Seriously, here’s the link to a Senate prepared graphic of the ObamaCare organization structure and processes … and a summary listing of the bill’s key provisions.
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Take a quick glance at the flowchart and ask yourself: ”Think this will work?”
The bill’s laundry list special interest provisions caught my eye …
One of the ballyhooed ObamaCare features is the end of lifetime caps on payouts.
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While the provision has obvious benefits for folks who encounter humongous medical bills, it strikes me as having a scary semblance to the “insurance” that AIG and others were selling against mortgage-backed securities and their derivatives.
Let me explain …
Well, nothing much since Match.com reportedly works. … at least for some people.
But, below is a clever analogy.
Everybody knows that the Administration reported that slightly over 100,000 people signed up for ObamaCare via the infamous exchanges in October.
But, not everybody is aware that those numbers may be a bit inflated.
Megan McArdle, writing in Bloomberg, nailed it:
“Does your health plan give you access to INOVA’s 4,000 physicians and 5 of the best hospitals in the region?”
That’s the question posed in the mailing I got yesterday …. with a specific reference to the “health plan exchanges” and a strong recommendation to “check your plans” to keep your doctors since “You deserve choices, You deserve the best”.
English translation: “You might be be able to keep your doctor either. Period.”
I expected “narrow networks” to be the next wave of ObamaCare angst, … but, I expected it to build slowly as folks discovered that their doctors aren’t participating in the new & improved ObamaCare-compliant plans.
Apparently, some docs are taking the cut in reimbursement rates personally.
Surprise, surprise, surprise.
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Yesterday’s post recapped articles from the NYT and WSJ that made a common, largely unrecognized point:
The expansion of “free” and near-free healthcare to approximately 15 million currently uninsureds (out of about 45 million uninsured citizens) is – to a large extent – being funded by the working middle class.
Case in point: the net insurance premiums paid after subsidies on the Obama Exchanges.
Using the Kaiser Foundation subsidy calculator , I picked off the net premiums for single, non-smoking 25 year olds across a range of incomes … and calculated the net premium as a percentage of income.
Here are the fundamental takeaways …
I don’t often cite the NYT … here’s an exception.
One of the best recaps of the ObamaCare issues with some emphasis on the redistributive effect … not from rich to poor … but from the working middle class to the poor.
My opinion: The web site was the detonating device … the crush of the middle class – in the labor & insurance markets — is the bomb that’s about to go off as folks realize the implications of the law.
As the WSJ puts it today:
Americans are beginning to understand that the essence of the Affordable Care Act is that millions of people are being conscripted to buy overpriced insurance they would never choose for themselves in order to afford Mr. Obama monies to spend on the poor and those who are medically uninsurable due to pre-existing conditions.
The ObamaCare exchanges (will likely) devolve into refuges for those who are medically uninsurable.
Having assumed the job of subsidizing these people, the federal government should do so honestly and openly and efficiently.
Redistribution is a popular idea as long as you’re filthy rich … or when it’s somebody else’s money being redistributed.
When it’s your money, it loses some of its sheen … especially if you’re living paycheck-to-paycheck with little money to redistribute.
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According to the Washington Post, the Obama administration brought in McKinsey to independently assess how the federal online health insurance enrollment system was developing.
And, McKinsey nailed it, “issuing a clear warning that the Oct. 1 launch was fraught with risks.”
This risk assessment was delivered to senior White House and Department of Health and Human Services officials in four briefings between March 28 and April 8.
“But with many of the project’s shortcomings now glaringly obvious, the report appears prescient in many respects”
A couple of numbers have gotten a lot of press coverage in the past couple of days …
The 2014 target enrollment for the Exchanges … 7 million.
The number of cancelled individual policies … 5 million.
The latter (5 million) is referred to by administration spokespeople as a “small sliver”.
The former (7 million) is generally positioned as a big, potentially unreachable number.
