Before ACA, Medicare and Medicaid was by Federal law to be sent by Federal agencies to states and cities to be distributed equally amongst people qualified to receive. It is true that Clinton/Bush/Obama ignored Federal and US Constitutional enforcement and allowed states to violate the methods of distribution of these Federal funds---the ACA now tries to fold that inequity into health reform law.
Maryland has done that for decades as the only state in the nation requesting and receiving Medicare exception----meaning it was supposedly allowed to ignore Federal laws of equal distribution of funds BUT SUCH AN EXEMPTION WAS ALWAYS ILLEGAL. ONE CITIZEN CANNOT BE DENIED RIGHTS THAT OTHERS STILL RECEIVE UNLESS CONVICTED OF CRIMINAL ACTIVITY.
Maryland was allowed to pool Medicare and Medicaid funds and for decades simply used that pool as a slush fund----these funds were misappropriated and mostly used to expand health corporations like MedStar and Johns Hopkins nationally and globally. Meanwhile, citizens that should have received these funds did not and longevity disparities soared in Baltimore as a result.
This started as a race and class issue but I could hear all citizens in Maryland and Baltimore becoming disgusted by the misuse of these vital social programs that both Republicans and Democrats love----Republicans may not love Medicaid---but when you allow one program to be dismantled and subprimed----then comes the next program---Medicare ---and that is what Affordable Care Act does----it privatizes both Medicare and Medicaid into these private health systems where they will be used anyway these soon to be global corporate health systems want ----and with Federal funding---that is always as subsidy to profit.
CLINTON/OBAMA WALL STREET GLOBAL CORPORATE NEO-LIBERALS WANT TO END OUR MEDICARE AND MEDICAID JUST AS MUCH AS REPUBLICANS AND AFFORDABLE CARE ACT DOES THIS.
The VAT tax is simply a new tax structure for health care that never existed outside of our payroll taxes.
So, why is the health insurance mandate tied to the word----TAX?
What the Supreme Court ruled on health care 'tax'
By Josh Levs, CNN
Updated 1:37 PM ET, Thu July 5, 2012
- The Supreme Court rejected arguments that the individual mandate involves a "penalty"
- The mandate "looks like a tax in many respects," Chief Justice John Roberts wrote
- The Obama administration argued that it's a penalty but also could be viewed as a tax
- The court said the Anti-Injunction Act does not apply
The Obama administration had argued that the fees should be considered a penalty. But the government also argued that the individual mandate can be viewed as constitutional under Congress' powers of taxation.
The high court rejected the "penalty" argument.
"The payment is not so high that there is really no choice but to buy health insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the (Internal Revenue Service) through the normal means of taxation," Chief Justice John Roberts wrote in the decision.
The court noted that the law calls for no other punishments for refusal to buy health insurance.
"Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insurance," the decision said, citing figures from the Congressional Budget Office. "We would expect Congress to be troubled by that prospect if such conduct were unlawful."
But on the taxation argument, the court agreed. The Constitution allows Congress to tax and spend, giving the federal government "considerable influence even in areas where it cannot directly regulate," the decision said.
The mandate "looks like a tax in many respects," Roberts wrote. The money is to be paid by people when they file their tax returns and does not apply to those who pay no federal income taxes; the amount someone owes "is determined by such familiar factors as taxable income, number of dependents, and joint filing status," and the "requirement to pay is found in the Internal Revenue Code and enforced by the IRS."
The high court overturned a unanimous decision by the 11th U.S. Circuit Court of Appeals that the mandate did not impose a tax.
The Supreme Court also ruled that it could proceed with considering the constitutionality of the tax despite the Anti-Injunction Act, which dates back 145 years. The law said lawsuits can't be used to prevent taxing, only to get refunded for taxes already paid. The high court said whether something is a tax for the purposes of the Anti-Injunction Act is Congress' decision -- and since Congress designated the mandate as including a penalty rather than a tax, the law did not apply in this case.
