Sen. Ted Cruz is among a shrinking number of Republican lawmakers still calling for the Affordable Care Act’s repeal. (Jim Lo Scalzo / European Pressphoto)
By NOAM N. LEVEYcontact the reporter
After five years and more than 50 votes in Congress, the Republican campaign to repeal the Affordable Care Act is essentially over.
GOP congressional leaders, unable to roll back the law while President Obama remains in office and unwilling to again threaten a government shutdown to pressure him, are focused on other issues, including trade and tax reform.
Less noted, senior Republican lawmakers have quietly incorporated many of the law’s key protections into their own proposals, including guaranteeing coverage and providing government assistance to help consumers purchase insurance.
And although the law remains very unpopular with GOP voters, more than 20 million Americans now depend on it for health benefits, making even some of the most conservative Republicans loath to cut off coverage.
April 15 is right around the corner, and millions of Americans will find themselves paying more in taxes than ever thanks to Obamacare.
The law is more than a fundamental change to the country’s health care system. It also is a massive tax hike. As The Heritage Foundation’s Federal Budget in Pictures shows, according to the most recent scores, Obamacare will increase taxes by nearly $800 billion for the period of 2013-2022.
Obamacare contains 18 separate tax increases. A few of the biggest include a tax on “Cadillac” health insurance plans, which doesn’t take effect until 2018, long after President Obama and many in Congress who voted for the tax in 2010 have departed Washington. Also, there is a tax on health insurance premiums and a higher rate on the Hospital Insurance payroll tax for single filers with incomes above $200,000 ($250,000 for married filers) that also applies to investment income.
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At a time when the already-onerous tax code has created a significant drag on the economy, Obamacare’s tax hikes only do more damage. Many Americans have found themselves afflicted by higher health insurance premiums, driven up, in part, by new taxes on insurers. Increased rates on capital gains and dividends from the wage and investment tax hike discourage saving and investment, resulting in fewer jobs created and lower wage growth.
Because of Obamacare, Americans are paying much higher taxes and those taxes are hurting the economy. Though some bipartisan efforts exist to repeal some of the new taxes that benefit special-interest groups, including the medical device tax, an incomplete approach won’t be sufficient to overcome the detrimental effects of this law.
Congress should repeal Obamacare and all of its tax increases.
Premiums are rising rapidly and the young and healthy are bailing out
By Sean Parnell – – Thursday, March 26, 2015
The Supreme Court decision in King v. Burwell, the case challenging the Obama administration’s decision to award tax credits for health insurance sold through federally established exchanges, could turn on the question of whether a ruling that ends the tax credits on federal exchanges might cause something known as a “death spiral” in health insurance markets.
The good news is the answer is probably no, but the bad news is that’s only because the death spiral has probably already started.
A death spiral generally occurs when insurers are forced to raise premiums sharply to pay promised benefits. Higher premiums cause many of the healthiest policyholders, who already pay far more in premiums than they receive in benefits, to drop coverage.
When healthy policyholders drop coverage, it leaves the insurer with little choice but to raise premiums again because they now have a risk pool that is less healthy than before. But another premium increase means many of the healthy people who remained now drop their policies, too, and this continues until the only people willing to pay the now-very-high premiums are those with serious medical conditions.
The death spiral isn’t just a theory. Eight states learned this the hard way in the 1990s when they enacted two policies known as “community rating” and “guaranteed issue,” requiring health insurers to sell coverage to anyone who wanted it at the same price.
This quickly set off a death spiral because people knew they could wait until they were sick or injured to buy insurance, and premiums rose sky-high as healthy people exited the individual insurance market while the sick remained.
March 28, 2015, 11:13 AM Last updated: Saturday, March 28, 2015, 11:15 AM
By DONNA GORDON BLANKINSHIP
Associated Press
SEATTLE (AP) — The federal health care overhaul is leading some colleges and universities to get out of the health insurance business.
