When the Patient Protection and Affordable Care Act (“Obamacare”) was being debated, proponents were accused of saddling Americans with inferior and expensive health care while keeping generous coverage for themselves at taxpayer expense. To rebut that allegation and build confidence in the bill, a provision was added mandating that members of Congress – and their staff members – get their coverage through the new exchange system the bill set up. Now that the time to sign up for exchange coverage is nearing, a Democratic member, Rep. John Larson (D., Conn.), is saying that “this is simply not fair” – as key staff members head for the exits to avoid Obamacare.
Politico reports that “many on Capitol Hill fear it could lead to a brain drain” and notes that “[t]he problem is far more acute in the House, where lawmakers and aides are generally younger and less wealthy.”
But, we were told that Obama Care was wonderful, and that it would cut health care costs. Yet Larson VOTED for the bill, he voted for it KNOWING it would hurt the poor and middle class, funny how that Democratic compassion for working Americans work isn’t it?
Dozens of lawmakers and aides are so afraid that their health insurance premiums will skyrocket next year thanks to Obamacare that they are thinking about retiring early or just quitting.
The fear: Government-subsidized premiums will disappear at the end of the year under a provision in the health care law that nudges aides and lawmakers onto the government health care exchanges, which could make their benefits exorbitantly expensive.
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Democratic and Republican leaders are taking the issue seriously, but first they need more specifics from the Office of Personnel Management on how the new rule should take effect – a decision that Capitol Hill sources expect by fall, at the latest. The administration has clammed up in advance of a ruling, sources on both sides of the aisle said.
If the issue isn’t resolved, and massive numbers of lawmakers and aides bolt, many on Capitol Hill fear it could lead to a brain drain just as Congress tackles a slew of weighty issues – like fights over the Tax Code and immigration reform.
The problem is far more acute in the House, where lawmakers and aides are generally younger and less wealthy. Sources said several aides have already given lawmakers notice that they’ll be leaving over concerns about Obamacare. Republican and Democratic lawmakers said the chatter about retiring now, to remain on the current health care plan, is constant.
Rep. John Larson, a Connecticut Democrat in leadership when the law passed, said he thinks the problem will be resolved.
“If not, I think we should begin an immediate amicus brief to say, ‘Listen this is simply not fair to these employees,’” Larson told POLITICO. “They are federal employees.”
Republicans, never a fan of Democratic health care reform, are more vocal about the potential adverse effects of the provision.
“It’s a reality,” said Rep. Pete Sessions (R-Texas). “This is the law… It’s going to hinder our ability with retention of members, it’s going to hinder our ability for members to take care of their families.” He said his fellow lawmakers are having “quiet conversations” about the threat.
Alabama Rep. Jo Bonner said the threat is already real, especially for veteran lawmakers and staff. If they leave this year, they think they can continue to be covered under the current health care plan.
“I’ve lost one staffer who told me in confidence that he had been here for a number of years and the thought of losing the opportunity to keep his health insurance on Dec. 31 [forced him to leave]. He could keep what he had and on Jan. 1 he would go into that big black hole,” said Bonner, who had already planned his resignation from Congress. “And then I’ve got another staff member that I think it will be a factor as she’s contemplating her future.”
Lawmakers and aides on both sides of the aisle are acutely aware of the problems with the provision. Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) have discussed fixes to the provision. Boehner, according to House GOP sources, believes that Reid must take the lead on crafting a solution. Since Republicans opposed the bill, Boehner does not feel responsible to lead the effort to make changes.
The Affordable Care Act – signed into law in 2010 – contained a provision known as the Grassley Amendment, which said the government can only offer members of Congress and their staff plans that are “created” in the bill or “offered through an exchange” – unless the bill is amended.
Currently, aides and lawmakers receive their health care under the generous Federal Employee Health Benefits Program. The government subsidizes upward of 75 percent of the premiums for the health insurance plans. In 2014, most Capitol Hill aides and lawmakers are expected to be put onto the exchanges, and there has been no guidance whether the government will subsidize those premiums. This is expected to cause a steep spike in health insurance costs.
There have been many options for fixing the problem discussed throughout the year, including administrative fixes and legislative tweaks. One scenario seen as likely on Capitol Hill would have OPM simply decide that the government could still subsidize insurance on the exchanges.
House Democratic leadership says the issue must be resolved.
“The leadership has assured members that fixing this issue is a top priority,” said one Democratic leadership aide. “This issue must be fixed by administrative action in order that the flawed Grassley Amendment’s spirit is honored and all staff and members are treated the same.”
It could be politically difficult to change this provision. The provision was put in the bill in the first place on the theory that if Congress was going to make the country live under the provisions of Obamacare, the members and staff should have to as well.
The uncertainty has created a growing furor on Capitol Hill with aides young and old worried about skyrocketing health care premiums cutting deeply into their already small paychecks. Some longtime aides and members of Congress, who previously had government subsidized health care for life, are concerned that their premiums will now come out of their pension.
If their fears are borne out, the results could be twofold. Some junior staff will head for the private sector early while more seasoned aides and lawmakers could leave before the end of the year so they can continue under the old plan.
Several lawmakers said departures could run the gamut from low-level staff to legislative aides, to senior aides and lawmakers. Capitol Hill is an attractive workplace for politically ambitious college graduates, but a core of Capitol Hill aides stick around for decades, serving as institutional knowledge, and earning prized retirement packages.
OPM, which administers benefits for federal employees, is expected to rule in the coming months on how congressional health care is to be administered.
OPM did not respond to a request for comment.
More than a dozen senior aides interviewed by POLITICO about the issue declined to be named out of fear for future job prospects. The problem is most acutely felt at the staff level, where aides make between $35,000 and roughly $170,000 and budgetary problems have all but stopped pay increases and bonuses. Lawmakers have questioned leadership aides about the future of their health care.
“Between the constant uncertainty surrounding sequestration, and the likelihood aides will soon be paying for the subsidy portion of their health care coverage, congressional office budgets are being squeezed once again, and it’s causing a lot of concern amongst chiefs of staff regarding how to best handle the situation,” said one chief of staff to a senior Democratic member of the House. “Do we give raises to junior level aides so they can afford to pay for their higher health care costs, and if so, where do we find the funds to do so? Additionally, leadership has been relatively silent in terms of providing guidance to offices, which is frustrating.”
There are other ways that aides can fully avoid this problem. If they’re married, they can join their spouse’s health care plan. If they are 65, they can go on Medicare.
But the focus right now is centered on lawmakers trying to figure out how to offset potential increases in premiums.
“I know other members are doing the same thing in terms of what we can do to offset [premiums],” Rep. Tom Cole (R-Okla.) said. “You are particularly limited now because of course we’ve had the cuts in the [member office allowances] on top of this. You just don’t have a lot of options.”
Cole added, “A lot of the staff stays on largely because of the benefit levels and particularly if you’ve got people with families and it’s extraordinarily important to them… it’s just not right.”
Democrats continue to try to dismiss the evidence that Obamacare will dramatically increase the cost of insurance for people who buy it on their own. But on Thursday, the Ohio Department of Insurance announced that, based on the rates submitted by insurers to date, the average individual-market health insurance premium in 2014 will come in around $420, “representing an increase of 88 percent” relative to 2013. “We have warned of these increases,” said Lt. Gov. Mary Taylor in a statement. “Consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014.”
The rates that Ohio reported are proposed rates; the Department of Insurance still has to formally approve them. “A total of 14 companies proposed rates for 214 plans to the Department. Projected costs from the companies for providing coverage for the required [by Obamacare] essential health benefits ranged from $282.51 to $577.40 for individual health insurance plans.”
It’s called “rate shock,” but it’s not shocking to people who understand the economics of health insurance. In August 2011, Milliman, one of the nation’s leading actuarial firms, predicted that Obamacare would increase individual-market premiums in Ohio by 55 to 85 percent. This past March, the Society of Actuaries projected that the law would increase premiums in that market by 81 percent. Like good players on “The Price is Right,” they both came in just under the Dept. of Insurance’s figure.
