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NY Promises $205 Billion It Doesn't Have
Posted By:  - 10/14/10

Just when you thought things could not get any worse in New York, they do. A new report by the Empire Center for New York State Policy shows that New York's state and local governments have promised their employees $205 billion in retiree health benefits, but have not set aside any of the funds necessary to pay for those benefits.

"New York taxpayers spend billions of dollars a year on health insurance coverage for retired state and local government employees, many of whom are too young to be eligible for Medicare," the report states. "But the mounting “pay-as-you-go” bill for retiree healthcare is just the tip of a much larger iceberg. Now, thanks to a new government accounting standard, the true cost of this long-term entitlement is finally emerging from the murky depths of state and local finances."

The report finds that for New York City, the largest local governments and school districts outside New York City and the largest public authorities, the unfunded liabilities total $165.3 billion. For all other local governments and school districts in New York State, the unfunded liabilities amount to an estimated $39.7 billion.

While New York does not have to come up with the $205 billion right away, the huge cost could be unsustainable over the long term. New York's state and local governments have not shown much willingness to reduce benefits or take other measures necessary to bring the costs of the health benefits under control. The rising cost of health care could reach a level above what the state can afford, leading to a default on the benefits. The prospect of what a default might mean for the state and taxpayers in terms of litigation, higher taxes, loss of benefits, and turmoil in municipal bond markets, is worrisome.

 At some point, New York's state and local governments have to get serious about reforming public employee benefits. Hopefully, this report will get them thinking about it sooner rather than later.

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Obamacare Tax Hikes
Posted By:  - 10/08/10

I’ve blogged about several of the new taxes and hidden fees in the new health care law, but you should take a look at one of the National Reviews’ most recent posts. It comes in response to a piece in the Kiplinger letters that highlights thirteen tax changes found in Obamacare. Yes, there are a couple of credits for those who enroll in PPACA-sponsored state-based exchanges, but they only apply to businesses with 25 or fewer employees (and yearly wages less than $50,000) and individuals making between $11,000 and $44,000. The problem is that Obamacare will unleash ten tax increases designed to help raise the trillions of dollars necessary to fund the aforementioned subsidies as well as the law's massive Medicaid expansion.

The tax hikes are as follows:

1. 10% tax on indoor tanning services;
2. Eliminate tax deduction for those employers who provide Medicare prescription drug coverage;
3. Increase HSA penalties by 50% to 20%;
4. Cap employer contributions to tax-free FSAs at $2,500. As of now, the “limit” is determined by your business;
5. Prohibit HSA funds from being used to purchase over-the-counter drugs;
6. Medicare surtax for individuals making $200,000 and families earning $250,000, as well as a 3.8% Medicare tax on investment income for these taxpayers;
7. You will have to spend 10% of your income on medical expenses before making itemized deductions. Currently, the starting point is 7.5%;
8. Employer mandate. All businesses with more than 50 employees will have to offer approved health plans or pay a tax of $2,000 per employee;
9. A Cadillac tax will charge high-value plans ($10,200 for individuals and $27,500 for families) a 40% excise tax;
10. Individual mandate. Everyone much purchase health insurance or pay a fee. According to the National Review, it “starts in 2014 at $95 or 1 percent of gross income, whichever is greater; and maxes out in 2016 at the greater of $695 or 2.5 percent of income.”

The 13th change would require employers to disclose health costs on W-2s.

While we have discussed many of these provisions before, I think the National Review provides a nice snapshot of the dire reality we face. We still have a few years before some of these tax hikes kick in and their details are specified, so it’s not too late to push for repeal. If we don’t halt full implementation of Obamacare, or at a minimum defund it, there will be tremendous, unwarranted consequences for American taxpayers.

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More Unintended Consequences
Posted By:  - 09/30/10

Back in June, I wrote about a Politico article, entitled “Health care law could ban low-cost plans,” that highlighted Obamacare's risk to mini-med plans and the potential for more than 1 million people to lose their current insurance. Here’s an excerpt from that post:

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.