Experts are divided on whether this change will be good or bad for students. Some call it an inevitable result of health care reform and a money-saver for students since insurance in the marketplace is usually cheaper than the college plans. Others worry that more students will go without health insurance since their premiums won’t be folded into the lump sum they pay for school, and they say college health plans offer more coverage for the money than other options.
The main driver of colleges getting out of the insurance business is a provision in the Affordable Care Act that prevents students from using premium tax subsidies to purchase insurance from their college or university, according to Steven M. Bloom, director of federal relations for the American Council on Education, a Washington, D.C., group representing the presidents of U.S. colleges and universities.
Add to that the provision that allows young people to stay on their parent’s health insurance plans until age 26, plus the expansion of Medicaid in some states and the rising cost of student insurance. The result is cheaper health insurance available for students off campus.
But Bloom worries more schools will decide to drop insurance coverage..
What the Domino’s CEO Would Change on Taxes, Obamacare
Stephen Moore / @StephenMoore / March 22, 2015
Here’s a question that has been puzzling Patrick Doyle, the CEO of Domino’s, for months, as he puts it: “How do we list the calorie content of our pizzas on a menu when we have 34 million different variations of pizza?” The new menu labeling law, a creation of the Affordable Care Act, could require his company to do just that.
It’s a textbook case of a mindless and arcane regulation, of Washington bureaucrats imposing on businesses costs that will have no effect on public health. “We’ve been voluntarily doing menu labeling for over a decade,” Doyle says. “We even have an online calorie calculator we call the ‘Calo-Meter’ for every possible pizza order, and it tells customers what happens if they substitute, say, sausage for mushrooms, because we strive to be very nutrition-conscious.”
That isn’t good enough for the feds. The Food and Drug Administration is now insisting that every one of the chain’s 5,000 stores post menu boards on the wall with calorie counts. “It’s crazy and it doesn’t help consumers,” Doyle says, because “90 percent of Domino’s orders arrive by phone or Internet and are for delivery, so fewer than one of 10 customers will ever see these signs.” The signs will cost about $2,000 at every store, and each change of menu will require new ones. That is about $10 million of extraneous costs nationwide for Domino’s. Thank you, Washington.
Other than that, Doyle is having a good day when I visit him at the Domino’s world-wide headquarters in Ann Arbor, Mich. And a very good year, with sales up 12 percent in the past quarter alone.
The headquarters are a few miles up the road from where the original Domino’s Pizza opened in 1960. Doyle, who is 51, is tall, stocky, affable and appropriately a Michigan man through and through, having grown up in Midland and earned a degree at the University of Michigan. In his five years as CEO, annual sales have climbed to $9 billion from about $2 billion. Some 250,000 workers wear a Domino’s uniform and sell roughly one billion pizzas each year. During the Super Bowl, Domino’s was taking a dizzying 1,400 orders a minute.
Making pizzas may not be the sexiest business—though it’s a $125 billion world-wide market. But while investors obsess over finding the next Facebook, the share price of Domino’s has soared from $13 in 2010 to just over $100 today. It has been among the top performing stocks in the Fortune 100.
Doyle has helped take the company global, with stores operating in 80 nations and expansion plans throughout Asia. In sales, Domino’s is now the No. 1 restaurant chain in India. Sub-Saharan Africa is also among the company’s fastest-growing markets, with a billion people and a growing middle class. “We’ve discovered Africans love pizza,” he says. “They order them on their mobile phones.”
Things weren’t always flying so high in Ann Arbor. Doyle became CEO after two of the company’s worst years, and sales were still sliding. One of his first decisions was to take an unorthodox approach: “We held a series of focus groups with consumers and we discovered that people hated the pizza. So we ran these TV ads featuring Americans complaining about how bad Domino’s pizza tasted.” Then Doyle appeared on screen with an apology and promise: “We hear you America. Sometimes you know you’ve got to make a change. Please give us another try.”
He adds with a laugh that the one thing in his career that impressed his children was when they were in a New York restaurant and comedian Amy Poehler spotted him and shouted, “Hey, you’re the pizza guy.”
