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Whitewash! - Help Us Tell the Truth About the Health Care Boondoggle
United States Chamber of Commerce
"I received this from the United States Chamber of Commerce and felt it was important enough to share with you. If you have been reading the information presented by the RBA, you will have learned of falsehoods about the new legislation. You will have learned how the cancellation of business tax credits to help pay for this legislation will cost Rockland businesses millions of dollars. The "need" for this campaign gives credibility to the arguments presented by all of us who opposed this legislation. This wasn't about healthcare, it was about an anti--business Administration and it's war against the insurance industry."
-- Al Samuels, President, Rockland Business Association
Whitewash! - Help Us Tell the Truth About the Health Care Boondoggle
United States Chamber of Commerce
Good policy sells itself.
Bad policy apparently requires a $125 million spin campaign.
That's right -- a pair of D.C. insiders are set to launch a massive PR campaign to rescue the public's rejection of their health care boondoggle.
As Politico reports:
Former Senate Majority Leader Tom Daschle (D-S.D.) and Victoria Kennedy -- widow of Sen. Ted Kennedy (D-Mass.) -- are expected to be named co-chairmen of a $125 million campaign that White House allies are rolling out to defend health care reform.
This isn't surprising. They twisted arms and bent the rules to pass the law -- and now they're panicked that Americans aren't buying it.
In fact, a recent Rasmussen Poll shows that only 36% of Americans think the health care bill will be good for the country.
The liberals are worried this failure will hurt their election chances in November. Here at the U.S. Chamber, we are counting on it -- but we need your help.
Can you help us fight back against their $125 million spin campaign with an online contribution of $125 or more today?
The reason people don't like the health care bill isn't because of lack of PR -- it's because it's a bad law.
We were promised a bill that costs less than $1 trillion. We now know that wasn't true.
We were promised the bill wouldn't increase the deficit. We now know that wasn't true.
Don't let the liberals whitewash their health care mistake. Please contribute $125 or more today to counteract their $125 million whitewash.
The real costs of the health care bill won't kick in for a few years. If we allow them to spin the story to distort public opinion -- it will be too late to fix its problems.
We promised we would make health care an issue in the elections.
Contribute today to help us do just that.
Sincerely,
Bill Miller
Senior Vice President and National Political Director
U.S. Chamber of Commerce
Upcoming Seminars - Implementing Federal Health Care Reform: What New York Businesses Need to Know
The Business Council of New York State, Inc. is pleased to announce a new Seminar Series entitled Implementing Federal Health Care Reform: What New York Businesses Need to Know.
These half day seminars will take place in five locations around the state. For a complete list of dates and locations, click here
Attached is a registration form with a special rate for RBA members: Use Priority Code CHASN when registering online.
Healthcare News Just Gets Worse
April 30, 2010
With every week that passes, we learn more about ObamaCare and it just gets worse. The recent report on the practical effects of ObamaCare from the Chief Actuary of the Centers for Medicare and Medicaid (CMS) is devastating.
Here are the salient findings of this report:
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Health care costs will go up, not down. National health expenditures will increase from 17 percent of GDP now to 21 percent under the new law and will be higher than without the legislation. Net federal spending on health care will also increase.
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Health care shortages are "plausible and even probable." Because of the increased demand for health care, "supply constraints might initially interfere with providing the services desired by the additional 34 million insured persons."
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14 million employees will lose their employer coverage. Employees of small firms are especially at risk (despite small employer tax credit subsidies).
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2 million employees who lose coverage will have to enroll in Medicaid.
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A Medicaid insurance card is not a guarantee of care. An estimated 18 million people will be added to Medicaid. However, because there is no corresponding increase in the supply of caregivers, "it is reasonable to expect that a significant portion of the increased demand for Medicaid would be difficult to meet, particularly over the first few years."
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One in ten insured workers will see their health benefits taxed. By 2019, more than 10% of insured workers will "be in employer plans with benefit values in excess of the thresholds (before changes to reduce benefits) and this percentage would increase rapidly thereafter."
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Higher taxes will lead to higher premiums. The new taxes on medical devices, prescription drugs, and insurance plans "would generally be passed on through to health consumers in the form of higher drug and device prices and higher insurance premiums."
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There are more than one-half trillion in Medicare cuts. The new health law cuts "$575 billion" from Medicare.
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Medicare cuts would threaten almost one in every seven hospitals. About "15 percent of Part A providers would become unprofitable within the 10-year projection period."
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Overall access to care for seniors would go down. Because of the law's payment reductions, "providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program.
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7.4 million people will lose access to Medicare Advantage plans. Enrollment in MA plans will be cut in half (from its projected level of 14.8 million under the current law to 7.4 million under the new law).
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False advertising: The new "Medicare Tax" doesn't go to Medicare. "Despite the title of this tax, this provision is unrelated to Medicare; in particular, the revenues generated by the tax on unearned income are not allocated to the Medicare trust funds."