Need specific examples? No problem.

Today, the Wall Street Journal published a story with the headline “McDonald’s May Drop Health Plan.” Talk about getting your attention! According to the WSJ, McDonald’s Corp. has “warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. Health overhaul.” A McDonald’s official says their insurance company will not meet the requirement that businesses exhaust 80% to 85% of its revenue on health care.

The fate of the McDonald’s waiver request remains uncertain. The WSJ reports, “Federal officials say there’s no guarantee they can grant mini-med carriers a waiver” and that Kansas Insurance Commissioner Sandy Praeger (former President of the National Association of Insurance Commissioners) does not believe mini-med plans deserve an exemption.

Time will tell, but let’s chalk this up to yet another unintended consequence of Obamacare. Did you know there would be so many?

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Water Protection, Textile Tariffs Featured in Latest Taxpayer’s Tab
Posted By: Dan Barrett - 09/28/10

Tab Insert

The latest Taxpayer’s Tab-- the NTU Foundation’s up-to-the-minute BillTally research newsletter -- brings you four more Congressional bills, all of which might affect you if they were enacted. One bill would mandate private insurers to expand breast cancer treatments. That bill was our Most Friended bill of the week with 252 House cosponsors. If you follow the NTUF Twitter feed, you would know the most expensive bill of the week would take new tax dollars and create a trust fund for water research and development.

Another bill would institute another tax on clothing importers, where the money would research US textile competitiveness. Is a friend looking to buy some Underarmor? Forward the Taxpayer’s Tab so they’ll know what Congress plans to tailor for us all.

The bills covered in the newest Taxpayer’s Tab include:

  • HR 3202, Water Protection and Reinvestment Act
  • HR 6134, To provide for a 10 percent reduction in pay for Members of Congress; to make Federal civilian employees subject to a period of mandatory unpaid leave, and to reduce appropriations for salaries and expenses for offices of the legislative branch, during fiscal year 2011; and for other purposes
  • HR 1691/S 688, Breast Cancer Patient Protection Act
  • S 1439/HR 3168, United States Optimal Use of Trade to Develop Outerwear and Outdoor Recreation (OUTDOOR) Act

With 34 days till Election Day 2010, are you aware of Congress’ potential spending agenda? If not, subscribe to the Tab and arm yourself with the best information from THE source of Congressional research: NTU Foundation.

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Six Months Later
Posted By:  - 09/23/10

Believe it or not, Obamacare turns six months old today, and the Administration has chosen to commemorate the occasion by launching a few of its new mandates. According to a White House website, beginning today, the federal government:

  • Bans discrimination against kids with pre-existing conditions.
  • Allows young adults to remain on their parents’ plan until their 26th birthday.
  • Prohibits insurance companies from cutting off your coverage when you’re sick if you made a mistake on your application.
  • Prohibits insurance companies from putting a lifetime limit on the amount of coverage you may receive, and restricts the use of annual limits until they are banned completely in 2014.

While these provisions may sound appealing at first glance, that intrigue is short-lived when you dive beneath the surface and discover the law’s true ramifications. The Heritage Foundation has a great piece out today on the specific groups that have been hardest hit by Obamacare…already.  

Employers: Heritage reiterates the damage of health care “reform” to small businesses, primarily in the form of a half of trillion dollars in new taxes and additional burdensome regulations. Hardly a recipe for economic recovery.

Doctors: Aside from “gaming the system” by “pretending to cut doctor Medicare reimbursement by 23%,” Obamacare will make it near impossible for doctors to establish their own hospitals and slaps them with "thousands of hours of new reporting requirements." Given the vast number of new mandates and massive Medicaid expansion, recent studies show Obamacare will be 300,000 nurses and 100,000 doctors short of what is needed by 2020. Scary.