In the three months following those ads, Domino’s had its fastest rise in sales in company history. “I think consumers really appreciated that we were direct and honest with them,” he explains. That ad campaign is now considered a textbook crisis-management story, with its lesson in honesty as a best commercial policy.
Domino’s is also riding the digital revolution. “In a lot of ways we’re really a technology company,” Doyle says. “We’ve adapted the art of pizza-making to the digital age. Globally, we’re already at a run rate of about $4 billion of digital sales.” He adds that digital drives sales by making ordering easier and more efficient, and saves money on bad orders because customers “take their own orders so they make fewer mistakes.”
His goal is to have every iPhone in the world equipped with a Domino’s app, and the company is working with Ford Motor Co. on a voice-activated technology that will let motorists order a large thin-crust pepperoni with onions while driving home from work.
The atmosphere at company headquarters feels more like Silicon Valley than a fast-food company. Most employees here are computer programmers and technicians monitoring in real time what people are ordering, how long it is taking to fill an order, and the online complaints and comments that stream in. Their mission is to streamline the pizza-making process from the time the order arrives to when the pie is handed off at the customer’s front door. If the goal is delivery in 30 minutes or less, every innovation that shaves 10 or 15 seconds is a major money saver when you’re selling a billion pies a year. Although the Domino’s menu also includes such things as sandwiches, pasta and chicken wings, 80 percent of its sales are pizzas.
Doyle is unconditionally bullish on the U.S. economy. “The big story since the recession is that American households and businesses have become lean and efficient and have paid down debts. Consumers finally have money and they are starting to spend it,” he says.
Meanwhile, as the head of one of the nation’s biggest employers, Doyle sees the effects of what he calls a “tightening of the labor market” firsthand. “Frankly, right now, it’s getting harder and harder to hire. We have shortages of truck drivers and delivery people.”
Such real-world experience makes Domino’s a barometer of sorts. “My take is that the official statistics are underestimating the strength of the labor market. Look, it has been a long, slow recovery. We’re now six years into it and we’ve finally reached the point where there seems to be more demand for labor than there is trained supply.” For job seekers “that is great news, right?”
As for those who fret that only the rich are getting richer and upward mobility isn’t possible, Doyle says they should pay more attention to what happens at Domino’s. “Over 90 percent of our 900 franchisees started as an hourly worker in the store,” he says. “Most of them started as delivery drivers at minimum wage. They work their way up. They become a manager. Then they come in, they apply to buy a store.” So from earning $7 or $8 an hour, they now earn $80,000 to $100,000 by operating a franchise. Many have become millionaires. “This is absolutely a story of upward mobility in America.
If he were economic adviser to the president, what reforms would he recommend to accelerate growth and hiring? Without hesitation he says: “Simplify the corporate tax. It’s a killer. We pay 38 percent at Domino’s.” He’s including state and local taxes, but that’s a huge burden, especially given that many large corporations pay below 10 percent. “Just get rid of all the loopholes—and make it fair with a broad base and lower rates.” Then he adds, only half-kidding: “No one in Washington ever woke up and said ‘let’s have a loophole for pizza makers.’” Sounds like he needs a lobbyi
One of Doyle’s biggest worries is that the Domino’s franchise-owner model—which is also used by thousands of other retail and restaurant stores—has come under assault from trial lawyers, unions and the National Labor Relations Board. These groups want to treat a Domino’s or Popeyes franchise store and the parent company as “joint employers.” This would mean a locally owned store with a few dozen staff would still have to comply with, for instance, the ObamaCare rules that only apply to firms with more than 50 workers. Seattle passed a minimum-wage law last year that treats franchise restaurants as big businesses that must pay a super-minimum-wage that phases up to $15 an hour.
“You’ve got 20 million people today employed in the franchise industry in the U.S. Part of why small business owners want to be in a franchise is because they’re getting support from each other, and they’re getting support and ideas from a company. Franchise stores have dramatically higher success rates than people who are just doing it all on their own,” Doyle says. “Why destroy a model that is almost uniquely American and has been a tremendous success for 50 or 60 years? This would be horribly detrimental.”