Gee, are 5 million and 7 million really that different?
Got me thinking and drove me to the official CBO estimates to do some digging re: ObamaCare numbers.
A couple of interesting points from the chart …
A couple of numbers have gotten a lot of press coverage in the past couple of days …
The 2014 target enrollment for the Exchanges … 7 million.
The number of cancelled individual policies … 5 million.
The latter (5 million) is referred to by administration spokespeople as a “small sliver”.
The former (7 million) is generally positioned by pundits as a big, potentially unreachable number that could sink ObamACare
Gee, are 5 million and 7 million really that different?
Got me thinking and drove me to the official CBO estimates to do some digging re: ObamaCare numbers.
Let’s highlight a couple of the numbers …
A couple of killer quotes from today’s WSJ editorial …
More and more it seems obvious that the vast majority of the politicians who pushed the bill in the House and Senate never read it.
They didn’t know what was in it.
They had no idea.
They don’t understand insurance.
They’re in politics, a branch of showbiz.
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Some of them would have tried to read it, but it was 2,000 pages of impenetrable paragraphs — real word-clots, word-slabs — accompanied by long lines of swimming numbers.
Comprehensive bills are never comprehensible ones — they are meant to lack clarity.
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You can sort of think you know what you’re saying when you say things like, “When each local exchange module launches it will reflect a national weighting of ‘invincibles’ and ‘ancients’ that will stabilize prevailing market realities while providing broader access not only to the poor but to those who currently have non-grandfathered or insufficient plans. So in the end it’s win-win for everyone.”
Say, what?
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Most of them had no idea what they were voting for.
They’re as surprised as anybody at what’s happened.
And it’s not only because so many of them are idiots.
They believed what they were told
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Conventional wisdom, summarized by the WSJ, is that”ObamaCare’s financing won’t work unless “young healthies” … pay through the nose for coverage … via the individual mandate.”
The Obama administration estimates that 2.7 million people between the ages of 18 and 30 need to buy health insurance through the federal and state marketplaces to offset the health care needs of older, less healthy Americans.
The 18-26 age group is the lowest user of care.
For example, the average male sees a physician only six times between the ages of 21 and 35.
But, ObamaCare now limits insurers to charging the sickest seniors no more than three times the amount they charge their youngest customers.
Since an average 64-year-old uses six times as much health care as 19-year-olds, young healthy enrollees have to pay considerably more than the cost of their own care.
So, the Administration is pulling out all stops to get young healthies enrolled.
But, there are some flies in the ObamaCare ointment …
Last week, President Obama said that he is “sorry that some Americans are losing their current health insurance plans as a result of the Affordable Care Act”, despite his promise that no one would have to give up a health plan they liked.
His supporters say: “See, he’s stepping up to his false assurances”.
His detractors say: “He’s saying he’s sorry to see people in that situation, but doesn’t fess up to his oft-repeated mis-direction that everybody can keep their doctors and health insurance plans if they like them.”
Pick your side on that one.
I just want to use Obama’s declaration as a philosophical launching point for what makes a good apology.
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A couple of months ago, I posted some research that proved it’s good business for companies to apologize to customers they’ve wronged — that an apology goes way further than, say, a discount on the next purchase.
I also made a passing reference to how important apologies are in personal life, too.
Following the links in the original article, I stumbled on these “8 simple principles” for making a meaningful apology …
Loyal readers know that I’m no fan of ObamaCare.
That said, here’s a field report that even I find laughably far-fetched.
My wife went shopping at Costco and decided to price check our dogs’ meds.
Here’s what she discovered …
The common wisdom is that the ObamaCare insurance exchange needs healthy young people to subsidize the older, less healthy enrollees … otherwise, policies offered on the exchanges will go into a premiums’ death spiral.
I’m not so sure.
Here’s my thinking …
Something caught my eye, buried deep in the weeds of the chatter re: the ObamaCare web site fiasco.
