Health Care Reform


LBJ: We were attacked (in the Gulf of Tonkin)!

Nixon: I am not a crook!

Clinton: I did not have sex with that woman… Miss Lewinski!

Bush – 41: Read my lips – No new taxes!

Obama:

I will have the most transparent administration in history.

TARP is to fund shovel-ready jobs.

I am focused like a laser on creating jobs.

The IRS is not targeting anyone.

It was a spontaneous riot about a movie.

If I had a son.

I will put an end to the type of politics that “breeds division, conflict and cynicism”.

You didn’t build that!

I will restore trust in Government.

The Cambridge cops acted stupidly.

The public will have 5 days to look at every bill that land on my desk

It’s not my red line – it is the world’s red line.

Whistle blowers will be protected in my administration.

We got back every dime we used to rescue the banks and auto companies, with interest.

I am not spying on American citizens.

Obama-Care will be good for America

You can keep your family doctor.

Premiums will be lowered by $2500.

If you like it, you can keep your current healthcare plan

It’s just like shopping at Amazon

I knew nothing about “Fast and Furious” gunrunning to Mexican drug cartels

I knew nothing about IRS targeting conservative groups

I knew nothing about what happened in Benghazi

And the biggest one of all:

“I, Barrack Hussein Obama, pledge to preserve, protect and defend the Constitution of the United States of America

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I recently had the opportunity to get a doctor’s opinion about how she anticipates the effects of Obama’s health care law upon her medical practice. She had this to say:

Honestly, It doesn’t affect me since I work at a government facility and I only see veterans. However, I think some kind of overhaul needed to be done. The current health care system leaves so many people uninsured. Only time will tell how it will affect the health care system. Hopefully the quality of health care won’t diminish because of it.

I do have several colleagues that work privately and the red tape that they currently deal with when it comes to private insurance companies is pretty overwhelming. Hopefully it won’t get worse with the health care system overhaul. I haven’t talked to any of them recently about work but If I hear anything I will let you know what their feedback is.

Obviously, she is cautiously optimistic.


I believe as she does; that reform was required to ensure all had equal coverage.

I also believed as the politicians did; that reform was required to ensure all had equal coverage and with the overreaching goal of bringing down costs.

I would have been ecstatic to have seen

  • reform to allow insurance companies to compete across state lines,
  • reform for pharmaceutical companies to be allowed to recoup R&D costs for longer periods before being turned into a generic,
  • reform for hospitals who are charging $50 for a tablet of aspirin and arbitrarily “negotiate” with insurance companies to bring down costs of medical procedures by 80%.

U.S Senator Sam Brownback and Rep. Kevin Brady Reveal the Details

Developed by the Joint Economic Committee minority, led by U.S Senator Sam Brownback of Kansas and Rep. Kevin Brady of Texas, the detailed organization chart displays a bewildering array of new government agencies, regulations and mandates.

In addition to capturing the massive expansion of government and the overwhelming complexity of new regulations and taxes, the chart portrays:

  • $569 billion in higher taxes;
  • $529 billion in cuts to Medicare;
  • swelling of the ranks of Medicaid by 16 million;
  • 17 major insurance mandates; and
  • the creation of two new bureaucracies with powers to impose future rationing:
    – the Patient-Centered Outcomes Research Institute and
    – the Independent Payments Advisory Board.

Brady admits committee analysts could not fit the entire health care bill on one chart. “This portrays only about one-third of the complexity of the final bill. It’s actually worse than this.”

Obama’s Bill Increases Cost of Prescription Drugs

In the US today, drug patents give twenty years of protection, but they are applied for before clinical trials begin, so the effective life of a drug patent tends to be between seven and twelve years.

The Patient Protection and Affordable Care Act, which President Obama signed on March 23, 2010 now authorize the Food and Drug Administration to approve generic versions of biologic drugs and grant biologics manufacturers only 12 years of exclusive use before generics can be developed.

What this means is that we can expect prices of our medications to go UP, not down, because the drug companies now have less time to recoup the R&D costs and costs associated with clinical trials.

The $940 billion health-care overhaul will take nearly a decade to roll out in full. What’s in it for you?

2010

Coverage

* Subsidies begin for small businesses to provide coverage to employees.
* Insurance companies barred from denying coverage to children with pre-existing illness.
* Children permitted to stay on their parents’ insurance policies until their 26th birthday.

2011

Coverage

* Set up long-term care program under which people pay premiums into system for at least five years and become eligible for support payments if they need assistance in daily living.

Taxes and fees

* Drug makers face annual fee of $2.5 billion (rises in subsequent years).