"It is up to Congress whether to apply the Anti-Injunction Act to any particular statute, so it makes sense to be guided by Congress's choice of label on that question. That choice does not, however, control whether an exaction is within Congress's constitutional power to tax."
The court emphasized that it was not weighing in on whether the mandate is a good idea.
"Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness," the decision said.
This is a great example of the debate over the Affordable Care Act and the mandate to buy insurance. The tax debate came when Obama and Clinton neo-liberals used what was called a tax to force US citizens onto these ACA state health systems. It was impossible to fight it because these taxes grew to the point of being more expensive than the health policies..which was the goal. Americans signing on to the ACA were slow coming---people do not want managed care----they do not want global health corporations writing these ACA health policies but media was ready to report that more and more people were signing on to ACA BECAUSE THEY COULD NOT AFFORD THIS TAX----FEE FOR NOT DOING SO.
This article does a good job in exposing Republicans as posing conservative in fighting this mandate----THIS MANDATE WAS WRITTEN AGAIN BY THE HERITAGE FOUNDATION---A REPUBLICAN THINK TANK. The New Republic news journal is a Clinton Wall Street global corporate neo-liberal media outlet so it gets fuzzy when reporting on the feelings of social Democrats on the left. It states that there were all kinds of protesting and critics other than Republicans ----but mentions only the Libertarians---the far-right group----see how these right-leaning media groups are making the far-right seem the group fighting for civil rights?
It was social Democrats that knew Affordable Care Act was a raging far-right health policy meant only to consolidate and deregulate the health industry creating global health systems that will operate like Wall Street---predatory and profit-driven with no attention to social good/safety/public interest. Social Democrats did not want Affordable Care Act because of this and it certainly did not want US citizens FORCED into these global corporate health systems which is why Republican think tanks wrote these health policies and Obama and Clinton neo-liberals pushed them. This article does a good job in describing how ACA folds Medicare and Medicaid into these private health care systems with the goal of ending them.
'Was this epiphany? Or political opportunism? While I can’t be sure, I can make a pretty good guess.
Now, the mandate critics do see one other distinction between Medicare and the Affordable Care Act. Americans pay for the former via paryoll taxes and for the latter through either insurance premiums or the penalty. The former clearly falls within the constitution's taxing power but the latter, according to the critics, does not'.
See how New Republic points to Libertarians as the civil rights group fighting this and never mentioning social Democrats?
The Bad Faith of Mandate Critics, Part 1
By Jonathan Cohn
February 3, 2011 New Republic
Is there an honest constitutional argument against the individual mandate? Of course there is. The constitution is ambiguous and open to conflicting interpretations.
But are the people making constitutional arguments against the mandate being honest? Count me as very skeptical.
As you probably know by now, many of the conservatives in high dudgeon about the individual mandate had no problem with it when it was a staple of Republican health care proposals. Several, including Senate Finance Chairman Charles Grassley, actually endorsed it as a reasonable demand for personal responsibility and essential component of universal coverage. Only after President Obama endorsed the mandate did they decide it was not just bad policy but an act of full-blown tyranny.
Was this epiphany? Or political opportunism? While I can’t be sure, I can make a pretty good guess.
But forget about them and think about the mandate’s more genuine critics: The lawyers, writers, and experts providing intellectual ballast for this crusade. Many of them have long histories of libertarianism. I don't share their views, obviously, but I have no problem believing their opposition to even modest extensions of government power is sincere -- and that, as a result, they think the individual mandate not just unconstitutional but even immoral.
What I don't understand is how these people can, on the one hand, reject enactment of the Affordable Care Act and, on the other hand, accept the existence of a program like Medicare.
That is precisely what many of them argue and what Judge Roger Vinson stated in his opinion this week.