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What are the drivers of the increase? According to Milliman, the two biggest drivers are (1) risk pool composition changes, such as forcing the young to subsidize the old, and the healthy to subsidize the sick; and (2) Obamacare’s required expansion of insurance benefits, particularly its mandated reductions in deductibles and co-pays.
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This is a significant concept to understand. Some people have the impression that the main reason that rates are going up under Obamacare is because of the law’s requirement that insurers cover people with pre-existing conditions. But that accounts for only a fraction – around a quarter – of the rate hike. The rest comes from all the other things that Obamacare does, such as forcing people to buy richer insurance benefits; to buy products with all sorts of add-ons they might not need; to pay Obamacare’s premium tax; and to pay a lot more, if they’re young, to subsidize older individuals.
There is an important difference between these analyses and the one I conducted for California last week. Ohio has reported average premiums across the individual market, for everyone; for California, I looked at the lowest-priced individual-market plans for 25- and 40-year-old men, both pre- and post-Obamacare. We’ll need to go through Ohio’s individual rate filings, especially after they’ve been approved by the state, to get a more detailed sense of what is going on.
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But the bottom line is this: President Obama and then-House Speaker Nancy Pelosi promised that premiums would go down for those who already have insurance. And yes, for those lower-income folks who benefit from the subsidies provided by other taxpayers, the costs they see may go down. But middle-class Ohioans will pay more in taxes to pay for those subsidies, and more in premiums. It will be interesting to see how those Ohioans feel about that.
UPDATE 1: Dave Dysinger, who runs a growing manufacturing business in Dayton, is worried about being subjected to the employer mandate as premiums in Ohio rise, according to the Dayton Daily News:
Dave Dysinger of the Dayton-based precision machine business, Dysinger Inc., said business is booming, putting pressure on the firm with just under 50 employees to expand its workforce.
But if the company crosses the 50-worker threshold, it would be forced to comply with the provisions of the health care law or pay a fine.
The cost of insurance could skyrocket if Dysinger brings on a fresh new crop of younger workers, but the law would limit how much of that cost he could pass onto his employees in the form of deductibles, co-payments, and coinsurance.
“I am very concerned about what’s going to happen with the cost of health care,” Dysinger said. “But I’m going to save my whining until I actually see what’s going to happen.”
UPDATE 2: For those who are curious about the details of the Society of Actuaries’ estimate about pre-ACA insurance costs (which were cited by the Ohio Department of Insurance), the SOA calculated that “average costs in the non-group market” pre-ACA were $223 per month. The SOA estimates that post-ACA, non-group coverage will cost $403 per month, an increase of 81 percent.
According to SOA, that $223 figure reflects a risk pool in which 21.4 percent had a chronic condition. 1.7 percent of non-group individuals who were “high risk” were outside of that pool. If you incorporate them, the average cost goes up to $254; this leads to a premium increase of 59 percent by the SOA estimates. In other words, 22 percent of the absolute increase is due to guaranteed issue, and 59 percent is due to other factors.
There is one issue to nail down with the Ohio Dept. of Insurance’s figures. The Society of Actuaries data appears to describe medical costs; the Dept. of Insurance figures appear to describe rates. Rates include administrative costs, medical costs do not. If we assume an administrative cost ratio of 20 percent, the SOA baseline is closer to $279, which means that the rate shock is around 51 percent, not 88 percent.
INVESTORS’ NOTE: Publicly-traded insurers who participate in public and private health insurance exchanges include Aetna AET +1.64% (AET), UnitedHealth (UNH), Humana HUM +0.34% (HUM), WellPoint WLP -0.97% (WLP), and Cigna CI +1.52% (CI).
For the first time, researchers have reprogrammed the immune systems of MS patients to stop cells attacking the protective layer around nerves in the spinal cord.
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The destruction of the insulating sheath – called myelin – prevents normal transmission of nerve signals, triggering symptoms of the disease such as limb paralysis.
The clinical trial showed that patients’ immune systems learned to recognise myelin as harmless. Further studies are expected to start shortly to confirm whether that in turn prevents relapses of the disease.
Northwestern University in Chicago, which took part in the research, hailed the study as a “big breakthrough”.
Researchers, working with scientists in Switzerland and Germany, took billions of white blood cells from nine patients and processed them to carry tiny fragments of myelin.
The cells were then re-injected, training the immune system to tolerate myelin.
Lead researcher Professor Stephen Miller said results showed the treatment stopped the body turning against itself – without the side effects of some other treatments that suppress the entire immune system, leaving patients vulnerable to infections and cancer.
“Our approach leaves the function of the normal immune system intact. That’s the holy grail,” he said.
Results published in the journal Science show that reactivity to myelin fell by between 50% and 75%.
Swiss authorities have already approved the next stage of clinical trials to confirm whether the treatment prevents progression of the disease. Experiments on mice show that it does.
“In the phase two trial we want to treat patients as early as possible in the disease before they have paralysis due to myelin damage,” said Prof Miller.
“Once the myelin is destroyed, it’s hard to repair.”
Dr Susan Kohlhass, head of biomedical research at the MS Society, said treatments that prevent progression of the disease are “urgently needed”.
“Being able to specifically stop the immune system attacking myelin but still keeping it fully functional poses an exciting potential therapy for people with MS,” she said.
“More research is now needed and we eagerly await the results of any future larger clinical trials of this therapy.”
Physicians currently have about 18,000 medical diagnostic codes to choose from to help them inform insurers of their patients’ ailments. However, as [Sen. Rand] Paul (himself a physician) notes, Obamacare includes a mandate for 140,000 of those codes — and some of them sound downright ridiculous.
“Included among these codes,” the senator continued, “will be 312 new codes for injuries from animals; 72 new codes for injuries just from birds; 9 new codes for ‘injuries from the macaw.”‘
“The macaw?” he asked. “I’ve asked physicians all over the country, ‘Have you ever seen an injury from a macaw?”‘
What about turtle bites? You’re in luck, Obamacare’s got you covered. And if that turtle merely sideswiped your leg? Rest assured your pain and suffering will be alleviated.
He continued, adding that he had found “two new injury codes under Obamacare for ‘injuries sustained from a turtle.”‘
“Now, you might say, ‘Well, turtles are dangerous’ — but why do you have to have two codes?” he asked. “Your doctor has to inform the government whether you’ve been struck by a turtle or bitten by a turtle.”
And just because Barack Obama deeply cares about you, should that turtle bite you while your water skis are on fire, you’re completely covered!
He added: “There is a new code for … walking into a lamppost. There’s also a code for ‘walking into a lamppost, subsequent encounter.’”
“I guess that’s if you don’t learn,” he added. “[T]here is [also] a code … for ‘injuries sustained from burning water skis.”‘
Ah, so that’s how your water skis caught fire; you walked into a lamppost! Twice!
Who dreams up this stuff?
What about if your head explodes while trying to figure out the code for being attacked by a midget wearing a sundress and a hockey mask? Is there a code for that?
The Holy Cow is slain. The shibboleth has crumbled. Our once unimpeachable NHS, which no one dared give anything but gushing praise to, now seems constantly in the news for appalling failings in the most basic standards of human decency. So how do our politicians respond?
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The latest reports that hospitals become fatally unsafe at weekends, when top doctors go AWOL, follows admissions that many A&E units are treacherously overloaded. The head of the NHS, Sir David Nicholson, has resigned. We have seen the patient deaths scandal unfold at Stafford Hospital, while 14 other hospitals are now under investigation for suspicious death rates. Many others are crippled by poor care standards and rising debt. It looks like an outright crisis.
The truth is, though, that these problems have been going on for years. The difference now – and the Government deserves credit for this – is that this dirty linen is starting to be washed very publicly. We can expect lots more to come too, including patient feedback scores being published this summer about the state of every hospital in the country.
