Unions, insurers team up to fight coming Obamacare tax

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BY SEAN HIGGINS

A coalition of labor unions and health insurance companies is pushing Congress to repeal Obamacare’s “Cadillac tax,” arguing that it will hurt workers by causing their employers to cut back, or eliminate, insurance coverage.

But many economists and analysts argue that whatever the workers lose in coverage they will largely make up in additional wages or benefits.

“The economic evidence is strong that there is a tradeoff between health benefits and wages, so I would expect wages on average to rise as firms cut back on health benefits as a result of the Cadillac plan tax. The wage effect could vary by employee and employer, though, depending on labor market conditions. Workers whose skills are in greater demand will be more likely to get wage increases,” said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation.

The Affordable Care Act, or Obamacare, includes a 40 percent tax onemployer-provided plans with supposedly lavish benefits, i.e., “Cadillac” plans. The White House’s intention was to use the tax revenue from the wealthier plans — estimated by the Congressional Budget Office at $87 billion over 10 years — to finance other parts of the law. However, many of the plans were negotiated by labor unions and are a key benefit for members. They fear the tax will cause employers to drop or scale back the plans rather than pay the tax.

It is a dilemma that more employers will have to deal with. On Monday, Kaiser released a study that found that 26 percent of employer-provided plans could be subject to the tax when it starts in 2018. The share would rise to 30 percent by 2023 and to 42 percent by 2028.

Organized labor, which fought hard to pass Obamacare, has been worried about the tax’s impact for years. At its 2013 convention, the AFL-CIO labor federation passed a resolution criticizing the law and demanding major changes.

Several top unions such as Unite Here, the United Brotherhood of Carpenters and Joiners, and the Laborers International Union of North America have joined a coalition group called “Alliance to Fight the 40” that also includes major health insurance companies such as Blue Cross Blue Shield Association, Cigna and New York Life Insurance Co.

The group sent a letter to all House lawmakers Monday urging them to repeal the tax. The letter disputes the argument that the tax will bring in $87 billion and argues that many employers will drop coverage or restructure it to avoid paying the tax. Those who don’t drop coverage will require employees to contribute more to offset the higher cost.

Those workers won’t get much in return, the alliance argued. “[I]t is economic theory, not hard evidence, supporting the claim that employers will make up lowered health benefits with higher wages,” the letter stated.

One of the coalition members pointed the Washington Examiner to a 2014 study the American Health Policy Institute, a think tank whose board of governors consists of “60 chief human resources officers from America’s largest employers.” It cited a survey of employers that found that 30 percent would eliminate high-cost plans and 42 percent would require more worker cost-sharing.

“The more likely outcome is that workers do not get any compensating wage benefit,” said Tevi Troy, president of the institute and a former deputy secretary of the Health and Human Services Department under President Bush.

The coalition also pointed to a October study by Aon Hewitt, a company that consults on human resources issues, that found that a third of businesses would “reduce the richness” of their company-provided plans and another 10 percent said they would eliminate the high-cost options.

However, the non-partisan Congressional Budget Office said in a March report that business groups’ efforts to avoid the “Cadillac tax” would likely result in “a larger share of employees’ compensation over the coming decade … [being] paid in the form of taxable wages and salaries.” It even said the increase in taxable wages was the “largest factor” in why it reduced its projection for the federal budget deficit over the next decade by $431 billion.

It stands to reason that employees would get back most of the money in some form, said David Hogberg, author of Medicare’s Victims, a newly published study on the impact of federal health care policies. He noted that employers would not be reducing health coverage because their profits are down, but to avoid new taxes. In other words, companies would still have the same amount of money budgeted for their employees as before.

“Reducing health benefits to avoid a tax … should have no impact on an employer’s revenue stream. Thus, will the employer replace those benefits with wages or maybe some other benefit like 401(k) matching funds? My guess is yes, since if he doesn’t, he risks losing his more productive employees to an employer who is willing to do that,” said Hogberg, who is also a policy analyst for the National Center for Public Policy Research.

John Goodman, president of the President of the Texas-based Goodman Institute for Public Policy Research, agreed. “The CBO guess is not a bad one. This is an easy tax to avoid (spend marginal dollars on some other benefit or on wages) and at least 3/4ths of the employers will do just that,” he said, adding, “It’s not even controversial.”

