“GOP Opposition Is More About The Man”: The Obamacare Idea Conservatives Should Be Cheering But Aren’t
Obamacare hate is a full-time occupation on the right. But a story from Monday’s New York Times is a reminder that some pieces of the law should have conservatives celebrating, for the same reason they are leaving liberals like me a little queasy.
The story is about Obamacare’s “Cadillac Tax,” which isn’t really a tax so much as a convoluted attempt to undo an existing tax break. To simplify things a bit, the government today doesn’t treat employer health insurance as taxable income. That makes a dollar of insurance worth more than a dollar of wages, giving both employers and employees incentive to load up on insurance.
Most economists think that contributes to rising health care costs, since people with more insurance tend to spend more on medical care. The Cadillac tax would limit the value of the tax break, effectively reducing that incentive and, in theory, reducing health care costs for everybody over the long run. (The mechanism is complicated; read here if you want an explanation of how it works.)
In an ideal world, insurers and employers would respond to the Cadillac tax by finding more efficient ways to pay for care, so that workers would end up with the same access to and quality of medicine. They’d just pay a little less for it. One way to accomplish this would be to switch employees over to a smartly managed care insurance plan—think Kaiser Permanente, where the physicians and nurses coordinate with each other, focusing on the most effective treatments and long-term health of the patient.
In the real world, alas, employers frequently find it easier just to shift costs over to their employees. They change their plan benefits, so that workers pay more for each prescription, hospital visit, and the like. The Times story, by Reed Abelson, suggests employers are doing just that.
It’s difficult to pinpoint how much the Cadillac Tax is responsible for these shifts, given that employers were looking for ways to shift costs long before Obamacare came long. The tax doesn’t start to phase in until 2018. And the Congressional Budget Office, in its most recent revision of projections on Obamacare, said that it now expects fewer plans to hit the tax threshold when it first takes effect. Still, employers are certainly talking about the tax. (I’ve heard the same chatter.) If employers are reducing their coverage in response, then—as Matthew Yglesias notes—it’s working precisely as the economists predicted it would.
That doesn’t mean the change is popular. People don’t like to hear that they’ll have to pay more the next time they go to the doctor. Unions are particularly wary of the change, since many of their members fought hard for the generous financial protection that the Cadillac Tax will curb. But the real danger is for the chronically ill, who run up huge medical bills year after year—and for whom higher out-of-pocket expenses can be a real hardship. The Times article focuses on one such person—a woman with cystic fibrosis who said she had to drop out of school and take a second job, in order to pay the bills from her higher deductibles.
Liberals who support or at least tolerate the Cadillac Tax do so because the economists have convinced us it might truly reduce costs in the long run. We also know that other parts of Obamacare, like tax credits for purchasing insurance and guarantees of coverage for people with pre-existing conditions, will help the sick and the poor far more than the Cadillac tax will hurt them.Conservatives can’t stand this kind of spending and regulation, of course. But they should have no such hostility to the Cadillac tax.
On the contrary, writers like James Capretta and Robert Moffit have long called for reducing or eliminating the tax breaks for employer sponsored insurance. They subscribe to the same economic logic that compelled Obamacare’s architects to include the provision in the first place—that, without the favorable tax treatment, employers and insurers will be more thrifty. The only difference is that conservatives think the tax incentives are even more central to the cost issue than liberals do. And, unlike liberals, conservatives don’t seem particularly troubled by the implications for the chronically ill. Either that, or conservatives do a remarkably good job of disguising their anxiety.
The Cadillac Tax will not work as quickly or smoothly as conservatives would prefer. And that’s fair grounds for criticism. But surely the concept deserves a kind word or two somewhere on the right—unless, perhaps, opposition to Obamacare is less about what’s in the law and more about who signed it.
By: Jonathan Cohn, The New Republic, May 28, 2013
“Between A Rock And A Stupid Place”: The Medicaid Scandal Of State Level Republicans
As the reality of states refusing the insanely generous terms of the Affordable Care Act’s Medicaid expansion (viz., the Texas legislature’s proactive legislation prohibiting the state from participating), begin to sink in, with it comes the realization that a completely perverse situation will now prevail in these states. The New York Times‘ Robert Pear explains for anyone who hasn’t heard:
More than half of all people without health insurance live in states that are not planning to expand Medicaid.
People in those states who have incomes from the poverty level up to four times that amount ($11,490 to $45,960 a year for an individual) can get federal tax credits to subsidize the purchase of private health insurance. But many people below the poverty line will be unable to get tax credits, Medicaid or other help with health insurance.