Both Medicare and the Affordable Care Act perform the same essential function: Providing access to affordable medical care in exchange for ongoing, fixed contributions based on income. The key difference is that Medicare historically required people to enroll in a government-run program while the Affordable Care Act will give people the option of enrolling in private insurance plans or, barring that, paying an income-related penalty to offset the eventual cost of their uncompensated care. From a conservative perspective, surely the Affordable Care Act is the lesser intrusion on liberty, because it allows more individual choice of payment and coverage while establishing less direct government interference with the health care marketplace.
Now, the mandate critics do see one other distinction between Medicare and the Affordable Care Act. Americans pay for the former via paryoll taxes and for the latter through either insurance premiums or the penalty. The former clearly falls within the constitution's taxing power but the latter, according to the critics, does not.
There is the question about paying twice----payroll taxes have paid for our Medicare and yet-----it is being folded into plans for which we are made to pay.
I think that's a pretty shaky distinction, for reasons I've explained and will soon discuss further. But even if you accept that claim, it's more an argument about rhetoric and labeling than high principle. (As Ezra Klein wrote on Wednesday, "I don't believe our forefathers risked their lives to make sure the word 'penalty' was eschewed in favor of the word 'tax.' ") When it comes to fundamental principles of liberty, the strident critics of the Affordable Care Act's mandate--i.e., the ones invoking the tyranny of King George III--should be outraged by Medicare's payroll taxes, too.
And most of them probably are. I can't read minds, obviously, but my hunch is that their objection isn’t to a mandatory scheme of private insurance. It’s to a mandatory scheme of any insurance. Or to mandatory schemes in general. The problem, in other words, is the “mandatory” part. And that implicates Medicare as much, if not more than, the Affordable Care Act.
Of course, these thinkers on the right know the public won't entertain moral objections to Medicare any more than the courts will entertain constitutional ones. It's settled law and, for the most part, settled policy. So they don't challenge Medicare, except to argue for privatizing it--which, as it happens, would turn Medicare into a program that looks almost precisely like the Affordable Care Act. Gee, do you think they'd argue that's unconstitutional too?
Raise your hand if you see this same penalty being applied to Maryland's SMART METER program! EVERYONE. Smart Meters are a very far-right global corporate policy with goals of maximizing profits by soaking citizens and rate-payers. Well, that is what this health insurance mandate does and the fees 'taxes' pushing us into these health systems is again---very right wing. As with Smart Meters controlled by global corporations that will soak us-----so too will these health systems and mandated health policies.
AND NONE OF THIS WAS EVER NEEDED. IT WAS ALL A GREAT BIG TRILLION DOLLAR GIVE-AWAY TO THE INSURANCE INDUSTRY.
What is very, very dangerous about ACA is this=======when you are forcing people into these very private profit-driven soon to be global health systems ====being totally deregulated under free market===with a dismantling of all Western medical ethos of Hippocratic Oath and Patient's Bill of Rights---
SOCIAL DEMOCRATS ARE GOING CRAZY AND THAT IS WHAT EXPANDED AND IMPROVED MEDICARE FOR ALL ADDRESSES.
Loopholes Excuse Most Uninsured from Affordable Care Act Mandate
Written By : Pat Palmer
According to what we thought we knew about the Affordable Care Act’s individual mandate, those who are uninsured must purchase health insurance or face a tax penalty. The Affordable Care Act itself offers subsidy assistance for those with incomes between 100 and 400% of the Federal Poverty Level (FPL) in efforts to get consumers insured and avoid this penalty.
This year the amount of the tax penalty will be either $95 or 1% of the person’s income – whichever is greater. Next year, the tax will increase to $325 or 2%, and in 2016 it will further increase to $695 or 2.5% respectively.
Critics have not held their tongue regarding the individual mandate, calling it unconstitutional. A few exemptions were initially written into the law for those whose situation prevented them from enrolling in a healthcare plan, but these circumstances were previously thought of as exceptions to the rule.
Anyone who fit the bill for these workarounds would be exempt from the mandate. These exemptions included those who fall into the Medicaid coverage gap, Native American exemptions and religious beliefs.
