Why no hiring? Taxes and health care, that’s why
As I’ve mentioned many times, the engine of America is small business. Those businesses provide jobs to 85% of Americans. And according to the US Chamber of Commerce, they’re not going to be doing much if any hiring in the near future:
Small business owners’ concerns about the future—particularly on health care and taxes-—are impacting their hiring, according to the U.S. Chamber’s fifth quarterly small business survey released today.
Only one in five small businesses (20%) expect to add employees in 2013, according to the poll of 1,225 small business owners, conducted by Harris Interactive. The majority of small businesses say they are likely to keep the same number of employees over the next year – meaning there is likely to be little change in overall unemployment figures.
Concerns about health care and taxes (both brought to you by Barack Obama) are causing caution among small businesses and that’s because they perceive an “unsettled” business climate. Consequently there’s no incentive for them to change the status quo. In fact, they obviously believe there is some safety in the status quo (see the survey to see how they feel about their businesses locally) .
As we’ve mentioned repeatedly, government policy does have an effect on the economy. It can be an enabler that helps create incentives for businesses to expand and hire or it can be a disabler, doing precisely what it is doing now to unsettle the business climate, create disincentives for expansion or hiring and have small businesses go into a defensive posture.
It doesn’t get more defensive than now.
More from the Chamber survey:
- 78% want government to get out of the way.
- 90% are concerned about the impending fiscal cliff and are worried that Congress will fail to take action to prevent it.
- Nearly 60% say that expiration of the 2001 and 2003 tax rates and other business provisions, coupled with sequestration, will directly impact their business’ growth.
As you might imagine the road map to a better business climate is not hard to follow. There’s just no desire by the class warriors to do that.
Instead of doing the hard work of creating a business climate that will provide small business incentives to expand and hire, they’d rather tax them while demonizing them as the evil rich and talking about “fair shares” to 50% of the country that pay’s no – zero- income tax.
If this doesn’t paint the picture of what is wrong with the policies of this administration, I’m not sure what will. This is Econ 101 stuff. And apparently it is like a foreign language to this administration.
The golden goose is on life support, and the administration is about to pull the plug.
But let’s talk about Bain Capital, shall we?
~McQ
Twitter: @McQandO
Health care is still not a “right”
Yesterday, as the Republican controlled House of Representatives voted for the 30th time to repeal ObamaCare, Nancy Pelosi said:
“We put forth a vision for the middle class to make health care a right, not a privilege for all Americans. Today, as they have done more than 30 times this Congress, Republicans will vote to take away that right.”
Pelosi, among many of our legislators and politicians in general, displays a level of ignorance about rights and privileges that seems pretty basic to me. Governments don’t grant rights, they grant privileges no matter how hard they try to characterize what they do as a “right”.
A right, to be a right, must be inherent. It is something you have even before government shows up. The right to life. The right to liberty. As our founders identified these rights, they’re “inalienable”.
The best government can do, and the true foundation of a just government, is the acknowledge and protect our inherent rights. I.e government should exist to protect those rights.
Real rights are passive. They don’t require the assets, time, labor or commitment of others to enable their execution. Health care, of course, is a perfect example of a pseudo“right” which requires all of that.
Anything that government can give you (remember, we had the inherent rights I talk about before government existed and we formed the government to acknowledge and protect them – see founding documents) is not a “right.” And when government has to use it’s coercive power to “enable” these pseudo “rights” as it has in this health insurance debacle, it isn’t a right.
There is no right to health care. Period. There never has been. You have no inherent right to demand someone else use their skills, time and assets to service your health. You certainly have the right to negotiate and reach a voluntary agreement (see liberty) with health care providers based on a mutual exchange of value (see property). But “right” – no.
And besides, what Pelosi et al really cranked out was a requirement to buy health insurance via the coercive taxing authority of government. It no more guarantees health care as a right than the previous system. You still have to find a health care provider to accept your insurance and agree to treat you. In fact, it’s even tough to characterize the ObamaCare monstrosity as a government granted “privilege”.
Back to the point – this fundamental ignorance about rights and privileges, however, is at the root of many of our problems. For decades we’ve allowed government to get away with calling things it grants “rights” to the point that the concept of rights is so muddled that most people don’t understand them at all and have fallen for the government line.