2013

Taxes and fees

* New Medicare taxes on individuals earning more than $200,000 a year and couples filing jointly earning more than $250,000 a year.
* Tax on wages rises to 2.35% from 1.45%.
* New 3.8% tax on unearned income such as dividends and interest.
* Excise tax of 2.3% imposed on sale of medical devices.

Cost control

* Medicare pilot program begins to test bundled payments for care, in a bid to pay for quality rather than quantity of services.

2014

Coverage

* Create exchanges where people without employer coverage, as well as small businesses, can shop for health coverage. Insurance companies barred from denying coverage to anyone with pre-existing illness.
* Requirement begins for most people to have health insurance. Subsidies begin for lower and middle-income people. People at 133% of federal poverty level pay maximum of 3% of income for coverage. People at 400% of poverty level pay up to 9.5% of income. (Poverty level currently is about $22,000 for a family of four.)
* Medicaid, the federal-state program for the poor, expands to all Americans with income up to 133% of federal poverty level.
* Subsidies for small businesses to provide coverage increase. Businesses with 10 or fewer employees and average annual wages of less than $25,000 receive tax credit of up to 50% of employer’s contribution. Tax credits phase out for larger businesses.

Taxes and fees

* Employers with more than 50 employees that don’t provide affordable coverage must pay a fine if employees receive tax credits to buy insurance. Fine is up to $3,000 per employee, excluding first 30 employees.
* Insurance industry must pay annual fee of $8 billion (rises in subsequent years).

Cost control

* Independent Medicare board must begin to submit recommendations to curb Medicare spending, if costs are rising faster than inflation.

2016

Taxes and fees

* Penalty for those who don’t carry coverage rises to 2.5% of taxable income or $695, whichever is greater.

2017

Coverage

* Businesses with more than 100 employees can buy coverage on insurance exchanges, if state permits it.

2018

Taxes and fees

* Excise tax of 40% imposed on health plans valued at more than $10,200 for individual coverage and $27,500 for family coverage.

—Sources: House bill; Kaiser Family Foundation

Correction:
The House health legislation imposes a 2.3% excise tax on the sale of medical devices. An earlier version of this article incorrectly said the tax was 2.9%, the figure before a last-minute change to the legislation.

An argument frequently used by health care reform supporters is that since we have to buy car insurance, the requirement should also extend to buying health insurance. Those against this health care reform bill would retort with “yea, but you don’t have to buy the car” but it didn’t explain the legal footing for it.

I read a rather lengthy piece written by Sen. Orrin Hatch (R-Utah). Hatch points out that federal government can regulate commerce, but cannot force people to participate in commerce. The car insurance is a regulated aspect of the voluntary purchase of a car. Likewise, we cannot be forced to purchase health insurance and we cannot be fined for not participating in it.

Here’s how Hatch explained it.

The Congressional Budget Office examined the 1994 healthcare reform legislation, which also included a mandate to purchase health insurance. Here is the CBO’s conclusion: “A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy a particular good or service….Federal mandates typically apply to people as parties to economic transactions, rather than members of society.”

In other words, Congress can regulate commercial activities in which people choose to engage, but cannot require that they engage in those commercial activities.

Hatch continues,

If there is no difference between regulating and requiring what people do, if there is no difference between incentives and mandates, if Congress may require that individuals purchase a particular good or service, why did we bother with the Cash for Clunkers program? Why did we bother with the TARP or other bailouts? We could simply require that Americans buy certain cars or appliances, invest in certain companies, or deposit their paychecks in certain banks. For that matter, we could attack the obesity problem by requiring Americans to buy fruits and vegetables.

Some say that because state governments may require drivers to buy car insurance, the federal government may require that everyone purchase health insurance. Simply stating that point should be enough to refute it. States may do many things the federal government may not, and if you do not drive a car, you do not have to buy car insurance. This legislation would require individuals to have health insurance simply because they exist, even if they never see a doctor for the rest of their lives.

The defenders of this health insurance mandate must know they are on shaky constitutional ground. The bill before us now includes findings which attempt to connect the mandate to the Constitution. I assume that they are the best arguments that this unprecedented and novel mandate is constitutional.

Hatch continues shooting holes in Reid’s bill by pointing to the unconstitutional aspects of “excise tax on high cost employer-sponsored insurance plans differently in some states than in others. ”

The Constitution allows Congress to impose excise taxes, but requires that they be “uniform throughout the United States.” This is one of those provisions that will be dismissed with pejorative labels such as archaic by those who find it annoying. But it is right there in the same Constitution that we have all sworn that same oath to protect and defend and we are just as bound to obey it. And frankly, a good test of our commitment to the Constitution is when we must obey a provision that limits what we want to do.

As if the above constitutional nails were not enough to seal the coffin on Reid’s health care bill, Hatch moves on to the subject of states rights with regard to the limitation of federal powers upon individual states.