Forbes had an early-on article theorizing that a major cause of the web site problems was the Feds insistance that folks shouldn’t see potentially shocking list prices, but rather should input a lot of their private data so that they can be flashed a net price – after government subsidies.
That’s old news … and, you can believe it or not.
Here’s the passage that got me thinking:
The core problem stems from “the slate of registration systems [that] intersect with Oracle Identity Manager, a software component embedded in a government identity-checking system.”
The main Healthcare.gov web page collects information using CGI Group technology.
Then that data is transferred to a system built by Quailty Software Services.
QSS then sends data to Experian, the credit-history firm.
Hmmm
Experian – one the 3 major credit bureaus.
Why get a private sector credit bureau involved?
At first, I thought the Feds might have stumbled on a borderline brilliant idea …
If you thought you had a bad week … scroll down.
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Even Jon Stewart was flabbergasted when HHS Sebelius said she didn’t know how many people had enrolled on the ObamaCare exchanges.
Zillions of site hits, but no idea how many orders were placed.
Sounded fishy to just about everybody, right?
Any online marketing program – and, no doubt about it, this is a marketing program — tracks orders by the minute, hour, day, week, month, campaign duration.
Now, CBS reports that HHS has been getting real-time reporting … and a daily dashboard that includes, well, enrollments.
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So, why would Sebelius and the CMS head lie about not knowing the numbers?
The government shutdown was jolting to Congressional (and GOP) already low ratings.
Pundits were projecting a big positive bump for the President.
That was an eternity ago.
You know, a couple of weeks.
Then the spotlight turned to the ObamaCare fiascos … the web site mess and the loss of Obama-guaranteed health insurance policies.
Worm turned.
Latest NBC-WSJ poll reports an all-time low Presidential approval rating of 42% … down 5 percentage points from earlier in the month … and. down 10 percentage points from January.
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What’s driving the drop?
Flashback to February 2008 …
To counter Hillary’s snark that he was all words and no substance – Candidate Obama gave a moving speech re: how much words matter.
The punch line:
“I’m running for president of the United States of America … because the American people want to believe in change again. Don’t tell me
words don’t matter!” Transcript
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So, why would I bring that up today?
Let me be very specific …
Yesterday, Marilyn Tavenner — head of CMS (Centers for Medicare and Medicaid Services), responsible for “systems integration” for Healthcare.gov and other ObamaCare applications – said flat out:
“The system working albeit slower and less accurately than hoped.” CNN
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Hmmm.
First reaction, except for speed and accuracy … what is there?
Teased, I couldn’t resist temptation.
So, I broke down and went to Healthcare.gov.
Here’s what I got …
“I learned about it the same way you did … in the newspapers.”
Say, what?
The list of the President’s “news to me, too” is growing: Fast & Furious, IRS targeting, ObamaCare system snafus, NSA spying, Healthcare Insurance cancellations, etc.
It’s reached the point that even hardcore supporter Jon Stewart is asking: “What exactly does he know?”
Here’s a Stewart skit explaining how President Obama is kept out of the loop regarding spying and health care.
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The routine would be funnier if this stuff wasn’t such serious business.
MUST READ: The WSJ’s recap of what Obama has claimed ignorance of … The Unbearable Lightness of Obama
The president didn’t know the NSA was spying on world leaders, but he’s found time for at least 146 rounds of golf.
Call Mr. Obama’s style indifferent, aloof or irresponsible, but a president who governs like this reaps the whirlwind—if not for himself, then for his country.
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During the 2010 State-of-the Union address, Rep. Joe Wilson of SC shouted “You lie” when Pres. Obama was going through a list of what ObamaCare would and would not do.
First, let’s all agree that Wilson’s outburst was completely inappropriate for the venue.
That said, how does the substance of his shout out stack up?
Let’s start with a softball and then advance the story …
Everybody knows that Amazon’s free shipping program has been a resounding success.
