To make the current health care reform proposals work there must be some form of an employer mandate to provide health insurance. If there is not one, companies would have a strong incentive to drop coverage knowing the government will help their employees get insurance.
The easiest, best, and simplest way to create an employer mandate is to charge companies a flat fee if they don't offer health insurance. The fee could be some percent of payroll or a set fine multiplied by the number of employees at the firm.
The Republicans don't want a simple employer mandate and instead are demanding it take the form an extremely complex and dysfunctional “free rider” provision. Senator Baucus has given in to their demands and is promoting a byzantine free rider provision. Instead of penalizing companies for not offering health insurance, it would only penalize companies for each employee they have that gets tax credits to help afford insurance on the new exchange. Not only would this idea be a bureaucratic nightmare to enforce, it would provide a powerful financial incentive to only hire people who don't get tax credits to buy individual insurance. This group includes spouses whose partners get good employer health insurance and, of course, illegal immigrants.
Baucus has made it clear that legislation is not going to allow undocumented workers to get tax credits to help afford health insurance. Since they can't get tax credits to buy insurance, employers who hire illegal immigrants won't face any penalty for not offering health insurance. The free rider provision championed by Republicans will provide another large financial incentive to hire illegal immigrants instead of American citizens.
After years of demagoguery from Republicans on the issue of illegal immigration, I'm left wondering: Why are Republicans (and Max Baucus) fighting so hard to encourage employers to hire illegal immigrants instead of working class Americans? The other important question is, of course, are Democrats so afraid of passing a bill without a few Republican votes that they would embrace such a clearly dangerous and stupid idea?
[Another Note: The Republican backed free rider provision would only penalize employers if their employees get tax credits on the exchange, but not if they are on Medicaid (according the the current framework). Medicaid would cover everyone making under 133% of the federal poverty level ($14,404 a year for individuals). Paying an employee one dollar more than $14,404 could increase the cost of employing them by thousands of dollars. The Republican/Baucus free rider provision not only encourages the hiring of illegal immigrants, but also encourages businesses not to pay Americans more than $14,404 a year.]
Updated - Breaking: Baucus' bill will now not let illegal immigrants buy health insurance on the new exchange even if they are willing to fully pay for it themselves. Not only is this a stupid and cruel policy but it is also very expensive. Illegal immigrants will be force to get very expansive emergency room care (which the government will end up playing for) since they are not allowed to buy health insurance.
Showing posts with label Medicaid. Show all posts
Showing posts with label Medicaid. Show all posts
Medicaid Expansion, Subsidies, Taxes, Doughnut Hole Fix, etc: Reconciliation Protection, Part 2
There are many parts of health care reform that potentially violate the Byrd rule and potentially could be stripped out of health care reform if it passes using reconciliation. Yet it is important to remember just how much of health care reform could be easily passed using reconciliation. Many of the important provisions do directly relate to government revenue. Harry Reid recently said that reconciliation could accomplish 65 percent of what his party thinks is necessary.
Expanding Medicaid or the CHIP program to cover everyone below a set percent of the Federal Poverty Level can be passed using reconciliation. Simply expanding Medicaid to everyone below 150% of the FPL could reduce the number of uninsured by at most 26 million. The CBO says expanding Medicaid to Americans below 133% of the FDL would reduce the number of uninsured by 11 million, with a potential for several million more if strong efforts were made to enroll everyone eligible. While it may not be the best policy or the most cost effective way to expand coverage, simply expanding Medicaid to cover everyone below 300% of the FDL would offer coverage to almost all uninsured Americans. It could also be done using reconciliation.
Providing uninsured individuals money to help purchase insurance (either as subsidies, vouchers, or tax credits) should also pass using reconciliation. It is one of the major costs in health care reform.
Tax credits and/or subsidies to small businesses who offer their employees health insurance should be protected from the Byrd rule. They would be a significant source of federal spending.