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False advertising: Budgetary double-counting does not improve Medicare's solvency. Medicare cuts "cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the [life of the Medicare] trust fund, despite the appearance of this result from the respective accounting conventions."
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The new long-term care insurance plan (CLASS Act) is unsound. The program faces "a significant risk of failure" because the high costs will attract sicker people and lead to low participation.
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The promise to those with pre-existing conditions is unfunded. "By 2011 and 2012 the initial $5 billion in Federal funding for [high risk pools] would be exhausted, resulting in substantial premium increases to sustain the program."
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The law does almost nothing to limit actual fraud and abuse. The fraud provisions in the law will save only about two percent of $47 billion in suspect claims.
Health Care Reform Law
March 31, 2010
H.R. 3590, the Patient Protection and Affordable Care Act, is a sweeping reform law that includes many provisions that will impact both employers and employees.
Employer Requirement – Penalties would be assessed on employers with 50 or more employees who fail to offer coverage to employees. The penalty would be assessed if even one employee receives a subsidy to purchase coverage through a health insurance exchange. Employers would also incur penalties if the coverage they offer is considered “unaffordable” to the employee or if the health plan has an actuarial value of less than 60 percent or pays less than 60 percent of covered health care expenses.
Individual Requirement – The new law requires individuals to purchase health insurance coverage or pay a tax penalty beginning in 2014. The penalty, which is phased in, starts at $95 or 0.5% of income per individual in 2014 and increases to $750 or 2% of income in 2016. The penalties for families would be capped at $2,250. Religious and hardship exemptions are available.
Excise Tax on High - Value Health Plans (“Cadillac” tax) – Employers offering health plans that exceed a certain cost (the total employee and employer cost) would be subject to an excise tax on the amount above that value. For individual coverage, the threshold would be $8,500; for family coverage, the threshold would be $23,000. These thresholds would be indexed at Consumer Price Index plus one percentage point. Certain high-risk provisions would have a higher cost threshold.
Insurance Market Reforms – The new law requires insurance plans to provide coverage to any individual who requests insurance. It also includes a prohibition on pre-existing condition restrictions in the individual and small group health care market. Health insurance premiums would be allowed to vary based only on tobacco use, age, family composition, and geographic location. Large employers that purchase coverage through a health care exchange would be eligible for the above insurance protections. Both self-insured and fully-insured plans are required to provide dependent coverage for children up to age 26. Health plans are also prohibited from establishing annual and lifetime dollar limits on coverage.
Wellness Programs – Employers can offer increased incentives or rewards to employees for participation in a wellness program or for meeting certain health status targets beginning in 2014. Rewards or premium reductions up to 30 percent of the cost of coverage are now permissible.
Free Choice Vouchers – Employers offering coverage are required to provide “free choice vouchers” to qualified employees to purchase insurance through the exchanges. To be eligible for a voucher, an employee’s contribution under the employer’s plan would be between 8 percent and 9.8 percent of income, and the employee’s income would be at or below 400 percent of the Federal Poverty Level.
Flexible Spending Accounts (FSAs) – Contributions to health FSAs would be capped at $2,500 beginning in 2011 and over-the-counter medicines would only qualify for reimbursement with a doctor’s prescription.
Medicare Hospital Insurance Tax – Beginning in 2013, an additional Medicare tax of 0.9 percent is imposed on individuals with income in excess of $250,000 for joint filers or $200,000 for single filers.
Beyond the headlines: Some Things To Plan for In Federal Health Care Reform Implementation
March 31, 2010
Federal health care reform started with two essential goals: lowering the cost of health care coverage and expanding the availability of coverage. "Bending the cost curve" seemed to take on less importance as the debate progressed than did bringing more of the uninsured under the coverage umbrella.
The bills passed by the House will open Medicaid coverage to many more in the country, raising eligibility thresholds to levels New Yorkers have had had for a number of years. Additionally, there are a number of provisions designed to help small employers and individuals who, unlike large employers, generally have little bargaining power in the market for health insurance, including credits and insurance exchanges. Given the significant number of existing mandates on health plans in NYS — set at the state level — it remains unclear whether small businesses in NY will fully realize the cost savings and benefits anticipated in the federal insurance exchanges.
Because this reform approach has a primary emphasis on bringing more into coverage, this bill fails to really fix the underlying cost drivers of health care coverage, including malpractice reform, in any meaningful way. The major revenue sources in the Reconciliation Agreement derive 48% of payments from increasing the Medicare tax on high income individuals; and 26% of their revenues from fees on the health industry. It anticipates 11% of the overall revenue being generated from the Cadillac plan tax and 8% from individuals. In the long-term, this legislation is more likely to increase costs for NY employers as the cost drivers were not significantly addressed within the context of this bill.
One thing is clear: employers of all sizes will need to put a heavy emphasis on revising the design of the benefit plans they offer to avoid being subject to some of the provisions in the bills including the excise taxes on "Cadillac" plans and penalties or additional taxes for employees opting out of coverage. Additionally, new reporting to the IRS on plans and their benefit thresholds will add additional reporting burdens to most employers. Finally, employers will need to be much more informed on their employees' personal circumstances to assure compliance with items ranging from the new Medicare tax on higher wage earners, to the subsidies available for individuals at the lower end of the wage spectrum.
