to March 31.
Oregon’s exchange, however, qualifies for an even wider extension because its marketplace has experienced possible the worst technological problems of any state. With five days left before open enrollment was supposed to close, Oregon still has no website available for individuals to enroll in health insurance online.”
“The state’s embattled exchange crashed in October and officials are still unable to get it back up and running. Officials shifted the marketplace’s focus to paper applications in November and have since been able to sign up 52,000 for private health plans, but online enrollment still isn’t possible.
A recent private investigation into how Oregon’s exchange was so severely mismanaged discovered massive internal conflict which prevented the exchange from being effectively built, including “ineffective” and “at times contentious” communications between agencies.
So far, the top tech official in charge of creating the website and two successive directors of the exchange have all been forced to resign. The website’s primary contractor, Oracle, has not yet been fired, but Cover Oregon is withholding $25.6 million of contract and has reserved the right to sue the company over payments already issued.
After requests from federal Oregon lawmakers, the General Accountability Office will audit Cover Oregon’s website operations. The exchange spent over $300 million on the website and received several early innovator grants as one of Obamacare’s first supporters.” - Oregon Obamacare exchange gets month-long enrollment delay, daily caller.com, 03/26/2014
Link to entire article appears below:
http://dailycaller.com/2014/03/26/oregon-obamacare-exchange-gets-month-long-enrollment-delay/
“A supposedly temporary “fix” that President Obama announced in November to address the problem of the millions of Americans who lost coverage as a result of his health care law has now been extended through Oct. 1, 2016, the Department of Health and Human Services announced Wednesday.
In an attempt to limit the disruption to the insurance industry that would be caused by the move, HHS also announced that the “risk corridor” program (which has been described as a “bailout” to insurers) would be further modified to funnel more money to insurers in states affected by the change.” - HHS extends 'fix' for plans cancelled due to Obamacare through October 2016, alters bailout to insurers, Washington examiner.com, 03/05/2016
Mr. Obama has delayed, modified and/or removed thirty seven ACA/Obamacare legislative regulations during the very brief history of ACA. Upon normal occasion and in the main, the legislative regulations being tinkered with represent a tinkering related to tax increases to many households and many firms. Stated alternatively, the tinkering merely delays an inevitable tax increase of one sort or the other associated with ACA.
Given the tax delay theme, one might be well served to examine Andrew Mellon and Art Laffer and their proposition of the reverse phenomena: tax cuts. Supply-side economics stresses that tax cuts need to be either permanent or with a long tax time horizon e.g. ten years. How so? (1)
Temporary tax cuts of short duration, as argued by supply-side advocates, merely become saved as the individual or firm realizes the tax is soon to return hence they save their money for the inevitable tax increase. Stated alternatively, temporary tax cuts of short duration create a behavior completely different than tax cuts of either a permanent nature or with a long tax time horizon nature.
Supply-side’s proposition is that the individual or firm faced with a tax decrease of a permanent or long tax time horizon will exhibit behavior differently as uncertainty is reduced or removed [permanent or long-term tax decrease] and the additional resources available will be spent, saved or invested in a longer term fashion.
Also, supply-side tax cuts are generally put forth as an across-the-board tax reduction. That all income strata receives tax relief. That each income strata is a player and interacts in ways with other income strata and hence an equal across-the-board tax reduction interacts in that it aids the role of the income strata in question i.e. particular strata acting the part of consumption, saving and investing. Hence particular income strata aid private capital formation while others are more attune to consumption yet the two interact.
Conversely, Obamacare tax increases are a hodgepodge of differing taxes impacting different income strata in differing fashions. Will differing income strata impacted differently cause a cascade of unintended consequences e.g. private capital formation declines while consumption declines too? Will the two declines interact creating cascading unintended consequences?
The short-term nature of the delayed tax increase likely causes many to merely save resources in order to meet the new higher price related to the rising tax tide which has merely been delayed.
Returning to the thirty seven Obamacare delays with the delays merely extending short-term relief from the inevitable tax increase, then what sort of behavior would households and firms exhibit given the supply-side discussion above? Households and firms would be predicted to save their resources for the inevitable tax increase.