Falling for that line helps enable horrific legislation like ObamaCare because it gives it cover, a veneer of "good” the proponents use to push their agenda. Who wouldn’t be for something that’s a “right”?
My point: Don’t let them misuse the word. Call people and politicians who do this out. Make them substantiate their claim of a right and when they can’t point out what is really going on. They’re talking about a privilege established by government coercion. That’s not freedom. That’s not liberty, two things you have a right to expect and something these privileges usually curtail.
It’s time to take back the political language. And there’s no better place to start with the understanding that government’s don’t and can’t grant rights.
~McQ
Twitter: @McQandO
ObamaCare: It just gets better and better
And, of course, I say that facetiously. As it stands now, it has fostered more government regulation, more bureaucrats and more intrusion in epic proportion:
"There’s already 13,000 pages of regulations, and they’re not even done yet," Rehberg said.
"It’s a delegation of extensive authority from Congress to the Department of Health and Human Services and a lot of boards and commissions and bureaus throughout the bureaucracy," Matt Spalding of the Heritage Foundation said. "We counted about 180 or so."
So, minimally (we all know they’re not nearly done) 13,000 new pages of regulation, 180+ boards, commissions and bureaus and, of course, scads of bureaucrats to fill them.
Then there are the new broad powers granted HHS and the IRS.
Yes, friends, that’s right, this is how you make health care less expensive and better, not to mention making government less intrusive.
Probably the funniest thing, in a sad and ironic way, is the fact that there are still millions of people out there who believe the propaganda that sold this crap sandwich to the public. Someone among them I’m sure will someday be able to explain how adding costly regulations and layers upon layers of bureaucracy somehow helps reduce the cost of health care delivery.
According to James Capretta of the Ethics and Public Policy Center, federal powers will include designing insurance plans, telling people where they can go for coverage and how much insurers are allowed to charge.
"Really, how doctors and hospitals are supposed to practice medicine," he said.
Wait, wasn’t one of the primary problems with the old system, per the Democrats, a problem of insurance companies telling doctors how to practice medicine?
See, solved by government, right?
In fact, one master has been replaced by another one, the newest master being the most inept, inefficient and corrupt of the two. And, of course, no one has yet explained how all of this is going to ensure people have better access to a doctor. Why? Because, quite simply, having insurance doesn’t guarantee care. And with the disincentives provided by massive increases in regulation (and the increase that will cost for compliance) and oversight via these board, commissions and bureaus, my guess is there will be fewer doctors in the future.
So prepare to enjoy the dawning of the age of ObamaCare and the attendant disappointment, shock and anger it will eventually engender among the public. There are some things that one shouldn’t mess with, and people’s health care is one of them.
Forward.
~McQ
Twitter: @McQandO
Speaking of your health care, the obese should prepare for another government mandate
Given that ObamaCare has been upheld, the following shouldn’t take many people by surprise:
In a move that could significantly expand insurance coverage of weight-loss treatments, a federal health advisory panel on Monday recommended that all obese adults receive intensive counseling in an effort to rein in a growing health crisis in America.
The U.S. Preventive Services Task Force urged doctors to identify patients with a body mass index of 30 or more — currently 1 in 3 Americans — and either provide counseling themselves or refer the patient to a program designed to promote weight loss and improve health prospects.
Under the current healthcare law, Medicare and most private insurers would be required to cover the entire cost of weight-loss services that meet or exceed the task force’s standards.
And, of course, all that will be “free” and cost absolutely nothing because ObamaCare has magically lowered costs in the insurance and health care world.
Read those three sentences carefully. You can see the coming disaster easily through this fairly simple example. Government has a solution to obesity. More government.
First BMI is a crock of crap. Anyone who has spent a day looking into it knows that. Yet the government stubbornly holds on to the standard. I’m 6’ and 188 pounds. My BMI is 26 which makes me “overweight”. Sorry, that’s BS. And if you have any muscle mass at all, you can most likely count on being overweight even if you’re in the best shape of your life.
But BMI is what we’re going to see used to determine who that one-third are, and the bottom two-thirds? Well they have a role too. They will be paying for that top one-third’s “intensive weight loss services” for which the law mandates insurers pay.
What are those standards of treatment?