Kaiser’s Levitt said that exactly how much would flow back to the workers wasn’t clear, though. “We don’t have any independent estimates of how much of the savings from any curtailment in health benefits would be passed back to employees in the form of higher wages,” he said.

Dems and unions attack Obamacare ‘Cadillac’ tax

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BY ROBERT KING

Democrats and unions have been steadfast in their defense of Obamacare, except for one provision: the controversial “Cadillac” tax. But will the bipartisan desire to repeal the tax be enough to get approved by President Obama?

The “Cadillac” tax got its name because it goes after very expensive healthcare plans. The tax, intended to generate revenue for Obamacare, starts in 2018, and will tax 40 percent of the value of health plans that exceed $10,200 for an individual and $27,500 for a family.

There’s some bipartisan momentum to repeal the tax, as there are two bills in the House that would do so. But neither bill has gotten anywhere in the House.

A measure sponsored by Rep. Joe Courtney, D-Conn., and another bill sponsored by Rep. Frank Guinta, R-N.H., were referred to the Ways and Means Committee. So far the committee hasn’t taken up either bill.

Committee spokesman Brendan Buck said any effort to repeal the tax would “likely be part of a larger effort to undo the law.” There haven’t been any bills introduced in the Senate yet that just repeal the tax, although it is mentioned in larger repeal efforts.

Even if a standalone bill could get past the House and the Senate, it appears likely President Obama would veto it.

But an intense lobbying effort has recently geared up and hopes to persuade the president to change his mind. The lobbying group Alliance to Fight the 40 was created last month to fight the tax, and is not focusing on other parts of the healthcare law.

“Our feeling is that this provision is not central to anything doing the operations of the law,” said James Klein, president of the American Benefits Council, an advocate for employer-sponsored health plans. “There is no question that the president is not supportive of this change now but we think in the face of a big bipartisan push hopefully he would be persuaded.”

The council is helping coordinate the coalition, which includes the construction worker union Laborers’ International Union of North America, mega insurer Cigna and pharmaceutical giant Pfizer.

Unions, a perennial Democratic ally, are also fighting the tax because they believe it could affect the middle class.

“There is no doubt that this health care excise tax threatens every American worker and it must be repealed,” Douglas J. McCarron, president of the carpentry union United Brotherhood of Carpenters, said in a statement. The union is part of the lobbying group.

Unions are worried the tax could hurt generous benefits packages negotiated from large companies.

The tax is expected to generate $87 billion in revenue from 2018 to 2025, according to estimates from the nonpartisan Congressional Budget Office. The office estimated that a majority of that money will come from higher income and payroll taxes since employers will switch to less expensive plans.

But Klein told the Washington Examiner, “No employer that I have spoken to over the last five years believes that is what is going to happen.”

A 2014 study of large U.S. employers found that about half of the employers in the U.S. with 5,000 or more workers would be hit by the tax. The study from the consulting firm Towers Watson estimated the number would increase to 82 percent by 2023.

There is a debate over how many workers will be affected. Last year, the average health plan cost an individual $6,025 and a family about $16,834, according to data from the nonpartisan Kaiser Family Foundation.

The foundation did find that premiums are rising, and that the average family premium increased by 3 percent compared to 2013. A single coverage plan rose by 2 percent compared to the year before.

Over the past 10 years, the average premium for family coverage has increased by 63 percent, the foundation said.

Kaiser does note that premiums are rising at a much slower pace over the last five years from 2009 to 2014 compared to the preceding five-year period of 2004 to 2009.

Trump’s Statement About Government Shutdown over Planned Parenthood Likely to Make His Rivals Squirm

BY FRANK CAMP

Speaking with conservative radio host Hugh Hewitt on Monday, presidential hopeful Donald Trump made a statement that would make most Republicans squirm.

Government shutdown over Planned Parenthood? Absolutely, according to The Donald. The exchange went like this:

Hewitt: “Have you watched them [the Planned Parenthood Videos]?”

Trump: “I have. It’s disgraceful.”

