Tax refunds will be cut for ACA recipients

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Susan Tompor, Detroit Free Press 9:10 a.m.

A significant benefit of the Affordable Care Act is the opportunity to receive money-saving tax credits up front to cut the overall cost of health insurance, but now hundreds of thousands of consumers could owe back some of that money next April.

Those affected took advance payments of the premium tax credit for health insurance. Some married couples could owe $600 or $1,500 or $2,500 or even more. It might feel like a raw deal for some who are already suffocating under the escalating costs of health insurance.

“Health insurance is confusing enough, and now they’re adding the complexities of the Tax Code,” said Lorena Bencsik, a member of the Michigan Association of CPAs and owner of Prime Numbers in Ferndale.

When you file that 2014 tax return next year, the Internal Revenue Service will compare your actual income for the year with the amount you estimated when applying for exchange-based health insurance under the health insurance law.

The next open enrollment period begins Nov. 15. But notices were sent this week to some consumers whose incomes don’t match up to such things as 2012 tax return information.

On Monday, the Centers for Medicare and Medicaid Services said at least 279,000 households reported incomes that still don’t match what the government has on record. Supporting documents are needed by Sept. 30.

What can you do to avoid tax-time problems?

Experts say people need to realize early on that they should report changes in income and other changes in one’s life, such as a marriage, throughout the year. See HealthCare.gov to report “income and life changes.”

Of course, many people may have no idea that they’d need to report changes.

The IRS put out some more details on the issue mid-month.

What should you report? A move, an increase or decrease in income, a marriage or divorce, the birth or adoption of a child, whether you started a job that offers health insurance and whether you gained or lost eligibility for other health care coverage.

Best spots for information: HealthCare.gov and IRS.gov/aca.

Karen Pollitz, senior fellow with the Kaiser Family Foundation, said many people who qualify for these tax credits aren’t working 9-to-5 jobs with regular salaries. So guesstimating one’s income for the coming year can be very tough.

“It’s people in transition. Maybe they’re in and out of work,” she said. Or maybe they’re self-employed.

People who lose a job would want to report that change during the year, as well, because that change can lead to a higher advance payment for the credit.

“Life changes can drive tax changes,” said Mark Steber, chief tax officer for Jackson Hewitt Tax Service.

Steber stressed that people need to make sure to update information via HealthCare.gov or their state insurance exchanges.

The Kaiser Family Foundation site has a calculator to help figure out potential tax credits, based on one’s situation.

Premium tax credits are available to individuals and families with incomes between 100% of the federal poverty line ($23,550 for a family of four this year) and 400% of the federal poverty line ($94,200 for a family of four) who purchase coverage in the health insurance marketplace in their state.

The tax credits are paid directly to the insurer, if taken in advance. People are not required to take the entire credit in advance. Realistically, if you cannot afford insurance, you’d need some credit in advance.

To be sure, there are some caps on the amount filers must pay back and the cap is based on household income. The cap ranges from $300 to $1,250 for some single taxpayers and $600 to $2,500 for married taxpayers, again based on income.

But if the income is 400% or more above the poverty line, there is no cap and the taxpayer must pay back the full amount.

Rules exist for qualifying for the premium tax credit: You must buy health insurance through the marketplace; you’re not eligible for coverage through an employer or government plan; your income must be within certain limits; you do not file a married-filing-separately federal tax return (unless you meet certain exceptions, such as victims of domestic abuse and spousal abandonment) and you cannot be claimed as a dependent by another person.

The actual credit would vary based on how close your are to the federal poverty level, your age, the size of your family and where you live.

Sadly, it’s fair to say some people will see some unexpected, unpleasant surprises on their tax returns next year.

REPORT: US SPENT $22 TRILLION ON FAILED ‘WAR ON POVERTY’

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That’s because welfare is meant to keep people dependent of gov’t

Robert Rector

Robert Rector is a leading national authority on poverty, the U.S.welfare system and immigration and is a Heritage Foundation Senior Research Fellow.

