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Mark Caserta: Let’s truly work to create affordable healthcare

22 Jan

Obamacare just isn’t working

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Jan. 22, 2015 @ 12:01 AM

It’s time to get serious about providing affordable healthcare for all Americans.

Most people are now keenly aware of the political motivation behind the passage of the Affordable Care Act (ACA) and the lies and deceptive tactics needed to sell it to the American people. A recent Gallup Poll taken at the beginning of the 2015 enrollment period revealed 37 percent of Americans say they approve of the law, while 56 percent say they disapprove.

It’s also now known the enrollment numbers provided by the Obama administration touting the success of Obamacare were inaccurate. The Department of Health and Human Services recently reported that it had made a “mistake” in calculating the number of enrollments.

Reportedly, 380,000 stand-alone dental plans were “inadvertently” added into the number of healthcare plans, allowing the administration to claim more than 7 million paid enrollments, the “magic number” needed for the new health insurance exchanges to be sustainable.


Just last week, the leader of the agency charged with the rollout of Obamacare decided to step down. Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services, decided to step down after five tumultuous years on the job. Her tenure included the disastrous rollout of the website as well as the recent discovery of the inflated tally of Obamacare’s enrollment numbers.

But even without the inflated numbers, the exchanges have lost more than 1 million subscribers since May 2014, based on Tavenner’s recent testimony before the House Committee on Oversight and Government Reform. Tavenner attributed this to people picking up employer coverage, becoming eligible for Medicaid or simply not paying their premiums.

While proponents of this healthcare nightmare understandably ignore the falsehoods leveraged by this administration to pass the law, they rarely speak about the estimated 5 million people who lost their coverage because it “didn’t meet the ACA guidelines.” No doubt millions of these individuals were forced to purchase a replacement policy from an exchange, seriously compromising the legitimacy of the number of “newly” insured individuals.

And Americans found it insulting that liberal proponents of Obamacare would pompously justify the loss of those existing healthcare plans by declaring they were “inadequate” for the people who chose to purchase them. After all, big government knows best.

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Possibly making matters even worse for the ACA, the Supreme Court will soon decide whether the law provides for healthcare subsidies to people in the 36 states which declined to set up their own healthcare exchange and ended up on the federal exchanges instead. If the court kills Obamacare’s subsidies, more than 4 million people will likely see higher premiums, possibly forcing them to drop coverage altogether.

Liberals have made this simply about “winning.” The goal should be to provide everyone affordable healthcare and Obamacare simply isn’t working.

And once the ACA is replaced, it will be the government’s responsibility to ensure that no person who purchased health insurance from an exchange loses their coverage period.

Voting to repeal Obamacare isn’t enough. The GOP must first provide a visible, well-vetted alternative.

For now, Americans are simply waiting.

Mark Caserta is a conservative blogger, a Cabell County resident and a regular contributor to The Herald-Dispatch editorial page.


19 Jan

Some people will have no insurance and still have to pay their “shared responsibility” payment to Obama!

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Those Americans who didn’t get health insurance last year could be in for a rude awakening when the IRS asks them to fork over their Obamacare penalty — and it could be a lot more than the $95 many of them may be expecting.

The Affordable Care Act requires those who didn’t have insurance last year and didn’t qualify for one of the exemptions to pay a tax penalty, which was widely cited as $95 the first year. But the $95 is actually a minimum, and middle- and upper-income families will actually end up paying 1 percent of their household income as their penalty.

“People would hear the $95, quit listening, and make an assumption that that was what their penalty was going to be,” said Chuck Lovelace, vice president of affordable care for Liberty Tax Service. “I think that a lot of people will be surprised when they get in there and find out that their penalty is [based] on their household income.”

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The penalty is designed to prod Americans to buy insurance and the penalty for not having it is scheduled to rise considerably: to a $325 minimum or 2 percent of income in 2015, and to a $695 minimum or 2.5 percent of income in 2016.

This Aug. 21, 2014, file photo shows health care tax forms 8962, … more >

Tax experts said those stung by a higher penalty the first year may buy plans to escape the penalty the next year.

“We will be showing them what the penalty is,” said Jackie Perlman, principal tax research analyst at The Tax Institute at H&R Block, said of this year’s customers. “But we will also be telling them, ‘How do we not go down this road next year?’”

The tax industry and government officials have been trying to prepare filers for the changes since the Affordable Care Act was signed in 2010, but tax preparers still expect to get strange looks when they inquire about their customers’ health insurance.