Cases of seriously bad care are thankfully not widespread, but increased public scrutiny means politicians must at last grasp the problems underlying those that do exist. These lie not with the doctors and nurses on the wards, who are both overworked and undervalued. It’s a disgrace, for example, that state-set pay scales force a front-line nurse to earn less than a junior hospital HR assistant. Meanwhile, the top brass pick their own hours so they can fit in moonlighting for private hospitals that didn’t pay a penny towards their years of training.
No, the blame lies squarely with the bureaucrats and politicians that have run the health service, for years hiding areas where care is not just below par, but downright dangerous. Their worst failing has been total slavery to the idea that the NHS is somehow different from other services, so must be owned, controlled and run by them. This is despite the progressive marketisation, since the 1980s, of how health care actually works in practice and in spite of the fact that healthy competition between hospitals is proven to save lives.
Only in one case, early last year, has any Government in this country allowed a provider from outside the state to operate an NHS hospital. It’s a company run by doctors who took over Hinchingbrooke Hospital in Cambridgeshire, which was under threat of closure due to poor care and financial deficits. Within a year, care has been completely turned around, the finances look better and the local community is keeping its hospital. There are many other places in need of exactly this help, but the system simply doesn’t open up to the organisations that could offer it.
Recently-passed legislation theoretically allows new providers to come into the NHS in future, but so much still depends on the political will to push the policy through. The Government’s main response to failings like Stafford has been to appoint new inspectors and inspection regimes. All fine, but where is the will to drive through the disruptive innovation that will really turn things around? New entrants have improved every other service market in existence for all of history – and the NHS is no different.
The Government has said nothing about this recently, however. In addition, the Labour Party, who under Tony Blair had a successful record in public service reform, now say they’d turn back the clock by reintroducing a state-run monopoly. If anything, the public debate around how to improve the NHS is going backwards, not forwards. And all we get from the NHS leaders is outdated bleating about giving them more money.
The brightest future for our NHS is a system where patients can freely choose any provider they like and avoid ones they don’t. A genuinely open market of this kind will powerfully raise standards, but will take years to emerge – time we don’t have in regard to the many hospitals, like Stafford, which we know face real issues right now. So let’s just take our worst performing institutions and have a genuinely open, transparent competition for innovative, compassionate providers to come in and turn them around. It’s not rocket science.
If politicians want to keep opening the NHS to greater transparency – which is wholly right – they cannot sit on their hands when systemic problems are revealed to the public. The more the mask on poor care falls, the more people will get angry about what they see. Will that at last give our politicians the kick to bring in the change we need?
In 2010 the Obama Department of Health and Human Services predicted in their Actuarial Report that 55.1 million Americans would be enrolled in Medicaid in 2013.
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Here’s how that prediction worked out…
A record 72,600,000 were enrolled in Medicaid for at least one month in fiscal 2012. This is more people than the population of France or the United Kingdom.
That means HHS was off by 17.5 million.
Only in government can you be so off in your predictions and still keep your jobs.
More… HHS did not do much better in their 2011 report.
You can’t make this stuff up. Israel has set up a field hospital for wounded Syrians on the Golan Heights, it provides regular, critical medical care to the ‘Palestinians’ regardless of their ability to pay, and it provides medical care that is otherwise unavailable to them to persons throughout the Arab world. And the response? The World Health Organization has condemned Israel for the medical care it provides to Syrians and ‘Palestinians
As thousands of people in large swathes of the planet, including war-torn Syria, are dying daily for lack of adequate medical care, the one geographic area whose “health conditions” are slated for condemnation at the World Health Organization’s annual conference is, naturally, “the occupied Palestinian territory, including east Jerusalem, and in the occupied Syrian Golan.”
What makes this surreal isn’t just that the above areas enjoy far better “health conditions” than much of the rest of the world. It’s that the Palestinian Authority (Israel’s “peace partner”), together with Syria and other Arab countries, is seeking to condemn Israel at a time when it is actively providing medical services to both Palestinians and Syrians.
The denunciation of health conditions on the Golan is particularly surreal: Syrians in Syria, where medical care of any kind is often simply unavailable, would be thrilled to get the same state-of-the-art care as their brethren on the Golan – where, as in East Jerusalem, Israeli law applies, entitling residents to the same services as all other Israelis.
But thanks to Israel, some of those Syrians actually are getting such care – which is doubtless Syrian President Bashar Assad’s real gripe. Israel has quietly set up a field hospital on the Golan where dozens of Syrians wounded in the civil war have been treated; others, who need more intensive care, have been transferred to regular Israeli hospitals.
Israel has also offered treatment to some Syrian refugees. Just this month, via Israel’s Save a Child’s Heart program, Israeli doctors saved the life of a four-year-old Syrian refugee with a serious heart condition. Similar treatment was offered to three other Syrian children in Jordan who have similar conditions, but their parents refused: Apparently, they fell victim to their own anti-Israel propaganda. Still, the doctors are hoping they will change their minds once the first girl returns to Jordan healthy and happy.
In the PA and Hamas-run Gaza… they have an advantage most other countries with similar health-care systems don’t: generous access to Israeli hospitals for any problems their own can’t treat. And you needn’t take my word for it: Just this month, after PA Health Minister Hani Abdeen visited Jerusalem’s Hadassah Ein Karem Hospital, the official PA daily Al-Hayat Al-Jadidaeportedr that “30% of the patients who are children are Palestinians.” It also reported that Hadassah is now training some 60 Palestinian doctors, who will then return to serve the PA’s own population.
First the Supreme Court rewrote President Barack Obama’s signature health reform law to save it from the Constitution. Now the Internal Revenue Service claims its new rule can interpret the law in a way that violates its text and history.
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The latest outrage against common sense is an IRS rule finalized on May 23. The rule makes tax credits available to participants in federally run health insurance exchanges created under the Patient Protection and Affordable Care Act (aka ObamaCare). But while Section 1311 of ObamaCare allows tax credits to certain people in state-run exchanges, Section 1321 – the section regulating federally run exchanges – does not.
Nevertheless, the new IRS rule specifies that tax credits will be available through exchanges “established under section 1311 or 1321” of ObamaCare.
By rewriting ObamaCare without statutory authorization, the IRS is engaging in an illegal power grab that will cost taxpayers billions.
As regulation experts Jonathan Adler and Michael Cannon explained in testimony before Congress, one of the central arguments used to promote ObamaCare was that passing it would not add a penny to the federal deficit.
The ability to make that argument was based on shifting the cost of creating and running the health insurance exchanges onto states.
Here is where liberals in Congress got cute.
Instead of simply forcing states to create exchanges – which would have heightened opposition inside and outside Washington – they coupled the mandate with an enticement. Voluntary compliance would trigger “premium-assistance tax credits” available to people in state-run exchanges. The tax credits would act as a subsidy paid by the Treasury Department on behalf of an eligible participant purchasing health insurance from a private provider in the exchange.
When ObamaCare was working its way through Congress, Senate Finance Committee Chairman Max Baucus (D-MT), a lead sponsor of the law, confirmed the tax credit enticement strategy. When questioned about the difference between the benefits to people in state versus federally run exchanges, he said, “And [for] states – an exchange is, essentially is tax credits.”
However, if states refuse to create an exchange, ObamaCare empowers the Secretary of Health and Human Services to do so.
But those pushing ObamaCare toward passage didn’t count on almost thirty states eventually refusing to create exchanges. With the federal government stepping in to create and run sixty percent of the nation’s newly mandated exchanges, gone is the accounting gimmick of cost-shifting the spending increase onto the states.
The hit to taxpayers will be bad enough, but the new IRS rule makes the spending problem even worse. By injecting tax credits into federally run exchanges, the IRS is requiring the Treasury Department to subsidize health insurance purchases in thirty jurisdictions that ObamaCare, by its terms, does not cover.