Today, the U.S. Census Bureau will release its annual report on poverty. This report is noteworthy because this year marks the 50th anniversary of President Lyndon Johnson’s launch of the War on Poverty. Liberals claim that the War on Poverty has failed because we didn’t spend enough money. Their answer is just to spend more. But the facts show otherwise.

>>> Full Report: The War on Poverty After 50 Years

Since its beginning, U.S. taxpayers have spent $22 trillion on Johnson’s War on Poverty (in constant 2012 dollars). Adjusting for inflation, that’s three times more than was spent on all military wars since the American Revolution.

One third of the U.S. population received aid from at least one welfare program at an average cost of $9,000 per recipient in 2013.

The federal government currently runs more than 80 means-tested welfare programs. These programs provide cash, food, housing and medical care to low-income Americans. Federal and state spending on these programs last year was $943 billion. (These figures do not include Social Security, Medicare, or Unemployment Insurance.)

>>> INFOGRAPHIC: 9 Facts About How the Poor in America Live

Over 100 million people, about one third of the U.S. population, received aid from at least one welfare program at an average cost of $9,000 per recipient in 2013. If converted into cash, current means-tested spending is five times the amount needed to eliminate all poverty in the U.S.

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But today the Census will almost certainly proclaim that around 14 percent of Americans are still poor. The present poverty rate is almost exactly the same as it was in 1967 a few years after the War on Poverty started. Census data actually shows that poverty has gotten worse over the last 40 years.

How is this possible? How can the taxpayers spend $22 trillion on welfare while poverty gets worse?

The typical family that Census identifies as poor has air conditioning, cable or satellite TV, and a computer in its home.

The answer is it isn’t possible. Census counts a family as poor if its income falls below specified thresholds. But in counting family “income,” Census ignores nearly the entire $943 billion welfare state.

For most Americans, the word “poverty” means significant material deprivation, an inability to provide a family with adequate nutritious food, reasonable shelter and clothing. But only a small portion of the more than 40 million people labelled as poor by Census fit that description.

The media frequently associate the idea of poverty with being homeless. But less than two percent of the poor are homeless. Only one in ten live in mobile homes. The typical house or apartment of the poor is in good repair and uncrowded; it is actually larger than the average dwelling of non-poor French, Germans or English.

According to government surveys, the typical family that Census identifies as poor has air conditioning, cable or satellite TV, and a computer in his home. Forty percent have a wide screen HDTV and another 40 percent have internet access. Three quarters of the poor own a car and roughly a third have two or more cars. (These numbers are not the result of the current bad economy pushing middle class families into poverty; instead, they reflect a steady improvement in living conditions among the poor for many decades.)

The intake of protein, vitamins and minerals by poor children is virtually identical with upper middle class kids. According to surveys by the U.S. Department of Agriculture, the overwhelming majority of poor people report they were not hungry even for a single day during the prior year.

We can be grateful that the living standards of all Americans, including the poor, have risen in the past half century, but the War on Poverty has not succeeded according to Johnson’s original goal. Johnson’s aim was not to prop up living standards by making more and more people dependent on an ever larger welfare state. Instead, Johnson sought to increase self-sufficiency, the ability of a family to support itself out of poverty without dependence on welfare aid. Johnson asserted that the War on Poverty would actually shrink the welfare rolls and transform the poor from “taxeaters” into “taxpayers.”

Judged by that standard, the War on Poverty has been a colossal flop. The welfare state has undermined self-sufficiency by discouraging work and penalizing marriage. When the War on Poverty began seven percent of children were born outside marriage. Today, 42 percent of children are. By eroding marriage, the welfare state has made many Americans less capable of self-support than they were when the War on Poverty began.

Bono Quote, free enterprise

President Obama plans to spend $13 trillion dollars on means-tested welfare over the next decade. Most of this spending will flow through traditional welfare programs that discourage the keys to self-sufficiency: work and marriage.

Rather than doubling down on the mistakes of the past, we should restructure the welfare state around Johnson’s original goal: increasing Americans capacity for self-support. Welfare should no longer be a one way hand out; able-bodied recipients of cash, food and housing should be required to work or prepare for work as condition of receiving aid. Welfare’s penalties against marriage should be reduced. By returning to the original vision of aiding the poor to aid themselves, we can begin, in Johnson’s words, to “replace their despair with opportunity.”