Others have observed that the legislation requires states to establish health benefit exchanges. It does not ask, cajole, encourage, or even bribe them. It simply orders state legislatures to pass legislation creating these health benefit exchanges and says that if states do not do so, the Secretary of Health and Human Services will establish the exchanges for them.

But as the Supreme Court said in FERC v. Mississippi in 1982, “this Court never has sanctioned explicitly a federal command to the States to promulgate and enforce laws and regulations.” The Supreme Court reaffirmed a decade later in New York v. United States that “The Framers explicitly chose a Constitution that confers upon Congress the power to regulate individuals, not States.” In that case, the Court struck down federal legislation that would press state officials into administering a federal program.

And more recently, in Printz v. United States, the Supreme Court stated: “We have held, however, that state legislatures are not subject to federal direction.” And yet, this legislation does what these cases said Congress may not do. It commands states to pass laws, it regulates states in their capacity as states, and it attempts to make states subject to federal direction.

In its present form, it would appear Harry Reid’s health care bill (actually, it’s an insurance reform bill) is dead on arrival.

Orrin Hatch spoke the above on the Senate floor December 11, 2009.

You can watch Orrin Hatch speak on the issue, followed by Randy Barnett,
Carmack Waterhouse Professor of Legal Theory, Georgetown University Law Center, who also speaks on the unconstitutional aspects of the health care bill.

The Congressional Budget Office released a study about how Harry Reid’s Senate bill will affect insurance costs and found that premiums in the individual market will rise by 10% to 13% more than if Congress did nothing. If left alone, family policies are projected to cost $13,100 on average. Under ObamaCare it will jump to $15,200.

Playing along with Reid and his ilk, the New York Times told its readers there is “No Big Cost Rise in U.S. Premiums Is Seen in Study” and the Washington Post tried to prop it up by saying, “Senate Health Bill Gets a Boost”. Obama’s White House put their unique spin on it by stating the CBO report was “more good news about what reform will mean for families struggling to keep up with skyrocketing premiums under the broken status quo.”

From the Senate floor Finance Chairman Max Baucus said,

“Health-care reform is fundamentally about lowering health-care costs. Lowering costs is what health-care reform is designed to do, lowering costs; and it will achieve this objective.”

Well, Not Quite

What Baucus and the White House left out some very important points about the report. What they don’t want you to know is that the CBO says it expects employer-sponsored insurance costs to remain roughly as they are now. Costs will not be going down. Not only that, the whole purpose of Reid’s reform bill was to fix the individual market which is expensive and unstable due mostly to the fact it does not receive favorable tax treatment which are given to job-based coverage.

The CBO’s report is confirming that new coverage mandates actually drive premiums higher. Democrats are claiming that these higher insurance prices will be offset by new government subsidies. How do they do that? Government subsidies come from you and me through taxes, that’s how.

About 57% of the people who buy insurance through the bill’s new “exchanges” that will supplant today’s individual market will qualify for subsidies that cover about two-thirds of the total premium, whose cost will be offset by subsidies.

For you thinkers out there, yes, you got it, the bill will increase costs but it will then disguise those costs by transferring them to taxpayers from individuals. Higher costs can be made to fade away because on the government balance sheet. The Reid bill’s $371.9 billion in new health taxes are also apparently not a new cost because they can be passed along to consumers, or perhaps will be hidden in lost wages.

What’s that called?

This is the paleo-liberal school of brute-force wealth redistribution, and a very long way from the repeated White House claims that reform is all about “bending the cost curve.” The only thing being bent here is the truth.

The CBO is almost certainly underestimating the cost increases. Based on its county-by-county actuarial data, the insurer WellPoint has calculated that Mr. Baucus’s bill would cause some premiums to triple in the individual market. The Blue Cross Blue Shield Association came to similar conclusions.

Prices for the individual market are regulated community rating. With it, insurers charge nearly uniform rates regardless of customer health status or habits. The CBO doesn’t think this will have much of an effect, but costs inevitably rise when insurers aren’t allowed to price based on risk. This is why today some 35 states impose no limits on premium variation and six allow wide differences among consumers.

Amanda Kowalski of MIT, William Congdon of the Brookings Institution and Mark Showalter of Brigham Young have found similar results. In a 2008 paper in the peer-reviewed Forum for Health Economics and Policy, these economists found that state community rating laws raise premiums in the individual market by 20.9% to 33.1% for families and 10.2% to 17.1% for singles. In New Jersey, which also requires insurers to accept all comers (so-called guaranteed issue), premiums increased by as much as 227%.