“You might think it’s a question that a tax preparer shouldn’t be asking, but we have to ask that,” Ms. Perlman said.

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Tax experts said mixing Obamacare with the annual tax filing season is a major adjustment, and it comes even as the IRS, blaming budget cuts, says it won’t be able to even answer a majority of help calls, and those who do get through will have to wait an average of 30 minutes.

Gearing up for the challenge, Treasury Secretary Jacob Lew and Health and Human Services Secretary Sylvia Mathews Burwell spoke to more than 100 volunteer tax preparers Friday.

Most taxpayers will only have to check a box asserting they had their own insurance, usually through their employer. But those who bought insurance on the Obamacare exchanges with the help of federal subsidies will have to reconcile their payments with their income level.

Some people will get money back, although those who failed to report raises or bonuses to their respective health exchanges will pay back some amount of subsidy.

immigration 1obamacare hurts, the federal exchange that serves 37 states, started to mail out 1095-A forms to customers last week, and state-run exchanges say they will meet the end-of-month deadline to postmark theirs.

But the subsidies were paid directly to insurers, and not the Obamacare customer, so filers might not remember them or realize they need the form.

It’s a short wait for the 1095-A — about two weeks — but tax experts fear some taxpayers, looking to get a jump on the process and with a W-2 already in hand from their employers, will file without waiting for the Obamacare form, causing problems and delaying their refund.

“Hopefully, we’ve communicated that to our customers,” Mr. Lovelace said. “But as a general rule, I’m not sure that the population out there is understanding it.”

obamacare 3 years later Affordable Care Act Fair Draws Floridians As Enrollmnent Deadline Looms

Filers who ignored the exchanges, or couldn’t get insured through government programs or a job, may qualify for an exemption from the individual mandate and avoid penalties.

Some of the exemptions are baked into the law — ones for prisoners, members of Indian tribes or the Amish, for example — while others may qualify for far-reaching “hardship exemptions” from the Obama administration.

Mark Steber, chief tax officer for Jackson Hewitt Tax Service, noted that filers can only apply for certain exemptions on their actual tax forms, making it one of the trickier aspects to navigate under Obamacare.

Someone who doesn’t take advantage of an exemption will end up paying more than they should.

“I would say the exemption area is one opportunity for missteps,” Mr. Steber said, “both by a taxpayer or a tax preparer.”

Mark Caserta: Scandal characteristic of Obama’s rule

8 Jan

Will the pattern continue into 2015?

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FSP editor – Mark Caserta

Jan. 08, 2015 @ 12:01 AM

While President Obama charged Republicans with probing “phony scandals” in 2014, a look back at the sheer number of aspersions throughout his progressive tenure suggests that abuse of power and corruption are not something being dreamed up by the GOP, but instead a defining characteristic of the Obama administration.

Last year, the president assured Americans there wasn’t “a smidgen of corruption” in the IRS, yet investigation by the House Committee on Oversight and Government Reform revealed intentional targeting of conservative organizations prior to the 2012 election. IRS Director Lois Lerner was ultimately held in contempt of Congress for failing to cooperate with the committee investigation. Questions remain as to White House involvement and any intent to cover up the scandal.


Veterans Affairs Secretary Eric Shinseki was forced to resign following an interim independent report showing officials falsified records at a medical center in Phoenix, hiding the amount of time veterans had to wait for medical appointments. Subsequent investigations revealed a systematic breakdown across the country revealing false record-keeping and long waiting lists for veterans, some who died while waiting for care.

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Americans actually witnessed a three-part scandal in the attack on Benghazi: The failure of the administration to protect the Benghazi mission on the anniversary of 9/11, the changes made to the talking points in order to suggest the attack was motivated by an anti-Muslim video, and the refusal of the White House to say what President Obama did the night of the attack.

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Attorney General Eric Holder was held in contempt of Congress over his failure to turn over documents related to the “Fast and Furious” scandal, the first time Congress has ever taken such a dramatic move against a sitting Cabinet official. Then CBS News investigative correspondent Sharyl Attkisson exposed the truth about her investigations into this and other Obama administration’s scandals in her book, “Stonewalled: My Fight for Truth Against the Forces of Obstruction and Intimidation in Obama’s Washington.”