Doyle is optimistic about the world economy and how the digital revolution will continue to lift living standards for billions in the coming decade. Even in sub-Saharan Africa per capita incomes are growing at 5 percent annually. “I’m a free trader. I just believe in my core that free markets, technology, innovation, cheap energy and globalization will be triumphant and will make people better off.” They will also, not coincidentally, make people order more pizzas on their smartphones.
Obamacare Is Really Expensive for Small Businesses. Surprise!
Lousy news for growing the economy, creating jobs, and overall increasing prosperity
“Complying with the health care law is costing small businesses thousands of dollars that they didn’t have to spend before the new regulations went into effect,” reports AP business writer Joyce M. Rosenberg. This should be a surprise to exactly nobody. In general, government mandates have poor track record of making people’s lives less expensive and complicated. Specifically, businesses around the country have reported over the past year that Obamacare raised their healthcare costs and they anticipated more hikes to come. Hiring—especially of full-time employees—has taken a hit as a result.
Writes Rosenberg:
The Affordable Care Act, which as of next Jan. 1 applies to all companies with 50 or more workers, requires owners to track staffers’ hours, absences and how much they spend on health insurance. Many small businesses don’t have the human resources departments or computer systems that large companies have, making it harder to handle the paperwork. On average, complying with the law costs small businesses more than $15,000 a year, according to a survey released a year ago by the National Small Business Association.
Last summer, Federal Reserve Banks around the country surveyed businesses in their regions. In the service sector, about 82 percent of businesses told the Federal Reserve Bank of Dallas that the Affordable Care Act raised costs for them in 2014; 91 percent expected increased costs in 2015.
CBO: Obamacare to Hit Only 65 Percent of 2015 Coverage Target
7:23 AM, Mar 20, 2015 • By JEFFREY H. ANDERSON
Given that Obamacare’s supporters like to take the Congressional Budget Office’s overly optimistic scoring of the president’s signature legislation as gospel, it’s fun to look at how poorly Obamacare is actually doing in relation to earlier CBO projections. When the Democrats rammed Obamacare through Congress in 2010 without a single Republican vote, the CBO said that the unpopular overhaul would lead to a net increase of 26 million people with health insurance by 2015 (15 million through Medicaid plus 13 million through the Obamacare exchanges minus 2 million who would otherwise have had private insurance but wouldn’t because of Obamacare).
Fast-forwarding five years, the CBO now says that Obamacare’s tally for 2015 will actually be a net increase of just 17 million people (10 million through Medicaid plus 11 million through the Obamacare exchanges minus 4 million who would otherwise have had private insurance but won’t, or don’t, because of Obamacare).
In other words, Obamacare is now slated to hit only 65 percent of the CBO’s original coverage projection for 2015.
Obamacare’s under-publicized failure on this key point is attributable to a variety of factors, including but not limited to the following: People aren’t thrilled with Obamacare-compliant insurance’s high cost and limited doctor networks, and some would even rather pay a fine for refusing to buy such insurance than pay its premiums; the Supreme Court ruled that part of Obamacare was unconstitutional, thereby giving states more freedom not to help expand it; and HealthCare.gov has been more reminiscent of DMV.org than of Expedia.com.
Reader says starting in 2018 the BoE and the Village will start having to pay a 40% tax on top of those benefits just because they are so valuable
But let’s raise taxes more to pay to subsidize all of the annual increases in healthcare premiums for our BoE and Municipal employee, right? While they pay a minimum amount out of pocket for what are classified as “platinum” plans under the ACA, the rest of us are paying for both our own health care coverage and then subsidizing public workers – how on earth is this fair? And starting in 2018 the BoE and the Village will start having to pay a 40% tax on top of those benefits just because they are so valuable, worth well over $22,000 according to divorce settlement findings on the value of the health plans. Why are Village taxpayers footing all of the annual increase, which was almost $700K (+12% compared to 2013) just for our municipal employees in 2014? This taxpayer give away has to stop, as this article says, we’re already have the fifth-highest average property tax bill in the nation and pay well over 2% of our property value annually in property taxes… we’re literally being taxed to death to pay for essentially free health care benefits. This has to stop.