The 35.4 Percent: 109,631,000 on Welfare

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By Terence P. Jeffrey

109,631,000 Americans lived in households that received benefits from one or more federally funded “means-tested programs” — also known as welfare — as of the fourth quarter of 2012, according to data released Tuesday by the Census Bureau.

The Census Bureau has not yet reported how many were on welfare in 2013 or the first two quarters of 2014.

But the 109,631,000 living in households taking federal welfare benefits as of the end of 2012, according to the Census Bureau, equaled 35.4 percent of all 309,467,000 people living in the United States at that time.

When those receiving benefits from non-means-tested federal programs — such as Social Security, Medicare, unemployment and veterans benefits — were added to those taking welfare benefits, it turned out that 153,323,000 people were getting federal benefits of some type at the end of 2012.

Subtract the 3,297,000 who were receiving veterans’ benefits from the total, and that leaves 150,026,000 people receiving non-veterans’ benefits.

The 153,323,000 total benefit-takers at the end of 2012, said the Census Bureau, equaled 49.5 percent of the population. The 150,026,000 taking benefits other than veterans’ benefits equaled about 48.5 percent of the population.

When America re-elected President Barack Obama in 2012, we had not quite reached the point where more than half the country was taking benefits from the federal government.

It is a reasonable bet, however, that with the implementation of Obamacare — with its provisions expanding Medicaid and providing health-insurance subsidies to people earning up to 400 percent of poverty — that if we have not already surpassed that point (not counting those getting veterans benefits) we soon will.

What did taxpayers give to the 109,631,000 — the 35.4 percent of the nation — getting welfare benefits at the end of 2012?

82,679,000 of the welfare-takers lived in households where people were on Medicaid, said the Census Bureau. 51,471,000 were in households on food stamps. 22,526,000 were in the Women, Infants and Children program. 20,355,000 were in household on Supplemental Security Income. 13,267,000 lived in public housing or got housing subsidies. 5,442,000 got Temporary Assistance to Needy Families. 4,517,000 received other forms of federal cash assistance.

How do you put in perspective the 109,631,000 people taking welfare, or the 150,026,000 getting some type of federal benefit other than veterans’ benefits?

Well, the CIA World Factbook says there are 142,470,272 people in Russia. So, the 150,026,000 people getting non-veterans federal benefits in the United States at the end of 2012 outnumbered all the people in Russia.

63,742,977 people live in the United Kingdom and 44,291,413 live in the Ukraine, says the CIA. So, the combined 108,034,390 people in these two nations was about 1,596,610 less than 109,631,000 collecting welfare in the United States.

It may be more telling, however, to compare the 109,631,000 Americans taking federal welfare benefits at the end of 2012 to Americans categorized by other characteristics.

In 2012, according to the Census Bureau, there were 103,087,000 full-time year-round workers in the United States (including 16,606,000 full-time year-round government workers). Thus, the welfare-takers outnumbered full-time year-round workers by 6,544,000.

California, the nation’s most-populated state, contained an estimated 38,332,521 people in 2013, says the Census Bureau. Texas had 26,448,193 people, New York had 19,651,127, and Florida had 19,552,860. But the combined 103,984,701 people in these four massive states still fell about 5,646,299 short of the 109,631,000 people on welfare.

In the fourth quarter of 2008, when President Obama was elected, there were 96,197,000 people living in households taking benefits from one or more federal welfare programs. After four years, by the fourth quarter of 2012, that had grown by 13,434,000.

Those 13,434,000 additional people on welfare outnumbered the 12,882,135 people the Census Bureau estimated lived in Obama’s home state of Illinois in 2013.

OBAMA OFFICIAL DELETED OBAMACARE EMAILS SOUGHT BY CONGRESS

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Administrator of Centers for Medicare and Medicaid Services deleted some of her emails

Patrick Howley
Political Reporter

The administrator of the Centers for Medicare and Medicaid Services (CMS) deleted some of her emails and may not be able to cooperate with a congressional investigation into the flawed Obamacare rollout, CMS has warned Congress.