So much so. that the company has announced that it will be moving the minimum qualifying order up from $25 to $35 … inducing shoppers to fill their carts fuller or switch to the highly profitable Amazon Prime program.
The free shipping program’s success was highly predictable based an an apparently inadvertent “matched market test” that Amazon did.
Early-on, Amazon launched free shipping on $25 orders in the U.S. and sales skyrocketed.
In the UK, Amazon launched “nominal shipping” (think, 99 cents) for orders totaling the equivalent of $25.
Sales increased … but only by a fraction of the U.S. sales gain.
Proof-positive of the “power of free” … and evidence an equally important dynamic: there’s a big difference between “free” and “almost free” … when you slip a price on something – even a small one, people recoil.
Now, what’s the link to ObamaCare?
Loyal readers know that I really like Peggy Noonan.
Even when I disagree with her views, I enjoy her writing.
Noonan was a strong 2008 Obama supporter … not so much any more.
She wrote a really good editorial re: ObamaCare in last Friday’s WSJ.
Worth reading in its entirety … here are a couple of snippets …
First, for all of you youngsters, some background …
The “Mariel boatlift” was a mass emigration of Cubans who departed from Cuba’s Mariel Harbor for the United States in 1980.
The Mariel boatlift was precipitated by a sharp downturn in the Cuban economy which led to thousands of Cubans badgering the government to allow them to leave and seek asylum in the U.S.
Previously, the Communist government maintained closed borders – in and out. Citizens weren’t allowed to leave. Think, Berlin Wall.
Then, suddenly, the Cuban government announced that anyone who wanted to leave could do so, and an exodus by boat started shortly afterward.
At first, President Carter – reading the move as a humanitarian gesture – opened the U.S. borders to the emigrating Cubans.
Then, Fidel Castro seized the opportunity to load the boats with convicted felons from Cuban jails and patients from Cuban mental health facilities.
When Carter caught on, the Mariel boatlift was ended.
By that point, as many as 125,000 Cubans had made the journey to Florida.
Estimates vary widely re: what portion of the the exiles who made it to U.S. shores were hardcore criminals and very unhealthy patients.
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What’s the Mariel boatlift got to do with ObamaCare?
I’ve railed for awhile re: one of ObamaCare’s most popular benefits … forcing insurance companies to allow “adult-children” to be appended to their parents’ health insurance policies.
I wouldn’t mind if they – or more accurately, their parents – were paying for the coverage … but they typically aren’t
All other folks are being forced to pay higher premiums to cover the added costs.
Let me explain the economics and tie it to another likely ObamaCare “glitch” …
Let’s see ….
The original ObamaCare law said that an insurance applicant’s eligibility should be verified before they’re granted a Federal premium subsidy.
Sounds easy enough.
But then, out of the blue, President Obama modifies the law on-the-fly with an Executive Order to fugetaboutit..
You know, just go by the honor system.
Hmmm.
Anybody remember the “liar loans” that played a central role in the financial crisis?
Then the budget brouhaha gets settled by reinstating the original law’s requirement that an applicant’s eligibility be verified before a subsidy is granted.
Essentially, eligibility is based on income.
Which led my wife to ask me a question that cuts to the core of the ObamaCare systems issue.
My wife’s question: “Why is verifying income so hard?
If people have to submit their Social Security numbers when applying for ObamaCare, can’t they just ask the the IRS system how much income the people make ?”
Good question.
But, a question that opens up a veritable Pandora’s box. …
The recent Forbe’s article that we reported on yesterday said that the ObamaCare web site gets bogged down because folks need to enter their private info in order to get a premium quote.
Why?
Forbes (and other pundits) say that the “list price” of the premiums are much higher than people expect … so the Feds want to calculate the ObamaCare subsideis first and quote people a net price … after taking the subsidies into account.
That got me curious.