Consumers: If you like it, you CAN’T keep it. I have written quite a few blog posts on this topic, but I’ll review. By eliminating caps on coverage, it could force insurance companies to significantly raise costs or eliminate niche markets, like mini-med plans, altogether. That would be detrimental to many low-wage workers (who rely on these low-cost plans) since insurance exchanges and tax credits will not be available until 2014. Furthermore, your health savings accounts (HSAs) and flexible spending accounts (FSAs) are in grave danger of becoming extinct. According to Heritage, “Obamacare’s regulations are likely to incentivize employers to dump 35 million Americans out of their current health care plan.”

States: By 2017, taxpayers will foot the bill for Obamacare’s Medicaid expansion, leading many states to an even more dismal budget crisis. Enough said.

Seniors: The President’s Medicare Actuary projects that payment reductions to hospitals, home health agencies, and nursing homes could potentially hinder access to care for older Americans. Not to mention, Medicare Advantage enrollment is expected to drop from 14.8 to 7.4 million. Heritage has a separate post that further outlines the exorbitant cuts to Medicare Advantage.

Thank you, Heritage, for your unfailing ability to bring many of these specifics to light. After all, the devil is in the details, right? Happy Six Month Anniversary, Obamacare. Let’s hope we’re six months closer to repealing you.

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GOP Pledges to Keep Tinkering
Posted By:  - 09/23/10

Although I'm hardly the first to say it, the GOP's brand spanking new "Pledge to America" sounds pretty darn familiar.  I'm not talking about the obvious reference to 1994's Contract with America, but 2010's Patient Protection and Affordable Care Act. 

As the WonkRoom gleefully points out, the Pledge seems to be completely restating at least 7 practices that are ALREADY LAW.  To quote directly from the Pledge, "Health care should be accessible for all, regardless of pre-existing conditions or past illnesses. We will expand state high-risk pools, reinsurance programs and reduce the cost of coverage."  Sounded nice when President Obama said that too.

The problem here has been discussed ad nauseum.  The GOP summed it up nicely themselves back in April (apparently before their pollsters told them to shut-up), "The basic tenets of economics, combined with inherent self-interest, guarantee that people will wait until they are sick before they buy insurance now that Congress has guaranteed they can get it at any time."  Why on earth would any healthy person who currently pays for insurance continue to do so?  Even with a fine, it will still be cheaper to stop paying until you get sick!  It doesn't matter how many times you say it, this will NOT in any way shape or form bring down the cost of coverage.

What will?  Stop tinkering, Stop regulating, Stop mandating.  Allow insurance companies to compete.  Allow insurance companies to sell cheap plans that only cover catastrophes.  We've heard GOP representatives talk about how regulatory uncertainty has been cripping our markets.  Let's go ahead and take that advice.

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Hello, Higher Premiums!
Posted By:  - 09/08/10

This past April I wrote about the potential for ObamaCare to increase premiums for young adults by as much as 17%, or roughly $42 each month. That’s certainly not an insignificant sum as all Americans continue to cut back on expenses to try and make ends meet. Now we’re hearing that premiums could increase as much as 20%, and not just for young people. In today's Wall Street Journal, we read that companies such as Aetna Inc., BlueCross BlueShield, and other smaller carriers have asked for premium increases in response to the new health care law.

As expected, health insurers are saying they must raise their rates in order to comply with new health care mandates, including new benefits to enable children to stay on their parents’ plan until they are 26 and eliminate lifetime and certain annual coverage caps. While insurers do have to submit any proposed fee changes to designated regulators for official approval, the process varies by state. Kansas Insurance Commissioner Sandy Praeger says she can ‘deny only rate increases that are unreasonable and discriminatory.’ Needless to say, insurers are smart enough to avoid hikes that are in blatant violation of the law, so I wouldn’t place too much hope in the Obama Administration’s claim that regulators will block large increases. After all, didn’t the same Administration once promise to spare families making less than $250,000 a year from higher taxes? We know that didn’t happen!