Marilyn Tavenner, who was appointed by President Obama to take over CMS within the Department of Health and human Services in 2013 — prior to the Obamacare rollout — deleted some of her emails and did not save hard copies as the Federal Records Act requires her to do, MSNBC reported Thursday.

Though Tavenner’s computer did not crash like ex-IRS official Lois Lerner’s computer allegedly did, Tavenner may be unable to cooperate with House Oversight and Government Reform Committee subpoenas.

“During her entire tenure at CMS, Ms. Tavenner’s CMS email address, which is accessible to both colleagues and the public, has been subject to write-in campaigns involving thousands of emails from the public,” according to a letter CMS sent Wednesday to the National Archives and Records Administration. “Therefore, she receives an extremely high volume of emails that she manages daily. To keep an orderly email box and to stay within the agency’s email system capacity limits, the Administrator generally copied or forwarded emails to immediate staff for retention and retrieval, and did not maintain her own copies.”

CMS noted that this practice of not keeping emails “continued until November 2013,” just one month after the Obamacare website launched.

“It is possible that some emails may not be available to HHS,” the letter stated.

Read more: http://dailycaller.com/2014/08/07/obama-official-deleted-obamacare-emails-sought-by-congress/#ixzz3A8BGXosj

Obama Official Deleted Obamacare Emails Sought By Congress

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Patrick Howley

The administrator of the Centers for Medicare and Medicaid Services (CMS) deleted some of her emails and may not be able to cooperate with a congressional investigation into the flawed Obamacare rollout, CMS has warned Congress.

Marilyn Tavenner, who was appointed by President Obama to take over CMS within the Department of Health and human Services in 2013 — prior to the Obamacare rollout — deleted some of her emails and did not save hard copies as the Federal Records Act requires her to do, MSNBC reported Thursday.

Though Tavenner’s computer did not crash like ex-IRS official Lois Lerner’s computer allegedly did, Tavenner may be unable to cooperate with House Oversight and Government Reform Committee subpoenas.

“During her entire tenure at CMS, Ms. Tavenner’s CMS email address, which is accessible to both colleagues and the public, has been subject to write-in campaigns involving thousands of emails from the public,” according to a letter CMS sent Wednesday to the National Archives and Records Administration. “Therefore, she receives an extremely high volume of emails that she manages daily. To keep an orderly email box and to stay within the agency’s email system capacity limits, the Administrator generally copied or forwarded emails to immediate staff for retention and retrieval, and did not maintain her own copies.”

CMS noted that this practice of not keeping emails “continued until November 2013,” just one month after the Obamacare website launched.

“It is possible that some emails may not be available to HHS,” the letter stated.

Read more: http://dailycaller.com/2014/08/07/obama-official-deleted-obamacare-emails-sought-by-congress/#ixzz39jyOTeVF

Doctors Begin To Refuse Obamacare Patients

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Sarah Hurtubise

Obamacare plans have shrunk payments to physicians so much that some doctors say they won’t be able to afford to accept Obamacare coverage, NPR reports.

Many of the eight million sign-ups in Obamacare exchanges nationwide already face more limited choices for physicians and hospitals than those in the private insurance market. But with low physician reimbursement rates, the problem could get even worse.

For a typical quick patient visit, Dr. Doug Gerard, a Connecticut internist, told NPR a private insurer would pay $100 while Medicare would pay around $80. But Obamacare plans are more likely to pay closer to $80, which Gerard says is unsustainable for his practice.

“I cannot accept a plan [in which] potentially commercial-type reimbursement rates were now going to be reimbursed at Medicare rates,” Dr. Gerard told NPR. ”You have to maintain a certain mix in private practice between the low reimbursers and the high reimbursers to be able to keep the lights on.”

Narrow networks have become a hallmark of many Obamacare exchange plans, as one of few options left to insurance companies that allows them to save money by lowering reimbursement rates and covering fewer providers. In the health-care law’s first year, 70 percent of all Obamacare plan networks were either narrow or ultra-narrow, according to an analysis from consulting firm McKinsey.