How much are ObamaCare premiums … and what are the policy terms & conditions re: deductibles, co-pays, etc.?
So, I did some hunting … and, in fact, it takes some hunting.
Best source that I found is a tool developed by the Kaiser Family Foundation (link below).
The Kaiser calculator requires just a couple of inputs … no private information.
Here’s what I input: Family of 4, non-smokers, $100K household income.
OK, place your bets.
What do think the annual premium would be?
A case study in how not to develop and launch new systems
Why isn’t the system able to do the basics?
You know: log people in, tell them the price, sign them up and, oh yeah, keep people’s private information secure.
Some of the problems are structural … what happens when you try to inter-connect old legacy systems … each with a humongous, uniquely-designed database.
Other problems are self-inflicted … either amateurish design or intentional strategic specifications built into the design.
As a recovering systems designer and CIO — and, oh yeah, a pricing prof — here’s my take ..
Couple data points converged for me …
First, loyal readers may remember that I was an identity theft victim.
Started a couple of weeks after my first e-filing of a tax return to the IRS.
Coincidence?
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Being sensitized to the ID theft issue, I noticed a couple of recent articles about “ripe pickings” …
I’ve been amused by the Dems squawking about the way that the GOP Congress has linked ObamaCare to the Budget’s “continuing resolution”.
Foul. Fight fair. Never done. Blah-blah-blah.
Here’s the ironic twist …
Remember how Obama Care was passed?
To refresh your memory, and see the irony …
First, a quick refresher course courtesy of the Government Finance Officers Association (of Canada, that is).
When using zero-base budgeting (ZBB), a government builds a budget from the ground up, starting from zero.
There has been renewed interest in ZBB in today’s environment of fiscal constraint, not least because the “zero” in zero-base budgeting sends a powerful message that taxes and spending will be held in check.
Zero-base budgeting, also known simply as ZBB, has had a long … history in the public sector.
Zero-base budgeting first rose to prominence in government in the 1970s when U.S. President Jimmy Carter promised to balance the federal budget in his first term and reform the federal budgeting system using zero-base budgeting, a system he had used while governor of Georgia.
ZBB, as Carter and budget theorists envisioned it, requires expenditure proposals to compete for funding on an equal basis – starting from zero. In theory, the organization’s entire budget needs to be justified and approved, rather than just the incremental change from the prior year.
Today, there is an apparent resurgent interest in ZBB.
GFOA’s survey shows that traditional budgeting methods, namely line-item and incremental budgeting, have declined in use in the last few years, while all forms of budgeting that are thought to be better adapted to cutting back the budget, not just ZBB, have increased Source
OK, they’re talking about Canada, not the U.S.
Still a couple of takeaways:
1. The process – in government, at least – traces back to Jimmy Carter.
2. Many Canadian governments are using ZBB
3. In Canada, the use of ZBB is increasing
Now. here’s what I think is interesting …
Although they stumbled into it, the GOP may have landed on a masterful plan.
In effect, the GOP’s piecemeal approach to unraveling the government shutdown is nothing more than real-time ZBB.
Think about it for a second.
A week ago the gambit was to fund everything except ObamaCare.
Non-starter, right?
Now, in concept at least, the piecemealing approach allows everything to be funded … except ObamaCare.
Everything that matters – either really or because of political optics – can be quickly restored with short, separate authorization bills.
Anything that’s questionable stays squashed.
Anything that’s essential gets an appropriation,
Eventually everything that’s essential gets funded.
Gee, that sounds like zero-based budgeting, doesn’t it?
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I’ve been meaning to write about this for awhile – and since it’s back in the news, I’ll take my shot.
You’ve probably heard that Congress and Congressional staffs – as part of the ObamaCare law – were required to get their health insurance on the newly forming ObamaCare exchanges and give up some of their generous government subsidies.
More specifically:
The ObamaCare Act applied to Congress the same civil-rights employment and labor laws that lawmakers had required everyday citizens to abide by.