The task force concluded after a review of the medical literature that the most successful programs in improving patients’ health were "intensive, multicomponent behavioral interventions." They involve 12 to 26 counseling sessions a year with a physician or community-based program, the panel said.
Successful programs set weight-loss goals, improve knowledge about nutrition, teach patients how to track their eating and set limits, identify barriers to change (such as a scarcity of healthful food choices near home) and strategize on ways to maintain lifestyle changes, the panel found.
The programs set goals? Anyone who is past the age of 20 and with an IQ above room temperature knows that programs setting goals are useless. Unless the person for whom the program is setting those goals is willingly and totally committee to change, it won’t work. Ask any ex-smoker or alcoholic.
But, cynic that I am, I see opportunities here for all sorts of waste, fraud and abuse. It is found in the phrase “community based programs”. The new growth industry? “Intensive, multicomponent” weight loss companies contracted to the government to provide “behavioral interventions” and facilitate weight loss. Because otherwise, doctors have to do the sessions and we all know that’s going to happen, don’t we? We;’re so overstocked with them and they have so little to do.
And don’t you just love the phrase “behavioral intervention?” Sounds … ominous?
Finally, the government is still pushing diet regimes that don’t solve the problem. Look at the sample menu here on this 1,600 low calorie menu. Note the carbohydrates and sugars in that menu (sugars aren’t noted, but it has juice and fruit). If you want to lose weight it is those you must cut out. Not salt. Not even fat. The body converts carbs and sugars to glucose. And it burns glucose before it burns fat. If you load up on things that produce glucose and the body doesn’t burn It all, it then stores the rest as fat. So you want a diet that reduces glucose production and has the body burning stored fat. That is how you lose weight. That means removal of grains, bread, potatoes, pasta, etc. You should also avoid starchy vegetables like corn.
That menu is loaded with them. Personal experience. Go low carb and you’ll see weight drop off and quickly (like 7 pounds in a week). At some point, you can begin to add a few carbs back in when you go to maintenance mode. There are or may be some initial unpleasant side effects to going low carb, but you get over them fairly quickly.
But government continues to push a “balanced” diet loaded with all the things that actually help make us fat.
If any weight is lost using their plan it will be excruciatingly slow and if you think someone is going to stick with a diet like that I’ve linked for very long, you don’t know human nature. If you’re going to motivate someone to lose weight, you’d better show them some pretty real and dramatic progress fairly quickly or you’re going to lose their interest in about 2 weeks, a month at the most. Because here is ground truth about diets:
A common argument that many experts wield against carbohydrate restriction is that all diets fail, the reason being that people just don’t stay on diets. So why bother? But this argument implicitly assumes that all diets work in the same way—we consume fewer calories than we expend—and thus all fail in the same way.
But this isn’t true. If a diet requires that you semi-starve yourself, it will fail, because (1) your body adjusts to the caloric deficit by expending less energy, (2) you get hungry and stay hungry, and (3), a product of both of these, you get depressed, irritable, and chronically tired. Eventually you go back to eating what you always did—or become a binge eater—because you can’t abide semi-starvation and its side effects indefinitely. -Taubes, Gary (2010). Why We Get Fat: And What to Do About It (p. 209). Random House, Inc.
By the way, that’s a great book and I recommend it highly.
Anyway, I didn’t mean to wander off into a diet discussion, but it only helps reinforce my point. Government, as of now, is touting exactly the wrong stuff to fight obesity. Yet it plans, obviously, on taking the lead, having doctors prescribe the weight loss programs and require unwilling “obese” people to take them. And all of it will ‘cost less’ – never mind the golden opportunities for waste, fraud and abuse.
Yes, friends, now that the government owns health care, it has a plan for all you fatties out there. Whether or not you really want to lose weight that’s another choice (freedom) you’ll probably lose. Mandatory obesity screening and a prescribed program of weight loss coming you’re way whether you want it or not. And all at a nominal cost, of course. Because, you know, health care costs have been reduced now that we all have to have insurance or pay a tax.
Welcome to your new world.
Forward.