The Real Crime

The crime is there are plenty of reform alternatives that really would reduce insurance costs. According to CBO, the relatively modest House GOP bill would actually reduce premiums by 5% to 8% in the individual market in 2016, and by 7% to 10% for small businesses. The GOP reforms would also do so without imposing huge new taxes.

Once again, the CBO comes in with the unbiased truth, independently backed up by brains at MIT, the Brookings Institution and Brigham Young. And once again, Reid and his Democrat Party spin and distort the facts to doctor up this pig while hoping we won’t notice.

The Democrats tell us it’s all about “lowering costs.” The truth is it doesn’t. It raises them. Clearly, Obama, Reid and Nancy don’t care. They’re really only interested in creating yet another government run program. Time after time, history shows it amounts to being an incredible waste of money.

The Internal Revenue Service will be your Health Care Enforcer


H.R. 3962, the “Affordable Health Care for America Act” contains thirteen new tax hikes. They are listed here for your enjoyment.


Employer Mandate Excise Tax (Page 275): If an employer does not pay 72.5 percent of a single employee’s health premium (65 percent of a family employee), the employer must pay an excise tax equal to 8 percent of average wages. Small employers (measured by payroll size) have smaller payroll tax rates of 0 percent (<$500,000), 2 percent ($500,000-$585,000), 4 percent ($585,000-$670,000), and 6 percent ($670,000-$750,000).

Individual Mandate Surtax (Page 296): If an individual fails to obtain qualifying coverage, he must pay an income surtax equal to the lesser of 2.5 percent of modified adjusted gross income (MAGI) or the average premium. MAGI adds back in the foreign earned income exclusion and municipal bond interest.

Medicine Cabinet Tax (Page 324): Non-prescription medications would no longer be able to be purchased from health savings accounts (HSAs), flexible spending accounts (FSAs), or health reimbursement arrangements (HRAs). Insulin excepted.

Cap on FSAs (Page 325): FSAs would face an annual cap of $2500 (currently uncapped).

Increased Additional Tax on Non-Qualified HSA Distributions (Page 326): Non-qualified distributions from HSAs would face an additional tax of 20 percent (current law is 10 percent). This disadvantages HSAs relative to other tax-free accounts (e.g. IRAs, 401(k)s, 529 plans, etc.)

Denial of Tax Deduction for Employer Health Plans Coordinating with Medicare Part D (Page 327): This would further erode private sector participation in delivery of Medicare services.

Surtax on Individuals and Small Businesses (Page 336):
Imposes an income surtax of 5.4 percent on MAGI over $500,000 ($1 million married filing jointly). MAGI adds back in the itemized deduction for margin loan interest. This would raise the top marginal tax rate in 2011 from 39.6 percent under current law to 45 percent—a new effective top rate.

Excise Tax on Medical Devices (Page 339): Imposes a new excise tax on medical device manufacturers equal to 2.5 percent of the wholesale price. It excludes retail sales and unspecified medical devices sold to the general public.

Corporate 1099-MISC Information Reporting (Page 344): Requires that 1099-MISC forms be issued to corporations as well as persons for trade or business payments. Current law limits to just persons for small business compliance complexity reasons. Also expands reporting to exchanges of property.

Delay in Worldwide Allocation of Interest (Page 345): Delays for nine years the worldwide allocation of interest, a corporate tax relief provision from the American Jobs Creation Act

Limitation on Tax Treaty Benefits for Certain Payments (Page 346): Increases taxes on U.S. employers with overseas operations looking to avoid double taxation of earnings.

Codification of the “Economic Substance Doctrine” (Page 349): Empowers the IRS to disallow a perfectly legal tax deduction or other tax relief merely because the IRS deems that the motive of the taxpayer was not primarily business-related.

Application of “More Likely Than Not” Rule (Page 357): Publicly-traded partnerships and corporations with annual gross receipts in excess of $100 million have raised standards on penalties. If there is a tax underpayment by these taxpayers, they must be able to prove that the estimated tax paid would have more likely than not been sufficient to cover final tax liability.

When Bush-era Republicans try to cut the Medicare/Medicaid budget, the Democrats howl.

Nancy Pelosi railed against town hall protesters by calling their efforts “astroturf” to insinuate that they were illegitimate. In this clip, we see her back home in San Francisco, conducting her own town hall and embracing the right for people to disrupt and indicating it is a just thing to do.

In August 2009, Nancy Pelosi called town hall protests “un-American” and “an ugly campaign… to disrupt public meetings”.

Here, Nancy Pelosi complains about what she sees as Republican free market philosophies and classifies them as “an anything goes mentality” with “no regulation, no supervision, no discipline”.

Four years earlier, Republicans and financial leaders alike almost begged the Left Wing Nuts to apply more regulation an oversight for Fannie Mae and Freddie Mac.

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