Gruber billing referred to Vermont attorney general
APRIL BURBANK, Free Press Staff Writer 4:26 p.m. EST February 23, 2015
Vermont officials ignored “obvious signs” of problematic billing by health care economist Jonathan Gruber, the state auditor said in a memo released Monday.
Gruber’s invoices lacked important details and claimed dubious numbers of work hours as he prepared economic models for a single-payer health care system — but state officials failed to scrutinize the invoices, Auditor Doug Hoffer wrote.
Hoffer said he was referring the matter to Attorney General William Sorrell.
Gruber said Monday he had no comment. Gov. Peter Shumlin’s spokesman, Scott Coriell, referred a request for comment to Administration Secretary Justin Johnson.
“We don’t believe that the work was overstated, in part because we were dealing with Dr. Gruber on a daily basis, and he was doing the work that we asked him to do,” Johnson said.
Feds sent incorrect tax information to 800,000 people on ObamaCare
By Peter Sullivan and Sarah Ferris – 02/20/15 10:26 AM EST
The administration sent the wrong tax information to 800,000 people who have enrolled in ObamaCare, officials announced Friday.
The information used to calculate subsidies was wrong on about 20 percent of tax forms, an error that could delay tax refunds for thousands of people.
Administration officials stressed that the vast majority of HealthCare.gov customers received the correct forms, and White House spokesman Josh Earnest said the issue impacted “a very small fraction of people.”
But the tax glitch quickly provided new ammunition for Republicans, who continue to argue that the healthcare law is fatally flawed.
“Surprise, surprise, the Obama administration still does not have its act together,” Rep. Marsha Blackburn (R-Tenn.), vice chair of the House Energy and Commerce Committee, wrote in a statement.
She said the new problems offer more proof that the IRS should be kept out of healthcare, and pledged to redouble her efforts to repeal the ObamaCare insurance penalty entirety.
“The Obama administration has built a healthcare law so complex, so confusing, and so costly that even they don’t know how to properly administer it,” Rep. Diane Black (R-Tenn.) added in a statement just minutes after the error was disclosed.
Democrats seek relief from health law penalties
By RICARDO ALONSO-ZALDIVAR, Associated Press
WASHINGTON (AP) — The official sign-up season for President Barack Obama’s health care law may be over, but leading congressional Democrats say millions of Americans facing new tax penalties deserve a second chance.
Three senior House members told The Associated Press that they plan to strongly urge the administration to grant a special sign-up opportunity for uninsured taxpayers who will be facing fines under the law for the first time this year.
The three are Michigan’s Sander Levin, the ranking Democrat on the Ways and Means Committee, and Democratic Reps. Jim McDermott of Washington, and Lloyd Doggett of Texas. All worked to help steer Obama’s law through rancorous congressional debates from 2009-2010.
The lawmakers say they are concerned that many of their constituents will find out about the penalties after it’s already too late for them to sign up for coverage, since open enrollment ended Sunday.
That means they could wind up uninsured for another year, only to owe substantially higher fines in 2016. The fines are collected through the income tax system.
This year is the first time ordinary Americans will experience the complicated interactions between the health care law and taxes. Based on congressional analysis, tax preparation giant H&R Block says roughly 4 million uninsured people will pay penalties.
The IRS has warned that health-care related issues will make its job harder this filing season and taxpayers should be prepared for long call-center hold times, particularly since the GOP-led Congress has been loath to approve more money for the agency.
“Open enrollment period ended before many Americans filed their taxes,” the three lawmakers said in a statement. “Without a special enrollment period, many people (who will be paying fines) will not have another opportunity to get health coverage this year.
“A special enrollment period will not only help many Americans avoid making an even larger payment next year, but, more importantly, it will help them gain quality health insurance for 2015,” the lawmakers added.
So far, administration officials have deflected questions about whether an extension will be granted. Health and Human Services Secretary Sylvia M. Burwell has authority to grant special enrollment periods under certain circumstances.
