"Cadillac" Health Care Plans and Obamacare

[Prosuper]

This is a classic example of the saying " be careful for what you wish for". I have no sympathy for anyone who helps in sending Nancy Pelosi back to Congress. They got what they voted for. Elections have consequences.

Edited November 6, 2013 by Prosuper

[Hueypilot]

I found it interesting that they intend on reducing their income (see bold in the story above) in order to qualify for subsidies (ie govt handouts). The great race to the bottom has begun. Why earn more when you'll just get taxed to death for it?

[HeloDude]

I found it interesting that they intend on reducing their income (see bold in the story above) in order to qualify for subsidies (ie govt handouts). The great race to the bottom has begun. Why earn more when you'll just get taxed to death for it?

I think it's smart on their part...rich people do the same thing in terms of trying to pay as little taxes as possible without hurting their bottom line. The problem is with the bill, not what they are doing to minimize their pain.

That being said, on the other hand, philosophically this does point out the hypocrisy of those on the left--they are all about giving away free stuff and having a more socialist utopia, but when it comes to them opening up their pocket books more, many of them try to escape the pain. Yet another reason the federal government needs to scrap the entire income tax system and move to a national sales tax that affects damn near everybody. Make it a flat 15% or whatever federal sales tax on everything people buy and there you go, everybody is paying for all the crap and rich people are still going to pay a shitload more. You can even work out a system where certain food items, clothing at goodwill, basic utilities less than $100/month, cars less than $2K, etc are all exempt. Be a whole lot better than the crap system we have now.

[matmacwc]

We had this tome some extent in the early 80s. Remember free gym/country club/golf/airline deals? It wasn't becuase the private sector businesses were so generous, they were lowering the taxable income of their employees while giving benefits. It will probably happen again for a few years, until the whole thing caves because only granny signed up.

[Fuzz]

There's a difference between reducing your income to pay as little in taxes and reducing your income to get more money out of the government while paying less into it.

[HeloDude]

There's a difference between reducing your income to pay as little in taxes and reducing your income to get more money out of the government while paying less into it.

I don't think you worded your statement the way you wanted to...but I think I understand what you were intending to say.

So do you hold the guy who attempts to reduce his net federal income taxes paid to as close to $0 in a higher regard compared to the person who can find a way to get his net taxes paid to be ($1) or greater (ie gets even more net money from the gov't)?

If it's legal, I don't blame either one, and I definitely don't blame one more than the other. They're both trying to work the system the best way they can in order to maximize their gains/minimize their losses. All things being equal, do you fault the homeowner more than the person who rents?...the homeowner gets to reduce their taxable income with property taxes, interest paid, etc and the renter gets nothing other than a standard deduction (assuming no other itemized deductions). Yes, I know there is more risk in buying a house vs renting, that buying a house helps growth, etc...but again, all things being the same, the renter is paying more in taxes.

The problem is the SYSTEM. As much as I'm a staunch Libertarian, I am not an anarchist. We need to have some form of government at the federal and State/local level with our Constitution and thus some system of collecting revenue to pay for what The Constitution outlines that the federal government will provide. The problem in DC is the spending and the way revenue is collected as it is very unfair and full of loopholes and exceptions. Reduce the spending considerably and adopt something closer to the Fair Tax.

Don't hate the player, hate the game.

[matmacwc]

Fair tax still has some loopholes. Flat tax is where it's at

[HeloDude]

Fair tax still has some loopholes. Flat tax is where it's at

I'm not 100% down with the Fair Tax in its current form, but I believe it's the right direction. The problem with the flat tax is that if you make your money underneath the table then you don't pay any direct federal income taxes. Nearly everybody buys something these days in which a sales tax is charged (or could be charged as in the case with purchasing something online and out of State)...why not roll all the federal taxes at the corporate and income level to the last place the good or service is transferred?

[matmacwc]

Nobody would buy new products, above a certain level of course.

Plus I hate subsidies.