~McQ
Twitter: @McQandO
The tax that isn’t a tax because 75% of it falls on the middle class
If you’re wondering why the administration is so adamant about claiming the health care mandate isn’t a tax, all you have to do is look at this chart:
Even a quick look makes it clear that 75% of the taxes to be paid will be paid by those making $120,000 or less. That, my friends is a middle class tax increase of epic proportions– something this president promised wouldn’t happen on his watch.
Of course it doesn’t fully kick in until 2016 (it starts in 2014), but let’s be clear, it is going to kick in (thanks to John Roberts).
And, if you’re wondering what that means in terms of money, well, here’s a repeat of the chart of the tax from the list of 20 taxes (of about half a trillion) this monstrosity levies (and don’t forget, it is the amount or the percentage of AGI – whichever is highest):
Yet what do we get from the dopes at the Romney campaign? Well first they agree it’s not a tax it’s a penalty. What’s one of the first maxims of politics? When you’re opponent is self-destructing, shut up and get out of the way?
Yeah, they do neither.
Then what do we hear today?
For an issue that’s supposedly potent against Democrats, Romney’s campaign is declaring a cease fire. This, even as the law polls unfavorably and it proved to be a motivating force for Republicans and disaffected independents in the 2010 midterms.
Now on the one side, I have some sympathy, since the following paragraph touts what I’ve been recommending – don’t get distracted:
It’s becoming clear that Romney has decided to focus on the economy at the expense of everything else, even issues that could play to his political benefit. He’s avoided criticizing the administration’s handling of the botched Fast and Furious operation, even as it threatens to become a serious vulnerability for the president. He’s been silent in responding to Obama’s immigration executive order, not wanting to offend receptive Hispanics or appear like a flip-flopper.
Got it. But let’s not put blinders on. The health care tax (and don’t let them get away with calling it anything else) and Fast and Furious are political gold. You don’t have to necessarily concentrate on them, but let’s see a little multi-tasking, for heaven sake. Use them even as the campaign concentrates on the economy. You don’t freakin’ call “cease fires” in politics on issues in which all the rounds are outbound toward your opponent.
This is about broken promises (flip-flopping in some cases – remember when candidate Obama argued against imposing a mandate?) and new taxes. Two very unpopular issues in politics (oh, and for the Republicans agreeing with the administration that the mandate isn’t a tax – STFU, will you?)
Finally, those two charts are something the Romney campaign should have as a part of just about everything they release. They disallow dissembling by the administration. It’s a tax, it’s going to begin to hit in 2014 and it is a tax on the middle class.
Use it often and relentlessly.
~McQ
Twitter: @McQandO
Speaking of taxes, here are 20 new taxes ObamaCare imposes
These via the Americans for Tax Reform. Says the ATR:
Taxpayers are reminded that the President’s healthcare law is one of the largest tax increases in American history.
Indeed. Tax increases which took place in 2010 after the passage of the bill:
1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971
2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113
3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105
4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980
5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004
6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399
By my count $53.4 billion plus that collected in point 1.
2011:
7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959
8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959
$6.4 billion more ($59.8 billion and counting).
2012:
9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957
No actual number but let’s just say “billions and billions” as the middle class gets taxed for its health benefits. Next year (2013), these kick in:
10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93
Also known as a “tax on the rich”. To what effect? Well in 2012 capital gains is taxed at 15%, dividends at 15% and “other” at 35%. If you’re wondering what constitutes “other” here’s how it is defined:
*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.
In 2013 capital gains will be taxed at 23.8%, dividends at 43.4% and “other” at 43.4%.
11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes. Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93
12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986
13. Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI ($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995
14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389
15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994
16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000
Your running total through next year? $322.9+ billion in taxes.
And on to 2014:
17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following:
Of course, there are exemptions (Catholics need not apply regardless of what it says):
Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS). Bill: PPACA; Page: 317-337
“Undocumented immigrants” get a bye … more of the DREAM Act?
18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346
Combined score of individual and employer mandate tax penalty: $65 billion/10 years
19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993
And 2018:
20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956
At this point, we’re very near if not past half a trillion dollars in new taxes.
Never mind the perverse incentives Dale outlines in his post about ObamaCare and the fact that they’ll work very hard to make it one of the largest failures in American history. Imagine the horrific effect these taxes will have on the middle class, on investment, on innovation and, frankly, on the level of care. Not to mention the drain on a very shaky economy (and the possibility of Taxmageddon hitting as well).