What we’re seeing now, though, is a growing list of exemptions – some highly controversial. The individual mandate has lost some of its original bite, and now, according to the Congressional Budget Office (CBO), most people without insurance won’t have to comply.
CBO and Joint Committee on Taxation reported that, of the 30 million uninsured people in the country, about 27 million will not be held to the mandate, because they fall under one of the expanded exemption umbrellas.
The number of people exempt from the law has spiked in part because of states not expanding Medicaid, resulting in a number of people falling into the coverage gap. This is further exacerbated by a recent legal battle over whether or not the Affordable Care Act was written to allow consumers to receive subsidies in states that did not operate their own healthcare exchange. The administration lost the case and has since asked for the decision to be overturned.
Undocumented immigrants are also exempt from the mandate. According to Kaiser Health News, undocumented immigrants in California account for 24 percent of the uninsured population. The Commonwealth Fund reported that California has about a quarter of the nation’s undocumented immigrants. This statistic gives a good idea of just how many people qualify as an exception under this one exemption.
If a person’s income is so low that they do not need to file a tax return, or if the only healthcare plans available to them would cost over eight percent of their income, they would also be eligible to apply for the exemption.
Victims of domestic violence can be exempt from the individual mandate. Critics of Obamacare cite this as ridiculous and claim it has nothing to do with whether or not they can afford healthcare, and some believe that it may mean they need healthcare even more. Victims are not required to offer proof of the domestic violence; they need only claim that they have experienced it recently.
If a person has been evicted or foreclosed on their home, or they are facing eviction or foreclosure, the administration has given them the opportunity to apply for the exemption and avoid the tax. Furthermore, if a person was homeless at any time in the past year, they are also exempt.
Also, if a person is incarcerated or being held on pending charges, they may qualify for an exemption. If they are taking care of a disabled, ill or elderly family member or if a family member passes away, they may also qualify.
The list of exemptions goes on further to include those who have had property damage caused by a natural disaster, people who have had problems registering on the website, those who received a shut-off notice from their utility company and anyone who is a member of a healthcare sharing ministry.
As made clear by the long list of possible exemptions, one may be hard pressed to find someone who doesn’t qualify for one. Worries are plaguing insurance companies, because a flimsier mandate means fewer people have to enroll, and if fewer people buy insurance, the risk pool weakens.
Healthy young people seem to be a big part of those who can claim exemption from the mandate. Some fear this could drive up costs once again, causing the older and less-healthy population to have to foot more of the bill.
A representative of Blue Cross and Blue Shield of North Carolina confirmed that more sick and elderly people enrolled during the first period than anticipated. In a program that relies upon the young and healthy enrolling, this can be disastrous. The representative also said that strengthening the mandate, and increasing penalties would help the risk pools. One recommendation was to make insurance more affordable for the young and healthy individuals.
Those that were already against Obamacare and the individual mandate are wondering what the point of the law is if most of the people targeted are going to be exempt from it anyway. Furthermore, critics already opposed to the mandate ask why the administration doesn’t just move to waive the mandate altogether since it seems so easy to dodge anyway.
Douglas Holtz-Eakin, former CBO director, remarked, “If your pajamas don’t fit well, you don’t need health insurance.” He went on to say that the exemption increase “basically waives the individual mandate.”
Douglas Holtz-Eakin, former CBO director, remarked, “If your pajamas don’t fit well, you don’t need health insurance.” He went on to say that the exemption increase “basically waives the individual mandate.”
Critics also say that some of the exemptions are quite possibly illegal and that because of this growing list, the number of uninsured individuals will not be much different than it was before the implementation of Obamacare, citing the entire system as a failure.
Supporters claim that it is not the intention of the law to force those who can’t afford insurance to buy it anyway, which is what many assume the individual mandate is all about. They say the reason behind the plethora of exemptions is to help those who do not fall neatly into the categories set out by the ACA.