State legislators around the country have introduced more than 200 bills aiming to nullify regulations and laws coming out of Washington, D.C., as they look to rein in the federal government.
The legislative onslaught, which includes bills targeting federal restrictions on firearms, experimental treatments and hemp, reflects growing discord between the states and Washington, state officials say.
“You have a choice,” said Kentucky state Rep. Diane St. Onge (R). “To sit back and not do anything or say anything and let overregulation continue — or you have the alternative choice to speak up about it and say, ‘We know what you are doing or intend to do and we do not think that it is constitutional and we as a state are not going to stand for it.’ ”
Last month, St. Onge introduced H.B. 13 to nullify federal gun control laws within Kentucky state lines. Similar legislation has been introduced in seven other states.
“This law is saying the sheriff and those under him do not have to follow federal regulations,” she said.
Administration officials are refusing to say whether they have an ObamaCare backup plan if the Supreme Court torpedoes the law.
But Republicans don’t believe them.
GOP lawmakers on the Senate Finance Committee repeatedly pressed Health and Human Services (HHS) Secretary Sylvia Mathews Burwell on the issue. But Burwell on Wednesday did not budge during a tense back-and-forth, with a half-dozen Republicans claiming that the administration must have a “plan B.”
“I’m asking, is there a contingency plan? Not what is the plan, but is there a plan?” Sen. Tim Scott (R-S.C.) asked.
The case, which begins oral arguments next month, could make billions of dollars of healthcare subsidies disappear in 37 states. And with such high stakes, two former HHS officials said they are confident the administration is preparing a backup plan.
“Of course, they have one, they should all resign if they don’t,” said Tom Scully, an HHS official under former President George W. Bush. “And they certainly should not discuss it either.”
Former HHS Secretary Michael Leavitt, who left office in 2009, agreed. He added that he isn’t surprised that senior officials would rather face a day of bad headlines than signal weakness to the Supreme Court.
“If the court thought they had a plan, they might think, they felt like their case was weak,” Leavitt, who also served as governor of Utah, said in an interview.
Wednesday’s heated exchange was dominated by Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Senate Majority Whip John Cornyn (R-Texas), both of whom signed an amicus brief in support of the plaintiff earlier this year.
“You’re a highly intelligent, charming person, but you’ve refused to answer our questions, and to me, that doesn’t strike me as trying to work with Congress, but rather contemptuous of Congress’s responsibilities,” Cornyn told Burwell.
Sen. Dan Coats (R-Ind.) added that he believes it is “irresponsible” if the administration is not making plans for the “what-ifs” of the case, which will likely be decided in June.
President Obama’s Budget Cuts $50 Million From Vaccine Program For Underinsured
“Health insurance expansion will further increase access to immunizations and decrease the number of uninsured and underinsured individuals in need of Section 317 vaccine for routine immunizations,” a White House official told BuzzFeed News.
President Obama’s fiscal year budget for 2016 cuts $50 million from Health and Human Service’s 317 immunization program, which provides provides vaccines at no cost to those eligible, typically the uninsured and underinsured.
The cut from the program comes during a measles outbreak in California and other western states, which has reignited the debate over mandatory childhood vaccinations.
In a statement the White House defended the proposed cut, saying the Affordable Care Act’s coverage makes the program less necessary.
“Health insurance expansion will further increase access to immunizations and decrease the number of uninsured and underinsured individuals in need of Section 317 vaccine for routine immunizations,” a White House official told BuzzFeed News.
White House Seeks to Limit Health Law’s Tax Troubles
By ROBERT PEARJAN. 31, 2015
WASHINGTON — Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.
The White House has already granted some exemptions and is considering more to avoid a political firestorm.
Mark J. Mazur, the assistant Treasury secretary for tax policy, said up to six million taxpayers would have to “pay a fee this year because they made a choice not to obtain health care coverage that they could have afforded.”
But Christine Speidel, a tax lawyer at Vermont Legal Aid, said: “A lot of people do not feel that health insurance plans in the marketplace were affordable to them, even with subsidies. Some went without coverage and will therefore be subject to penalties.”
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