But doctors are feeling even more financial pressure due to the changes and many believe there’s a risk that Obamacare insurance will go the way of Medicaid, where patients still struggle to find a doctor after low reimbursement rates led many physicians to stop accepting it.

“I don’t think most physicians know what they’re being reimbursed,” Gerard said. “Only when they start seeing some of those rates come through will they realize how low the rates are they agreed to.”

If Obamacare coverage continues on its current track, exchange customers could face a lower level of care than those who buy coverage in the private market.

“I think it could lead potentially to this kind of distinction that there are these different tiers of quality of care,” Connecticut Obamacare chief Kevin Counihan told NPR. ”That’s been something, at least in our state, that we’re trying to work against. And the carriers are, as well.”

The problem is especially bad for private practices like Gerard’s, where physicians’ income is directly tied to reimbursements. But hospitals — especially top-tier ones that treat the most difficult diseases — are also increasingly rejecting the low reimbursement rates. The nation’s best cancer treatment centers are often covered by very few exchange plans in their states; if Obamacare customers end up with a difficult-to-treat cancer, they’re likely to face a lower quality of care right off the bat.

“You get what you pay for,” said Connecticut State Medical Society president-elect Bob Russo. “If you can’t convince [doctors] that they’re not losing money doing their job, then it’s a problem. And they haven’t been able to convince people of that.”

Read more: http://dailycaller.com/2014/08/04/doctors-begin-to-refuse-obamacare-patients/#ixzz39TNjuopb

THE FINANCIAL SYSTEM IS PRIMED FOR A CRISIS WORSE THAN 2008

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Trillions in US household wealth has evaporated

by PHOENIX CAPITAL RESEARCH | INVESTMENTWATCH | AUGUST 4, 2014

Over the last 30 years, the US has built up record debts on a personal, state, and national level. Consumers thought they were financially stable so long as they could cover the interest payments on their credit cards, states created program after program few if any of which they could afford, and the Federal Government issued $30-50 trillion in debt and liabilities (counting Social Security and Medicare).

This all came to a screeching halt when the housing bubble (arguably the biggest debt bubble in history) imploded in 2007. Since that time, stocks have staged one of their worst years on record (2008), one in five us mortgages has fallen underwater (meaning the mortgage loan is worth more than the home itself), and some trillions in US household wealth has evaporated.

These issues seem to be distinct, but in reality they all stem from a debt problem. And as you know, there is only one legitimate way to deal with a debt problem:

Pay it off.

However, instead of doing this, the Feds (the Federal Reserve, Treasury Dept, etc.) have been producing EVEN MORE DEBT. Here’s a brief recap of their moves thus far:

The Federal Reserve cuts interest rates from 5.25-0.25% (Sept ’07-today)
The Bear Stearns deal/ Fed buys $30 billion in junk mortgages (March ’08)
The Fed opens various lending windows to investment banks (March ’08)
The SEC proposes banning short-selling on financial stocks (July ’08)
The Treasury buys Fannie/Freddie for $400 billion (Sept ’08)
The Fed takes over AIG for $85 billion (Sept ’08)
The Fed doles out $25 billion for the auto makers (Sept ’08)
The Feds’ $700 billion Troubled Assets Relief Program (TARP) (Oct ’08)
The Fed buys commercial paper (non-bank debt) from non-financials (Oct ’08)
The Fed offers $540 billion to backstop money market funds (Oct ’08)
The Feds backstops up to $280 billion of Citigroup’s liabilities (Oct ’08).
Another $40 billion to AIG (Nov ’08)
The Fed backstops up $140 billion of Bank of America’s liabilities (Jan ’09)
Obama’s $787 Billion Stimulus (Jan ’09)
The Fed’s $300 billion Quantitative Easing Program (Mar ’09)
The Fed buying $1.25 trillion in agency mortgage backed securities (Mar ’09-’10)
The Fed buying $200 billion in agency debt (Mar ’09-’10)
QE lite buys $200-300 billion of Treasuries and mortgage debt (Aug ’10)
QE 2 buys $600 billion in Treasuries (Nov ’10)
Operation Twist reshuffles $400 billion of the Fed’s portfolio (Oct ’11)
QE 3 buys $40 billion of Mortgage Backed Securities monthly (Sept ‘12)
QE 4 buys $45 billion worth of Treasuries monthly (Dec ’12
And that’s a BRIEF recap (I’m sure I left something out).