The exemptions simply supply relief to those who can’t afford it or are going through some type of hardship. Those who can afford to buy health insurance, in their opinion, should do so in order to cover themselves and avoid their healthcare bills being passed on to other consumers.
Furthermore, supporters say that even though so many consumers qualify for exemptions, that number is not indicative of how many will actually use them. Most people want health insurance coverage, and due to the Affordable Care Act and subsidy programs, more people can enroll in a plan and actually afford to pay for it.
Because of this, many who have the green light to request an exemption are likely to go ahead and enroll in a healthcare plan that fits their budget, and when they do, the estimated numbers may fall closer to where CBO originally predicted rather than fall to their downgraded estimate.
CBO said the increase in options for exemption from the individual mandate “is attributable in part to regulations issued since September 2012 by the Departments of Health and Human Services and the Treasury and in part to technical updates and changes in the economic outlook.”
Arguments from both sides have their own level of merit, but only time will tell what effects this myriad of exemptions for the individual mandate will have on consumers as well as the Affordable Care Act as a whole.
Here we see what the Republicans are fighting against in this Republican health policy----it's not the mandate to buy---it is the mandate of corporations to provide insurance policies. Now, if you know neither Clinton/Obama Wall Street global corporate neo-liberals or Republicans want corporations to pay for insurance---that is what ACA was designed to do---end corporate health plans---you know Obama never intended to make corporations mandated to participate----THIS WAS JUST PROGRESSIVE POSING. All corporate health plans will end and right now those are the ones still connected to quality, first world health coverage for the rest of the 95%. The statement below shows how the Urban Institute---which used to be social Democratic in supporting Federal Equal protection laws is now working for the global corporations coming into US cities deemed International Economic Zones.
As Republican is the independent review board which will as with any QUASI-GOVERNMENTAL agency be filled with corporate appointments under Clinton/Obama neo-liberals. That is why Baltimore is filled with these agency structures. Republicans simply wanted to get rid of Medicaid and Medicare OUTRIGHT instead of the gradual disappearance of folding it into private health systems.
'Dropping that requirement would not significantly affect the number of Americans with coverage, researchers at the Urban Institute said in a recent report titled, “Why Not Just Eliminate the Employer Mandate?”
A Post-Election Day Certainty: New Scrutiny for the Affordable Care Act
By ROBERT PEAR
NOV. 6, 2014 New York Times
Senator Susan Collins, who was re-elected in Maine, wants to revise a clause in the health law. Credit Bill Sikes/Associated Press
WASHINGTON — This week’s elections ensure a new round of political attacks on the Affordable Care Act, but they also create potential opportunities to repair provisions of the law that people on both sides of the partisan divide would like to fix.
With the shift in power in the Senate, Republicans can turn up the heat on the White House, which has dismissed as political stunts repeated House votes to repeal the law.
Republican leadership aides in the Senate and the House said that a few more such votes were likely because many of the new Republican lawmakers had vowed in their campaigns to dismantle the Affordable Care Act. President Obama said Wednesday that he would oppose changes that “undermine the structure of the law” or “take away health care from the 10 million people who now have it and the millions more who are eligible to get it.”
But Mr. Obama said he would be “open and receptive” if Republicans proposed “responsible changes to the Affordable Care Act to make it work better.”
Republicans are sure to test that commitment, knowing that their idea of “responsible changes” can appear to Democrats like an attempt to gut the law.
“In the new Congress, there will be at least one vote on full repeal of the Affordable Care Act,” said Joseph R. Antos, an economist at the American Enterprise Institute, a right-of-center think tank. “New members ran on that as part of their platform. Beyond that, the likely strategy is to pursue targeted proposals that on their face make sense to the public at large.”
Mr. Antos pointed to provisions of the law that define employers’ responsibility to provide insurance to employees. Under the law, larger employers are subject to tax penalties if they do not offer coverage to “full-time employees,” defined as those who work at least 30 hours a week, on average. Senators Susan Collins of Maine, a Republican, and Joe Donnelly of Indiana, a Democrat, have introduced a bill to change that to 40 hours, and the House in April passed similar legislation.