This is the pig-in-the-poke a Democratic Congress passed and the Supreme Court upheld yesterday.
Really something to celebrate, isn’t it?
~McQ
Twitter: @McQandO
ObamaCare ruling: Silver lining or whistling past the graveyard?
George Will has a column out today declaring that conservatism won “a substantial victory” yesterday:
Conservatives distraught about the survival of the individual mandate are missing the considerable consolation prize they won when the Supreme Court rejected a constitutional rationale for the mandate — Congress’s rationale — that was pregnant with rampant statism.
The case challenged the court to fashion a judicially administrable principle that limits Congress’s power to act on the mere pretense of regulating interstate commerce. At least Roberts got the court to embrace emphatic language rejecting the Commerce Clause rationale for penalizing the inactivity of not buying insurance:
“The power to regulate commerce presupposes the existence of commercial activity to be regulated. . . . The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. . . . Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, and — under the government’s theory — empower Congress to make those decisions for him.”
If the mandate had been upheld under the Commerce Clause, the Supreme Court would have decisively construed this clause so permissively as to give Congress an essentially unlimited police power — the power to mandate, proscribe and regulate behavior for whatever Congress deems a public benefit. Instead, the court rejected the Obama administration’s Commerce Clause doctrine. The court remains clearly committed to this previous holding: “Under our written Constitution . . . the limitation of congressional authority is not solely a matter of legislative grace.”
The court held that the mandate is constitutional only because Congress could have identified its enforcement penalty as a tax. The court thereby guaranteed that the argument ignited by the mandate will continue as the principal fault line in our polity.
I’m sorry, I’m just not feeling it. What part of the “tax” isn’t “pregnant with rampant statism”? Why did John Roberts feel compelled to save the mandate by helping the administration identify it as a tax?
And more importantly, since when did taxation go from simply being a means for funding the functions of government to a means of incentivizing/controlling behavior? To me that’s what approving the mandate as a tax has sanctioned. We make fun of the nannies who want to control what we do, eat, say, etc. This precedent just sanctioned a method of doing so. It says it is okay to coerce desired behavior through taxation.
Perhaps, as Will opines, it will limit the Commerce clause which is already insanely overstretched in application. Maybe it finally does draw a much brighter line around the clause, at least marginally.
However, the downside is worse than any upside. The ruling essentially sanctioned the state’s requirement to purchase health insurance and gave it the okay to “tax” those who don’t comply. I’m sorry, you may want to play the word game with them and call it a tax, but it is clearly identifiable to me as a penalty.
That’s just wrong.
One of the more interesting ironies is that within the same ruling the Court found that the Federal government was being coercive toward the states by requiring they comply with the new Medicaid mandates or lose their current Medicaid funding.
How is that anymore coercive than the “tax” required to be paid if an individual decides not to purchase health care insurance?
Taxation as a mechanism of control and/or enforcement of desired behavior is as coercive as the part on Medicaid which was struck down by the court. At least in my opinion.
There may indeed be a silver lining in the ruling as Will outlines. But a “substantial victory”? It sounds like David Axlerod trying to spin the Wisconsin results as a huge win for Obama and trouble for Romney, doesn’t it? If this was a “substantial victory”, then so was Pearl Harbor.
~McQ
Twitter: @McQandO
Obamacare: A System Designed to Fail
OK, we now have Obamacare. Absent a November election of Mitt Romney and Republican congressional majorities, we’ll simply have to live with it. Except, of course, we won’t, because Obamacare simply will not work. Its design practically ensures that it will meet none of the goals its proponents claim it will meet. The end result will inevitably be more people uninsured, higher costs, greater government spending, and higher debt.
If you want to see how a policy will work, then ignore all the claims made by it’s proponents—and opponents. All that is necessary is to look closely at the incentive structures the law creates. Those incentives will tell you how people will respond to the policy.
So, let’s take a brief look at just a few of the incentives Obamacare creates.
- First, health plans are more highly regulated. They must cover a wide range of preventative procedures, like pediatric or maternity care. This means that stand-alone catastrophic coverage will essentially be a thing of the past. This increases the cost of premiums across the board, and eliminates an entire class of individual insurance coverage.