Congress is going to have to return to health care reform to address issues like Medicare and Medicaid spending if they intend to constrain the growth in health care costs. This bill doesn't appear to do that in any meaningful way. Public programs such as Medicaid and Medicare pay providers at levels less than the actual cost of providing the care. Hospitals, doctors and nursing homes have been and will continue to have to make up that difference through private health insurance plans. The expansion of coverage to new people in public programs will likely exacerbate that balance of payments.
Some details of the health reform plan:
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Employers with over 50 full-time employees (defined as working more than 30 hours per week) will be forced to offer coverage or pay a $2,000-per-employee fee; the first 30 employees are not counted in the payment calculation). Businesses will also face a $3,000-per-employee fine if the coverage they offer is deemed “unaffordable” for employees (if the employee opts-out and gets a subsidy in the exchange). This means that an employer with low-income employees who offers comprehensive, affordable coverage could nevertheless be fined just as much as an employer who offers no coverage at all. It is estimated that 219,961 businesses could be subject to the employer mandate. The percentage of employees employed by businesses which could be subject to the employer fine is projected to be 26.4 million workers or 22 percent of the entire private-sector workforce.
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Corporations with assets of at least $1 billion must deposit $8 billion in higher estimated tax payments in 2014, meeting fiscal targets for the first five years. But the corporations’ actual taxes would be unchanged; the money would need to be refunded the next year. The net effect is simply to shift dollars from 2015 to 2014.
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The bills budgeted for $53 billion in anticipated higher Social Security taxes to offset health care spending. Social Security revenues are projected to rise as employers shift from paying for health insurance to paying higher wages.
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One of the largest risks for all businesses, is that the Congressional Budget Office expects the cost of the new entitlement spending aimed at coverage expansion in the Senate bill - the premium subsidies in the exchanges and the expansion of Medicaid - to reach about $200 billion by 2019 and then grow at a rate of 8 percent every year thereafter. In other words, this new health entitlement spending is expected to escalate just as rapidly as Medicare and Medicaid have in the past.
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Small employers defined in this bill as those with 100 or fewer employees will be allowed to adopt new "simple cafeteria plans” which are conceptually similar to simple 401(k) plans in current law.
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Beginning in 2011, W-2 statements must include the aggregate cost of employer sponsored health benefits; if the employee receives coverage under multiple plans, the employer must disclose the aggregate value of all such health coverage but exclude contributions to Health Savings Accounts.
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Beginning in 2013, Any large employer subject to rules for maintaining minimum essential coverage must file a return that identifies the employer; certifies whether it offers to its full-time employees the option to enroll in a minimum essential coverage plan; provides the number of full-time employees during each month of the calendar year; and information identifying each full time employee covered under the employer provided health plan. If the employer certifies to offering coverage, it must report additional information relating to the cost and availability of that coverage. Governmental units are subject to the same reporting requirements.
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This also authorizes the Treasury (IRS) to disclose to Health and Human Services relevant individual income tax return information used for determining eligibility for premium tax credits, cost sharing reductions and participation in a state Medicaid program, CHIP, etc.
Some requirements on employer plans:
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Must notify employees upon hire about the exchanges and the possibility that employees may be eligible for a tax credit, as well as any loss in employer contributions toward the employee’s health benefits if the employee purchases health insurance through an exchange.
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Employers that contribute toward the costs of health coverage must make the employer contribution available as a voucher that certain employees could use to purchase insurance through an exchange (vouchers are only required for employees whose contribution toward the plan would be between 8% and 9.8% of their income and whose household income is less than 400% of Federal Poverty Level). The entire amount of the voucher is deductible by the employer and, to the extent used to purchase insurance through an exchange, nontaxable to the recipient.
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Prohibition against lifetime limits.
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All plans offering dependent coverage allow unmarried children to remain covered under a parent’s plan through age 26 (NY already has this insurance mandate with an age cap of 29).
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Beginning in 2014, plans will be prohibited from imposing annual out of pocket limits that exceed the maximum Health Savings Account contribution.
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All annual limits will be prohibited effective in the 2011 plan year.
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Employers with more than 50 employees, as noted above, will be required to report whether they offer their full-time employees and dependents health coverage, the length of the waiting period, the lowest cost option in each enrollment category, the employer’s share of the total allowed costs of benefits, and the number and names of covered employees.
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Effective in the 2011 plan year, the bill establishes a new internal and external review procedure for claims determinations.
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The new excise tax on employers’ group health plans (40%) may force design changes. The tax kicks in 2018 under the Reconciliation Agreement and is based on the total cost of benefits provided under the plan regardless of how those costs are allocated among the employer and the employee. Avoiding the excise tax will require plan design changes as opposed to just shifting some or all of the premium cost to employees.
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