In analyzing the new IRS rule, the Congressional Budget Office estimates that if no states create exchanges, the cost of the new rule will total $1 trillion in new spending over the next ten years. With sixty percent of the states opting not to participate, federal taxpayers are looking at hundreds of billions of dollars added to the deficit.
And all this without one shred of authority from ObamaCare’s text or legislative history.
The quickest way to rein-in the IRS is for Congress to exercise its authority under the Congressional Review Act. It allows Congress to kill a bureaucratic rule from going into effect by passing a joint resolution of disapproval. SJR 48 by Senator Ron Johnson (R-WI) would do just that. Recently, the bill received the support of forty-six conservative and free market organizations (including CFIF) opposed to the IRS’s illegal power grab.
The Supreme Court failed to take the text and intent of ObamaCare seriously, and now the IRS is following its lead. Unless Congress reasserts control over the lawmaking function, it may soon find itself as the least important branch of government.
The Internal Revenue Service scandal would be bad enough if the IRS just handled issues like collecting income taxes and granting nonprofit status. But the immensely powerful federal agency is about to become even more powerful with the arrival of national health care, and that makes the still-unfolding scandal even more troubling.
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“When I hold town meetings, a great deal of distrust comes through about the size and increasing power of government,” says Republican Sen. Charles Grassley of Iowa. “The IRS targeting crystallizes that distrust in a very big way because of the IRS’ reach into taxpayer information. What’s happened heightens fears about how the IRS will handle taxpayer information and wield its power when it enforces Obamacare starting next year.”
The IRS is critical to Obamacare. The structure created by the Affordable Care Act requires the government to know about both the health care coverage (or lack of it) and the financial resources of every American. The IRS, which already knows the latter, was the only agency with the reach to do the job.
A look at the text of the health care law reveals that much of it consists of amending the Internal Revenue Code to give the IRS more power. When Obamacare goes fully into effect in January, every American will have to prove to the IRS that he or she has “qualifying” health coverage, meaning coverage with a list of features approved by Health and Human Services Secretary Kathleen Sebelius. That will be done by submitting a document to the IRS, something like a W-2, to confirm coverage.
The IRS will also decide who is, and who is not, eligible for Obamacare’s subsidies. The law authorizes the IRS to share confidential taxpayer information with the Department of Health and Human Services for the purpose of determining those subsidies. And since subsidies don’t just apply to a relatively small number of the nation’s poorest citizens – under the law, they can go to a family of four with a household income of nearly $90,000 – they will affect a huge segment of the population.
In addition, the IRS will keep track of even the smallest changes in Americans’ financial condition. Did you get a raise recently? You’ll need to notify the IRS; it might affect your subsidy status. Have your hours been reduced at work? Notify the IRS. Change jobs? Same.
Last August, IRS official Nina Olson testified before Congress on the changes Obamacare will bring to Americans’ dealings with the nation’s tax collector. “Do you believe that most Americans are going to update the IRS or state exchanges when they change jobs, get married, move states, whatever?” Michigan Republican Rep. Tim Walberg asked Olson.
“I think it’s going to be a very great learning curve,” Olson answered. If Americans don’t keep the IRS up to date on their financial status, they might incur penalties, which the IRS will collect by withholding income tax refunds. “I think it will be a surprise to taxpayers if they don’t update their information,” Olson said.
And now the IRS has been exposed abusing its authority for apparently partisan purposes. At the height of the Tea Party movement, IRS officials applied special scrutiny to organizations with “Tea Party” or words like “patriot” in their names when those groups applied for tax-exempt status.
At his brief news conference Monday, President Obama sought to assure Americans that he will correct the situation. “If, in fact, IRS personnel engaged in the kind of practices that had been reported on and were intentionally targeting conservative groups, then that’s outrageous and there’s no place for it,” Obama said before heading to New York City for a series of fundraisers.
In the next few weeks, the details of the IRS’ apparent misconduct will be spelled out in a series of hastily arranged congressional hearings. Most of the discussion will focus on political nonprofits and the selective treatment they received from the IRS. For millions of Americans, the hearings will do what Charles Grassley noticed at those town meetings in Iowa: reduce their faith that the federal government will treat them fairly.
And that will mean even more anxieties about the coming of Obamacare. “Now every American understands there are elements of the IRS that go off on their own,” former House Speaker Newt Gingrich told MSNBC Monday morning. “Why would you trust the bureaucracy with your health if you can’t trust the bureaucracy with your politics?”
The Internal Revenue Service is now facing a class action lawsuit over allegations that it improperly accessed and stole the health records of some 10 million Americans, including medical records of all California state judges.
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According to a report by Courthousenews.com, an unnamed HIPAA-covered entity in California is suing the IRS, alleging that some 60 million medical records from 10 million patients were stolen by 15 IRS agents. The personal health information seized on March 11, 2011, included psychological counseling, gynecological counseling, sexual/drug treatment and other medical treatment data.
“This is an action involving the corruption and abuse of power by several Internal Revenue Service agents,” the complaint reads. “No search warrant authorized the seizure of these records; no subpoena authorized the seizure of these records; none of the 10,000,000 Americans were under any kind of known criminal or civil investigation and their medical records had no relevance whatsoever to the IRS search. IT personnel at the scene, a HIPPA facility warning on the building and the IT portion of the searched premises, and the company executives each warned the IRS agents of these privileged records,” it continued.
According to the case, the IRS agents had a search warrant for financial data pertaining to a former employee of the John Doe company, however, “it did not authorize any seizure of any healthcare or medical record of any persons, least of all third parties completely unrelated to the matter,” the complaint read.
The class action lawsuit against the IRS seeks $25,000 in compensatory damages “per violation per individual” in addition to punitive damages for constitutional violations. Thus, compensatory damages could start at a minimum of $250 billion.
The Internal Revenue Service already has confessed to targeting and trying to injure tea party, Constitution and patriot organizations, by demanding answers to arbitrary questions and delaying their applications for a tax status so they could operate.
Now WND has learned that the IRS also put an organization in its bull’s-eye that wanted to do nothing more than share its pro-life message with churches.
Cherish Life Ministries was created to be a non-profit under the IRS 501(c)3 provision so that churches would feel comfortable working together…
…Shinn said the IRS contacted him regarding his application for nonprofit status, and was told he didn’t qualify.
“The representative was telling me I had to provide information on all aspects of abortion, I couldn’t just educate the church from the pro-life perspective,” he said. “Every time I pressed her on this issue and asked her to clarify her position, she would state that it wasn’t what she was saying, and then, she would repeat it almost the same way.”
The IRS agent did not respond to a WND request for comment on the ministry’s position.
But Shinn said he was accused of setting up a political organization.
“I asked her why she said we were political organization and she said it was because we had said in our application that we did less than 5 percent political activity. I explained to her that this was what was stated in the application and all we were doing was acknowledging that we were doing less than 5 percent political activity,” he said.
When a Tennessee lawyer asked the IRS for tax-exempt status for a mentoring group that trained high school and college students about conservative political philosophy, the agency responded with a list of 95 questions in 31 parts, including an ultimatum for a list of everyone the group had trained, or planned to train.
‘Provide details regarding all training you have provided or will provide,’ the IRS demanded. ‘Indicate who has received or will receive the training and submit copies of the training material.’
‘Can you imagine my responsibility to parents if I disclosed the names of their children to the IRS?’ he asked MailOnline.
It’s ‘an impossible question to answer fully and truthfully,’ he said, ‘without disclosing the names of anyone I ever taught, or would ever teach, including students.’
Like the leaders of many tea party-affiliated groups whose tax-exemption applications have become the subject of angry complaints, Kookogey called the IRS’s inquisition an overreach, ‘especially considering that my organization mentors high school and college students.’
It ‘should send chills through your spine,’ he told MailOnline, ‘that the government would ask me to identify those I teach, and to provide details of what I teach them.’