- At the same time, insurers are forced to cover pre-existing conditions, with premiums limited to 2.5x that of the lower-risk groups. People with chronic conditions, such as diabetes, generally incur costs far in advance of 2.5x that of healthy people—as I well know, being diabetic—and the care for the seriously ill, such as cancer patients, is far higher still. This will, again, raise the costs of premiums overall to recoup the extra costs of insuring the chronically or seriously ill.
- Individuals who do not have have health coverage will be forced to pay what we learned this morning was a tax to the IRS instead. Rational people, then will choose not to buy insurance until their health costs + the penalty is greater than the cost of a health plan.
- Lower income people, with a family income of less than 400% of the poverty level ($88,000 for a family of four) receive a subsidy of varying value, declining with income increases until the 400% of poverty level, at which point it drops to $5,000. At 401% of the poverty level, the subsidy ends. So at that $88,000 level, any increase of income results in the loss of $$5,000. At that point, it is uneconomic to accept any increase in income to less than $93,000, as it will result in a net loss of income, or the family will have to forego medical insurance. This will trap low-wage workers.
- Companies with less than 50 employees that currently provide health coverage to their workers will face a broad range of new costs, mandates, regulations and coverage mandates. They will have to either require more costs to be paid by employees, or simply drop health coverage altogether and simply pay a nominal tax penalty. I suspect many companies will choose the latter, thereby forcing employees to pay for higher-cost individual plans, or forego coverage. Even worse, companies that employ fewer than 50 people have a huge incentive to ensure they never have more than 50 people on the payroll, lest they then be required to provide health insurance, and subject themselves to a much higher administrative burden.
These perverse incentives will result in higher health insurance costs, and an increase in the number of uninsured people. Additionally, the macroeconomic incentives will result in less income growth and lower employment. We will then be told that the "free market" has failed yet again, and be forced to submit to a fully government-run health care system.
Ultimately, Obamacare is nothing more than the latest in "a long train of abuses and usurpations" about which we have done nothing, and will do nothing. I mean, let’s face it, no one is going to call for a new constitutional convention, much less get together with a lusty, gusty group of fellows and head off into the hills with rifles.
But, there’s always a silver lining to every cloud. In this case, it’s that when we default on or monetize our debt and destroy the currency and economy, Obamacare will be irrelevant, as there will barely be enough money for food and shelter, much less expansive health coverage programs.
So, we got that going for us.
~
Dale Franks
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But there will be no death panels
That’s what we’ve been assured would never exist if government is in charge of your health care and paying all costs.
That, of course, in the face of a promise to lower health care costs as well as the fact that the vast majority of health care spending takes place at the end of life. Forget those conflicting points, death panels will never happen because, well because the left says so.
Incentive? Well that’s sort of a foreign word to the left so forgive them if they don’t understand that those two dueling points above provide incentive to end lives whether or not they’re willing to call it the result of death panels or not.
The example?
Well the good old British NHS of course.
Shocking news from England today has top NHS officials indicating doctors acting in the UK government-run health program annually kill as many as 130,000 patients prematurely because of overcrowding at hospitals, medical clinics and nursing homes.
In fact they even have a name for doing that – the Liverpool Care Pathway.
Sounds so … benign.
He claimed there was often a lack of clear evidence for initiating the Liverpool Care Pathway, a method of looking after terminally ill patients that is used in hospitals across the country. It is designed to come into force when doctors believe it is impossible for a patient to recover and death is imminent.
It can include withdrawal of treatment – including the provision of water and nourishment by tube – and on average brings a patient to death in 33 hours. There are around 450,000 deaths in Britain each year of people who are in hospital or under NHS care. Around 29 per cent – 130,000 – are of patients who were on the LCP.
Or, in other words, the government and doctors playing God. And, naturally, it has devolved into something done often just for the medical caregiver’s convenience:
Professor Pullicino claimed that far too often elderly patients who could live longer are placed on the LCP and it had now become an ‘assisted death pathway rather than a care pathway’. He cited ‘pressure on beds and difficulty with nursing confused or difficult-to-manage elderly patients’ as factors.
Nice. LCP’d because they put what must be considered excess demands on the staff. But look at the bright side – costs are cut, an less expensive patient can take the bed and everyone is happy.