While the number of executive orders issued by the president is within the range of recent past presidents, the scope of the orders has gone far beyond what is constitutional. Obama altered Obamacare 38 times by executive fiat despite not having the constitutional authority to unilaterally alter passed legislation. In the face of several Supreme Court decisions that went against him, a defiant Obama mockingly taunted Congress by saying, “So sue me.”

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As the Obamacare “shared responsibility” payment prepares to impact Americans across the country, details of the lies and deception needed to pass the Affordable Care Act (ACA) have emerged. Jonathan Gruber, a health economist who helped design Obama’s health care law, stated during a panel discussion at the University of Pennsylvania that the ACA “was written in a tortured way to make sure” it did not appear to raise taxes, because it would not have passed if voters knew the truth.

With two years remaining in the Obama administration’s rule over the United States, one can only hope the number of scandals will be kept to a minimum. But I wouldn’t hold my breath.

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Mark Caserta is a conservative blogger, a Cabell County resident and a regular contributor to The Herald-Dispatch editorial page.

‘Stupidity’ consultant agrees to testify

25 Nov

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Jonathan Gruber, the former ObamaCare adviser in hot water for his comments about the “stupidity of the American voter,” has agreed to testify at a House panel next month, setting up a healthcare showdown in what could be the final week of this Congress.

The House Oversight and Government Reform Committee will also hear from Obama administration official Marilyn Tavenner, who is under fire this week for using inflated enrollment figures for the healthcare law.

“Both Mr. Gruber and Administrator Tavenner have agreed to testify,” committee spokeswoman Caitlin Carroll told The Hill. Both figures have played a role in major political headaches for the Obama administration, which is facing new attacks about “repeated transparency failures and outright deceptions” by committee chairman Darrell Issa (R-Calif.).

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Gruber, an economist at the Massachusetts Institute of Technology, will be grilled for a number of speeches he has given since 2010 that blame the Obama administration for intentionally obscuring details of the healthcare law in order to assure its passage. Tavenner, who leads the Centers for Medicare and Medicaid Services (CMS), has taken flak after an investigation by the House Oversight and Government Reform Committee revealed last week that ObamaCare enrollment figures had been inflated by nearly 400,000 people.

The administration has been quick to acknowledge that the misreported enrollment count was a mistake, and have defended Tavenner. But hardly any Democrats have stood beside Gruber.

Democrats on the committee are “still considering different options for a minority witness,” according to a Democratic staffer. The hearing, which takes place Dec. 9, will be one of the last for Issa, who has been one of the most vocal critics of the healthcare law. “The American people deserve honesty, transparency and respect from those who forced the federal government into their healthcare. I expect Mr. Gruber and Administrator Tavenner to testify publicly next month about the arrogance and deceptions surrounding the passage and implementation of ObamaCare,” Issa wrote in a statement last week when he announced the hearing.

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Mark Caserta: Was Obamacare an intentional deception?

20 Nov

It seems that everything about this administration is built around a planned deception of the American people.

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What can we now believe?

Nov. 20, 2014 @ 12:24 AM

Evidence is rapidly developing that suggests the lies about Obamacare which helped pass the law and get President Obama elected were premeditated.

Economist Jonathan Gruber, one of the Obama administration’s consultants on the Affordable Care Act (ACA), is under attack for comments he made last year in which he said the “stupidity of the American voter” was a key factor in passing Obamacare in 2010.

Gruber’s impartation regarding the president’s signature health care law emerged in a video taken at the Annual Health Economics Conference last year.

“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes,” he said during a panel discussion at the University of Pennsylvania in October 2013. “Lack of transparency is a huge political advantage. And basically, call it the ‘stupidity of the American voter’ or whatever, but basically that was really, really critical to getting the thing to pass.”

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Gruber said he regretted making the comments last Tuesday during an on-air interview with MSNBC’s Ronan Farrow. But even as Gruber apologized, subsequent videos began to surface adding veracity to Gruber’s remarks acknowledging the administration’s “lack of transparency” in the legislative process.

“You can’t do it politically. You just literally cannot do it, okay, transparent financing and also transparent spending.” Gruber said. “In terms of risk-rated subsidies, if you had a law which said that healthy people are going to pay in you made explicit that healthy people pay in and sick people get money, it would not have passed, okay.”

In a very telling fourth video Gruber not only insults the American people but portrays President Obama as being complicit in misleading Americans.