Different fixes or improvements to the Medicare Part D “doughnut hole” issue have been proposed. Closing the doughnut hole would cost several billion and would also likely be protected.
All the different changes to Medicare which are projected to save money should survive reconciliation. Fixing the overpayment for Medicare Advantage would save over $100 billion. Efforts to move away from the fee-for-service payment structure are projected to also save hundreds of billions. For the most part the important cost saving changes to Medicare should be able to pass using reconciliation.
Several different tax ideas are being considered to help pay for health care reform: reducing the tax deductions for the wealthy, a surtax, taxing “Cadillac” health insurance plans, soda tax, liquor tax, etc... Any tax that increase revenue should be protected.
These are are not the only aspects of health care reform that I believe will be easily passed using reconciliation, they are just the major pieces I'm 95 percent confident will not violate the Byrd rule. The major problems with getting these reforms passed using reconciliation is cost. The bill will need to be revenue neutral after only 5 years.
This should demonstrate that even though there are problems with using reconciliation, it can be used to dramatically improve the lives of millions. Savings from Medicare reform alone -- even without any new taxes -- could pay for fixing the Part D doughnut hole as well as dramatic expansion of Medicaid that could reduce the number of uninsured Americans by almost half.
Expanding Medicaid or the CHIP program to cover everyone below a set percent of the Federal Poverty Level can be passed using reconciliation. Simply expanding Medicaid to everyone below 150% of the FPL could reduce the number of uninsured by at most 26 million. The CBO says expanding Medicaid to Americans below 133% of the FDL would reduce the number of uninsured by 11 million, with a potential for several million more if strong efforts were made to enroll everyone eligible. While it may not be the best policy or the most cost effective way to expand coverage, simply expanding Medicaid to cover everyone below 300% of the FDL would offer coverage to almost all uninsured Americans. It could also be done using reconciliation.
Providing uninsured individuals money to help purchase insurance (either as subsidies, vouchers, or tax credits) should also pass using reconciliation. It is one of the major costs in health care reform.
Tax credits and/or subsidies to small businesses who offer their employees health insurance should be protected from the Byrd rule. They would be a significant source of federal spending.
Different fixes or improvements to the Medicare Part D “doughnut hole” issue have been proposed. Closing the doughnut hole would cost several billion and would also likely be protected.
All the different changes to Medicare which are projected to save money should survive reconciliation. Fixing the overpayment for Medicare Advantage would save over $100 billion. Efforts to move away from the fee-for-service payment structure are projected to also save hundreds of billions. For the most part the important cost saving changes to Medicare should be able to pass using reconciliation.
Several different tax ideas are being considered to help pay for health care reform: reducing the tax deductions for the wealthy, a surtax, taxing “Cadillac” health insurance plans, soda tax, liquor tax, etc... Any tax that increase revenue should be protected.
These are are not the only aspects of health care reform that I believe will be easily passed using reconciliation, they are just the major pieces I'm 95 percent confident will not violate the Byrd rule. The major problems with getting these reforms passed using reconciliation is cost. The bill will need to be revenue neutral after only 5 years.
This should demonstrate that even though there are problems with using reconciliation, it can be used to dramatically improve the lives of millions. Savings from Medicare reform alone -- even without any new taxes -- could pay for fixing the Part D doughnut hole as well as dramatic expansion of Medicaid that could reduce the number of uninsured Americans by almost half.
Baucus' Number One Goal Is A Bill That Just Looks Pretty
A new article in The Hill about Medicaid expansion speaks volumes about why Baucus is the wrong person to write health care reform. He is quoted as saying:
What Baucus is really saying is that it is more important that his bill looks good instead of being good. Looking at his top priorities it is clear his number one goal is that the he writes a bill that looks pretty. He wants it to be “bipartisan.” He wants it to come in below the random (but pretty) round number of a $1 trillion. He wants his bill to be “paid for.”
