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See You at the Pool!
Posted By:  - 07/02/10

I have a feeling my neighborhood pool will be a lot more crowded this summer now that individuals are being deterred from signing up for tanning bed memberships. For those of you who have trouble following the gazillion (and I never use that word) provisions of the new health care law, a 10% tanning tax was officially implemented yesterday to bring in $2.7 billion and help pay for the all-too-expensive Obamacare.  

And while employers and customers are frustrated at the tax, they are even more frustrated at its ambiguity. In an article yesterday, The Wall Street Journal (WSJ) talks about how tanning salons will be taxed, but health clubs that offer tanning beds will not. Tanning sessions that include ultra-violet rays will be taxed, but spray tans will not. And let's not forget that there are a number of businesses, aside from specified tanning salons, that offer tanning services on the side, including dry cleaners and video stores. Yes, that came as quite a surprise to me as well, but it's true. The WSJ article highlights Jeanne Chamberlain, a video-rental store owner who will be slapped with the burdensome levy:

"Ms. Chamberlain followed a number of her peers in adding tanning services to smooth out the bumps in her Rice Lake, Wis., business. Today, she wants to offer one free tan for every three rentals. Should that freebie be taxed? Ms. Chamberlain doesn't know, and even if she did, she doesn't yet have the software in place to help with the calculations."

The Internal Revenue Service's answer to Ms. Chamberlain's question? They don't even know! According to the WSJ, an IRS spokesperson said, "Business owners should 'make the best determination they can based on their own facts and circumstances.'" Talk about confusing! I think it's only fair for the appropriate entity (whether the Obama Administration, IRS, or both) to buckle down and solidify some of these new regulations so, at the very least, business owners and consumers know what they are facing. In the meantime, get all that "natural" sunlight you can. It certainly seems to be the more economical choice.

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Freakonomist Agrees with NTU
Posted By:  - 06/16/10

This week Money Magazine released a Q&A session with Steven Levitt.  After two best selling books, Freakonomics and Superfreakonomics, Levitt (Phd University of Chicago) is in the running for the rights to be called America's most famous economist.  In the interview, Money Magazine asked for his thoughts on both Health Care Reform and the Financial Bailouts.

It's always great getting Levitt's take on issues and lending a little more credibility to what should be common sense.  On Health Care reform, "It seems like we did everything wrong with the health care bill" and on Bailouts, "the government should not bail out companies" we couldn't agree more!

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No, Really, You Can't Keep It
Posted By:  - 06/16/10

Last week, I wrote about President Obama's oft-repeated (and now broken) promise to allow people to keep their current health plans if they were happy. Because, yes, Mr. President, a lot of people are! I referred you to a Politico article that highlighted mini-med plans, which offer low-cost benefits to low-wage employees who may not be able to afford more comprehensive health care. Unfortunately, Obamacare's diagnosis keeps getting worse...

According to the Daily Caller, the Obama Administration just released a new regulation setting rules for who can keep their current insurance plans under the health care law. In an article entitled "Five more ways Obama's health-care law boosts unions," writer Jonathan Strong claims this regulation gives "special consideration" to unions. He goes on to say, "For the rule regarding whether people can keep their health plans – known as "grandfathering" in bureacratise – the Department of Health and Human Services ruled that for union-negotiated health plans, companies can change insurance providers but keep their essential plan  details intact, or grandfathered. For non-union-negotiated plans, companies can't change providers – they must stay with their same insurance provider."

I certainly can't say I'm surprised. What else do you expect from a bill crafted behind closed doors and a law that remains virtually undefined? That's right. We're still waiting on the Administration to release details on how various provisions will be implemented, so I think it's safe to say that more bad news is yet to come.

Furthermore, the Daily Caller reports numerous other ways in which Obamacare boosts unions. The so-called "Cadillac" tax will be imposed on health care plans that cost at least $10,200, except where unions are concerned. For union-negotiated plans, the tax begins at $27,500, an adjustment that Strong says could save union members $60 billion. There is also a $5 billion subsidy for health care for early retirees, many of whom are unionized employees, a condition that gives union members premature access to exchange markets, and the exemption of very large groups from various regulations.

Again, I reiterate the uncertainty of this complex law. It's not just the issue of officials failing to make important information available to the public, it's the fact that many of these details have not yet been crafted! Expect to see even more "special consideration" for organized labor. It's almost inevitable.  