Edited November 7, 2013 by matmacwc

[Prosuper]

Even Hitler the national socialist hates Obamacare.

[BitteEinBit]

Nobody would buy new products, above a certain level of course.

This. National sales tax (in lieu of income tax) sounds great if you make the assumption that everyone will continue to buy goods and services at the rates they currently do with an income tax. All it would mean is people buy less stuff because in their heads, they are paying more for it (making the assumption that companies won't lower the base price of goods and services to keep purchasing power the same with the new tax). Then comes the ripple effect, less people buying less stuff means less growth, which means less jobs, which means less money in the economy to tax on less stuff being bought. In the end, you're essentially tying your federal revenue sources to a slowing economy. That means on the government goods and service side of the equation, you have less federal revenue from consumer spending which means less money to employ government workers (military for example), which means less government services which means less defense, which means less defense spending, which means less jobs, which means less money in the economy, which means less revenue. We all felt the pain during the "shutdown" and people were pissed about cut services. Can you imagine tying those goods and services to a slowing economy because people aren't buying shit? Income generally doesn't fluctuate as much as consumer spending although I would say there is a correlation between the two. Taxing something more stable like income at a flat rate will bring in a more steady revenue as long as you close the loopholes so people can't skirt the system. Taxing goods and services that people may or may not buy depending on the season just seems less predictable...especially If we exempt food, clothing, transportation. Which source do you think offers the most stability? What if people get serious about saving money and start saving more than they spend? Would the government then discourage saving or investing to keep that money in the system? If that money is just 'put away' instead of being pumped into the economy it is never taxed like it would be as general income.

National sales tax sounds like a good idea until you consider the second, third and fourth order effects of tying revenue solely to consumer spending....just something to think about.

[Fuzz]

I don't think you worded your statement the way you wanted to...but I think I understand what you were intending to say.

So do you hold the guy who attempts to reduce his net federal income taxes paid to as close to $0 in a higher regard compared to the person who can find a way to get his net taxes paid to be ($1) or greater (ie gets even more net money from the gov't)?

If it's legal, I don't blame either one, and I definitely don't blame one more than the other. They're both trying to work the system the best way they can in order to maximize their gains/minimize their losses. All things being equal, do you fault the homeowner more than the person who rents?...the homeowner gets to reduce their taxable income with property taxes, interest paid, etc and the renter gets nothing other than a standard deduction (assuming no other itemized deductions). Yes, I know there is more risk in buying a house vs renting, that buying a house helps growth, etc...but again, all things being the same, the renter is paying more in taxes.

The problem is the SYSTEM. As much as I'm a staunch Libertarian, I am not an anarchist. We need to have some form of government at the federal and State/local level with our Constitution and thus some system of collecting revenue to pay for what The Constitution outlines that the federal government will provide. The problem in DC is the spending and the way revenue is collected as it is very unfair and full of loopholes and exceptions. Reduce the spending considerably and adopt something closer to the Fair Tax.

Don't hate the player, hate the game.

I don't know I see a person exploiting loopholes or giving to charity to lower their tax bracket to keep more of the money they earned different than a person who purposely works less to bring home less money to take more of others. One person is still a very productive member of society, the is a leach on the system, and I can't stand them, considering they are lowering themselves into a situation where they work less and get money when the system was designed (not arguing political beliefs of subsides or handouts) for people who are working to their upmost and still can't earn enough to make it.

[Vertigo]

Income generally doesn't fluctuate as much as consumer spending although I would say there is a correlation between the two. Taxing something more stable like income at a flat rate will bring in a more steady revenue as long as you close the loopholes so people can't skirt the system.

Actually consumer spending has been more steady than AGI:

[TreeA10]

All those motivated progressive young people that voted for "Hope and Change" need to be thanked for the generous donation of their economic future to all the old folks.