In a nutshell, The Feds have tried to combat a debt problem by ISSUING MORE DEBT. They’re pumping trillions of dollars into the financial system, trying to prop Wall Street and the stock market. They’ve managed to kick off a rally in stocks…

But they HAVE NOT ADDRESSED THE FUNDAMENTAL ISSUES PLAGUING THE FINANCIAL MARKET.

Stocks are headed for another Crash, possibly as bad as the one we saw in October-November 2008. As you know, that Crash wiped out $11 trillion in household wealth in a matter of weeks. There’s no telling the damage this Second Round will cause.

The Feds have thrown everything they’ve got (including the kitchen sink) at the financial crisis… and things are fundamentally no better than they were before: most major banks are insolvent, one in five US mortgages is underwater, and the stock market is being largely propped up by in-house trading from a few key players (Goldman Sachs, UBS, etc).

Regarding stock investing, it’s important to take a big picture of stocks as an asset class. The common consensus is that stocks return an average of 6% a year (at least going back to 1900).

However, a study by the London Business School recently revealed that when you remove dividends, stocks’ gains drop to a mere 1.7% a year (even lower than the return from long-term Treasury bonds over the same period).

Put another way, dividends account for 70% of the average US stock returns since 1900. When you remove dividends, stocks actually offer LESS reward and MORE risk than bonds. If you’d invested $1 in stocks in 1900, you’d have made $582 with reinvested dividends adjusted for inflation vs. a mere $6 from price appreciation.

So as much as the CNBC crowd would like to believe that the way to make money in stocks is buying low and selling high, the reality is that the vast majority of gains from stocks stem from dividends.

The remaining gains have come largely from inflation.

Bill King, Chief Market Strategist M. Ramsey King Securities recently published the following chart comparing REAL GDP (light blue), GDP when you account for inflation (dark blue), and the Dow Jones’ performance (black) over the last 30 years. What follows is a clear picture that since the mid-70s MOST of the perceived stock gains have come from inflation.
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Which brings us to today. According to official data, the S&P 500 is currently trading at a CAPE ratio of 25 and yields 2.3%. In plain terms, stocks are expensive (historic average for CAPE is 15) and paying little.

In other words, there is little incentive, other than future inflation expectations, for owning stocks right now.

By most historic metrics, the market is showing signs of a significant top. Here are just a few key metrics:

1) Investor sentiment is back to super bullish autumn 2007 levels.

2) Insider selling to buying ratios are back to autumn 2007 levels (insiders are selling the farm).

3) Money market fund assets are at 2007 levels (indicating that investors have gone “all in” with stocks).

4) Mutual fund cash levels are at a historic low.

5) Margin debt (money borrowed to buy stocks) is at a new record high.

This final point is key. Mutual funds are the “big boys” of the investment world. If they have become fully invested in the market, this means there are few buyers left to push stocks higher. This is evident in the fact that every time mutual fund cash levels dropped, stocks collapsed soon after.

In plain terms, the odds are high that a Top is forming in stocks. With that in mind,

if your portfolio is heavily invested in stocks, now is a time to be taking some profits. If you can, consider moving a sizable chunk into cash.

The market is extremely tired and the systemic risks underlying the Financial Crisis are in no way resolved. With investor complacency (as measured by the VIX) at record lows, the Fed withdrawing several of its more significant market props, and low participation coming from the larger institutions, this market is ripe for a serious correction.

Be prepared.

This concludes this article. If you’re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled Protect Your Portfolio athttp://phoenixcapitalmarketing.com/special-reports.html.

This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.

Best Regards

Phoenix Capital Research