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Get the (Real) Facts!
Posted By:  - 06/11/10

In light of the President's new taxpayer-subsidized campaign to sell the American people on Obamacare, economics21 has launched an excellent new resource – – to help you get the facts straight.

The website will provide, in one convenient and searchable website, all of the most important research, analysis, news, and commentary related to the new health law. You can also sign up for their weekly "ebrief" for all the latest news and developments.

I encourage you to check it out! In the midst of 2010 election mayhem, it's a great way to stay in the health care loop and keep your leaders accountable for their vote.

Additionally, here is an Op-Ed by Senator Tom Coburn in response to the Obamacare PR campaign mentioned above.

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If You Like It, You CAN'T Keep It
Posted By:  - 06/08/10

Who am I?

"If you like your current plan you will be able to keep it. Let me repeat that: If you like your plan, you'll be able to keep it." That was a direct quote from our President at the White House on July 21, 2009. You may remember… the Administration was desperate to obtain public support for the (still) controversial health care plan, and thought that "promise" would appease the American people. Did it? Well, there were certainly some who bought into the faulty claim, but many of us remained skeptical of the details and ultimate ramifications of such a large, complicated bill. Now, those details are starting to emerge…

Politico published a piece today entitled "Health law could ban low-cost plans." The leading paragraph reads, "Part of the health care overhaul due to kick in this September could strip more than 1 million people of their insurance coverage, violating a key goal of President Barack Obama's reforms."

Here's why:

The "Affordable" Health Care Act would ban the caps currently in place for the amount of insurance company payouts. While, on the surface, this sounds like a positive reform to improve the quality of care, it is problematic for a couple of reasons. There is a niche insurance market, called mini-med plans, which many employees (retail, restaurant workers, etc.) have come to depend on. While these plans do offer limited benefits, they are priced low for low-wage workers who may not be able to afford more comprehensive health care. If caps are eliminated, it could force insurance companies to significantly raise costs or eliminate the plans altogether. That would be detrimental to many of these low-wage workers since insurance exchanges and tax credits will not be available until 2014. According to Politico, a number of employer groups sent a letter to Health and Human Services Secretary Kathleen Sebelius and Labor Secretary Hilda Solis and asserted, "this population would likely be left with no coverage until 2014" – again, when tax credits, etc. begin to kick in.

We are still waiting on the Administration to release particulars on how this provision will be implemented, but I'd recommend getting that job at Nordstrom NOW…before it's too late.  

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Government Insurance Boards Define Fairness
Posted By: Dan Barrett - 05/17/10

Federal legislators feel they can ensure you get the best value for your health insurance premiums and are willing to put $255 million of our tax dollars toward the effort. S 3078 and HR 4757 propose to establish a Health Insurance Rate Authority to review "potentially unreasonable increases in rates for health insurance coverage, which shall include premiums", in other words the government wants to arbitrarily determine what is fair and what is not.  As many states already have their own commissions dictating rate changes, proponents say this is a fallback for those states and for other states that do not have such regulators – an umbrella our friends at the AFL-CIO endorses.  

If you are already a resident of such regulated states, why would you want two layers of regulation doing the same thing? If you are in a state without such government commissions, why would you want to give up your state's sovereignty, as it could just as easily create a system customized for your state's residents and economic situation? The way I see it, both questions are really asking if you think the federal government can make your insurance plans better. (Note: Google Medicare and 2017)

If we are going to further nationalize the “greedy” healthcare sector, why not target other companies doing well in the recession? Wal-Mart ($13 billion in profits), Johnson & Johnson ($13 billion), Procter & Gamble ($12 billion), and Google ($4 billion) have all profited while the economy stagnated or declined. As with all these companies and the health insurers, if you feel you are paying too much for a product, you have plenty of alternatives. Government should not be in the business of health when its own survival is parasitic on our economy.

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Health Care Costs to Rise
Posted By:  - 04/23/10

In a report released yesterday by the Health and Human Services Department, it has been concluded that Obamacare will cause health care costs to rise.  According to the AP:

The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, "possibly jeopardizing access" to care for seniors. 

As the report's grand finale:

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces "a very serious risk" of insolvency.

Wow.  The program will increase costs, ration care, and is ultimately unsustainable.  If only there had been somebody, somewhere, who could have seen this coming.  I'll try to contain my shock.