Mr. Obama threatened to veto the bill last spring, saying it would increase the number of uninsured. On the other hand, some public and private employers say they have reduced the work hours of some employees to avoid the expense of providing them with health insurance, and if the Senate joins the House in pushing such changes, Mr. Obama would be hard-pressed to avoid negotiations.
Senator Mitch McConnell of Kentucky, the Republican in line to be majority leader, and Speaker John A. Boehner said they would advance a proposal to restore what they called “the traditional 40-hour definition of full-time employment.”
Short of repealing the whole law, Republicans list other changes they may seek: repealing a federal excise tax on medical devices; eliminating an independent board that is supposed to limit the growth of Medicare spending; and abolishing special payments to insurers that Republicans criticize as a bailout for the industry.
Mr. Boehner made the case for piecemeal changes on Thursday. “Just because we may not be able to get everything we want, doesn’t mean that we shouldn’t try to get what we can,” he said.
Whether the administration is willing to negotiate is unclear. Even if the president authorized negotiations, Senate Republicans would still need 60 votes in most cases, and they say they doubt that Mr. Obama could deliver the votes of Democrats needed to achieve such a majority.
White House officials have repeatedly complained that Republican hostility to the health care law made it impossible to pass “technical corrections” or other legislation to clarify or modify its provisions. Supporters of the law would, for example, like to clarify that premium subsidies are available to people in all states, regardless of whether they have an insurance exchange established by the state or by the federal government. The administration and its critics are locked in court fights over that question, which arises from ambiguous language in the law.
The power shift in Washington comes just as some supporters of the Affordable Care Act are raising questions about its requirement for employers to offer coverage to employees.
Dropping that requirement would not significantly affect the number of Americans with coverage, researchers at the Urban Institute said in a recent report titled, “Why Not Just Eliminate the Employer Mandate?”
Prof. Timothy S. Jost, an expert on health law at Washington and Lee University, supports the Affordable Care Act but said the employer mandate “cries out for repair.”
Mr. Obama said Wednesday that he could not accept repeal of the individual mandate. But he did not make such a statement about enforcement of the employer mandate, which he has twice delayed.
In an interview Thursday, Representative Michael C. Burgess, Republican of Texas and chairman of the Congressional Health Care Caucus, said, “I would be surprised if the president vetoed repeal of the employer mandate.”
Mr. Obama had been hoping that the elections would increase the number of Democratic governors eager to expand Medicaid eligibility, and to that end, he campaigned last week for Democratic candidates in Wisconsin and Maine. But in both states, voters re-elected Republican governors opposed to expansion of the program.
The election results do not immediately alter the outlook for expansion of Medicaid, but could strengthen the hand of Republican governors negotiating with the Obama administration for permission to expand it in their own way. Gov. Gary R. Herbert of Utah and Gov. Mike Pence of Indiana, both Republicans, have been engaged in such negotiations for months.
Speaking to state Medicaid directors on Tuesday, Sylvia Mathews Burwell, the secretary of health and human services, said the administration was eager to cut deals. “We’re eager and willing to work with states that have yet to expand,” Ms. Burwell said.
Sara Rosenbaum, a professor of health law and policy at George Washington University, said some states that have refused to expand Medicaid might go along with a partial expansion — an option that is not allowed by the administration but could be considered by Congress.
Under the law, the federal government offers large financial incentives to states that agree to provide Medicaid to anyone with income less than 138 percent of the poverty level (less than $16,105 a year for an individual). Among states that have chosen not to expand Medicaid, some want to extend eligibility up to the poverty level ($11,670 for an individual), but no further.
“This is a request that states have repeatedly made to the administration,” Ms. Rosenbaum said. “They may find that a Republican Congress is more receptive to the idea.”