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“Barack Obama’s not a stupid man, okay?” Gruber said in a college talk at Holy Cross in March 2010. “He knew when he was running for president that quite frankly the American public doesn’t actually care that much about the uninsured. What the American public cares about is costs.”

And indeed, the president kept Americans focused on the “affordability” of his health care debacle.

As a candidate in 2008, Barack Obama repeatedly said his healthcare plan would reduce the typical family’s annual premiums by up to $2,500 per year. Often, he didn’t include the disclaimer “up to,” simply saying the “typical” family would save about $2,500 a year on premiums. Yet, this promise, as so many others, did not come to fruition for Americans.

And last Friday, just hours before the health insurance marketplace was to open to buyers seeking insurance for 2015, the Obama administration unveiled data showing that many Americans with health insurance plans purchased under the ACA could face up to 20 percent increases in their premiums unless they switch plans!

I believe these were calculated deceptions which changed the course of American history. Obamacare and very likely the election of Barack Obama would never have happened if the American people had known the truth.

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As a result, Democrat leadership and this president have stained American history, forged a legacy of deceit, and lost all credibility with the American people.

Mark Caserta is a conservative blogger, a Cabell County resident and a regular contributor to The Herald-Dispatch editorial page.


17 Nov


“I came in with Halley’s Comet in 1835. It is coming again next year (1910), and I expect to go out with it. It will be the greatest disappointment of my life if I don’t go out with Halley’s Comet.”

“There are three kinds of lies: lies, damned lies and statistics.”

– Mark Twain

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Alright, I admit it: I am a geek. So I was fascinated at the pictures this week of a probe resting on a comet.  How far, in some ways, we have come.  I am anxious for more of those million dollar photos and lots of cool stuff we never knew about comets.  I also remember that Mr. Twain was born within days of Halley’s Comet, and, true to his prediction, died just after its closest approach to Earth.

I was also fascinated, rather like a bird watching a snake, at the comments of our latest “scientific expert”, Jonathon Gruber. (Is it a bad thing that when I hear his name, I think Blucher, and hear horses neighing?)

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Well, the comic opera of a comet whizzing across our brief attention span, while Gruber ( horses neighing ) alternately brags about, defends, and apologizes for his 2500 page tissue paper of lies got me to thinking.

What would the estimable Mr. Clemons have thought of Mr. Gruber (Yep, horses again), I wonder?


Twain had the benefit of history on his side. He hardly had to wait for our boy Johnny to hear the horse chips he is spreading today. Karl Marx, about the time Sam was a young boy in Hannibal, began to pen his Das Capital, in which he criticized money and all those who gather or possess it. Productivity, i.e. the work of the masses, was the only true source of wealth, he argued.  He wrote a few books, which sold very poorly, and lived, along with his family, in dire poverty.  Ah, but he did have one thing in his favor.  His wealthy friend, Frederic Engels, son of a textile manufacturer, supported Marx for most of his life.  While Das Capital was bad stuff, apparently Dis Capital which his rich buddy put in his pocket was ok.  This, in his mind, qualified him as an expert (this is defined as a guy travelling to another town to quote his own book as proof that he is right) on what other people should do with their money.


Well, now, our own little “expert” has been running his mouth about how all the rest of us who were working had a duty to pay the bills for the ones who don’t.  Now, of course, we are too stupid to realize how truly good that is, so it was necessary to lie to us about it for the greater good of getting to pick our pockets. It seems also that the greater good involved putting 4 million bucks in Gruber’s (Neigh!) grubby hands for being a liar and pickpocket.  It seems once again, that the needs of the many, outweigh the needs of the few. Except when the “few” are the self-righteous experts telling us how we need to pay for their great ideas, while they get fat in the process and everyone loses, except the experts.

So, back to our original point, what would Mark Twain think about Jonathon Gruber (Whinny)?   I expect he would poke fun at him just like he did with lawyers. (Perhaps slap a horse every time he was around, just for comic relief.)

Mark Twain invested most of his money in an automatic typesetting machine.  It was complicated, and obsolete due to the invention of the Linotype, before he could make his money back. He went bankrupt.  He called on, not an expert, but a no nonsense, evil banker (oh perish the thought) to take charge of his finances. He embarked on a world speaking tour that kept him away for over a year.  At the end of the process, he paid off all his creditors in full, though bankruptcy protection did not require him to do so.

He did not shirk his debts, nor did he expect others to pay them for him, nor did he employ “experts” to tell others why it was their responsibility to do so.  I believe I can deduce what Mark Twain would say about Mr. Gruber, from his comfortable perch on that comet, watching over the foolishness of his countrymen.

