ObamaTax crumbling

We haven't written much about "the other" Exchange slated to go online shortly. The "Small Business Health Options Program (SHOP) exchanges" will enable employees of small groups to compare and purchase plans.

Oh, did I say will?

Sorry, my bad:

"The Obama administration now says a special system of exchanges designed to make it easier for small businesses to provide insurance will be delayed an entire year -- to 2015."

Ooopsies!

Turns out, setting these things up is no mean feat. And so HHS Secretary Shecantbeserious has thrown up her (no doubt well-manicured) hands on rolling out the small group Exchanges.

So here's a question: there are a LOT fewer small businesses than individual citizens, and they can't get this part right. So tell me about that countdown timer in the sidebar....

Tax Subsidy Blues (An Opus in Ooopsies)

One of the lesser-known pieces of The ObamaTax puzzle is that one "pre-qualifies" for any subsidy to which one might be entitled. That is, one signs up for one of the Exchange policies and part of that process is declaring guestimating one's 2014 annual income. It is partially upon that criterion that one's eligibility for a subsidy is based.

Here's a question:

What happens if you guess wrong?

Aye, therein lies a rub:

"Millions of people who take advantage of government subsidies to help buy health insurance next year could get stung by surprise tax bills if they don't accurately project their income ... What happens if you or your spouse gets a raise and your family income goes up in 2014? You could end up with a bigger subsidy than you are entitled to."

When you enroll in an Exchange Plan (since these are guaranteed issue, it is not an "application") any subsidy is based on your income. And since you probably won't know your 2013 total annual income in October, you can either guesstimate it or rely on your 2012 return.

But what if your 2013 income ends up being greater than your 2012 (hey, it could happen!)? That could spell trouble:

"If that happens, the law says you have to pay back at least part of the money when you file your tax return in the spring of 2015."

And who knows what your financial condition will be almost 2 years from now?

The ObamaTax: The gift that keeps on giving taking.

From the P&C Files: Members only

How to write this?

Over the years, we've chronicled some of the more, um, interesting things folks have sought to insure: their virginity, marathons, even football games.

But I think this one may be the most unusual yet:

"In an interview earlier this week, Van Halen frontman David Lee Roth surprised no one by revealing that he’d had his penis insured by Lloyd’s of London."

One shudders to consider the list of covered [ahem] exposures  such a plan would entail, but I've always said that, if price is no object, one can insure anything.

Even "Little Elvis."

ObamaTax Good News/Bad News

First the "good news. Remember this?

"A fast-food chain is slashing employee hours so franchise owners don't have to pay health benefits"

Well, turns out that is the good news, at least for Dave's Place:

"Wendy's Co. (WEN) initially estimated the health-care law would increase the cost of operating each of its 5,800 U.S. restaurants by $25,000 a year. But Chief Financial Officer Steve Hare told an investment conference ... that executives have cut the estimate by 80%, to $5,000 a year, primarily because they expect many employees to decline the insurance offering."

So those lucky few who do keep their full-time positions will most likely play chicken with The ObamaTax, either because they see it as the waste that it is or because they can't afford the premiums.

Over at Popeye's, for instance, most of their eligible employees don't sign up for health insurance now, before the major rate increases necessitated by The ObamaTax, and company execs don't expect any uptick in that:

"Ralph Bower, Popeye's president-U.S ... doesn't expect many more employees to enroll next year"

Funny how that's working out, isn't it? It's almost like the folks who didn't read the plan before they passed it didn't understand how it would work in the real world.

Hunh.

[Hat Tip: FoIB Sam B]

Wrong House

Don't you just hate it when you make big plans, get all gussied up for a party, and then show up at the wrong house?

According to a recent Obamacare lawsuit, that may be what happened on the way to ramrodding this mess through Congress.

A challenge filed by the Pacific Legal Foundation contends that the Affordable Care Act is unconstitutional because the bill originated in theSenate, not the House. Under the Origination Clause of the Constitution, all bills raising revenue must begin in the House. 