Hewitt: “The word is…the only way to get rid of Planned Parenthood money for selling off baby parts is to shut the government down in September. Would you support that?”

Trump: “I would.”

Politico reports that speaking of the prior shutdown in 2013, and the possibility of the same thing happening with the defunding of Planned Parenthood, Trump told Hewitt:

“If the Republicans stuck together you could have done it with Obamacare also, but the Republicans decided not to stick together and they left a few people out there like Ted Cruz.

If they had stuck together they wold have won that battle. I think you have to in this case [on Planned Parenthood] also, yes.”

Poll after poll shows that a government shutdown would prove painful for Republicans; the general public would likely place blame on the GOP for such an event. Last time around, Gallup reported a ten percentage point drop in Republican favorability over the course of just one month.

However, the conservative base continues to be bananas about Trump. Currently, Trump stands at 23.2% on the RealClearPolitics polling average, far ahead of any other Republican candidate.

With every statement, Trump’s star rises higher. Even advocating a government shutdown would likely do little to dent his numbers.

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POLL: Two-thirds of Obamacare recipients unhappy with coverage…

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BY TOM HOWELL JR.

Obamacare has offered insurance to millions of people, but they’re unhappy with the coverage they’re getting and are particularly upset about the costs, according to a survey released Monday that suggests the health care law continues to struggle to win over Americans.

Just 30 percent of customers on Obamacare’s exchanges were satisfied with their coverage, the health care research arm of the Deloitte consulting firm said.

Only a quarter of Obamacare customers in the survey were confident that they could get care when they needed it, and just 16 percent felt “financially prepared” to handle future health care costs, Deloitte said.

“Those are not high numbers,” said Paul Lambdin, a director for Deloitte’s work on insurance exchanges and retail practices.

Analysts said it is hard to tell at this point whether dissatisfaction is the inevitable byproduct of a new customer base or whether the law itself has structural problems.

“I think you’d have to go a lot deeper to really discern that at this point. They’re muddied together,” Mr. Lambdin said in an interview.

The polling contradicts findings in other surveys that seemed to show higher levels of satisfaction, including a Kaiser Family Foundation poll, that found three-quarters of people on exchange plans rated their overall coverage as “excellent” or “good.”

The discrepancies could result from how the surveys measure satisfaction and how much weight is given to people who feel lukewarm about their plans.

Deloitte asked more than 3,800 adults, including 406 exchange enrollees, to rate their satisfaction from one to 10. More than half of exchange customers said they were in the “somewhat satisfied” range of four to seven.

Fourteen percent of exchange users said they were “not satisfied.” By comparison, those who have coverage through Medicare, Medicaid or plans through their employers had dissatisfaction rates in the single digits.

Obamacare customers were twice as likely as the uninsured to see a primary care doctor, suggesting that the coverage is paying off in trying to create a more healthy population.

Also, 35 percent had a high level of confidence that the exchanges are providing good information.

The Affordable Care Act, as Obamacare is officially known, set up marketplaces in each state where those who lack insurance but make too much money to qualify for Medicaid can purchase plans, usually with government subsidies in the form of tax credits.

The Supreme Court has upheld the broad outlines of the law as constitutional, and in June issued yet another ruling finding that the law allows tax credits to be paid nationwide, putting Obamacare on surer footing.

Still, the law has suffered from a number of self-imposed hiccups, including potential fraud, lax verification and potentially rising costs for customers as insurers figure out the economics.

Audit finds 22 of 23 taxpayer-backed ObamaCare co-ops lost money in 2014

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Nonprofit co-ops, the health care law’s public-spirited alternative to mega-insurers, are awash in red ink and many have fallen short of sign-up goals, a government audit has found.

Under President Barack Obama’s overhaul, taxpayers provided $2.4 billion in loans to get the co-ops going, but only one out of 23 — the one in Maine — made money last year, said the report out Thursday. Another one, the Iowa/Nebraska co-op, was shut down by regulators over financial concerns.

The audit by the Health and Human Services inspector general’s office also found that 13 of the 23 lagged far behind their 2014 enrollment projections.