There are three kinds of liars. There are ordinary liars, there are outrageous liars, and there are scientific experts.

Now why in the world are we expected to take any of them seriously? Gruber, Gruber, Gruber. (Cue horses. Fade to black. )

that's all folks

3 thing about Obamacare you simply won’t like!

15 Nov

Folks, this is just starting…Obamacare was passed and Obama was elected on a series of pre-meditated lies!

ObamaCare architect and MIT professor Jonathan Gruber’s remarks about the “stupidity” of the American voter and the passage of ObamaCare is bad enough. What is even more disturbing are his comments about the bill’s deliberate lack of transparency. White House Press Secretary Josh Earnest’s denials Thursday were also absurd.

The arrogance and condescension that has too often characterized the Obama administration’s policies have put the American public in the unfortunate position of having to learn about the health care changes the hard way, on their own.

Here are three crucial changes that the president clearly didn’t want you to know about:

According to the Congressional Budget Office, the latest projections for the net cost of ObamaCare over the next ten years are just over $1.4 trillion. Whereas President Obama promised in 2009 that it would cost less than $1 trillion over ten years. In order to partially pay for this, ObamaCare has added more than 20 new taxes totaling over $500 billion.

 2. BUREAUCRACY. Speaking of Orwellian politics, ObamaCare includes 159 new boards and agencies to restrict and govern your health care choices.

Dysfunctional state exchanges with high deductible policies, narrow doctor networks, including federally-run exchanges in 36 states which may not be allowable under the law (SCOTUS currently considering this case).

Here are three new things coming up in 2015 that you aren’t going to like:

In 2014, people are facing a penalty of $95 per person or 1% of income.

In 2015, the penalty will more than triple to $325 per person or 2% of income, whichever is higher.

If an American failed to get coverage this year, the penalty will be taken out of their tax refund in early 2015.

According to Investor’s Business Daily, the lowest cost bronze plan will increase an average of 7 % in many cases, the lowest cost silver plan by 9%, and the lowest priced catastrophic policy will climb 18 percent on average. Double digit rate hikes are anticipated in several southern and Midwestern states including Kansas, Iowa, Louisiana, North and South Carolina, Tennessee, Iowa, and Virginia.

Subsidies will continue to be a huge part of the program. In 2014, subsidies provided ¾ of the premiums for the federally-run exchanges.

After being delayed for a year, large businesses (100 or more employees in 2015, 50 or more in 2016) will be required to offer affordable (and subsidized) health plans to at least 70 percent of their full time employees or face a $2,000-$3,000 penalty per employee.

This mandate will lead to fewer full time employees being hired.

The latest Kaiser Family Foundation poll in July revealed that 53 percent of those surveyed had an unfavorable view of ObamaCare.

I expect this number to rise as more of ObamaCare’s “bells and whistles” are rolled out. Americans are experiencing ObamaCare as a cancer of the health care system. — The more it grows, the more it infiltrates and destroys healthy tissue.

Dr. Marc Siegel, a practicing internist, joined FOX News Channel (FNC) as a contributor in 2008.

Can we trust Barack Obama?

1 Nov


Let’s get folks out to vote November 4th

Who’s paying the new Obamacare tax? You

31 Aug

So who’s surprised?

When Congress passed the Affordable Care Act, it required health insurers, hospitals, device makers and pharmaceutical companies to share in the cost because they would get a windfall of new, paying customers.

But with an $8 billion tax on insurers due Sept. 30 — the first time the new tax is being collected — the industry is getting help from an unlikely source: taxpayers.

States and the federal government will spend at least $700 million this year to pay the tax for their Medicaid health plans. The three dozen states that use Medicaid managed-care plans will give those insurers more money to cover the new expense. Many of those states — such as Florida, Louisiana and Tennessee — did not expand Medicaid as the law allows, and in the process turned down billions in new federal dollars.

Other insurers are getting some help paying the tax as well. Private insurers are passing the tax onto policyholders in the form of higher premiums. Medicare health plans are getting the tax covered by the federal government via higher reimbursement.

State Medicaid agencies say they have little choice but to pay the tax for health plans they hire to insure their poorest residents. That’s because the tax is part of the health plans’ costs of doing business. Federal law requires states to pay the companies adequate rates.