With some lapses, it’s worked well to defuse public outrage about “one law for thee, one law for me” congressional behavior.
In 2009, Senator Chuck Grassley decided that the principle deserved to be embedded in Obamacare, and he was able to insert a provision requiring all members of Congress and their staffs to get insurance through the Obamacare health exchanges.
“The more that Congress experiences the laws it passes, the better,” said Grassley.
Most employment lawyers interpreted that to mean that the taxpayer-funded federal health-insurance subsidies dispensed to those on Congress’s payroll — which now range from $5,000 to $11,000 a year — would have to end.
Makes sense to me – make them eat their own cooking.
But, there’s much more to this story …
If you’ve been shrugging off the government spying and control stuff, watch this short video-simulation.
It’s getting personal …
Thanks to ST for feeding the lead …
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According to a survey by the U.S. Chamber of Commerce ,,,
The answer has little to do with the Fed’s threat to tighten monetary policy.
Though 77% continue to think the U.S. economy is on the wrong track, most small businesses are optimistic about their local economy and individual business.
So, what’s up?
Definitely from the ‘you can’t make this stuff up” file …
ABC News is reporting …
The Internal Revenue Service official in charge of the tax-exempt organizations at the time when the unit targeted tea party groups now runs the IRS office responsible for the health care legislation.
Sarah Hall Ingram served as commissioner of the office responsible for tax-exempt organizations between 2009 and 2012.
But Ingram has since left that part of the IRS and is now the director of the IRS’ Affordable Care Act office, the IRS confirmed.
House Speaker John Boehner expressed “serious concerns” that the IRS is empowered as the law’s chief enforcer.
“Obamacare empowers the agency that just violated the public’s trust by secretly targeting conservative groups,” Rep. Marlin Stutzman, R-Ind.,
added.“Even by Washington’s standards, that’s unacceptable.”
Sen. John Cornyn even introduced a bill, the “Keep the IRS Off Your Health Care Act of 2013,” which would prohibit the Secretary of the Treasury, or any delegate, including the IRS, from enforcing the Affordable Care Act.
“Now more than ever, we need to prevent the IRS from having any role in Americans’ health care,” Cornyn, R-Texas, stated.
“I do not support Obamacare, and after the events of last week, I cannot support giving the IRS any more responsibility or taxpayer dollars to implement a broken law.”
Seriously, you just can’t make this stuff up …
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Just in case you missed the news last Friday, the IRS publicly admitted that it targeted conservative groups during the 2012 election … and then shielded itself behind a George Castanza defense.
Here is the WSJ summary of the IRS disclosure:
Yesterday,an Internal Revenue Service official disclosed for the first time, and by way of apologizing, that the agency that wields the taxing power of the federal government had targeted conservative groups for special scrutiny during the 2012 election season.
A spokeswoman acknowledged that the agency had flagged groups with the words “tea party” or “patriot” to have their tax returns inspected.
In addition, the agency was targeting groups raising “issues regarding government spending, government debt or taxes”, or … how to ‘make America a better place to live’. WSJ update
She added the tax inspections were carried out entirely by low-level workers in Cincinnati without any direction from Washington.
Here’s my take on the IRS revelations:
First, a couple of weeks ago Obama bristled at the thought that some (many ?) folks don’t trust the government.
What does the jabrone expect if his administration turns its bulldogs on its political opponents?
Can you imagine the outcry if George Bush had told the IRS to key word search “Muslim”, “Islamic”,”Progressive” or “choice” and then said to go get ‘em.
All hell would have broken loose.
Second, about the “don’t blame me, it was somebody in my organization” defense …
Yesterday we posted “Connecting the dots: ObamaCare may be creating jobs!”
The punch line: many companies are reported to be down mixing their work forces by reducing full-timers to part-time status … and hiring additional part-timers to fill their needs.
Today, let’s look at some macro numbers.
