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The sequester continues to dominate the headlines in Washington, but several Congressional committees are closely examining another important and controversial subject: the Affordable Care Act, better known as ObamaCare.
Yesterday, the Oversight Subcommittee of the House Ways & Means Committee held a hearing to review the tax provisions found in ObamaCare. This coincided with a lengthy new report from the Joint Committee on Taxation (JCT) that describes the law’s 47 new taxes or tax related provisions. All in all, ObamaCare’s new taxes will extract approximately $1 trillion from taxpayers over the next 10 years.
As the JCT study shows, several of these tax hikes just took effect at the beginning of 2012, like the 2.3 percent excise tax on medical device manufacturers and an increase in Medicare payroll taxes for higher income earners. Some will not kick in until 2014, like the individual mandate tax and the health coverage provider “fee,” and the “haircut” on the medical expense deduction, a write-off claimed by more than 10 million people. It takes effect this year but won’t be felt until tax returns are filed in 2014. And some, like the “Cadillac tax” on high-cost employer-provided insurance, won’t take effect for several years.
Meanwhile, the House Energy & Commerce Committee and Senate Health, Education, Labor & Pensions Committee released a joint report showing other disturbing facts about ObamaCare. It demonstrates that contrary to President Obama’s claims, the law will make health insurance significantly more expensive for families and individuals. According to the report:
“Some estimates show some Americans facing startling premium increases of 203 percent because of the law. A study by actuarial firm Oliver Wyman suggests premiums in the individual market will increase an average of 40 percent. The Society of Actuaries similarly estimates an average premium increase of 32 percent in the individual market.”
As then-Speaker Nancy Pelosi infamously said in 2010, “we have to pass the [health care] bill so that you can find out what’s in it.” Well, we continue to learn more about ObamaCare and, unfortunately for taxpayers, it ain’t pretty.2 Comments | Post a Comment | Sign up for NTU Action Alerts
The Late Edition: March 4, 2013
A recap of the programs on the chopping block because of last Friday’s sequester, and the $1 trillion in spending cuts found by the Public Interest Research Group and NTU. Read the story in The Reporter.
Will the President forego some of the $83.4 billion he proposed in his State of the Union Speech as calculated by the National Taxpayers Union Foundation now that the sequester has begun to take affect? Unlikely, says Fox News.
Wondering which states are still declining to expand their Medicaid programs under Obamacare? Check out the detailed chart below from the Kaiser Family Foundation showing where each states stands.
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The U.S. spends substantially more on health care, of both the public and private variety, than many other developed countries. Consider this graphic from PBS, which uses Organisation for Economic Co-operation and Development (OECD) Health data:
The OECD has a full run-down of the numbers here. Their figures offer an interesting glimpse at the nature of health care provision, financing, and outcomes across a number of different countries.
But why are health care costs and expenditures rising? The Government Accountability Office (GAO) released a report on Tuesday that offers some possible explanations. The report was requested by Senator Jeff Sessions (R-AL) of the Senate Budget Committee, and was discussed in a recent hearing on the effect that the Patient Protection and Affordable Care Act (ACA) could have on long term budget figures. According to the report, the primary factor behind the rising cost of health care could be due to changes in health-related technology:
The chart above is taken from page 30 of the report, and it compares the relative influence certain factors have on health care costs. The factors were identified by four different studies conducted over a 20 year range. It is important to note that there is always a degree of uncertainty when analyzing something as complex as the health care industry. Nevertheless, the graph shows the general agreement among these researchers that technological change may be most responsible for driving health care cost growth per capita. "Technological change" is identified as "changes in clinical practice that enhance the ability of providers to diagnose, treat, or prevent health problems." Specifically, this could mean the development of new drugs, more precise surgical machinery, or new treatment procedures.
At first glance, the conclusion might seem somewhat counter-intuitive -- after all, as medical technology becomes more advanced, shouldn't expenditures on health care be decreasing? GAO explains:
"In general, a technological change that enables providers to treat a previously untreatable disease will increase health care spending, while expanding disease management or shifting disease management to prevention or cure can lead to either increased or decreased health care spending. However, the introduction of new treatments and technologies may result in increased health care spending due to the possibility that health complications may arise from a new treatment, or that patients survive one disease long enough and eventually are diagnosed with an additional disease with additional treatment cost."
The takeaway is that health care spending is affected by a web of interconnected variables, especially as medical technology changes rapidly. Ironically enough, higher health expenditures could be a sign that the services are working as designed. As the population grows, ages, and becomes increasingly eligible for health services under the ACA, the Congressional Budget Office expects to see health care spending continue to grow. The debate going forward will likely center around how much of that spending should be privately or publicly funded.