The 13-month delay, while burdensome, was far shorter than those some other groups endured. According to a report released late Tuesday by the IRS’s Office of Inspector General, the average delay at one point was 574 days.
But Kookogey said a $30,000 grant was canceled as a result of the IRS’s months-long radio silence, when he couldn’t tell his donor that Linchpins had earned its 501(c)(3) tax-exempt status.
That money would have made a significant difference to the group, judging from its public filings in Tennessee. In 2011, Linchpins of Liberty reported collecting just $3,460 in contributions, and spending $7,328 on its programs.
The group’s online materials refer to it as ‘an American leadership development enterprise.’ Its stated purpose is to mentor high school and college students, placing an emphasis on Western civilization and an old-style core curriculum – what previous generations called the ‘great books.’
‘Our ideas are opposed to the Obama administration, but we’re not tea party,’ Kookogey told The Tennessean.
It’s that lack of a tea party connection, he said, that makes his predicament so maddening.
He told MailOnline that nothing about his group – ‘not our name or our description or our website, or anything’ – should have placed it among the organizations the IRS chose to scrutinize closely by using key words like ‘tea party,’ ’9/12,’ and ‘patriots’ as qualifiers.
‘I’m not a Tea Party group. I’m not a Patriot group by name’ he told NewsChannel 5 in Nashville.
‘We mentor high school and college students in conservative political philosophy. It’s a one on one relationship.’
Kookogey summed it up in an interview with MailOnline as ‘unethical, unconstitutional, and unfair,’ later asserting in an email that ‘[w]e were targeted by the IRS based on our political beliefs and the content of our speech.’
The American Center for Law and Justice, which represents 27 conservative groups including Linchpins of Liberty, is planning to file suit against the IRS.
Jay Sekulow, that organization’s chief counsel, wrote on Tuesday that ‘the IRS abuse is ongoing.’
‘Even though the IRS admitted wrongdoing,’ Sekulow wrote in an essay for FoxNews.com, even though the Inspector General’s report indicates that wrongdoing was widespread, the IRS still hasn’t withdrawn its overbroad and unconstitutional questions, and it still hasn’t granted the exemptions it should grant, despite the fact that some applications have been pending for more than two years.’
The Inspector General’s report includes a list of ‘the seven questions’ the IRS asked right-wing groups that were later ‘identified as being unnecessary.’
Its request for the list of students trained by Linchpins of Liberty was not among them.
The report also largely exonerates political appointees in the Treasury Department and at the top of the IRS, instead blaming mid-level bureaucrats for providing ‘ineffective management’ and using ‘inappropriate criteria’ to red-flag conservative groups.
It makes no mention of anyone in the White House directing the IRS to play political favorites. But The Washington Post has reported that ‘senior IRS officials’ in Washington, D.C. were notified of the practice in 2011.
In December of that year, Kookogey says, he called the IRS’s nonprofit evaluation arm in Cincinnati, Ohio, to find out why his group’s application had taken so long.
The agent on the other end of the line, he said, told him, ‘We are waiting on guidance from our superiors as to your organization and similar organizations.’
Attorney General Eric Holder has said that he ordered the FBI to initiate a criminal probe on Friday, when he learned about the IRS’s practices.
The IRS’s actions, he said, were, ‘certainly outrageous and unacceptable, but we are examining the facts to see if there were criminal violations.’
Holder is expected to testify in a House Judiciary Committee hearing on Wednesday in Washington. On Friday the House Ways and Means Committee will hear testimony from acting IRS Commissioner Steven Miller and Treasury Inspector General J. Russell George.
Florida Republican Senator Marco Rubio has called for Miller to lose his job.
‘At a bare minimum, those involved with this deeply offensive use of government power have committed a violation of the public trust that has already had a profoundly chilling effect on free speech,’ Rubio wrote Monday in a letter to Treasury Secretary Jack Lew. ‘Such behavior cannot be excused with a simple apology.’
‘It is clear the IRS cannot operate with even a shred of the American people’s confidence under the current leadership,’ Rubio continued. ‘Therefore, I strongly urge that you and President Obama demand the IRS Commissioner’s resignation, effective immediately.’
On Friday, Sekulow demanded that the IRS immediately approve the tax-exempt status applications of his organization’s 10 legal clients, including Linchpins of Liberty, that are still waiting. He issued the agency an ultimatum: Grant the requests by noon on May 17, or prepare to fight in court.
‘We are demanding that the IRS grant our remaining clients tax-exempt status immediately,’ Sekulow said in a statement. ‘If that does not occur by Friday, we will advise our clients of their right to sue the IRS for the redress of their grievances.’
Lois Lerner, the senior executive in charge of the IRS tax exemption department and the person at the center of the exploding scandal over the IRS targeting conservative, evangelical and pro-Israel non-profits, has been given $42,531 in bonuses since 2009.
That figure was included in data provided by the IRS in response to a Freedom of Information Act request by The Washington Examiner. Lerner is director of the IRS exempt organizations division, which processes and approves or denies applications from groups seeking tax-exempt status.
Lerner received $17,220 for 2009, $24,691 for 2010 and $10,620 for 2011, the most recent year for which the I(RS said data was available.
The Treasury Inspector General’s damaging report on the IRS-Tea Party scandal has destroyed the administration’s claim that low-level workers in a Cincinnati, Ohio office are to blame, revealing that 10 of 12 agency offices referenced in the affair are in Washington.
The report repeatedly references actions taken by the Washington-based Exempt Organizations unit and guidance specialists also in Washington. What’s more, the report was researched in the Exempt Organizations offices and the Cincinnati-based Determinations Units, which has received the blame for targeting Tea Party groups.
The audit, for example, probes into how the Cincinnati-based Determinations Unit developed its plan to pay attention to groups with the words “Tea Party,” “Patriot,” and other phrases used by anti-Obama groups during the 2010 election.
Washington-based offices denied involvement, but did change the “criteria” for groups to target in July 2011. Instead of looking for “Tea Party” groups seeking tax exempt status to investigate, the criteria was broadened to “political, lobbying or [general] advocacy.”
However, “the team of specialists subsequently changed the criteria in January 2012″ back, apparently without telling their bosses. “Specialists” are both Washington- and Ohio- based.
Popular talk radio host Mark Levin, one of the first to post the IG report online, suggested that the House committees investigating the scandal use the IG’s “High-Level Organization Chart of Offices Referenced in this Report” on page 29 in picking who should testify. He suggested that the heads of all 12 be called to testify.
In the midst of the Internal Revenue Service (IRS) scandal, individuals and groups, alike, are continuing to come forward with ever-startling allegations. On Wednesday, Dr. Anne Hendershott, a devout Catholic and a noted sociologist, professor and author, exclusively told TheBlaze that she believes she may have been one of the IRS’s targets.
According to Hendershott, the IRS audited her in 2010 and demanded to know who was paying her and “what their politics were.”
It all started with a phone call she received at her home in May of that year – a call during which Hendershott was told she would be audited. A letter that followed on May 19, 2010 solidified the IRS’s request to meet her in person two months later in July. While IRS investigations are certainly not uncommon occurrences, the professor believes that the situation surrounding hers was more-than-curious.
“The IRS calls my house and says… ‘I just wanted to let you know that we’re going to be auditing your business’ and I said ‘My businesses?’ and he said, ‘You know the expenses you take off for writing,” the academic recalls.
Hendershott was surprised she was being audited on business grounds considering she does not operate an entrepreneurial endeavor in the traditional sense. In addition to her academic work, she told TheBlaze that she occasionally freelances for Catholic outlets and for the Wall Street Journal. But can this really be considered “business” activity?
“I don’t make a lot of money from writing. In fact most years I don’t show a profit,” she told TheBlaze.
Hendershott said some of the outlets and organizations she has written for haven’t paid her a cent.
But the circumstances surrounding the irregular nature of the experience don’t end there. Hendershott noted it was particularly surprising that she, alone, was audited. Her husband, who brings in the vast majority of the family’s income, was not included in the IRS’s inquiry – even though the Hendershotts always files jointly.