“This situation results in the federal government taxing itself and taxing state governments to fund the higher Medicaid managed care payments required to fund the ACA health insurer fee,” said a report by Medicaid Health Plans of America, a trade group.

Meanwhile, many Medicaid managed-care companies have seen their share prices — and profits — soar this year as they gained thousands of new customers through the health law in states that expanded Medicaid. More than half of the 66 million people on Medicaid are enrolled in managed-care plans.



A KHN survey of some large state Medicaid programs found the tax will be costly this year. The estimates are based in part on the number of Medicaid health plan enrollees in each state and how much they are paid in premiums. States split the cost of Medicaid with the federal government, with the federal government paying, on average, about 57%.

• Florida anticipates the tax will cost $100 million, with the state picking up $40 million and the federal government, $60 million.

• Texas estimates the tax at $220 million, with the state paying $90 million and the federal government, $130 million.

• Tennessee anticipates it will owe $160 million, with the state paying $50 million and the federal government, $110 million.

• California budgeted $88 million, with the state paying $40 million and the federal government, $48 million.

• Georgia estimates the tax on its plans at $90 million, with the state paying $29 million and the federal government, $61 million.

• Pennsylvania predicts the tax will cost $139 million, with the state paying $64 million and the federal government, $75 million.

• Louisiana estimates the tax will cost $27 million, with the state paying $10 million and the federal government, $17 million.

Texas is believed to be the only state that has not yet agreed to cover the tax for its health plans, according to state Medicaid and health plan officials. “The premium tax is just another way that the costs of the Affordable Care Act are pushed down to states and families,” said Stephanie Goodman, spokeswoman for the Texas Medicaid program.

Medicaid officials in other states complain that paying the tax reduces money they could have spent on covering more services or paying providers.



“I do not feel I am getting anything in return for this,” said Tennessee Medicaid Director Darin Gordon.

Officials won’t know exactly how much states owe until the Internal Revenue Service sends bills to insurers at the end of August and the Medicaid plans submit those to states.

The health insurer tax is estimated to bring in at least $100 billion over the next decade from all insurers, government auditors estimate.

Most non-profit Medicaid health plans are exempt from the tax, which the trade group says gives the non-profits a competitive edge vying for state contracts. “We consider this tax so badly construed that it should be reconsidered because it makes no public policy sense,” said Jeff Myers, CEO of Medicaid Health Plans of America.

The trade group, which represents both non-profit and for-profit Medicaid plans, also opposes the tax because it takes money from Medicaid programs that could be used to pay plans to improve care, he said.

The Centers for Medicare & Medicaid Services declined to comment on how states and the federal government are covering part of the tax.

Timothy Jost, a consumer advocate and law professor at Washington & Lee University in Virginia, said the lawmakers intended to cover the costs of the law by including as many groups paying in as possible.

While it may be unusual for the federal government to essentially tax itself, Jost said, the situation is no different from the federal government paying a contractor to provide a service, then having that contractor use some of those dollars to pay state sales tax or federal income tax.

“This tax should not have surprised anyone, and it should have been worked into contract prices,” he said.

Paul Van de Water, senior fellow with the left-leaning Center for Budget and Policy Priorities, said neither health plans nor states should be complaining about the taxes because both are benefiting from the law.

“States are benefiting from the Affordable Care Act because with more people getting insured, it is driving down their uncompensated care costs,” he said. He noted that is true even in states that did not expand Medicaid under the health law.

“People always like to get a benefit and not have to pay for it,” he said. “If we did not have this tax, we would have had to raise the money somewhere else.”


Kaiser Health News is an editorially independent program of the Kaiser Family Foundation

Fed appeals court panel says most Obamacare subsidies illegal

22 Jul


Dan Mangan

In a potentially crippling blow to Obamacare, a federal appeals court panel declared Tuesday that government subsidies worth billions of dollars that helped 4.7 million people buy insurance on are illegal.

A judicial panel in a 2-1 ruling said such subsidies can be granted only to those people who bought insurance in an Obamacare exchange run by an individual state or the District of Columbia — not on the federally run exchange

“Section 36B plainly makes subsidies available in the Exchanges established by states,” wrote Senior Circuit Judge Raymond Randolph in his majority opinion, where he was joined by Judge Thomas Griffith. “We reach this conclusion, frankly, with reluctance. At least until states that wish to can set up their own Exchanges, our ruling will likely have significant consequences both for millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly.”