Moreover the amount of tinkering and variety of tinkering raises a question of uncertainty. The thirty seven delayed, modified and/or removed items leaves households and firms very uncertain about “what’s next”. Will all thirty seven be reinstituted tomorrow? Next week? Delays are further modified? Modifications are further modified? Taxes are changed upward or downward? Does the environment of uncertainty fostered delay, terminate or otherwise effect consumer and investor behavior? Further, the uncertainty is dictated by the whims of one individual, Mr. Obama. (2)
Link to the Washington Examiner article appears below:
http://washingtonexaminer.com/hhs-extends-fix-for-plans-cancelled-due-to-obamacare-through-october-2016-alters-bailout-to-insurers/article/2545141
Notes:
(1) Taxation, the People’s Business, Andrew W. Mellon, 1924
http://www.amazon.com/Taxation-Business-Andrew-W-Mellon/dp/1483975894/ref=sr_1_1?s=books&ie=UTF8&qid=1394371135&sr=1-1&keywords=taxation+the+people%27s+business
(2) Risk, Uncertainty and Profit, Frank H. Knight, 1921
http://www.amazon.com/Uncertainty-Profit-History-Political-Science/dp/0486447758/ref=sr_1_2?s=books&ie=UTF8&qid=1394371364&sr=1-2&keywords=risk+and+uncertainty
"Democrats strong-armed Obamacare into law three years ago. Now they're busy flouting it.
The mandate that employers provide insurance next year or pay a penalty, as the law requires? Delayed for at least a year.
The law's dictate that people applying for federal subsidies to buy insurance provide proof that they're eligible for the government aid? Scaled back.
Sharp limits on Americans' out-of-pocket costs for health care? Suspended for a year.
Providing members of Congress and more than 10,000 staff members with federal health care subsidies that the law does not allow? Done, via a deal brokered by President Barack Obama.
And on and on.
The Affordable Care Act, aka Obamacare, is a hugely complex law that sets up online health insurance marketplaces, requires people to have coverage or pay penalties, and doles out subsidies and incentives to nearly everyone in health care. Doctors, hospitals and insurers have spent large sums to gear up for its requirements. Employers are mulling: Hire? Fire? Cut workers' hours?
Millions of Americans, that is, stand to gain or lose from how this law is enforced — with the Obama administration bending that enforcement in ways that test, and arguably exceed, the boundaries of lawful conduct.
Every time the White House undercuts one provision of Obamacare, there is a massive ripple effect on other provisions. It's generally a zero-sum game: When someone gains, someone else loses. Example: When employers are relieved of their mandate to provide insurance, taxpayers risk having to subsidize more of those companies' employees.
The administration asserts that it can make these changes under the president's broad executive authority. Yet critics make a compelling argument that the president is stretching the limits. Former federal appellate Judge Michael McConnell, director of the Constitutional Law Center at Stanford Law School, writes in The Wall Street Journal about a different sort of mandate: the mandate in Article II of the Constitution that the president "'shall take Care that the Laws be faithfully executed.' This is a duty, not a discretionary power. ... As the Supreme Court wrote long ago (Kendall v. United States, 1838), allowing the president to refuse to enforce statutes 'would be clothing the president with a power to control the legislation of Congress, and paralyze the administration of justice.'"
Like most issues of presidential authority, this isn't cut and dried. Presidents do have broad discretion on how laws are enforced. But they're on shaky ground when they decide whether to enforce a law. It's not hard to understand why: Imagine the outcry if President Mitt Romney refused to enforce, say, Obamacare.
Granted, any president may decline to enforce statutes he believes are unconstitutional. But Obama is making no such claim here. Basically, he is admitting that parts of law are impossible to enforce on the deadlines imposed by Congress — deadlines he signed into law. He's also admitting he doesn't want to have Congress make these changes, for fear that if lawmakers get their mitts on this unpopular program, they would at least debate far more extensive changes than he'd like.
Congressional Democrats, and some Republicans, may agree with the numerous delays, changes and special favors. But the president invites chaos when he picks which parts of Obamacare to enforce, and which, in retrospect, he has decided are unworkable or unwise." - Editorial: How President Obama is flouting Obamacare, More reasons to delay and rewrite this ill-conceived law, Chicago Tribune, 08/18/2013
Link to the entire article appears below:
http://www.chicagotribune.com/news/opinion/editorials/ct-edit-obamacare-0818-jm-20130818,0,5666959.story