Except the dead bloke and his family. But, it’s not a “death panel”:
In the example he revealed a 71-year-old who was admitted to hospital suffering from pneumonia and epilepsy was put on the LCP by a covering doctor on a weekend shift.
Professor Pullicino said he had returned to work after a weekend to find the patient unresponsive and his family upset because they had not agreed to place him on the LCP.
‘I removed the patient from the LCP despite significant resistance,’ he said.
‘His seizures came under control and four weeks later he was discharged home to his family,’ he said.
Instead it’s just a “death pathway” protocol. So nothing to see here, citizen, move along.
~McQ
Twitter: @McQandO
Hints about how the Supreme Court will rule on ObamaCare?
File this under speculation, because that’s essentially what it is (but you have to do a little of it every now and then, and besides, it’s a sport when talking about pending SCOTUS decisions), but still speculation with some possibility of being accurate.
It seems, according to Avik Roy, that June 25th is most likely the day we will learn the fate of ObamaCare from the Supreme Court.
“Setting aside the ACA cases,” he notes, “the Court essentially has twelve other decisions to hand down.” In addition, “in recent Terms, the Court has handed down opinions on Wednesdays or Thursdays of both of the last two weeks of the Term, in addition to the regularly scheduled Mondays. And the Court has already announced that it will issue one or more opinions next Thursday, June 21.” Worth also noting, he writes, “the Court almost never issues more than four or five opinions on the same day.”
Hence, if the court issues four or five opinions each on Monday, June 18 and Thursday, June 21, that would leave between two and four opinions for the last scheduled day for reading opinions: Monday, June 25.
And how will the ruling go? Well, Ruth Bader Ginsberg has said previously that there are some “sharp divides” among the justices.
But, again according too Roy, Ginsberg may have also hinted she’s on the “dissenting” side, meaning that she’s on the minority side of the decision. The basis for that claim?
In her ACS remarks, Ginsburg suggested that she might be on the dissenting side of the case. “I have spoken on more than one occasion about the utility of dissenting opinions, noting in particular that they can reach audiences outside the court and can propel legislative or executive change,” said Ginsburg, in the context of a 2007 pay discrimination case.
Or that may signal nothing at all (she may simply have been speaking academically about “dissenting opinions”). The key, if we accept the premise that she’s on the dissenting side of this particular ruling is what that means.
Roy mentions that the divide may not be associated with killing the mandate – there may be more than 5-4 agreement on that subject (he suggests it is almost a given that Kennedy will join the conservatives on the court to kill the mandate). The divide may be with what to do with the law if the mandate is killed:
The key question is: how much of the rest of the law should be struck down along with it?
Ginsburg wittily put it this way: “If the individual mandate, requiring the purchase of insurance or the payment of a penalty, if that is unconstitutional, must the entire act fall? Or, may the mandate be chopped, like a head of broccoli, from the rest of the act?”
My understanding—again, from third-hand sources—is that this question of severability is the subject of intense debate among the justices, even now. It’s entirely unclear whether the Court will strike down the mandate and two related provisions—what I’ve called the “strike three” scenario; or take down the entirety of Title I, where the law’s restructuring of the private insurance market resides; or overturn the whole law. Indeed, it is probable that the Court has not yet decided how it will rule on this question.
As far as I’m concerned, I’d like to see the entire law struck down. However, I’m now wondering whether or not that will play out.
Roy also mentions Antonin Scalia’s recent book and asserts that it hints that Scalia is on the side of dumping the mandate and the law in its entirety. He wonders if Scalia, given his writing about the scale of the Commerce Clauses expansion and Scalia’s unhappiness with that, has chosen ObamaCare as the case he’s chosen for judicial pushback.
So, again, based on this speculation, one might surmise that the court has found the individual mandate to be unconstitutional, but is struggling with how much or how little of the law to strike down.
Of course, the individual mandate is the heart and soul of the bill. It is the payment mechanism that undergirds the entire ponzi scheme program. No mandate, no money, no expanded risk pool, not much of anything if it goes.
So perhaps even if the court leaves much of ObamaCare standing, it will end up being a Pyrrhic victory for its supporters as the law will then be unsustainable as it exists (minus the mandate).
I guess we’ll see on or around the 25th.
~McQ
Twitter: @McQandO