The biggest issue for seniors is that after decades of paying payroll taxes to simply sign up for Medicare and get most of the health coverage you need----now Medicare and Medicaid are being folded into plans that will be private health plans. You may think right now you age into Medicare and these private plans will use that money and not charge you----but that will not be the case. The goal is to end Medicare and Medicaid as Federal programs regardless that we paid payroll taxes for decades.
Here you see Republicans posing conservative again on taxation shouting it is the tax and spend Democrats adding all kinds of taxes-----remember that plan by Republicans to use health care to get the Value-Added Tax---VAT installed ---
THAT IS WHAT ALL THIS PROPAGANDA ABOUT TAXES HAS AS A GOAL----REPUBLICANS WILL SAY----LET'S GET RID OF ALL THESE DIFFERENT TAXES AND HAVE ONE VAT.
'Medicare’s payments for health services would fall increasingly below providers’ costs. Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.'
'This means that Medicare will owe $36 trillion worth of benefits for which it currently does not have the money to pay'.
Remember when Reagan TRIPLED OUR PAYROLL TAX RATE JUST TO MAKE SURE THERE WAS PLENTY FOR SOCIAL SECURITY AND MEDICARE FOR BABY BOOMERS?
The problem of course was a few decades of massive corporate fraud and profiteering emptying our Medicare Trust as well as our Social Security Trust.
$36 trillion dollars in benefits? REALLY????? Deduct $20 trillion in corporate fraud and profiteering and you will see the real costs to Americans in supporting our Federal Medicare Trust and program. They are making Medicare sound so unaffordable to end it----when it is affordable by far than the global private health systems they are forcing the American people join.
Obamacare’s Impact on Seniors: An Update
By Alyene Senger
About the AuthorAlyene Senger Research Associate
Center for Health Policy Studies
The Patient Protection and Affordable Care Act (Obamacare) makes dramatic changes in the country’s health care system, especially in Medicare, that will seriously affect American seniors. Indeed, much of the health law’s new spending is financed by spending reductions in the Medicare program.
Less Access to Care
Obamacare mandates $716 billion in Medicare payment reductions from 2013 to 2022. However, contrary to the way they are often portrayed, these cuts are not aimed at specific instances of waste, fraud, and abuse. Instead, they are across-the-board changes in Medicare payment formulas for a variety of Medicare providers, including hospitals, nursing homes, home health agencies, and hospice agencies.
Despite the constant political rhetoric that Medicare payment reductions affect only providers and not beneficiaries, funding cuts for Medicare services will directly affect those who depend on those services. If Obamacare’s major reductions are implemented by Congress over the coming decade, seniors’ ability to access Medicare services will surely diminish. In fact, the Medicare Trustees project that the lower Medicare payment rates would cause 15 percent of hospitals, skilled nursing facilities, and home health agencies to become unprofitable by 2019, and this percentage would reach roughly 25 percent in 2030 and 40 percent by 2050.
This means that seniors would have an increasingly difficult time accessing care. As the Trustees explain:
Medicare’s payments for health services would fall increasingly below providers’ costs. Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.
Fewer Plan Choices
In addition to the provider payment reductions, Obamacare significantly reduces payments to Medicare Advantage (MA) plans by an estimated $156 billion from 2013 to 2022. About 27 percent of all Medicare beneficiaries are enrolled in MA plans, a system of regulated and private plans competing against each other as an alternative to traditional Medicare. MA plans are attractive to beneficiaries because they offer more generous and comprehensive coverage than traditional Medicare by capping out-of-pocket costs and offering drug coverage.
When Obamacare was enacted in 2010, the Medicare Actuary projected that the impact of Obamacare’s cuts would be significant: “We estimate that in 2017, when the MA provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law).” This means that these enrollees would have to enroll in the less generous traditional Medicare program, causing them to lose their current health plan and likely face increased out-of-pocket costs.