The problem is that Baucus achieves his goal of a pretty bill in the worst ways possible. Instead of looking for real reforms to drive down cost, he uses short cuts, loopholes, budget tricks, and cost shifts.
Covering the uninsured costs a lot of money, so Baucus “reduces” the cost of his bill by simply leaving some 17 million Americans uninsured. Real health insurance is expensive, so Baucus just watered down the minimum definition of what qualifies as insurance. Expanding Medicaid would require a large financial commitment, so Baucus just shifts the price tag off of his bill and on to the state budgets. To make his bill cost less than $1 trillion over 10 years, he only expands coverage for 7 of the 10 years.
Baucus' is writing a bad health care reform bill because he has all the wrong priorities. He is more focused on optics than on quality. Instead of making his goal to provide every American with affordable insurance, he has placed more importance on writing a bill that looks good. His bill will appear cheap but at a great cost to the working class Americans who really need help.
“We can’t foot the entire bill for the states. We just can’t do that,” Baucus said. “We can’t let U.S. taxpayers pay the full state bill” for the expansion.This claim is stupidity in its purist form, and I know Baucus is not stupid. It is not like states' revenue comes from magical pots of gold. Whether through state taxes or federal taxes, the U.S. taxpayer will be paying the bill either way. People don't care if their higher taxes are the result a new federal tax or just a federal mandate that causes an increase in their states' taxes.
What Baucus is really saying is that it is more important that his bill looks good instead of being good. Looking at his top priorities it is clear his number one goal is that the he writes a bill that looks pretty. He wants it to be “bipartisan.” He wants it to come in below the random (but pretty) round number of a $1 trillion. He wants his bill to be “paid for.”
The problem is that Baucus achieves his goal of a pretty bill in the worst ways possible. Instead of looking for real reforms to drive down cost, he uses short cuts, loopholes, budget tricks, and cost shifts.
Covering the uninsured costs a lot of money, so Baucus “reduces” the cost of his bill by simply leaving some 17 million Americans uninsured. Real health insurance is expensive, so Baucus just watered down the minimum definition of what qualifies as insurance. Expanding Medicaid would require a large financial commitment, so Baucus just shifts the price tag off of his bill and on to the state budgets. To make his bill cost less than $1 trillion over 10 years, he only expands coverage for 7 of the 10 years.
Baucus' is writing a bad health care reform bill because he has all the wrong priorities. He is more focused on optics than on quality. Instead of making his goal to provide every American with affordable insurance, he has placed more importance on writing a bill that looks good. His bill will appear cheap but at a great cost to the working class Americans who really need help.
Half Steps on Health Care are an Insult to America
Part of Barack Obama's huge stimulus package contains money to help states expand Medicaid (a perpetually broken program) and subsidize 65% of COBRA premiums for recently laid off workers. These measures are an insult to Americans in two important ways.
First, it will extend and promote already broken programs. Medicaid is chronically underfunded and does not properly reimburse doctors. As a result, few doctors accept Medicaid and almost always at a loss. Medicaid should use the same reimbursement plan as Medicare. In fact it is a foolish waste of money to administer two health insurance programs which serve the exact same function.
The COBRA is unusable and not surprisingly an underused program. It "allows" laid off employees to keep their health care at a HIGHER price than their employer paid. You may ask: how can a person who just lost their job afford to pay for COBRA? The answer is they can't. Even if the government subsidizes 65% of the cost of COBRA, the price normally runs $1,000 a month for a family. A parent without income is unlikely to be able to afford even the subsidized $350 a month premium.
More importantly, what the United States' health care system needs is a real fix, not a combination of short-lived and short-sighted band aids which do little to fix our problems. The Democrats control the presidency, the House, and the Senate. They have promised to deliver on universal health care and have the power to do so now. Unlike their stimulus package, which is of questionable value, a universal health care bill would immediately improve the lives of millions of Americans. Instead of attaching rather useless band aids to a boondoggle of a stimulus package, the Democrats should live up to their promise and get a real universal health care bill passed by February.
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