So when the agent explained that she would need to come alone and in person to discuss her “business” activity in July of 2010, the professor was perplexed.
“[The IRS agent] didn’t even let me decide when it would be good for me… He didn’t want my husband to come,” she said of the meeting, which was held at an IRS office in New Haven, Connecticut.
The process was a grueling one, including many questions that Hendershott felt were political in nature. Numerous records were requested before the in-person meeting, as well as during and after.
“Every question had to do with bank deposits we made. Every single question,” she said. “What is this money? And I didn’t know a lot of it. We had to go to our bank and get deposits back. We had to get records showing where the money came from.”
While asking about the deposits, the agent wanted to know if the monies came from groups and, if so, what the organizations’ politics were.
The mention of groups, Hendershott notes, is particularly interesting, as she had been writing for numerous Catholic outlets and organizations at the time. In addition to Catholic World Report and the Catholic Advocate, she also penned op-eds for the Wall Street Journal. Many of these writings were critical of President Barack Obama and his policies.
And the plot thickens. Among the organizations she targeted in her writings were progressive groups highly supportive of Democratic causes, including: Catholics in Alliance for the Common Good, Catholics United, and Catholic Democrats.
At the time, one of the founders of Catholics United, Chris Korzen, had become a target of her work, as she exposed, in her view, his true leftist agenda and some of the complicated theological stances the left-of-center organizations he associated with were taking. Plus, there were alleged financial ties with billionaire liberal George Soros. Here’s just two paragraphs from an article she wrote in March 2010, just months before her meeting with IRS officials:
On its website, Catholics United describes itself as a 501(c) (4) non-profit organization – eligible to accept donations. But, Catholics in Alliance for the Common Good emerged in 2005 as a kind of sister organization to Catholics United. A 501(c) (3) organization, donors can claim a deduction against personal income tax when they donate money to Catholics in Alliance. Reviewing the 2007 IRS 990 forms for both Catholics in Alliance for the Common Good and Catholics United raises some questions, because Chris Korzen is listed as having received $84,821 in compensation for 40 hours per week from Catholics in Alliance on the group’s 990 Form – even though the Catholics United website claimed he was the director there during the same time period. [...]
Despite their inability to engage in extensive lobbying, Catholics in Alliance has been extremely successful in attracting large donors. Never a friend to the Catholic Church, George Soros, one of the earliest donors, contributed $50,000 to Catholics in Alliance in 2005 and another $100,000 in 2006 through his Open Society Institute. Likewise, Smith Bagley, a major Democratic donor and fundraiser, whose wife, Elizabeth Frawley Bagley, is Chairman of the Board of Catholics in Alliance, came close to matching Soros with grants from his family’s Arca Foundation. With a long history of supporting progressive organizations like ACORN, the Gamaliel Foundation, People for the American Way, and Planned Parenthood, Arca contributed $50,000 to Catholics in Alliance in 2007 and another $75,000 in 2008.
Hendershott can’t help but wonder if her writings against progressive groups played a role in her audit. It’s obvious that before she was notified by the IRS she was commenting regularly about matters of faith and politics and, in particular, Obamacare. While she doesn’t have proof that the IRS investigation was political in nature, she has strong suspicions that it was.
“I started writing articles like crazy saying these are fake Catholic groups,” she said of the aforementioned organizations, noting that Korzen would often target her work and rail against her assertions.
Hendershott noted that the progressive leader once called into a radio show she appeared on to challenge her contention that he had accepted Soros money.
“I had the tax return in front of me and read off the amounts that Chris Korzen was getting paid from Catholics in Alliance for the Common Good – a Soros supported fake Catholic group,” she told TheBlaze, noting that, through Catholics in Alliance, he had received $85,000.
While Korzen denied this on the air, Hendershott read from the 990 form in an effort to prove he wasn’t telling the truth. This, she believes, may have sparked – or played a role – in spawning the IRS audit.
“He was getting paid by one organization and working for another,” the professor said of Korzen. ”The IRS should have gone after them.”
Her writings for the Catholic Advocate soon ceased because, Hendershott admits, the IRS audit silenced her. If her suspicions are true, this may have been its chilling intention.
“I haven’t written for them since the audit, because I was so scared,” she said (records show her last article for the organization was on July 10, 2010 – the same month the IRS audit unfolded).
So far, she has only shared her story with friends and those close to her, but in light of the recent IRS scandal, she has decided to speak out.
“It was clear they didn’t like me criticizing the people who helped pass Obamacare,” she said of the audit,” later adding, ”The IRS is very frightening.”
In addition to creating stress and fear, Hendershott said that the experience came at a great emotional and financial expense for the family, noting that even after the audit the government sought more information from her.
“It was like they just couldn’t find what they wanted because they wanted more and more and more,” she said.
In March of 2012 Democratic Senators sent a letter to the Internal Revenue Service demanding that Tea Party groups get extra scrutiny (harassment). The Democrats even threatened legislative action if the IRS did not act.
A group of seven Senate Democrats urged the Internal Revenue Service on Monday to impose a strict cap on the amount of political spending by tax-exempt, nonprofit groups.
The senators said the lack of clarity in the IRS rules has allowed political groups to improperly claim 501(c)4 status and may even be allowing donors to these groups to wrongly claim tax deductions for their contributions. The senators promised legislation if the IRS failed to act to fix these problems.
“We urge the IRS to take these steps immediately to prevent abuse of the tax code by political groups focused on federal election activities. But if the IRS is unable to issue administrative guidance in this area then we plan to introduce legislation to accomplish these important changes,” the senators wrote.
The letter was signed by Senators Charles E. Schumer, Michael Bennet, Sheldon Whitehouse, Jeff Merkley, Tom Udall, Jeanne Shaheen and Al Franken. It follows an earlier letter, sent to the IRS by the same of group of senators last month, that also urged the IRS to better enforce rules pertaining to 501(c)4 organizations.
A copy of the letter is here.
This week Senate Finance Committee Chairman Max Baucus of Montana vowed congressional hearings and called the IRS actions “an outrageous abuse of power.” But, over the last three years, Democratic senators repeatedly and publicly pressured the IRS to engage in the very activities that they are only now condemning today.
UPDATE: Inspector General: The IRS targeted EVERY group with Tea Party in its name.
Internal cost estimates from 17 of the nation’s largest insurance companies indicate that health insurance premiums will grow an average of 100 percent under Obamacare, and that some will soar more than 400 percent, crushing the administration’s goal of affordability.
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New regulations, policies, taxes, fees and mandates are the reason for the unexpected “rate shock,” according to the House Energy and Commerce Committee, which released a report Monday based on internal documents provided by the insurance companies. The 17 companies include Aetna, Blue Cross Blue Shield and Kaiser Foundation.
The report found that individuals will face “premium increases of nearly 100 percent on average, with potential highs eclipsing 400 percent. Meanwhile, small businesses can expect average premium increases in the small group market of up to 50 percent, with potential highs over 100 percent.”
One company said that new participants in the individual market could see a premium increase of 413 percent when new requirements on age rating and required benefits are taken into account, said the report. “The average yearly cost for a new customer in the individual market grows from $1,896 to $3,708 — a $1,812 cost increase,” it added.
The key reasons for the surge in premiums include providing wider services than people are now paying for and adding less healthy people to the rolls of insured, said the report.
It concluded: “Despite promises that the law will lower costs, [Obamacare] will in fact cause the premiums of many Americans to spike substantially. The broken promises are numerous, and the empirical data reveal that many Americans, from recent college graduates to older adults, will not be able to afford the law’s higher costs.”
As part of a Mothers’ Day weekend defense of his signature legislative accomplishment, President Obama claimed that the law represented the “largest health care tax cut for working families and small businesses in our history.“
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His argument was a Hail-Mary effort to redesignate subsidies for individuals to purchase health insurance on government-run exchanges as a “tax cut.” But according to the Congressional Budget Office, these subsidies actually qualify as more than $1 trillion in “Exchange Subsidies and Related SPENDING.” (Emphasis mine.)
