There is a new report out by Inspector General for the Department of Health and Human Services (HHS). It is not favorable concerning how Obamacare is run, at least with respect to ACA contracted vendors. According to a recent online post (Watchdog.org – Eric Boehm, 01/23) HHS failed to conduct investigatory checks on work done previously by such firms — those awarded ACA contracts. HHS also failed to demand that those same vendors be held responsible for cost overruns. Tellingly, according to the Watchdog account, U.S. taxpayers got stuck with the bill. The HHS Inspector General’s Report, released Jan. 22, surmises that U.S. taxpayers’ total cost for such errors is now some $400 million. Furthermore, as these are “unexpected costs”, this actually comes out to being a “doubling [of] the expected costs of building the [healthcare] exchanges in the first place,” according to Watchdog.org.
60 government (Obamacare) vendor contracts were reviewed by the Inspector General of HHS.
According to a recent post on Market Watch (online, Jan. 22) by Russ Britt, “Roughly 6.3 million people just above the poverty line will drop their Obamacare coverage or face using as much as half of their income for health insurance if a Supreme Court ruling dismantles subsidies in states that haven’t established their own exchanges, a study released Thursday shows.”
Research by the Robert Wood Johnson Foundation and Urban Institute indicates, “nearly two thirds of those who lose subsidies are white southerners, and nearly half have full-time jobs.”
The findings by the two groups are in advance of arguments before the U.S. Supreme Court (in the case of King vs. Burwell). Those arguments are anticipated to begin in March, 2015. The gravamen of those legal arguments (and debates) is “whether the 2010 Affordable Care Act erroneously exempted states that have not set up state exchanges,” according to Britt’s report. Market Watch also points out an appreciable number of those states, like Mississippi – for example – are some of the most poverty-stricken in the U.S.
Some 3.9 million individuals in the American south may lose health insurance subsidies.
According to a recent report on CNN Money (online, Jan. 21) Phil Orlando, the chief equity strategist at Federated Investors, says, “There is greater demand for health care and that has improved profits for insurers and hospitals.” Such demand and profit results in higher share prices for healthcare stocks – according to the recent CNN Money report. In fact, CNN says, “They are part of a broader rally in the health care sector.”
For stock market investors, it is this conventional wisdom which may apply to healthcare stocks: appreciably promising growth possibilities, coupled with dividend safety. Added to this are “customers courtesy of President Obama,” so says the CNN Money report by Paul R. La Monica (online, Jan. 21) which adds, “Many health care companies have yields that are significantly higher than the puny yields investors get from buying long-term U.S. Treasury bonds.” La Monica also points out, “Simply put, greater access to health insurance has led to more customers for the insurance giants. And United Health is not the only company to benefit.”
Indeed, United Healthcare, has outpaced the stock market in general – and done so by a significant degree of difference – since 2010, the year Obamacare became law. According to the CNN Money report, this could mean good things for the healthcare sector overall. United Healthcare’s stock also surpassed the stock market in 2014.
According to the medical director for student health services at Clayton State University, “We should be encouraging Millennials to save for their first down-payment on a home, or free themselves of debt by paying off student loans.” In a report for The Hill (online, Jan. 22) Deborah Ann Travis Honeycutt, M.D., refers to increased costs for Obamacare, targeting those young persons defined as Millennials. Honeycutt claims such ACA-based healthcare expenditures couldn’t be coming at a worse time for categorized youth between the ages of 16 and 29 years. The Hill report also advises the unemployment rate for Millennials stands at 14.7 percent.
Honeycutt adds, “Typical20-somethings in Georgia now face premiums averaging $2,750.00 per year – a 179 and 108 percent increase for men and women, respectively, over what similar pre – Obamacare plans cost.” The student health services medical director of the Georgia based university describes this as, “a demoralizing reality for college students working their way through school while still having adequate time to devote to their studies.”
Ohio Attorney General Mike DeWine is an opponent of the Affordable Care Act. As a result, when it comes to the states and Obamacare, another state may soon make Obamacare news: Ohio. The Buckeye State could well be the next battlefield in the war directed against the ACA. This is according to a new (online) report in Cincinnati.com (A Gannett publication). The report, dated Jan. 26 cites an announcement by the Buckeye States AG – of the filing of a lawsuit in U.S. District Court. It specifically targets, “an unconstitutional tax on state and local governments,” by the Obama White House.
Cincinnati.com quotes DeWine as saying, “To put this simply, governments don’t tax other governments.”
“This illegal taxation is another example of federal overreach the administration’s refusal to operate within the boundaries of federalism’” the Ohio Attorney General added. Yet DeWine and his allies’ efforts are not being billed or promoted as an effort at eradication of the Affordable Care Act – - and its resultant Obamacare.
The lawsuit is in opposition to something called the Transitional Reinsurance Program, a portion of the ACA which levies fees on health insurers – - and in some cases, employers. Specifically assessed? Self-insured group health plans.
Call it a fee or tax, the Obama White house describes this as, “a reinsurance fund for 2014, 2015 and 2016 to help hold down the cost of health insurance premiums while acting as a safety net for insurers as the new insurance reforms take effect,” according to Cincinnati.com.
DeWine’s lawsuit (also comprised of additional plaintiffs in Ohio – such as universities) contends the fee is in reality a tax, and one which violates the 10th Amendment of the U.S. Constitution. The amendment which establishes the balance of power – especially between the states and federal government.