Total employment dropped 8.2 million during the recession.
5.3 million of those 8.2 million jobs have been recovered … but total employment is still down 2.9 million from its pre-recession peak.
Note that total employment is up 1.4 million since President Obama’s Inauguration in January 2009.
Keep that number in mind … 1.4 million.
Things get more interesting with a little drilling down …
You read that right.
The obvious has become evident to me …
The BLS reported that employment rose by 165,000 in April, and the unemployment rate was little changed at 7.5 percent,
Hmmm.
Memory jogged back to last week’s post re: the increasing number of part-timers:
Obvious question: how many of the 165,000 were part-timers?
According to the Fed’s data base, part-time employment increased by 229,000.
If true, that means that full-time employment dropped.
Hmmm again.
What’s going on?
In a prior post, we reported that middle income jobs were disappearing … apparently down mixing to lower income jobs.
Here’s more …
The NY Times reports that about 7.6 million Americans working part-time jobs are doing so reluctantly, and would rather have a full-time job … that’s about 3 million more than there were when the recession began at the end of 2007.
Most of the part-time jobs are in retail and food service … where companies are throttling full-time employment in advance of ObamaCare penalties.
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From the you can’t make this stuff up files …
During the 2009-10 battle over what’s now dubbed Obamacare, Republicans insisted that Capitol Hill hands must have the same health care as the rest of the American people.
Now, according to left-leaning Politico, “Congressional leaders in both parties are engaged in high-level, confidential talks about exempting 535 lawmakers and their aides from the insurance exchanges they are mandated to join as part of ObamaCare.”
“The lawmakers — especially those with long careers in public service and smaller bank accounts — are concerned about the hit to their own wallets.”
Obviously, “by removing themselves from a key ObamaCare mandate, lawmakers – who passed the law — and aides would be held to a different standard than the people on whom they’re imposing the law.”
Politico keenly observes: “If Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public.”
You think?
Good for us, bad for them.
Hmmm.
There’s more. Here’s the real head-scratcher …
Bit of a trick question since the constant refrain is that small companies are the ones that generate job growth.
According to a Business Week analysis of ADP National Employment data …
Since the U.S. economic recovery began in june 2009, big employers have increased employment 7.5%, while small employers have boosted payrolls only 4.9%.
Mark Zandi, chief economist of Moody’s Analytics, was on the McCain team in 2008 but has changed sides and now regularly advocates for the Administration of TV.
He says: that there are three explanations for why large employers (1,000 employees and up) grew faster than small ones (fewer than 50 workers).
Here’s a great recap prepped by the Heritage Foundation with links to deeper details …
Key takeaways:
Read ‘em and weep …
First, what’s the biggest tax loophole?
Answer: The non-taxable payments that companies make towards employees health insurance premiums.
These days, the policy to cover a husband, wife and a couple of kids is about $15,000.
Employers typically pick up about 2/3s of the bill … call it $10,000.
The $10,000 is tax deductible for the company, and isn’t taxed as employee compensation – even though it’s clearly part of an employee’s compensation package.
In total, the health insurance loophole amounts to over $170 billion annually … about twice the mortgage interest deduction … and about twice the “Bush tax cuts for the wealthy”.
Source: Credit Suisse, Neal Soss
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So, how might ObamaCare close this loophole?
(more…)
Interesting expose In the NY Times of all places.
Punch line:
When the federal government began providing billions of dollars in incentives to push hospitals and physicians to use electronic medical and billing records, the goal was not only to improve efficiency and patient safety, but also to reduce health care costs.
But, in reality, the move to electronic health records may be contributing to billions of dollars in higher costs for Medicare, private insurers and patients by making it easier for hospitals and physicians to bill more for their services.
How can this be?
Simple, Watson.
First, a system can provide docs with a checklist of separately billable procedures that they might perform … ensuring a complete check-up and making sure that no billing stone is left unturned.