The Congressional Budget Office (CBO) recently updated its MA enrollment estimates, projecting a significant increase in seniors who will be enrolled in MA plans by 2023. Thus, conflicting enrollment projections leave Medicare Advantage with an uncertain future. It is not yet known how MA plans will react to Obamacare’s significant reductions or how beneficiaries will respond to any changes made by MA plans.
Less Access to Physicians
Obamacare gives new powers to make additional cuts in Medicare through the Independent Payment Advisory Board (IPAB). IPAB is comprised of 15 unelected bureaucrats charged with meeting a newly created Medicare spending target. If spending exceeds the target, the board is to make recommendations to Congress to rein in spending. Congress must heed its recommendations or enact reforms with equivalent savings.
One of the only significant tools available to IPAB to reduce Medicare spending is to cut physician reimbursement rates. The trustees project that Medicare spending will exceed the target spending level for the first time in 2016, prompting IPAB to make its initial recommendations. Doctors are already leaving the Medicare program, likely due to ever-increasing government regulations and the habitual uncertainty regarding their reimbursement. The Centers for Medicare and Medicaid Services released information that 9,539 physicians who had accepted Medicare opted out of the program in 2012, which is significantly more than the 3,700 who dropped out in 2009. With the ominous power of an unelected new board hanging over them, it is likely that more physicians will choose to leave the Medicare program in coming years.
The House has passed bipartisan legislation to repeal IPAB.
Higher Part D Premiums
Obamacare gradually reduces seniors’ out-of-pocket costs in the Medicare Part D drug coverage gap, commonly referred to as the “donut hole,” until the gap is completely phased out in 2020. While this will help a small number of seniors who face the gap, it will increase the cost of the Part D benefit, a portion of which will be passed on to the beneficiaries.
According to the CBO, “enacting those changes would lead to an average increase in premiums for Part D beneficiaries of about 4 percent in 2011, rising to about 9 percent in 2019.” This average premium increase means a lot considering how few seniors actually fall into the gap. While the average premiums of all Part D beneficiaries will increase, of the 48.6 million Medicare enrollees in 2011, only 3.6 million actually fell into the donut hole.
Obamacare will also cause seniors to pay higher taxes. The higher taxes on prescription drugs (effective in 2011) and medical devices (effective in 2013) will affect seniors especially, as they are more heavily dependent on those very products. Older people, of course, have higher health costs than younger people, but the existing tax deduction for medical expenses will be raised from 7.5 percent to 10 percent of adjusted gross income in 2013. The reduced tax deductibility of medical expenses is waived for seniors only from 2013 to 2016. Likewise, older people have larger investments than younger people, so high-income seniors will be more heavily affected by the new 3.8 percent Medicare tax imposed on unearned or investment income (effective in 2013).
New federal health insurance taxes, both premium taxes and excise taxes, will also affect older workers and retirees. The federal premium tax (effective in 2014) will be applicable to Medicare Advantage plans and health plans offered to federal retirees in the Federal Employees Health Benefits Program (FEHBP). Oliver Wyman, a leading benefits consulting firm, has estimated that “[in] the Medicare market, the premium tax would increase the expected cost of MA coverage per enrollee by $3,604 over the ten-year period.”
Medicare’s Future Still Unstable
Obamacare’s changes in Medicare, and thus its impact on seniors, must be viewed in the overall context of the Medicare program. Medicare faces a dire financial future. The Medicare Part A trust fund is projected to be exhausted by 2026, and under the most realistic scenario, the entire program has a long-term unfunded obligation of $36 trillion. This means that Medicare will owe $36 trillion worth of benefits for which it currently does not have the money to pay.
However, despite these enormous problems, Obamacare’s Medicare “savings” are not even reserved to enhance the solvency of the financially troubled program. Instead, the money is counted as paying for new spending on non-Medicare coverage expansions in Obamacare.
Rather than implementing the structural reform desperately needed in Medicare, Obamacare’s provisions threaten current seniors’ ability to access care and leave Medicare in jeopardy for future generations.