Carl Schramm: How ObamaCare Rips Off the 'Young Healthies'

When ObamaCare is under attack, its defenders retreat to several well-worn claims. Among them is a provision that compels insurance companies to allow parents to keep their "children" ages of 21 to 26 on their family policies.

Yet this part of the Affordable Care Act was not engineered in response to any noticeable interest group. Instead, political considerations are responsible for the provision—which is an unnecessary and a deceptive ripoff of the "young healthies."

The first consideration is that young adults facing chronic unemployment—thanks to government policies that have retarded economic growth—commonly return to their parents' home. Understanding that this is what the economic "new normal" looks like, the Obama administration sought to avoid a potential political storm by providing a benefit normally connected to holding a job for one of its most reliable support groups.

Second, government's actuaries are well aware that this much-touted benefit basically costs nothing. Actuarial and other research suggests that the average male sees a physician six times between the ages of 21 and 35. The parental coverage provision seemed like a "freebie" for the administration's universal coverage sales pitch.

Third, ObamaCare's financing won't work unless "young healthies" (or their parents) pay through the nose for coverage under parental plans or via the individual mandate. The 18-26 age group is the lowest user of care, the least costly to cover and the most profitable of all health-insurance coverage. Yet the group faces extraordinarily high ObamaCare rates.

A Manhattan Institute analysis of Health and Human Services numbers notes that a 27-year-old male will pay 99% higher premiums under ObamaCare than he would under previously prevailing market rates. One reason is that the law now limits insurers to charging the sickest seniors no more than three times the amount they charge their youngest customers. Given that 64-year-olds use on average six times as much health care as 19-year-olds, the Affordable Care Act forces young people to pay considerably more than the cost of their own care.

Young men and women who pay a fine instead of buying coverage are not making an irrational choice. They know how little care they need and use. They also may be beginning to understand that the high cost of their plans reflects the redistribution of their wealth to older people and a bunch of mandated services that don't make sense for them.

Still, young healthies might see it in their interest to purchase a more affordable health policy that provides simple preventive care (check ups) and major medical coverage in the event of an accident or costly (and rare) episode of disease. There is such a cheaper alternative; I helped to devise it.

In 1993 I was president of Fortis (now Assurant AIZ +1.50% ) Health Care, a major health-insurance company. Sam Shriver, one of our brokers, noted that students graduating from Loyola College in Baltimore (he sold these students their group health-care coverage) were without health insurance before they landed their first jobs. We devised a "transition" product to provide graduates with two years of affordable coverage.

The product became very successful because it provided catastrophic coverage, including for things like motorcycle accidents, and was inexpensive. It became one of the company's most popular products and was copied by many carriers in the individual market. Health policies that cover catastrophic care may still be sold to individuals up to age 30—but buyers are likely to be subject to an annual fine for nonconforming coverage.

Suppose the federal government simply provided everyone under the age of 26 with a voucher to buy simple primary care/catastrophic plans that many companies could provide tomorrow. The number of uninsured would be greatly reduced at a fraction of the cost of covering them under ObamaCare.

A similar approach might have been used for those who do not qualify for Medicaid because they make too much money but not enough to purchase a plan, perhaps because of pre-existing conditions. The government could provide them with a voucher enabling them to buy a private health plan.

This approach—coupled with federal legislation limiting medical malpractice claims and permitting carriers to offer more efficient multistate products—would provide health reform without the current drama of incompetency and injustice that will inevitably deny us all affordable care.

Mr. Schramm is University Professor at Syracuse University. He was president of Fortis (now Assurant) Health Care.

[nsplayr]

I don't know I see a person exploiting loopholes or giving to charity to lower their tax bracket to keep more of the money they earned different than a person who purposely works less to bring home less money to take more of others. One person is still a very productive member of society, the is a leach on the system, and I can't stand them, considering they are lowering themselves into a situation where they work less and get money when the system was designed (not arguing political beliefs of subsides or handouts) for people who are working to their upmost and still can't earn enough to make it.