Second, an e-system can make it easier for doctors to “upcode” a procedure in a way to maximize reimbursement rates.
For example, when a doctor enters a billing code, the system can present him with alternative codes for very similar procedures that get higher reimbursement payments … and tell the doctor what addition work needs to be done to qualify for the higher paying code.
So, maybe just asking the patient a couple of more specific questions may upgrade an examination from ‘simple’ to ‘ complex. The doc can then ask the questions (or not) and check the higher paying box.
Third, an e-system makes it easy for docs to “clone” common ‘boiierplate’ findings from one patients chart to another patient’s chart … saving time and, perhaps, implying a more detailed examination.
The Times says:
As software vendors race to sell their systems to physician groups and hospitals, many are straightforward in extolling the benefits of those systems in helping doctors increase their revenue.
In an online demonstration, one vendor promises that it “plays the level-of-service game on your behalf and beats them at their own game using their own rules.”
An expert says “What’s happening is just the problem we feared” … unintended consequences.
For the record, I think that cutting healthcare costs by reducing doctors’ pay is nuts … there is lots of waste, fraud and unnecessary expense in a grossly inefficient system.
Punch line: Papa Johns CEO has taken a stand against Obamacare, and announced that the popular pizza delivery chain will pass the increased cost of doing business on to its customers, in order to protect its shareholders.
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Excerpted from latimes.com’s, “Papa John’s to raise pizza prices if ‘Obamacare’ survives”
Get ready to pay more for your Papa John’s pizza if “Obamacare” goes into full effect … 15 to 20 cents more.
John Schnatter, chief executive of the pizza chain, is bashing President Obama’s healthcare reform law as a policy that will force the company to choose between its customers and its investors. And if the Patient Protection and Affordable Care Act rolls out as planned in 2014, Schnatter’s strategy is “of course … to pass that cost on the consumer in order to protect our shareholders’ best interest,” he said in a recent conference call.
Schnatter estimates that the legislation will cost Papa John’s about 11 cents to 14 cents per pizza, which equates to 15 cents to 20 cents per order.
“We’re not supportive of Obamacare like most businesses in our industry but our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare,” Schnatter said. “Ergo, we have a high ticket average with extremely high frequency of order counts, millions of pizzas per year.”
On Twitter, reactions were mostly negative. “*switches to Pizza Hut*,” wrote one user. “*calls Dominoes*,” wrote another. “I really wish businesses would stay out of politics,” tweeted user mikedavis824.
The National Restaurant Assn. has criticized the healthcare legislation for having a chilling effect on expansion and hiring in the industry, which tends to be labor-intensive and burdened with thin margins. Chains such as White Castle and Burger King have predicted surging costs due to the new regulations, which require businesses with 50 or more full-time employees to offer healthcare to such workers and their dependents.
Unsurprisingly, Papa John’s chief is a big fan of Mitt Romney. Schnatter recently even hosted a private fundraiser for the Republican presidential candidate at his mansion in Anchorage, Ky. Romney was dazzled by the grounds, declaring to guests: “Who would’ve imagined pizza could build this. This is really something. Don’t you love this country? What a home this is, what grounds these are, the pool, the golf course…. This is a real tribute to America, to entrepreneurship.”
Edit by BJP
Of course, I’ve been thinking about entrepreneurs and small businesses recently.
And, the obvious suddenly became evident to me: Under ObamaCare, the incremental cost of a small company’s 51st employee is ENORMOUS.
Think restaurants … paying a bunch of workers minimum wage with few or no benefits.
Today, employee #51 costs the business about $20,000 annually (2,000 hours @ $10 per hour).
Under ObamaCare, that added bus boy costs $122,000 … his $20,000 plus the $2,000 per employee tax penalty on the business for not giving employees health insurance.
That’s a lot money for a bus boy.
Guess employees #1 to #50 are just going to have to work harder.
The Homa Files 