On a related legislative note, Congressman Erik Paulsen introduced a bill to repeal the recently-enacted 2.3 percent tax on medical devices. NTUF examined that bill, among others, in last week's edition of the Taxpayer's Tab. The bill was introduced to "... [eliminate] barriers to medical innovation, ensuring patients have access to life saving technologies," according to the sponsor.0 Comments | Post a Comment | Sign up for NTU Action Alerts
Florida Gov. Scott Joins Medicaid Flip-Floppers Club
Watch out John Kasich, the White House may have a new favorite GOP governor. Just weeks after his face-to-face meeting with HHS Secretary Sebelius where he explained that Medicaid expansion would cost the Sunshine State a whopping $26 billion over the next decade, Governor Rick Scott is now welcoming the expansion with open arms.
As a result of the Supreme Court’s June 2012 Obamacare decision, states have the option to expand this failing, fraud-ridden program. Right now, it is imperative that conservative state leaders take a stand by saying “NO.” Governor Scott seemed to understand this back in July, when he clearly explained why both insurance exchanges and Medicaid expansion are wrong for Florida:
“Floridians are interested in jobs and economic growth,” Governor Scott said. “Neither of these major provisions in Obamacare will achieve those goals, and since Florida is legally allowed to opt out, that’s the right decision for our citizens.”
While his flip-flop may help him curry favor with left-leaning voters in advance of his reelection campaign, it also casts a shadow of doubt over his status as a dependable taxpayer ally.
Medicaid expansion, as I’ve recently discussed, poses immense risk to state and federal budgets. It’s a government program already on the brink of collapse with low reimbursement rates and payment delays, not to mention rampant fraud (the improper payment rate in 2008 was 10.5 percent). Scott has to know that by expanding Medicaid to an additional 1 million Floridians, these problems will only get worse.
At the state level, Florida is already struggling to pay for Medicaid. While the federal government picks up the tab for the first three years and then promises to cover 90 percent of the expansion, the Sunshine State will still be responsible for a whopping $1.4 billion from 2014-2022. Tax hikes anyone? And this assumes that the debt-plagued federal government will follow through on its financial promise -- Obama has already proposed scaling back federal match rates starting in 2017.
The law will also have disastrous effects at the federal level. According to a recent report from the Kaiser Commission on Medicaid and the Uninsured, full-scale Medicaid expansion will cost the federal government $800 billion between now and 2022. Thanks to Governor Scott’s wobbly-kneed approach to the health care law, federal spending will increase by an estimated $20.3 billion through 2022 to cover Florida’s tab, according to the Heritage Foundation. However, that money is not “free”: current and future Florida taxpayers would still have to bear part of this burden (and that of other state expansions) on their federal tax returns. Instead of increasing the size and reach of the federal government, state officials should seize this opportunity to rein in Washington’s dangerous spending habit.
By calling for expansion of Medicaid under the health care law, Governor Scott has spurned the Florida taxpayers that put him in office and disappointed many more across the country. Expanding Medicaid would make Florida a co-owner of the government’s dramatic expansion into the health care system and demonstrate true fiscal irresponsibility. Hopefully, legislators in the Sunshine State will see the light and reject Governor Scott’s proposed expansion.0 Comments | Post a Comment | Sign up for NTU Action Alerts
…when he announced yesterday that Ohio will expand Medicaid? As a result of the Supreme Court’s June 2012 Obamacare decision, states have the option to expand this failing, fraud-ridden program. Right now, it is imperative that conservative state leaders take a stand by saying “NO.” Frustratingly, Kasich is the most high-profile Republican governor to call for the program’s expansion. When you also consider his severance tax hike proposal, one starts to wonder if Kasich is still a dependable taxpayer ally.
Medicaid expansion, as I’ve recently discussed, poses immense risk to state and federal budgets. It’s a government program already on the brink of collapse with low reimbursement rates and payment delays, not to mention rampant fraud (improper payment rate in 2008 was 10.5 percent). Kasich has to know that by expanding Medicaid to an additional 365,000 Ohioans, these problems will only get worse.
At the state level, Ohio is already struggling to pay for Medicaid. While the federal government picks up the tab for the first three years and then promises to cover 90 percent of the expansion (though, I’d argue, don’t count on it – Obama has already proposed scaling back federal match rates starting in 2017), the Buckeye State will still be responsible for a whopping $1.2 billion from 2014-2022. Tax hikes anyone?
Kasich’s decision also impacts taxpayers nationwide. If all 50 states were wise enough to reject Medicaid expansion, the country would save an estimated $800 billion between now and 2022, but that would be entirely too fiscally responsible, so it probably won’t happen. Thanks to Governor Kasich’s wobbly-kneed approach to the health care law, federal spending will increase by an estimated $17.4 billion through 2022 to cover Ohio’s tab, according to the Heritage Foundation. If other governors fall in line behind Kasich, watch out.
In the past month, we’ve seen the good, the bad, and the ugly at the state level. With yesterday’s announcement, Governor Kasich has spurned the Ohio taxpayers that put him in office and disappointed many more across the country. Expanding Medicaid would make Ohio a co-owner of the government’s dramatic expansion into the health care system and demonstrate true fiscal irresponsibility.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Late Edition: February 5, 2013
Idaho lawmakers are considering whether the state will set up a healthcare exchange as mandated under “ObamaCare”, something NTU has been active in opposing. Only eighteen states have complied so far, and the Idaho Freedom Foundation has compiled the statements of Governors who opposed setting up the exchanges.