How do you view employers who are cutting employee hours so they don't have to cover their health insurance costs? Are you fuming mad at them for being less productive then they otherwise would be? Many have said they're doing so to avoid new government mandates, not because business conditions dictate that employee hours be cut. It's the exact same principle.

Those companies are responding to the incentives presented to them, just like individuals do. Like HeloDude said, don't hate the player, hate the game, and I agree for the most part. The goal is to design a system that has the right incentives because in the end, the government isn't broadly powerful because of what it does or buys itself in the public sector, it's more because it has the power to set the rules that ultimately influence private sector behavior.

Suppose the federal government simply provided everyone under the age of 26 with a voucher to buy simple primary care/catastrophic plans that many companies could provide tomorrow. The number of uninsured would be greatly reduced at a fraction of the cost of covering them under ObamaCare.

Part of the purpose of Obamacare was to reform the health insurance market and get away from bare-bones, catastrophic plans. The fact that those plans are going away is not a glitch, it's a feature. Agree or disagree, but it's dumb to argue that it was an unintended consequence.

The administration screwed up the messaging here badly; they promised that you could keep your insurance if you liked it and yet designed the law to crowd out of the market plans that didn't cover a broad range of service that the government determined constituted "adequate insurance." While this dishonestly only applies to about 4-5% of the population, it was still wrong to frame it like they did and they're seeing the political backlash right now.

What they should have done, in my opinion, is to argue up front that Obamacare would reform the insurance marketplace for the better, getting rid of plans that have huge out of pocket costs, don't cover preventative care, and have yearly and lifetime caps that can leave you high and dry in an emergency. That argument was made, but not strongly enough and it doesn't fit on a bumper sticker quite as well as "If you like your insurance, you can keep your insurance."

That's part of the inherent problem with politics influencing policy making; policy making is complex, nuanced, and should be conducted in a rational way after consulting a broad array of experts in the appropriate field. Politics is an expensive a dog fight between bitter, rival factions and broadcast to a generally uninformed and uncaring audience. It leads to the need for quick, simple messages that resonate and you end up with nearly every politician telling some pretty big half-truths (at best) in order to communicate their message.

A similar approach might have been used for those who do not qualify for Medicaid because they make too much money but not enough to purchase a plan, perhaps because of pre-existing conditions. The government could provide them with a voucher enabling them to buy a private health plan.

How exactly is this fundamentally different than what happens under Obamacare? The government provides tax credits to offset the cost of private health insurance for people who make too much for meidcare, up to 400% of the poverty line. That's applicable to families of four making between $23K and $94K, i.e. much of your middle class.

Can you explain the difference between that and what the author of the article is proposing?

Edited November 7, 2013 by nsplayr

[HeloDude]

Part of the purpose of Obamacare was to reform the health insurance market and get away from bare-bones, catastrophic plans. The fact that those plans are going away is not a glitch, it's a feature. Agree or disagree, but it's dumb to argue that it was an unintended consequence.The administration screwed up the messaging here badly; they promised that you could keep your insurance if you liked it and yet designed the law to crowd out of the market plans that didn't cover a broad range of service that the government determined constituted "adequate insurance." While this dishonestly only applies to about 4-5% of the population, it was still wrong to frame it like they did and they're seeing the political backlash right now.What they should have done, in my opinion, is to argue up front that Obamacare would reform the insurance marketplace for the better, getting rid of plans that have huge out of pocket costs, don't cover preventative care, and have yearly and lifetime caps that can leave you high and dry in an emergency. That argument was made, but not strongly enough and it doesn't fit on a bumper sticker quite as well as "If you like your insurance, you can keep your insurance.

The problem wasn't with the messaging, the problem is with the piece of crap, over-reaching legislation that was passed 100% on a party line vote. The Dems barely got it through, and that was with having to lie about what it would do...if they had told the truth then it very well might have not gotten through the way it did, or even at all.