You will occasionally hear that people left exposed by states refusing to expand Medicaid are “covered” by Obamacare health insurances exchanges, and that’s true for what little it’s worth. The subsidies designed to make coverage affordable for the working poor (and a big chunk of the middle class), however, don’t kick in until a beneficiary’s income is above the federal poverty line. That’s because it did not occur to the Affordable Care Act’s sponsors that the Medicaid expansion provisions covering all Americans up to the poverty line would become voluntary for the states. And you know what? Had they known the Supreme Court was going to so rule, they probably would have thought no state would hate its own poor people enough to turn down the fiscal deal represented by the expansion (that was certainly the assumption a lot of otherwise smart observers made when the Court’s decision came down). Turns out as many as 25 states may in fact go in that stupid and malevolent direction, leaving up to 5.7 million Americans at the very heart of Obamacare’s intended coverage population without meaningful access to health insurance.
Now normally you’d think a Court-created “hole” in a legislative plan of this size would lead to a legislative “fix,” wouldn’t you? But that is for sure not happening until such time as Democrats regain control of the House and of 60 Senate seats–the temporary majorities that made enactment of the Affordable Care Act over the united opposition of the GOP possible in the first place.
The scandal of state-level Republicans leaving so much federal money on the table and so many poor people in the lurch may well become a campaign issue in 2014. But while this treachery is very likely to become a long-term political issue for Republicans in the affected states–particularly in the South, where its racial dimensions are impossible to ignore–the overall landscape going into the 2014 midterm election is hardly promising for Democrats there or nationally.
So putting things right and holding the happy architects of this wildly unfair situation may take a good long while. But payback’s hell.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, May 28, 2013
“Eight Months Until The End Of Job Lock”: A Reminder About One Of The Best Things Obamacare Does
For years, even before Barack Obama was elected, one of the many complaints liberals (mostly) had about the current employer-based health insurance system was “job lock”—if you have insurance at your job, particularly if you or someone in your family has health issues, then you’re going to be hesitant to leave that job. You won’t start your own business, or join somebody else’s struggling startup (unless they provide insurance), and this constrains people’s opportunities and dampens the country’s entrepreneurial spirit.
That this occurs is intuitively obvious—you probably know someone who has experienced it, or have experienced it yourself. And today there’s an article in that pro-Democrat hippie rag The Wall Street Journal entitled “Will Health-Care Law Beget Entrepreneurs?” Amid the worrying about the implementation of Obamacare in January, and the quite reasonable concern that the news could be filled with stories of confusion, missteps, and dirtbags like that Papa John’s guy cutting employees’ hours rather than give them insurance, to avoid the horror of increasing the cost of a pizza by a dime,11This is important: when you hear a story about an employer who cut his employees’ hours so he wouldn’t have to abide by the law, what you’re reading about is a jerk who doesn’t want to offer his employees insurance, not some inevitable consequence of the law. That’s a choice he makes. And don’t forget too that the employer mandate only applies to companies with 50 or more employers, and 96 percent of them already offer health insurance, even without a mandate. it’s a reminder that there will probably be lots of stories like this one in the news too, stories about people whose lives have been changed for the better by the fact that Americans will have something they’ve never had before: health security.
So what kind of effect could the elimination of job lock have on the economy? That’s tough to say. The study referred to in the WSJ article finds that people are much more likely to start a business if they get their health insurance from their spouse’s job than if they get it from their own job; in the former case you’d still have insurance if you started a business, while in the latter case you’d lose it. In addition, and this is particularly interesting, even though you might think of 65-year-olds as looking forward to days of golf and eating dinner at 4 p.m., a large number of people seem to start businesses pretty much the minute they become eligible for Medicare. While it’s hard to get insurance in the current private market if you’re 44, it’s basically impossible if you’re 64.
So it seems that the fact that after January, job lock will be history means that more businesses will be started. How many more? Well, we don’t know yet, and it could depend in part on how affordable the insurance you can get through the exchanges is compared to what people are getting from their employers. And it will be hard to measure precisely how much more economic activity is generated by businesses that wouldn’t have otherwise been started. Obviously, some will succeed and more will fail.
Nevertheless, beyond additions to GDP, there’s something psychological that shouldn’t be discounted, touchy-feely though it might be. The end of job lock means the end of a certain kind of fear that all of us under the age of 65 live with to one degree or another. It’s the fear that leaving a job, voluntarily or otherwise, could become an utter financial calamity if we or one of our loved ones has a health problem. Even if you wish reform hadn’t been grafted on to the existing employer-based system (I’ll raise my hand on that one), ending that fear is huge; it’s one of the best things Obamacare does. Even if it’s difficult to communicate on a bumper sticker.
By: Paul Waldman, Contributing Editor, The American Prospect, May 9, 2013
“Managing Expectations”: How Conservatives Are Helping Obamacare
Yuval Levin, among other conservatives, has made an offer to liberals: Let’s delay the implementation of Obamacare for a year and make everybody better off:
Congressional Democrats surely want to avoid being blamed for a meltdown of American health care during a congressional election year, the people implementing this law at every level could certainly use the time, and Republicans believe that more time would not make Obamacare more popular but would allow them to further develop and articulate their alternatives (and allow another election to intervene earlier in the rollout process, making a replacement more plausible).