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ObamaCare Hammers HSAs
Posted By:  - 04/09/10

A Health Savings Account (HSA) is a tax-advantaged medical savings account – contributed to by an employer, but owned by the individual. Millions of Americans use their HSAs every day to purchase medical goods and services they need to keep themselves and their families healthy, but ObamaCare could wipe them out altogether.

Thanks to our friends at the House Republican Conference, we learn the Joint Committee on Taxation (JCT) estimates people who use their HSAs, FSAs, or HRAs to pay for over-the-counter drugs will pay an additional $5 billion in taxes under ObamaCare. Get your pen and paper ready. The following items make up a partial list of medications and health care items that will become taxable withdrawals beginning January 1, 2011:

- Baby Aspirin
- Children's Cough Syrup
- Band-Aids
- Cold and chest relief 
- Antibiotic ointment and first aid creams
- Anti-flu medication
- Pain relievers
- Cough drops
- Throat lozenges
- Antacids 
- Sinus medications
- Allergy medications
- Nasal Sprays
- Smoking cessation aids
- First Aid Creams
- Pedialyte
- Calamine lotion
- Sleep Aids
- Motion sickness pills
- Contact lens solution

In addition to these items, HSAs will be subject to a 20% penalty tax on nonmedical early withdrawals. JCT estimates this new tax, larger than the tax on IRAs and 401(k)s, will cost families an additional $1.4 billion of their own money.

HSAs are vitally important tools to consumers, but will unavoidably suffer a severe blow come January 1. We hope Congress will do everything they can to protect one of the few (remaining) popular, free-market solutions to our health care challenges.

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Health Premiums Could Rise 17% for Young Adults
Posted By:  - 04/01/10

Remember all that talk from White House officials about how premiums will fail to rise under ObamaCare? In case you don’t, here’s a direct quote from the President when he spoke in Cleveland the week of March 15, 2010:

"You'll be able to buy in, or a small business will be able to buy into this pool," Obama said. "And that will lower rates, it's estimated, by up to 14 to 20 percent over what you're currently getting. That's money out of pocket."

He went on to say that employers would see premiums fall as much as 3,000 percent.” What?! Whether he meant 3,000 percent or $3,000, he is wrong. Let’s fact check, shall we? According to the Associated Press, Obama found the information on employer savings from a Business Roundtable report. The problem is that this report did not consider specific legislation or even the final language of the health care bill ultimately signed into law. Instead, the Congressional Budget Office (CBO) concluded that premium savings would be much more modest at roughly 3 percent.

Now, let’s go back to the previous statement – that people purchasing individual insurance will save “up to 14 to 20 percent.” Ironically, this comes from the same CBO report, but it’s not the full story. CBO said premiums would rise 10 percent to 13 percent for individuals in this market, compared to what they are paying now. The savings of 14 to 20 percent refer solely to those who choose to maintain their current insurance, which will likely become inadequate once other options are presented.

Unfortunately, that’s not all. We are now hearing that health premiums could rise as much as 17 percent for young adults. The reason? Under ObamaCare, people in their 20s and early 30s will be forced to shoulder the medical costs of older Americans more than ever before. This could tack on an additional $42 to their health insurance each month.  But, it should be said that “children” will get to remain on their parents’ plan until the AGE OF 26! Does anyone else think this is absurd? What 26-year-old do you know who deserves the title of “kid?” I am still a few months away from turning 26 and I have been accountable for my own health insurance for 4 years. Yes, it was hard at times, but I would not have had it any other way. It is unfortunate that a majority of young adults, doing their best to make it in the world post-college, will have to dish out even more of their hard earned money to subsidize not only older Americans, but those looking for one more excuse to postpone the responsibilities of adulthood.


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ObamaCare Already Slamming Companies
Posted By:  - 03/30/10

For those of you interested, the House Republican Conference released a document outlining merely a snapshot of those companies already suffering under the President’s health care “reform” legislation.  AT&T looks to be the hardest hit as they book $1 billion in first-quarter costs related to ObamaCare. These added costs come from a change in the tax treatment of Medicare subsidies, and now AT&T is saying they will be forced to consider changes to the health care benefits offered to their current and retired workers.

Other companies feeling the immediate effects of ObamaCare include Medtronic, Deere & Co., Caterpillar, 3M, and Valero Energy. I reiterate immediate. It’s hard telling what they will pay two years from now. This is just the beginning, folks. Costs will continue to rise until we repeal and replace.

Click here for more details on these job killing tax hikes.


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