And if you think Obamacare is just going to negatively affect 4-5% of people then you're just as wrong as you were 4 years ago when you bought into all the other lies. Rates are going to continue to rise because of what the law has deemed plans must cover...and when the employee mandate kicks in next year, you'll see the next wave of shit hitting the fan.

I can't understand why people believed that this bill was going to reduce costs for most people--it covers more in the new mandated plans and gives subsidies to people who don't make enough money. So either other people's premiums must go up, employers must pay more, and/or taxes must go up. The Dems didn't reduce any costs, they just shifted who pays for these costs. The insurance companies will make more money because it's more business for them, but at an increased cost in premiums and higher deductibles for the people.

Part of me thinks this will blow up so bad that the Dems will pay severely for it...but the other part of me thinks that they will spin it in such a way to blame the GOP, the insurance companies, etc and will take very little of a hit (if at all) because the American public is too stupid enough to see what is going on here. It's just another several nails into the coffin of the Republic.

[TreeA10]

I agree with Helodude. I don't think we have seen the end of the tsunami of the individual mandate but that shock wave will pale in comparison to the employer mandate.

Nsplayr, so lying to 4-5% of the population is okay? What is that percentage of the population not okay? 6%? 10%? When should I worry that the president of our country is lying to us and how will I know he is only lying to a percentage of the population that we are okay with throwing under the bus?

[matmacwc]

Not about health care!! Its about wealth re-distribution , guys like NS like this so they will defend anything no matter what it entails. This could be about pet care, as long as the money moves to people who didn't earn it (not how they see it, how I see it).

I hope it fails, I think it will.

[TreeA10]

I agree on the wealth redistribution. Obama and Reid have said in public they want single payer healthcare, i.e. full government control of healthcare. Destroying the current system of insurance and healthcare leaves the possibility of government stepping in to fix the problem. The fact government created the problem is irrelevant. So you may not be the only one hoping it fails.

[nsplayr]

Nsplayr, so lying to 4-5% of the population is okay?

Re-read what I wrote. While I believe politicians of every stripe tell frequent "half truths," give rosy projections, and some outright lies, it's still wrong. Tell the people what you want to do, how you want to do it, and be honest about how you think things will turn out. Don't dumb down your message to a bumper sticker phrase, especially when failing to be specific or nuanced makes what you're saying untrue.

[TreeA10]

That is all well and good but it appear that he and many others knowingly lied with the goal of re-election and selling a program. The result of that lie is causing mental stress and financial instability for millions of people. But despite this, at the present time no changes are going to be made to the program because they need customers to get a taste.

Usually if someone tells a half truth, gives rosy projections, and outright lies so they can steal from people, they are running some type of Ponzi scheme, investment fraud, or other con and they are referred to as criminals.

[DUNBAR]

http://www.nationalreview.com/article/363699/truth-about-navigators-john-fund

F&*king navs.

[TreeA10]

http://www.powerlineblog.com/archives/2013/11/today-obama-repeated-the-five-percent-lie.php?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+powerlineblog%2Flivefeed+%28Power+Line%29

The Federal Register, dated June 17, 2010, beginning at page 34,552 (Vol. 75, No. 116). It includes a chart that outlines the Obama administration’s projections. The chart indicates that somewhere between 39 and 69 percent of employer plans would lose their “grandfather” protection by 2013. In fact, for small-business employers, the high-end estimate is a staggering 80 percent (and even on the low end, it’s just a shade under half — 49 percent). This is the next shoe.

[Hueypilot]

Woman cited by President as Obamacare success story frustrated by sign up process

Posted by CNN Senior White House Correspondent Jim Acosta

Updated 1:20 a.m. ET, 11/19/2013 This is updated from an earlier version, adding more details.

(CNN) Washington state resident Jessica Sanford was bursting with pride when President Obama mentioned her story during a Rose Garden event on health care reform last month at the White House. "Who wouldn't?" Sanford asks. "I'm a nobody really to have him mention my story."