Far from being a historic tax cut, Obamacare actually qualifies as one of the largest tax increases in history. It contains roughly $1 trillion in taxes – on insurance plans, medical devices and investment income. And many of the taxes will end up falling on the middle class. The law’s individual mandate, which the Obama administration successful argued was a tax before the U.S. Supreme Court, is projected to hit nearly 5 million Americans with incomes less than $60,000 by 2016.
The South Carolina House approved a bill Wednesday criminalizing the implementation of President Obama’s health care law in the state.
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The Republican-controlled House voted 65-39 on the Freedom of Health Care Protection Act.
The act renders “null and void certain unconstitutional laws enacted by the Congress of the United States taking control over the health insurance industry and mandating that individuals purchase health insurance under threat of penalty.”
“This kind of victory occurs when the grassroots across the State come together and coalesce,” Chris Lawton, spokesman for the Greenville Tea Party, told The Greenville Post. “I could not be prouder.”
The bill declares “Obamacare” unconstitutional – despite the Supreme Court ruling last year that the Affordable Health Care Act was constitutional – and that there will be criminal penalties for enforcing the law.
Gov. Nikki Haley earlier this year said that the state will not implement the nation’s health care law.
“Connecticut expanded early under ‘Obamacare’ and just reported a $190 million Medicaid deficit – in spite of subjecting their citizens to a massive tax increase,” Haley said during the State of the State address. “California just raised taxes in part to cover their Medicaid deficit and yet needs $350 million more to pay for ‘Obamacare’ next year. That’s not us. That’s not South Carolina.”
On Thursday, the Senate Finance Committee refused to expand Medicaid eligibility to more poor adults as part of the state budget.
A 13-10 vote defeated Democrats’ attempt to insert the expansion into the Senate’s budget proposal for 2013-14. The committee is crafting its spending plan this week.
The proposal came a day after Democrats grilled Medicaid director Tony Keck on his reasons for opposing an expansion under the federal health care overhaul. But senators didn’t debate each other Thursday.
Senate Minority Leader Nikki Setlzer said a protracted debate was unnecessary since senators knew their positions.
Haley, along with House Republican, also oppose extending the government health care programs to hundreds of thousands of additional poor adults.
The House budget plan includes money for Keck’s initiatives aimed at improving health.
At his press conference this week, President Obama tried to reassure Americans about ObamaCare. Instead, he displayed either an incredible lack of understanding about his own law, or something far worse.
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Asked about increasing Democratic concern over what Sen. Max Baucus called a looming ObamaCare “train wreck,” Obama claimed that it’s all much ado about very little.
But almost nothing he said in defense of ObamaCare was accurate. Among his statements:
“A huge chunk of it’s already been implemented.”
In fact, all that’s been implemented so far are a few PR-friendly changes like a mandate to cover children up to age 26 and a more generous Medicare drug benefit.
Democrats put off the bulk of the law – the massive market regulations, the government-run exchanges, mandates to buy coverage, and various taxes and fees – until 2014, both to hide its true costs and to avoid any unpleasantness before the 2012 elections.
“For the 85% to 90% of Americans who already have health insurance… they don’t have to worry about anything else.”
Really? The Congressional Budget Office expects 7 million workers – and possibly as many as 20 million – will lose their employer coverage because of ObamaCare. That’s plenty to worry about.
The Centers for Medicare and Medicaid Services said millions of seniors will get dumped from their private Medicare Advantage plans by 2017 thanks to sharp payment cuts required by the law.
And small businesses now providing coverage face huge rate hikes thanks to ObamaCare’s many market regulations and benefit mandates. Maryland’s biggest insurer, nonprofit CareFirst BlueCross BlueShield, said ObamaCare will force rates up by 15% next year.
“The other stuff’s been implemented and it’s working fine.”
That’s only true if you ignore the fact that ObamaCare’s high-risk pools have been a disaster, attracting a third as many people as predicted while costing far more than the administration budgeted.
Or the fact that Obama had to issue more than 1,200 waivers to companies who said the law’s initial insurance market rules would have forced them to cancel coverage for millions of workers.
The overly complicated small-business tax credit has also been a bust, with only about 5% of eligible firms taking advantage of it. And so on.
“We’re going to be able to drive down costs… and that will save the country money as a whole over the long term.”
Except, Obama’s own health care number crunchers say ObamaCare will force national health spending up 7.4% in 2014, and add billions in costs over the next decade. The Congressional Budget Office says it will add massively to federal health spending.
And the architects of Obama’s reform wrote in the New England Journal of Medicine about how, despite ObamaCare, “health costs remain a major challenge.”
It all leads one to wonder: Is Obama just dangerously misinformed about ObamaCare? Or is he willfully misleading the country?
Asked about Senator Max Baucus’s (D-Mont.) recent “train wreck” comments, President Obama today said, “A huge chunk of it [Obamacare] has already been implemented.” Unmentioned was the wave of destructive Obamacare tax increases that will begin to hit Americans during the next tax filing season and beyond:
Starting in tax year 2013:
Obamacare Surtax on Investment Income: A new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This tax hike results in the following top tax rates on investment income:
Capital Gains
Dividends
Other*
2013+
23.8%
43.4%
43.4%
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. (Bill: Reconciliation Act; Page: 87-93)
Obamacare Medical Device Tax: Medical device manufacturers employ 409,000 people in 12,000 plants across the country. Obamacare imposes a new 2.3 percent excise tax on gross sales – even if the company does not earn a profit in a given year. In addition to killing small business jobs and impacting research and development budgets, this will make everything from pacemakers to artificial hips more expensive. (Bill: PPACA; Page: 1,980-1,986)
Obamacare High Medical Bills Tax: Before Obamacare, Americans facing high medical expenses were allowed a deduction to the extent that those expenses exceeded 7.5 percent of adjusted gross income (AGI). Obamacare now imposes a threshold of 10 percent of AGI. Therefore, Obamacare not only makes it more difficult to claim this deduction, it widens the net of taxable income. According to the IRS, 10 million families took advantage of this tax deduction in 2009, the latest year of available data. Almost all are middle class. The average taxpayer claiming this deduction earned just over $53,000 annually. ATR estimates that the average income tax increase for the average family claiming this tax benefit will be $200 – $400 per year. To learn more about this tax, click here. (Bill: PPACA; Page: 1,994-1,995)
Obamacare Flexible Spending Account Tax: The 30 – 35 million Americans who use a pre-tax Flexible Spending Account (FSA) at work to pay for their family’s basic medical needs face a new Obamacare cap of $2,500. This will squeeze $13 billion of tax money from Americans over the next ten years. (Before Obamacare, the accounts were unlimited under federal law, though employers were allowed to set a cap.) Now, a parent looking to sock away extra money to pay for braces will find themselves quickly hitting this new cap, meaning they would have to pony up some or all of the cost with after-tax dollars.
Needless to say, this tax will especially impact middle class families.
There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. Nationwide there are several million families with special needs children and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. This Obamacare tax provision will limit the options available to these families. (Bill: PPACA; Page: 2,388-2,389)
Starting in tax year 2014:
Obamacare Individual Mandate Non-Compliance Tax: Starting in 2014, anyone not buying “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services – must pay an income surtax to the IRS. The Congressional Budget Office recently estimated that six million American families will be liable for the tax, and as pointed out by the Associated Press: “Most would be in the middle class.”
In addition, 100 percent of Americans filing a tax return (140 million filers) will be forced to submit paperwork to the IRS showing they either had “qualifying” health insurance for every month of the tax year or they obtained an exemption to the mandate.