This Mercatus Center publication examines “sin taxes” and the popularity they have recently garnered from revenue-hungry lawmakers looking to avoid making cuts during the economic downturn.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Late Edition: January 30, 2013
Today’s Taxpayer News!
Politico has compiled the latest “Obamacare” news, including NTU’s opposition (as well as that of twenty other free market organizations) to the Independent Payment Advisory Board.
Consumer confidence is down with workers taking home less pay as a result of the payroll tax cut expiration, according to Boston.com.
Wondering why your cell phone bill ends up looking so much higher than you initially thought? The Tax Foundation recently found that on average Americans pay 17 percent in taxes and fees on top of their wireless bills.0 Comments | Post a Comment | Sign up for NTU Action Alerts
On Monday, Governor Rick Scott, who has been a sharp critic of Obamacare, will finally meet face-to-face with Health and Human Services Secretary Kathleen Sebelius. This one will be worth keeping a close eye on – not only did Scott ignore the December deadline to notify federal officials about Florida's health insurance exchange, but two weeks ago, Florida’s Agency for Health Care Administration released a report showing that Medicaid expansion in Florida would cost taxpayers in the Sunshine State a staggering $26 billion over the next decade. This estimate is more than three times the $8 billion estimate that was released a few months back and does not include the $38 billion in additional costs to the federal government for Florida’s possible expansion.
In its June 2012 decision on Obamacare, the Supreme Court gave states the ability to opt into or out of the law’s Medicaid expansion. For those unfamiliar with how the expansion would work, enrollment would be extended to all people under 65 who are not eligible for Medicare and have incomes up to 133 percent of the federal poverty level. In addition to income requirements, other current criteria for eligibility (for example, pregnancy or a child in the household) will be loosened in states that opt into the expansion. Prior to the Court’s decision, 16 million people were expected to be added to states’ Medicaid rolls.
In February, before the Supreme Court had ruled on the health law, the Government Accountability Office surveyed state budget directors on the law’s Medicaid expansion. The survey results included responses from 42 of 50 states with near-universal agreement that states would have to spend much more on administrative costs, the acquisition or modification of information technology, and the influx of patients who were previously eligible but had not yet enrolled. Combined with the flood of newly eligible Medicaid patients, the cost of the expansion in states that choose to accept it will be unsustainable, as illustrated in the recent Florida report.
Medicaid is already on the brink of collapse. Higher enrollment in recent years has led to low reimbursement rates and payment delays. While administrative costs are a giant hurdle for Medicaid expansion, the doctor shortage is also cause for concern. It is estimated that 36 percent of doctors have stopped accepting new Medicaid patients, and 26 percent of physicians do not see any Medicaid patients at all. Clearly, Medicaid is already failing to provide quality care for the neediest Americans, and expanding the program by millions of additional people is certain to accelerate the program’s failure.
Another factor contributing to Medicaid’s high cost is rampant fraud. The Government Accountability Office has designated Medicaid as a “high risk” program and has estimated that the improper payment rate in 2008 was 10.5 percent, amounting to $32 billion in fraudulent payments. With the additional Medicaid beneficiaries likely to join the rolls in states that approve the program’s expansion, this number could very easily increase.
A disturbing recent example of Medicaid fraud was featured last month on the Today Show. The report exposed a Texas company called Small Smiles that was performing unnecessary and unsafe dental procedures on poor children in order to reel in Medicaid dollars. At one location, $900,000 out of $1 million in revenue came from Medicaid.
Under Obamacare, approximately 1 million additional uninsured Floridians will be eligible to join this fiscally unstable and costly program. With the recent projection of an additional $26 billion over 10 years to the State of Florida, Secretary Sebelius has a lot of explaining to do on Monday.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Late Edition: November 15, 2012
Today’s Taxpayer News!
Pete Sepp on the importance of sparing oil and gas companies from harsh tax hikes at the end of the year.
This article from Real Clear Markets offers an economic explanation for how policies that lower tax rates and broaden the tax base generate more revenue than those which hike tax rates.
Check out his video from Americans for Limited Government explaining how governors who forgo setting up the state exchanges under ObamaCare actually empower employers in their states to fight the mandate.0 Comments | Post a Comment | Sign up for NTU Action Alerts
The Late Edition: October 4, 2012
Today’s Taxpayer News!
NTU’s Pete Sepp discusses the many unknowns about the IRS’s role in healthcare should ObamaCare continue to be implemented in this article from the Heartlander.
A new study from the Tax Policy Center finds that if the Bush Tax Cuts are allowed to expire completely at the year’s end, a whopping 71 percent of taxpayers would watch their taxes rise.
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