Back in October, Sanford had written a letter to the White House to share her good news. The 48-year-old single mother of a teenage son diagnosed with ADHD had just purchased what she considered to be affordable insurance on the Washington state exchange.

"I was ecstatic. I couldn't wait to call the doctor for an appointment on January 2nd," Sanford told CNN about the feeling she had when she first enrolled. Her heartfelt letter made it to the President's hands and then into his October 21 speech. "'I was crying the other day when I signed up. So much stress lifted.'" Obama said, reading from Sanford's letter.

The president said Sanford's story was proof, despite the technical problems with the healthcare.gov website, that the Affordable Care Act was working. "That's what the Affordable Care Act is all about. The point is, the essence of the law - the health insurance that's available to people - is working just fine," Obama said.

But then, after Obama mentioned her story, Sanford started having problems. Sanford said she received another letter informing her the Washington state health exchange had miscalculated her eligibility for a tax credit. In other words, her monthly insurance bill had shot up from $198 a month (she had initially said $169 a month to the White House but she switched plans) to $280 a month for the same "gold" plan offered by the state exchange.

Sanford said she was frustrated with the state's error. But she decided to purchase the new plan and thought everything was fine. It wasn't fine. Last week, Sanford received another letter from the Washington state exchange, stating there had been another problem, a "system error" that resulted in some "applicants to qualify for higher than allowed health insurance premium tax credits."

The letter said the state exchange was "disappointed to have discovered this issue" and apologized. The result was a higher quote, which Sanford said was for $390 per month for a "silver" plan with a higher deductible. Still too expensive. A cheaper "bronze" plan, Sanford said, came in at $324 per month, but also with a high deductible - also not in her budget.

Then another letter from the state exchange with even worse news. "Your household has been determined eligible for a Federal Tax Credit of $0.00 to help cover the cost of your monthly health insurance premium payments," the latest letter said.

"I had a good cry," Sanford said about her reaction to the latest news from the state. As a self-employed court reporter, the new quote was simply out of her range. "This is it. I'm not getting insurance," Sanford told CNN. "That's where it stands right now unless they fix it."

Sanford, an Obama supporter who voted for the president twice, is careful to say she blames the state of Washington's online marketplace for the mixed signals and not the White House. She is sorry Obama mentioned her during the October 21 speech. "I feel awful about it. I support (the Affordable Care Act)," Sanford said.

But the messy rollout in the other Washington, the nation's capital, was not far from her mind. "What the hell? Why is it the same story as the federal government?" Sanford says in disgust with the Washington state exchange. "They didn't have it ready." "They screwed up," she added.

Sanford reiterated her frustration in a post to the Washington HealthPlanFinder's Facebook page last Friday. "Wow. You guys really screwed me over," Sanford wrote. "Now I have been priced out and will not be able to afford the plans you offer. But, I get to pay $95 and up for not having health insurance. I am so incredibly disappointed and saddened. You majorly screwed up."

In response, a HealthplanFinder posting tried to direct Sanford to a broker for help. "Jessica, we are very sad and disappointed that the tax credit miscalculation affected you so heavily," the comment read, suggesting she try to find a new plan on the site. Sanford responded on Facebook the issue was affordability.

Bethany Frey, a spokeswoman for Washington HealthPlanFinder told CNN on Monday night, "I'm already looking into this with our client specialist team. I'll let you know what I hear."

I see that Obamacare thing is working out well for those middle class Democrats that voted for our current president.

On a more serious tone, the fact she blames her state and exonerates the very law and politician that is driving the state of Washington to have these policies is just UFB. We are all fucked if that's a display of the average American's logic.

[Fuzz]

I see that Obamacare thing is working out well for those middle class Democrats that voted for our current president.

On a more serious tone, the fact she blames her state and exonerates the very law and politician that is driving the state of Washington to have these policies is just UFB. We are all fucked if that's a display of the average American's logic.

Sometimes you can't fix stupid.