The Supreme Court upheld most provisions of the act in June, but ChiefJustice John G. Roberts Jr. took pains in the majority opinion to define Obamacare as a federal tax, not a mandate. That was when the Sacramento, Calif.-based foundation’s attorneys had their “aha” moment.

“The court there quite explicitly says, ‘This is not a law passed under the Commerce Clause; this is just a tax,’” 

Washington Times

JUST a tax. The largest tax increase in the history of the US.

The challenge citing the Origination Clause isn’t the only lawsuit against Obamacare, but it is the only one that has the potential to wipe out the entire act in one fell swoop.

Makes you wonder why PresBO and the critters in DC keep trying to sell us something most people don't want and never wanted from the start.

The Justice Department also points out that the court has allowed revenue bills to originate in theSenate if the money raised was incidental to the bill’s mission.

The Affordable Care Act’s central purpose is to “improve the nation’s health care system,” and it fulfills that goal “through a series of interrelated provisions, many, if not most, of which have nothing to do with raising revenue,” said the government brief.

I would hardly classify a $1 trillion plus tax as "incidental", and I fail to see how Obamacare improves the nation's health care system.

The VA as SP

Although we may not like to think so, the Veterans Administration health care system is, in fact, a single-payor, nationalized program. That is, the government finances and staffs it, administers it and decides who gets what level of treatment.

So how does it stack up against what's left of our private health care system?

Not so great:

"[T]he office that handles complaints from federal whistle-blowers says it has found a pattern of problems at a Department of Veterans Affairs medical center in Jackson, Miss., that raises serious questions about the hospital’s management practices ... “Collectively, these disclosures raise questions about the ability of this facility to care for the veterans it services"

And keep in mind: this is The Gray Lady, hardly a bastion of right-wing opinion.

Aside from the shanda that this is how we care for those who served our country, another real question is raised about how the rest of us will fare under the single-payor system that is the true goal of The ObamaTax.

If You Build It . . .

they may not come.

One of the big assumptions of Obamacare is that young, mostly healthy individuals will buy health insurance.

But what if you give a party and no one comes?

That is what the folks at KHN ponder.

Getting sufficient enrollment, especially from the young and healthy, is vital to holding down premium costs in those markets. The concern is that if all the sick people flood the exchanges and younger, healthier ones hang back, health care costs will spike, along with premiums.

Yet one of the biggest reasons for the anemic initial enrollment in the county program that began in 2006, called Vita Health, and similar programs is that many healthy people don't believe they need insurance and are reluctant to spend even nominal amounts to purchase it, say organizers. 

“A lot of people who are uninsured and can afford it, don’t buy it because they aren’t sick,” said Paul Gionfriddo, a consultant who formerly led an alliance in Palm Beach County to help the uninsured.  

Kaiser Health News

I run into this all the time. Many of my under age 27 clients only have health insurance because their parents found a plan and are paying the premium.

Of course let's not forget that Obamacare age compression means premiums for those under age 35 will increase at a higher percentage than those age 55+.

But persuading millions of people to buy insurance, even those eligible for subsidies, is still expected to be a very tough sell. The Obama administration, which will run the marketplaces in at least 33 states has yet to release any details of its marketing campaign designed to let people know about new insurance options and how to enroll. 

I wonder how much of our tax dollars will be used to advertise free and almost free health insurance?

Isn't it bad enough we are advertising welfare benefits in Mexico, now we have to promote a health insurance plan that most people don't want?

In Florida, another effort to reduce the uninsured, JaxCare, also suffered from low enrollment. JaxCare, which started in Jacksonville in 2004, was marketed as low-cost coverage for small employers. Employers could get low-income workers covered for $50 a month. But two years after it began, fewer than 500 people had signed up, or less than a third of those projected.  Jaxcare, which closed in 2008 when city funding ran out, finally did reach its goal of covering 1,500 people, but it took nearly four years.

Sounds like PCIP.

Enrollment in the national plan for those with pre-existing conditions was anemic. Eventually insurance agents were paid a finders fee for referring people to the plan.

The bounty offer lasted about 6 months and many agents never got paid for many of their referrals. Then PCIP ran out of money and abruptly closed new enrollments with only a few days notice.

No way this will happen with Obamacare.

Right?