Author and senior editor at The Federalist, David Harsanyi, says in his recent post on Human Events (online, Jan. 9), “The idea that lifting subsidies for a relatively small number of newly insured Americans would result in collapse of the entire state insurance markets or create unmanageable havoc is not only risible but transparently political.” Harsnyi adds, “so needless to say, the pending Supreme Court challenge over the Affordable Care Act via King v. Burwell is the most significant decision since Hobby Lobby or perhaps Citizen United — or whenever the most recent time was when the world was going to come tumbling down around us.” Harsanyi feels many liberal pundits are pushing the United States Supreme Court to consider aspects of the Affordable Care Act having nothing to do with the (healthcare) law. He clarifies, Republicans and libertarians argue that a “replacement healthcare bill,” creates an atmosphere where it is “easier for the court to act.” If that were the case, would the U.S. Supreme Court simply be “surrendering to the politics of the day,” Harsanyi’s Human Events report asks.
Kimberly Leonard is a health care reporter at U.S. News and World Report. A recent post by her in that publication (online, Jan. 12) quotes Michael Cannon, director of health policy studies at the Cato Institute, “The fact that the subsidies are causing controversy among the very people they’re intended to help is “evidence that the government doesn’t do charity very well.” As 2015 begins, this also means that questions of ethics emerge. What about those persons eligible for health insurance – as determined by their income – who in reality completely possess the means to “pay their own way.”
According to Ed Haislmaier, who is a senior research fellow at the Heritage Foundation, “There is no question that we are enrolling people through these programs who would otherwise be considered middle-class or even affluent.” He adds, “We are seeing people with enrollment in these programs that have significant assets, but for whatever reason – usually a temporary reason – fall below the income line.”
Dave Klemencic, who owns Ellenboro Floors in W. Va., is one person who has elected to not have health insurance. He could be in for a tax subsidy. Yet, because of his own beliefs, he will not be taking it. He feels it’s not in the county’s “best interests,” according to U.S. News and World Report. For his part, Klemencic sees such subsidies as a handout – which runs counter to his own personal beliefs. He also questions the validity of the government’s constitutional standing to offer such funds.
Will single-payer health insurance coverage and care ever work in the United States? Some argue the only way that it can is through what amounts to healthcare “rationing.” For Medicaid recipients this becomes quite the cruel joke. In an online (CNBC) posting “Street Signs” supervising producer Jake Novak says, “[W]e’re talking about millions of poor people who won’t even get in the door to see a doctor in the first place. And that also means breaking the promise that emergency rooms will get some kind of traffic relief thanks to Obamacare. Those rejected Medicaid patients are going to have to go somewhere, and the ER will remain the only places that can’t turn them away.”
As of late, finding a doctor willing to accept Medicaid payments is now even more difficult, due to a severe decrease in reimbursements to doctors treating such patients. Novak says, “The reasons are the same as they are for Medicaid: The reimbursements are going down just as demand is getting higher.”
Novak also advises us (especially physicians) that is unlawful for doctors to “write-off” the dispensing of healthcare for free. Translation? “[M]ore and more Americans are “covered,” but fewer and fewer Americans will actually be able to get health care.” Novak calls that, “The Great Obamacare Bait ‘n’ Switch.”
Perhaps one constant about federal income tax returns, and the IRS who oversees them, “Everything you put in your tax return is something that they’re trusting that you’re telling the truth” . . . “And of course if they audit you, you will have to prove it.” This quote comes from Jeffrey Porter, an Accountant with Porter and Associates.
While tax filing season is just around the corner, some may find this tax season more aggravating – - due to provisions in the Affordable Care Act. This is according to a recent report in the Washington Post (online, by Jonnelle Marte, Jan. 12).
Another accountant, Michael Greenwald, a partner with Friedman LLP, offers his view of filing taxes in 2015 – - when it comes to healthcare matters relating to Obamacare, “The Internal Revenue Service, in addition to being a tax collection agency, is now a health care agency.” The reason? According to the Washington Post report, “[T]axpayers will now have to say on their tax returns if they did — or did not — have health insurance last year. Those who received insurance subsidies or who went without insurance altogether are also going to face new forms, additional questions and some complicated math.”
Still, these scenarios may not automatically add up to IRS horror stories for Americans. Literally, millions who have health insurance coverage courtesy of their employers – or who have it, through for example, Medicare, Medicaid, or even COBRA, will simply check off on an additional box on their federal income tax return.
Accountant Jeffrey Porter adds, “If you didn’t purchase [insurance] on a market place and did not get a subsidy, you’re pretty much done.”
The majority of Americans who purchased health insurance on the healthcare exchanges (or marketplaces, as they are also known) were additionally in receipt of subsidies – assisting in the reduction of their insurance expenditures. Yet, Jonnelle’s Washington Post report tellingly adds, “But come tax time, people will find out just how much of a subsidy they received — and if they have to pay part of it back.”
At least one anti-Obamacare argument goes something like this – - that hospitals should literally compete for patients’ business. According to a recent report in Forbes (online, Jan. 12) Avik Roy explains, “Republicans talk about letting patients buy insurance across state lines. But the real solution is to allow patients to buy hospital care across state lines. Furthermore, it’s important for federal and state governments to pursue anti-trust proceedings against hospital mergers that would create regional monopolies. To date, the Federal Trade Commission and the Department of Justice have done precious little to stop the trend of hospital consolidation, and often when they try, they’ve been stymied by the courts.”
Apart from being the Forbes Opinion Editor, Avik Roy is also a senior fellow at the conservative Manhattan Institute.