According to the WSJ, “The rate increases largely apply to policies for individuals and small businesses and don’t include people covered by a big employer or Medicare.” Approximately 9% of Americans purchase coverage through an individual plan and 1/5 of workers (who receive insurance through their employer) work at a company with 50 or fewer employees. Futhermore, the Seattle Times reports that these increases may be larger for individuals whose ages end in "5" or "0" because insurers can "hike rates for each five-year increase in age." The newspaper cites a 60-year-old self-employed hairdresser in Washington who just witnessed her health insurance go from $643 to $899 per month. While increases may primarily apply to new policies written after October 1, individuals will be subject to them if they alter their existing plans - many of which are likely to become inadequate once other options are presented.

Yet another reason why ObamaCare is bad news for taxpayers and must be repealed.

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A Different Kind of Packing List
Posted By:  - 08/18/10

How many of you have young adults getting ready to head off to college? The Wall Street Journal wrote up a very interesting piece on what you should be packing, and I'm not talking about fridges, linens, and a collage of your favorite family photos. This to-do list won't require a trip to Bed Bath & Beyond, but it's just as important.

The article discusses a myriad of items to get in order, such as cash strategy and car insurance, but I want to highlight one in particular: health insurance. The rules have changed so much this past year and it's important for you to be prepared. As I mentioned in a previous post, the new health care law will allow many kids to stay on their parents' health plan until age 26, but that provision technically doesn't take effect until September. The WSJ says, "While some plans are offering the coverage right away, others won't adopt the rule until their plan begins in 2011." If your plan does offer the coverage, make sure you get details before you send your child to school in a different state. Why? Jen Kozin, a public policy major at Duke University, needed emergency surgery in North Carolina. Her parents assumed health insurance wouldn't be a problem since their family plan, Blue Cross Blue Shield, had always been good in Massachusetts, but the WSJ reports that the Kozins' plan "treated urgent care differently from regular care." While the Kozins were able to get things straightened out after a slew of phone calls (Blue Cross initially hesitated to pay Jen's medical bill), other families have not been as lucky.

A lot of schools try to sell you on their in-house health insurance plan, but Stephen Beckley, a consultant on student health plans, claims many of these offers are 'totally junk.' According to the WSJ, "60% exclude pre-existing conditions, have high deductibles, offer little or no prescription benefit or have maximum coverage of less than $100,000." Hannah Gomez signed up for insurance at the University of Arizona, but was caught off-guard after failing to read the fine print. The plan covered nothing until she paid $1,000 out-of-pocket and offered limited help with physical therapy - a huge problem after she tore a ligament in her elbow.

As you prepare your kids for this next chapter in their lives, remember what's most important and prioritize those items before stressing about them having the most stylish dorm room on campus. Your pocketbook (and child!) will thank you down the road.  

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What Happened to America's Favorite Sheriff?
Posted By:  - 08/05/10

Remember Andy Taylor, the rock-solid, good-natured sheriff from Mayberry, North Carolina? Nothing beats those opening credits (yes, I still watch reruns!) when he and his son, Opie (Ron Howard), walk down the country road, fishing rods in hand and whistling in the background. It was one of America's most beloved shows with one of America's most non-controversial actors, right? Eh not so much anymore…

It seems Sheriff Taylor has bought into Obama's health care propaganda. A commercial staring Andy Griffith is now airing nationwide in an effort to sell Obamacare's supposed Medicare benefits and boost unfavorable polling numbers. Here's one line from the ad: "With the new health care law, more good things are coming: free checkups, lower prescription costs, and better ways to protect us and Medicare from fraud." Why the push to senior citizens? Politico says they are the demographic "most skeptical" of the new law.

Here's the worst part: the commercial cost taxpayers $700,000! As if the new health care law wasn't already expensive enough, we're expected to dish out even more in order for Obama and friends to sell lies to the America people.

Andy Griffith's last line? "I think you're going to like it." Don't hold your breath, Sheriff.

Here's the video. Let us know your thoughts!

 

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