The probe raised concerns about whether federal loans will be repaid, and recommended closer supervision by the administration as well as clear standards for recalling loans if a co-op is no longer viable. Just last week, the Louisiana Health Cooperative announced it would cease offering coverage next year, saying it’s “not growing enough to maintain a healthy future.” About 16,000 people are covered by that co-op.

“The low enrollments and net losses might limit the ability of some co-ops to repay startup and solvency loans, and to remain viable and sustainable,” said the audit report. A copy was provided to The Associated Press.

Although the audit only goes through the end of 2014, problems apparently persisted into this year. A preliminary review of 2015 data by government officials shows that enrollments have increased, but co-ops continue to report financial losses.

Officially called Consumer Operated and Oriented Plans, nonprofit co-ops were a compromise after liberals were unable to achieve their goal of using the 2009-2010 health care debate to create a government-run insurance program competing against corporate insurers. Under the deal they struck, taxpayers would provide two types of loans: startup money and reserve funds to meet solvency standards set by state regulators.

As recently as the spring, the White House touted co-ops as an accomplishment. “In states throughout the country, co-ops have competed effectively with established issuers and attracted significant enrollment,” said a report by the president’s Domestic Policy Council on the fifth anniversary of the health law.

The IG’s audit paints a very different picture. Among its findings:

–Maine was the only co-op in the black for 2014, with $5.9 million in net income. Losses ranged from a high of $50.4 million for Kentucky’s co-op to $3.5 million for Montana’s. Most of the co-ops had previously projected losses for 2014, but the actual losses they experienced tended to be higher. Illinois had projected $28 million in income and instead came in with a loss of $17.7 million. New York, the leader in enrollment, had a $35 million loss.

–Thirteen co-ops fell far short of their enrollment projections, and nine met or exceeded them. New York enrolled 155,400 people, more than five times what it had projected. But co-ops in Arizona, Illinois and Massachusetts only hit 4 percent of their enrollment targets. There were no year-end data for the Iowa/Nebraska co-op that was shut down.

–Low enrollment and medical claims expenses that exceeded the income from premiums contributed to the losses. Nineteen co-ops had medical claims that exceeded premiums. The reasons included higher-than-expected enrollment of people with expensive health problems, lower-than-expected enrollment of younger people, and inaccurate pricing of premiums.

Separately, the AP used data from the audit to calculate per-enrollee administrative costs for the co-ops in 2014. It ranged from a high of nearly $10,900 per member in Massachusetts to $430 in Kentucky.

In a written response to the audit, Medicare chief Andy Slavitt said the administration agrees with the findings as well as the IG’s recommendations for closer oversight and clearer standards. He also offered a defense of the co-ops, saying they don’t have an easy job.

“The co-ops enter the health insurance market with a number of challenges, (from) building a provider network to pricing premiums that will sustain the business for the long term,” Slavitt said. “As with any new set of business ventures, it is expected that some co-ops will be more successful than others.”

The administration “takes its responsibility to oversee the co-op program seriously,” he said.

It’s On! Mark Levin Calls for McConnell and Boehner to Resign!

Lots of conservatives have been calling for new GOP leadership in Washington. However, no one seems to do it with as much flair as Mark Levin…

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BY JOHN BRODGIAN

It is time for Mitch McConnell and John Boehner to resign for the good of the nation and the Republican Party. The nation and GOP are both suffering as a result of the unwillingness or inability of McConnell and Boehner to effectively defend either. Instead, these politicians are consumed with consolidating their own power on Capitol Hill and silencing opponents who dare to challenge their ironfisted rule. Sadly, they rarely act in the best interests of America’s future. Indeed, time and again they have delivered victory after victory for Obama and his radical agenda — from spending, borrowing, and Obamacare to illegal immigration, Iran and “trade” power. Never before has a Congress controlled by one party been so thoroughly impotent. This is due to the disastrous leadership of McConnell and Boehner. It is time for younger, wiser, and more courageous Republican leaders — constitutional conservatives who understand the role of a statesman in perilous times — who are willing to truly lead the nation and the Republican Party based on America’s enlightened principles, advance the cause of liberty and republican government, and make the case everyday to the American people.

My only problem is, say they do resign, who steps up? No one seems to want to, which is part of the problem.