Liberals, wisely, are saying no. What’s funny about this conversation is that conservatives have been accidentally managing expectations for implementation: By harping constantly on what a disaster the rollout is going to be, they will make what actually happens look good by comparison.
Jonathan Cohn has a good piece in the New Republic arguing that implementation won’t be as bad as people are saying. This is his really important observation:
Notice that the worries about implementation chaos apply strictly to people who would otherwise be uninsured or at the mercy of the existing individual insurance market, in which plans are inconsistently priced, full of coverage holes, and of unpredictable reliability — and in which financial assistance for buying private coverage is not available at all. Even if it takes these people a while to get insurance, and even if finding that coverage is a maddening experience, they’re going to end up with something they don’t have now: Coverage that meets more of their needs and is available to them, with substantial financial assistance. Don’t forget: Today, people with pre-existing medical conditions frequently cannot get any coverage on the individual market.
This is something that has been lost in the discussion of Obamacare implementation difficulties:
Implementation won’t much affect the 78 percent of Americans currently covered through Medicaid, Medicare, or employer group health plans. It will make some people who currently buy individual coverage worse off. But only 5 percent of Americans get insurance through the individual market, which is already hugely dysfunctional. Three times as many Americans are currently uninsured, and they can only stand to gain from Obamacare implementation, even if it does not go smoothly.
For those 5 percent who buy individual coverage now, the new law will be a mixed bag. Some people will probably have frustrating bureaucratic experiences with the new exchanges that they didn’t have buying directly from insurers. And some people (particularly young and healthy people) will see their premiums go up. But others will see their premiums go down, either because they currently pay a lot because of age or health status, or because income-based premium subsidies will more than offset any premium increase.
There will also be people who lose group health coverage, when premium subsidies make it attractive for their employers to send them to shop in the exchanges. (Others will gain group coverage if employers decide it is better to offer it than to pay a penalty for uninsured workers.) But neither this effect nor any problems faced by people with existing individual insurance is likely to create a clamor for repeal that is any more effective than the din of the last three years.
That is because the most obvious way to fix the problem of those who have trouble in the health exchanges will be to fix the exchanges, not repeal them. Let’s say your employer dropped group coverage and you’re having trouble with the exchange. Will you want the whole law repealed in the hope that will lead your employer to reverse course and offer a group plan again? Or will you want the exchange fixed so you are guaranteed access to coverage?
Cohn looks back to Medicare Part D and the Children’s Health Insurance Program and argues that those programs got through their rocky implementations in large part because benefits obtained with bureaucratic difficulty are better than no benefits at all. He’s right, and this is why conservatives are “magnanimously” offering to delay implementation of Obamacare. They realize that once people have guaranteed access to health coverage, they won’t want to give it up, even if there are implementation problems.
The political landscape is already dire for those who still hope to repeal Obamacare, and they’re actually making their position worse by talking constantly about what a nightmare implementation is going to be. This fall, as the exchanges come on line, tens of millions of people are going to find they can get health coverage they never could before. They are likely to be quite happy about that, especially if they’ve been hearing for months in advance that it will be a mess.
By: Josh Barro, Bloomberg, April 29, 2013
“Debunking GOP Hype”: Very Few Businesses Plan To Drop Health Coverage Because Of Obamacare
Companies that have threatened to drop coverage of their employees as a result of Obamacare are vocal, but according to a new study they are also few and far between. Only a total one percent of businesses said they are not going to continue coverage in the International Foundation of Employee Benefit Plans survey. Another 2 percent said that they are “somewhat unlikely” to continue providing health care to their employees. Meanwhile, 69 percent will definitely cover employees, and 25 percent “very likely” will.
The results are encouraging primarily because they show businesses have growing confidence in Obamacare — last year, the survey showed that far fewer companies were certain to continue their health care plans. It also means business leaders are beginning to recognize the benefits providing employees with health coverage:
That hefty percentage of respondents who said coverage definitely will be offered in 2014 contrasts with a similar survey the IFEBP did last year, when only 46% of respondents said coverage would definitely be offered. That greater certainty expressed by employers about offering coverage next year may the result of several factors, said Julie Stich, research director for the Brookfield, Wis.-based IFEBP. One factor may be a greater consideration by employers on how offering a health care plan can significantly aid in the recruitment and retention of employees, Ms. Stich said.
Offering health care does, indeed, aid recruitment and retention. And if three percent of companies chose not to do so while the rest do, they will likely suffer the consequences. Lacking health coverage also drives away some of the best employees, especially when, under Obamacare, those employees will then be forced to take on the cost burden of healh care coverage themselves.
By: Annie-Rose Strasser, Think Progress, April 11, 2013
Share This Blog
Unknown Feed- An error has occurred; the feed is probably down. Try again later.
mykeystrokes.com 