Americans liable for the surtax will pay according to the following schedule
1 Adult
2 Adults
3+ Adults
2014
1%AGI/$95
1%AGI/$190
1%AGI/$285
2015
2%AGI/$325
2%AGI/$650
2%AGI/$975
2016
2.5%AGI/$695
2.5%AGI/$1390
2.5%AGI/$2085
Obamacare Employer Mandate Tax: If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2,000 for all full-time employees. This provision applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3,000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). (Bill: PPACA; Page: 345-346)
Obamacare Tax on Health Insurers: Annual tax on the industry imposed relative to health insurance premiums collected that year. The tax phases in gradually until 2018. Fully imposed on firms with $50 million in profits. (Bill: PPACA; Page: 1,986-1,993)
Starting in tax year 2018:
Obamacare Tax on Union Member and Early Retiree Health Insurance Plans: Obamacare imposes a new 40 percent excise tax on high cost or “Cadillac” health insurance plans, effective in 2018. This tax increase will most directly affect union families and early retirees, who are likely to be covered by such plans. This Obamacare tax will be levied on insurance policies whose premiums exceed $10,200 for an individual and $27,500 for a family. Middle class union members tend to be covered by such plans in states like Ohio, Pennsylvania, Wisconsin, and Michigan. Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. (Bill: PPACA; Page: 1,941-1,956)
Republican senators pushed back on the idea that Congress ought to receive an exemption from the health-care exchanges required under Obamacare, after Politico reported Thursday that leaders from both parties had been involved in negotiations to do just that for aides and lawmakers.
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The report says that lawmakers are concerned that if aides’ health insurance premiums are not subsidized by their employer, the federal government, they could see those costs skyrocket to levels they might not be able to pay. It is not clear if under Obamacare, the federal government would be able to do so.
Republican Sen. Lindsey Graham of South Carolina issued a terse an disapproving statement.
Obamacare is a train wreck. Congress shouldn’t be able to get out of Obamacare until everyone else does,” he said.
“I voted against imposing the new health-care law on America, but I don’t think Congress ought to be treated any differently than the rest of the country,” said Republican Sen. Lamar Alexander of Tennessee in a statement emailed to The Daily Caller.
Sen. Ted Cruz, a freshman Republican from Texas who has been adamant about the need to repeal the health-care law in full, wrote on Twitter that the whole country should be getting an exemption, not just Congress.
“Rather than exempt Congress from Obamacare, we ought to work on permanently exempting all of America w/ a #FullRepeal,” he tweeted Thursday morning.
Republican Sen. Johnny Isakson of Georgia had a similar take.
“I am strongly opposed to any effort to exempt Congress from the ObamaCare exchanges. I have consistently called for the full repeal of ObamaCare, but as long as it is the law of the land, Congress must be subject to it,” he said in a statement.
“It’s encouraging to see that Democrats in Congress are having second thoughts about their health care law, now that its disastrous consequences are hitting close to home. I hope Democrats will now come to the table and work with us to spare all Americans from skyrocketing health insurance premiums and the rest of ObamaCare’s taxes and mandates,” he added.
“All Americans ought to be exempt from the onerous and costly provisions of Obamacare, not just a select few,” said Sen. John Cornyn of Texas in a statement emailed to TheDC. “The only way to remedy this is to repeal the bill in its entirety.”
Adam Jentleson, communications director for Senate Majority Leader Harry Reid, sent a number of tweets Thursday morning pushing back on the idea that lawmakers were trying to exempt themselves from Obamacare.
Jentleson tweeted a piece by Washington Post blogger Ezra Klein entitled “No, Congress isn’t trying to exempt itself from Obamacare” multiple times, writing in one tweet: “Before freaking out about a certain Politico story, please read.”
“[N]o one is discussing ‘exempting’ congressional staffers from Obamacare,” Klein wrote. “They’re discussing creating some method through which the federal government can keep making its current contribution to the health insurance of congressional staffers.”
Reid put out a statement Thursday flatly denying that there had been any such discussions.
“Senator Reid is committed to ensuring that all members of Congress and Congressional staff experience the benefits of the Affordable Care Act in exactly the same way as every other American,” said Jentleson in the statement. “He believes that this is the effect of the legislation as written, and that therefore no legislative fix is necessary. There are not now, have never been, nor will there ever be any discussions about exempting members of Congress or Congressional staff from Affordable Care Act provisions that apply to any employees of any other public or private employer offering health care.”
Democratic House Minority Leader Nancy Pelosi told reporters Thursday morning during a press conference that she had been “in close contact with Mr. [House Minority Whip Steny] Hoyer as he was in any of these conversations.” Politico reported that Hoyer was involved in the conversations.
Pelosi added that she did not, however, feel that different members of Congress and aides should be treated differently under Obamacare – a fact that was highlighted in the Politico story. Under the law, committee staffers would not be required to get health care through the exchanges, while staffers in lawmakers’ offices would.
“I think that whatever the outcome is, people have to be treated the same,” Pelosi said.
Republicans and Democrats are meeting right now in discussions to exempt staffers from this horrible law. The Politico reported:
Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.
The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said.
A source close to the talks says: “Everyone has to hold hands on this and jump, or nothing is going to get done.”
Yet if Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public. By removing themselves from a key Obamacare component, lawmakers and aides would be held to a different standard than the people who put them in office.
Any Republican who does not stand against this deserves to be voted OUT of office!
The nation’s largest movie theater chain has cut the hours of thousands of employees, saying in a company memo that ObamaCare requirements are to blame.
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Regal Entertainment Group, which operates more than 500 theaters in 38 states, last month rolled back shifts for non-salaried workers to 30 hours per week, putting them under the threshold at which employers are required to provide health insurance. The Nashville-based company said in a letter to managers that the move was a direct result of ObamaCare.
“In addition, some managers have requested guidance on what they should tell those employees negatively impacted and, at your discretion, we suggest the following,” read the memo obtained by FoxNews.com. “To comply with the Affordable Care Act, Regal had to increase our health care budget to cover those newly deemed eligible based on the law’s definition of a full-time employee.”
“To manage this budget, all other employees will be scheduled in accord with business needs and in a manner that will not negatively impact our health care budget,” the message continues.
Regal, which had revenue of $2.8 billion in 2011, is the latest company to respond this way to the Affordable Health Care Act’s requirement that employees at companies of a certain size who work more than 30 hours per week be provided health coverage. Applebee’s and Olive Garden also scaled back the hours of workers. A handful of colleges have cut hours because of the law, including Palm Beach State College in Florida and New Jersey’s Kean University. Critics say the law is boomeranging on working folks.
“If you want to have reduced work, lower wages and economic stagnation, this is a great way to do it, said Ed Haislmaier, senior research fellow at the Heritage Foundation.
One Regal theater manager told FoxNews.com the move has sparked a wave of resignations from full-time managers who have seen their hours cut by 25 percent or more.
“In the last couple weeks, managers have been quitting on a daily basis from various locations to try and find full-time work,” said the manager, who asked not to be named. “Regal up until now has never restricted anyone to anything below 40 hours.”
The manager told FoxNews.com ObamaCare has had the unintended consequence of taking food off his table.
“Mandating businesses to offer health care under threat of debilitating fines does not fix a problem, it creates one,” he said. “It fosters a new business culture where 30 hours is now considered the maximum in order to avoid paying the high costs associated with this law.
“In a time where 40 hours is just getting us by, putting these kind of financial pressures on employers is a big step in a direction far beyond the reach of feasibility for not only the businesses, but for the employees who rely on their success,” he said.
Regal, which operates cinemas under the names Regal Cinemas, Edwards Theatres and United Artists Theaters and recently purchased Oregon-based Hollywood Theaters for $191 million, did not respond to repeated requests for comment from FoxNews.com. The publicly-traded company’s stock has risen nearly 30 percent over the last year.
In addition to the movie theater chain and several restaurants, the state of Virginia also rolled back the hours of all part-time employees back to 29 per week in February, with officials from the state claiming that the new mandate would cost the state tens of millions of dollars a year.
