Obamacare Cadillac Tax’s Secret Threat to FSAs

You may like your flexible spending account … you might not be able to keep it.

Obamacare’s impeding “Cadillac tax” on high-cost health plans threatens to hit 1 in 4 U.S. employers when it takes effect in 2018—and will impact 42 percent of all employers by a decade later, according to a new analysis. 

And many of those employers will be subject to the heavy Obamacare tax because they offer popular health-care flexible spending accounts to workers, which, ironically, are designed to reduce the income tax burden to those employees.

As a result, the co-author of the analysis expects the health FSAs to start being phased out and “largely disappearing” over time by companies looking for reduce their exposure to the Cadillac tax.

GOP Struggles to Replace Obamacare without Losing Voters

Just before Louisiana Gov. Bobby Jindal revealed his plan to replace Obamacare last year, he sat down with 15 of Washington’s top conservative healthcare wonks to discuss it. They didn’t approve.

That’s because any attempt to roll back Obamacare might lead to losing votes from milions of people that already have the coverage.

In other words, even Obamacare’s toughest critics say that parts of the ACA are here to stay.

Read more at The Hill

IRS May Never See Some $350 Million Worth of ACA Tax Credit Overpays

According to a recent article by Tom Howell, Jr., in The Washington Times (online, Aug. 11), a flaw in The Affordable Care Act ” means the IRS will never be able to recoup nearly $350 million in overpayments on Obamacare tax credits last year, and one top senator says he is worried that fraudsters will exploit the loophole to wring more cash out of the government.”

That key Senator is Sen. Chuck Grassley, R-Iowa, who says, “It’s unclear how many people might be intentionally underestimating their income to get an overpayment, and whether the statutory repayment cap should be changed to minimize this incentive.” Grassley adds, “The challenge is to balance cracking down on the intentional gaming of the credit with fairly treating taxpayers who have been overpaid through no fault of their own.”

Howell’s Washington Times report also quotes Timothy Jost, a professor law at law at Washington and Lee University. Jost closely monitors Obamacare. The Washington Times summarizes Jost’s position on the issue by saying, “exchange customers should get better at estimating their income over time, and 2014 might have been an aberrant year as customers had a difficult time logging onto balky Web systems to update their income status. “We’re going to get a closer fix on what people actually owe.”

Read more at: The Washington Times

Feds Fail to Properly Scrutinize Obamacare Applications

An Aug. 10 story in The Washington Examiner says (Robert King, online) says (in July of this year) “11 fake Obamacare applications were able to re-enroll in the healthcare program and continue to get subsides.” The source of these findings is a study by the Government Accountability Office (GAO).  Predictably, this ignited a fire under members of the GOP, who later said, “the administration fails to create appropriate safeguards to federal tax dollars,” according to The Washington Examiner.

Compounding matters along these lines, an HHS IG (Health and Human Services Inspector General) investigation found that under the Obama administration there has not been an accurate review whether some ACA applicants “were U.S. citizens or in jail, two factors that should disqualify people from getting health insurance under the law,” as King’s Examiner article explains it.

Read more at The Washington Examiner

Mike Huckabee Gets It Half-Right On Obamacare

A recent article by Linda Qiu (8/7, PolitiFact online) quotes former Arkansas Governor and 2016 presidential hopeful, Mike Huckabee from the recent Aug. 6 GOP debate: “illegals, prostitutes, pimps, (and) drug dealers” have taken from Social Security.

Huckabee has also employed a similar line for the Affordable Care Act, “If Congress wants to mess with the retirement program, why don’t we let them start by changing their retirement program, and not have one, instead of talking about getting rid of Social Security and Medicare that was robbed $700 billion to pay for Obamacare?” According to PoltiFact such an anti-Obamacare narrative is not new to the GOP, actually going back to the 2010 mid-term elections.

PolitiFacts ruling? “Obamacare doesn’t literally ‘rob’ Medicare. But the Affordable Care Act does include provisions that reduce future increases in Medicare spending. In other words, the law slows down the rising costs of Medicare.”

The PolitiFact finding adds, “It’s also important to note that the savings come at the expense of insurers and hospitals, not beneficiaries.”

A resident scholar at AEI (the American Enterprise Institute) Andrew Biggs is quoted in the PolitiFact story as saying, “While ‘robbed’ is a bit loaded, the idea that Medicare beneficiaries are getting less generous benefits in order that the ACA can offer health benefits to younger people isn’t outrageous.”

Read more at PolitiFact.com 

Kasich Picks And Chooses On Obamacare Reform

While 2016 GOP presidential hopeful John Kasich has previously said he’d scrap Obamacare entirely, it may actually be a case of Kasich picking and choosing which facets of the ACA he likes, and those he doesn’t.

According to USA Today (online 8/15), featuring a story by Chrissie Thompson of the Cincinnati Enquirer,  this specifically means Kasich wants to be able to select the “facets of Obamacare he likes, with difficult agreements brokered by a hypothetical Kasich administration, but not mandated by law.”

Thompson’s account adds, “Kasich has insisted he wouldn’t cut back on the expansion of Medicaid to more low-income Americans. Instead, he says, he’d want to send the federal money back to states, with more freedoms on how to implement the program.”

Ideally, in Kasich’s world healthcare view, an unregulated marketplace or separate states “should be the vehicle for establishing the facets of Obamacare that he likes,” according to the Cincinnati Enquirer.

Thompson’ story continues, that Kasich “wants to ensure insurance coverage for people who have pre-existing conditions. He likes insurance exchanges. And he thinks everyone should have health insurance – even young, healthy people who need an incentive to sign up.”