In his dissent, Judge Harry Edwards, who called the case a “not-so-veiled attempt to gut” Obamacare, wrote that the judgment of the majority “portends disastrous consequences.”

Indeed, the decision threatens to unleash a cascade of effects that could seriously compromise Obamacare’s goals of compelling people to get health insurance, and helping them afford it.

The Obama administration is certain to ask the full U.S. Court of Appeals for the District of Columbia Circuit to reverse the panel’s decision, which for now does not have the rule of law.

The ruling endorsed a controversial interpretation of the Affordable Care Act that argues that the subsidies are illegal because ACA does not explicitly empower a federal exchange to offer subsidized coverage, as it does in the case of state-created exchanges. Subsidies for more than 2 million people who bought coverage on state exchanges would not be affected by Tuesday’s ruling if it is upheld. serves residents of the 36 states that did not create their own health insurance marketplace. About 4.7 million people, or 86 percent of all enrollees, qualified for a subsidy to offset the cost of their coverage this year because they had low or moderate incomes.

If upheld, the ruling could lead many, if not most of those subsidized customers to abandon their health plans sold on because they no longer would find them affordable without the often-lucrative tax credits. And if that coverage then is not affordable for them as defined by the Obamacare law, those people will no longer be bound by the law’s mandate to have health insurance by this year or pay a fine next year.

If there were to be a large exodus of subsidized customers from the plans, it would in turn likely lead to much higher premium rates for nonsubsidized people who would remain in those plans.

The ruling also threatens, in the same 36 states, to gut the Obamacare rule starting next year that all employers with 50 or more full-time workers offer affordable insurance to them or face fines. That’s because the rule only kicks in if one of such an employers’ workers buy subsidized covered on

The decision by the three-judge panel is the most serious challenge to the underpinnings of the Affordable Care Act since a challenge to that law’s constitutionality was heard by the Supreme Court. The high court in 2012 upheld most of the ACA, including the mandate that most people must get insurance or pay a fine.

If the Obama administration fails to prevail in its expected challenge to Tuesday’s bombshell ruling, it can ask the Supreme Court to reverse it.

A high court review is guaranteed if another federal appeals court circuit rules against plaintiffs in a similar case challenging the subsidies. And the only other circuit currently considering such a case, the Fourth Circuit, is expected by both sides to rule against plaintiffs there in a decision that is believed to be imminent.

Tuesday’s ruling focused on the plaintiffs’ claim that the ACA, in several of its sections, says that subsidies from the federal government in the form of tax credits can be issued through an exchange established by a state.

The law also says that if a state chooses not to set up its own exchange, the federal government can establish its own marketplace to sell insurance in such states.

However, the ACA does not explicitly say, as it does in the case of state-run exchanges, that subsidies can be given to people who buy insurance on a federal exchange.

The plaintiffs’ claim has been met with derision by Obamacare supporters, who argue that it relies on a narrow reading, or even misreading of the law. Those supporters said the claim ignores its overarching intent: to provide affordable insurance to millions of people who were previously uninsured.

Supporters argue that the legality of the subsidies to enrollee derives from the fact that the law explicitly anticipated the potential need to create an exchange in the event that a state chose not to.

When the ACA was passed, most supporters believed that the vast majority of states would create their own exchange. But the opposition to Obamacare of many Republican governors and state legislators lead to most states refusing to build their own marketplaces, setting the stage for the challenges to the subsidies issued for plans.

Two separate federal district court judges—in D.C. and Virginia—have rejected plaintiffs’ challenge to the subsidies. Those denials lead to the appeals in the D.C. federal circuit and in the Fourth Circuit.

Out of the more than 8 million Obamacare enrollees this year, fewer than 2.6 million people signed up in plans sold via an exchange run by a state or the District of Columbia. Of those people, 82 percent, or about 2.1 million, qualified for subsidies.

The subsidies are available to people whose incomes are between 100 percent and 400 percent of the federal poverty level. For a family of four, that’s between about $24,000 and $95,400 annually.

In a report issued Thursday, the consultancy Avalere Health said that if those subsidies were removed this year from the 4.7 million people who received them in states, their premiums would have been an average of 76 percent higher in price than what they are paying now.

Another report by the Robert Wood Johnson Foundation and the Urban Institute estimated that by 2016, about 7.3 million enrollees who would have qualified for financial assistance will be lose access to about $36.1 billion in subsidies if those court challenges succeed.

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