Yet, the 2016 presidential hopeful has also argued for doing away with the Obamacare employer mandate, requiring businesses with 50 or more employees to provide healthcare coverage to full-time workers.

Will Kasich really be the one in the GOP to rid the American socio-economic landscape of Obamacare?

Read more at USA Today

For Some, Obamacare Minuses Still Outweigh Pluses

Back in 2013, in an interview with NBC News, Barack Obama said (when it came to healthcare) his goal was “to do everything we can to make sure that people are finding themselves in a good position, a better position than they were before this happened.”

But, a recent opinion by the Editorial Board of The Oklahoman (online 8/15) says: “Instead millions of Americans have been left less financially secure, not in spite of the healthcare law, but because of it.”

The editorial adds, “President Barack Obama famously promised that if people liked their current insurance policies, they could keep them under the Affordable Care Act. That was quickly proven false as associated regulations forced cancellation of countless existing insurance plans.”

Obama subsequently expressed his view of the terminated health insurance policies as “substandard plans.” The president’s main contention was that such plans would be succeeded by “quality, comprehensive coverage.”

The Oklahoman editorial also cites a recent article in Investor’s Business Daily by Jed Graham, describing the “primary impact” of the ACA’s individual mandate which “will be to compel low-income households to buy bronze coverage with deductibles of up to $6,850 per adult that are well beyond their capacity to afford.”

The Oklahoman also claims, “Currently, the overwhelming majority of people in those income groups choose to go uninsured and pay the individual penalty, rather than pay the higher price of Obamacare policies.”

Read more at The Oklahoman

New Obamacare Tax Ensnares Elderly and Poor

According to a recent article in The Daily Caller (online, 8/9) both older and poorer Americans could be impacted by a looming new Obamacare tax. Ironically, it was these segments of the U.S. population who were supposed to gain the most protection(s) from the Affordable Care Act.  The tax also stands to adversely impact state government coffers.

The tax is actually an “excise tax,” and The Daily Caller article by Richard Pollock quotes Sen. John Barrasso, R-Wyo., regarding the levy, saying it “is another example of how the president’s healthcare law was designed so the most painful part of the law kick in years later.”

More specifically, Barrasso’s reaction is in response to “a 41 percent increase in excise taxes because of hidden fees contained in an obscure section of the Affordable Care Act,” per a Daily Caller News Foundation probe.

Pollock’s Daily Caller account adds, “The tax was buried by congressional authors in section 9010 of the law and was envisioned as a way to raise future funds to pay for Obamacare.”

Read more at The Daily Caller

California Blue Shield Owes Nearly $83 Million Worth Of ACA Rebates

The Los Angeles Times recently reports in an article (online, 8/4, by Chad Terhune) the bumpy ride Blue Shield of California is experiencing lately is because of how it calculated Obamacare premiums. The insurer now owes nearly owes $83 million “in rebates to consumers and small employers under requirements of the federal health law.” Additionally, according to Terhune’s story, “The company said it missed the mark on premiums, in part because it wasn’t entirely sure how the first year of Obamacare enrollment would turn out.”

The Times account also quotes Blue Shield spokesman Steve Shivinsky: “It reflects a lot of the uncertainty in the marketplace we were entering into with the Affordable Care Act.”

While rebates are a welcome gift by consumers, the L.A. Times adds, “sizeable refunds are a sign health insurers were overcharging to begin with.”

Meanwhile:

  • Comparatively recently, California’s Franchise Tax Board took away Blue Shield’s state tax exemption for Blue Shield of California.
  • California Blue Shield’s rates in The Golden State came under increased focus “after it was disclosed this year that the state’s Franchise Tax Board revoked the state’s tax exemption.”
  • U.S. health insurers issued $332 million worth of customer rebates in 2014. A decrease from  $500 million, the year before.
  • Blue Shield has also been called to account, as Terhune cites, “documents reviewed by The Times,” in which  “state auditors criticized the company for stockpiling ‘extraordinarily high surpluses’ — more than $4 billion — and for failing to offer more affordable coverage.”

Read more at The Los Angeles Times 

Health Law’s Test Run At Centers Showed No Savings

Following the 2009 passage of the Affordable Care Act, the Department of Health and Human Services (HHS) devised an experimental concept, one which was supposed to serve as an alternative to patient care in bricks and mortar hospitals. HHS’ idea? According to a new report in Kaiser Health News (KHN, online 7/27, by Jay Hancock) it was to be an “experiment to deliver better, more efficient care at federally funded health centers.” Yet, the idea when implemented wound up being an arduous exercise in grappling with goal targets, and ultimately not likely generating savings.

With “Medical Homes,” as they were termed, Obamacare money was to be directed to something also known as “community health centers,” this is according to a recent study by the RAND Corporation.  According to Hancock’s Kaiser report, “non-profit clinics that received federal funds and care mainly for the poor.”

Eventually, “another goal was to cut unnecessary hospital visits. But admissions and emergency-room care rose in centers that were part of the experiment compared with results in those that weren’t. So did expenses,” according to KHN.

  • The medical home concept usually designates “case managers” in attempt to ensure those with chronic maladies get required medicines, eat sufficiently, remaining out of and away from hospital environments and care.
  • The clinics “were developed to care for more-indigent people,” said Dr. Katherine Kahn, who led the RAND evaluation. “It’s not even entirely clear that one should expect lower costs initially.”
  • Medical homes have been broadly touted as an alternative to America’s dysfunctional healthcare structure. One “which by some estimates wastes 30 percent of its spending on unnecessary treatment, fraud and administrative lard,” according to Hancock’s KHN story.

Read more at Kaiser Health News