By Caitlin Owens
March 29, 2015 Taxes are unpopular. Obamacare is contentious. And the two in tandem promise to make for a political maelstrom, especially come April—when taxes are due and last-minute filers start to see their results.
This year’s deadline, however, is likely to be especially contentious. Last year, 2014—whose tax bills are now coming due—saw the implementation of the individual mandate, the part of the Affordable Care Act that (generally) requires people to have health insurance or pay a penalty.
With added unfamiliarity to an already complex process, filers whose returns are affected by Obamacare may be in for unexpected results, whether a surprise bill or a surprise refund.
As with any event associated with the health care law, rival spin machines will go into full effect, with Republicans highlighting horror stories while Democrats spotlight the law’s biggest beneficiaries. But the real-life impacts of the law are far more nuanced. Indeed, despite all talk of how much Obamacare would cost taxpayers, the reality is that a large percentage of the uninsured are exempt from penalties.
The Affordable Care Act, signed by President Obama five years ago this week, sparked a host of changes. For some workers, the law’s legacy amounts to fewer hours of paid work.
The law’s requirement that larger employers provide affordable insurance to workers putting in 30-plus hour weeks has led some companies to cap the number of hours employees can log. A new survey out Tuesday from the Society for Human Resource Management finds that 14% of employers have cut back on hours for part-time employees, and an additional 6% plan to do so. The survey, which included more than 740 human resources professionals, found that a small subset of companies were considering reducing hours for full-time employees too.
Firms are playing around with how they classify and schedule workers, but the strategy comes with risk. James Napoli, a partner with Seyfarth Shaw LLP who helps employers comply with the ACA, says he’s seen an uptick in audits focused on compliance with the health care law by the Department of Labor and the Internal Revenue Service. The audits, which began about three years ago, are starting to become broader, more frequent and more serious, he said.
Anticipating the upcoming Supreme Court decision on King v. Burwell, which could halt health insurance subsidies available through the federal exchange, Republican Senators Richard Burr and Orrin Hatch joined with Representative Fred Upton to propose a comprehensive replacement for the Affordable Care Act (ACA). The Patient Choice, Affordability, Responsibility, and Empowerment Act, or Patient CARE Act, is modeled on a proposal of the same name offered last year by Senators Burr, Hatch, and Tom Coburn, who has retired from the Senate. The Burr-Hatch-Upton plan, like its predecessor, adopts consumer-based reforms of the insurance market, modernizes the Medicaid program, and makes other changes intended to lower cost and increase choices.
In an earlier post, we described in detail the provisions of the Burr-Coburn-Hatch bill. In this post, we discuss how the Burr-Hatch-Upton plan differs from the earlier proposal. We also discuss the impact of the new proposal on health insurance coverage, premiums, and the federal budget based on a new analysis from the Center for Health and Economy (H&E), a non-partisan think tank focused on producing informative analyses of trends in U.S. health care policy and reform ideas. We conclude by commenting on the direction Republicans are likely to take in reforming the health system in the aftermath of a Supreme Court decision in the King v. Burwell case.
Six Democratic senators and one independent have asked the Department of Health and Human Services to a delay a new rule that would likely force small businesses to pay more for employee health insurance under the Affordable Care Act, aka Obamacare. The senators warn that if the administration goes ahead with the change it would be “particularly harmful and disruptive” to small businesses.
Starting in 2016, the Obamacare change will require businesses that employ between 51-100 people to purchase insurance in what the government defines as the “small group market,” rather than the market for large group plans. The senators warn that the change will inflate health care costs for those businesses.
“[T]hey could experience higher premiums, less flexibility, and new barriers to coverage. We therefore encourage you to delay the effective date in the definition change for two years so the market can more smoothly transition to the new rules,” the senators wrote in the March 12 letter to HHS Secretary Sylvia Burwell.
During a 2014 Valentine’s Day meet-up with House Democrats, President Obama thanked them for their unstinting support of the Patient Protection and Affordable Care Act. “I think,” he said, “10 years, five years from now, we’re going to look back and say this was a monumental achievement.”
Well, the president’s health care law marks its fifth anniversary this week. And most Americans are not, in fact, looking back and saying the law enacted in 2010 – with not one Republican vote in either the House or Senate – was a monumental achievement.
Indeed, in an NBC News/Wall Street Journal poll this month, a 44-34 plurality of respondents thought Obamacare a “bad idea.” And a 62-22 percent majority said that what they had seen, read or heard in recent weeks about the Affordable Care Act had made them “less confident” about the law.
Some suggest the public’s misgivings about Obamacare are almost entirely attributable to GOP opposition to the law. In a statement Monday, Democratic National Committee Chairwoman Debbie Wasserman Schultz noted that “Republicans have voted more than 50 times to repeal or undermine this critical law.”
Looking closer, the 6.3 million-person enrollment drop in fully insured employee plans represents a sudden 10 percent decline in a market that previously had been eroding by about 1 percent to 3 percent a year. In contrast, the 1.4 million more individuals in self-insured plans equates to enrollment growth of about 1.5 percent in a market that, prior to Obamacare, was growing at about 1 to 3 percent a year—putting that uptick solidly within the pre-Affordable Care Act trend range.
Thus, the data indicates Obamacare likely was responsible for a significant additional decline in fully insured employer group coverage. But, with respect to another anticipated effect—the expectation that more employers will shift to self-insured plans to escape Obamacare’s costly benefit mandates—the data does not indicate that is yet occurring to any noticeable extent. The modest enrollment increase in self-insured employer plans could well be the result of other factors, the most likely being increased job creation as the economy continues to recover from the last recession.
Taken together, the administrative data tell us that the number of Americans with health insurance coverage increased by around 9.7 million individuals during 2014—not the 14.1 million estimated by Health and Human Services.
What Were the Top 5 Fails from 5 Years ofACA?
Here are some of the top actual practices of the ACA thatdiverge from what we were promised:
1. PolitiFact “Lie of the Year”: “If you like your health care plan, you can keep it.”
The Obama Administration and many Democratic members of Congress repeatedly assured Americans that “If you like your health care plan, you can keep it.” PolitiFact rated this the “Lie of the Year for 2013” after cancellation notices went out to 4 million people. (PolitiFact)
2. “If you like the doctor you have, you can keep your doctor, too.” Not.
In June 2009, President Obama said, “If you like the doctor you have, you can keep your doctor, too.” But nearly five years later, the president admitted that Americans might lose their doctors after all. (WebMD Exclusive Interview). This is a broken promise that many ObamaCare enrollees will face, given that 70 percent of ObamaCare plans are narrow or ultra-narrow network plans, compared to 23 percent of employer-sponsored plans. (Washington Post)
The Congressional Budget Office’s new report shows updated cost projections for the insurance coverage expansion in the Affordable Care Act. With the debate over the ACA remaining so intensely polarized, advocates moved aggressively to spin this routine update as reflecting favorably on the law. A front-page article in the Washington Post referred to the new findings as showing “savings,” quoting a supporter as saying, “I can’t see how people can continue to say . . . that Obamacare had no cost containment in it.” Such comments in the wake of CBO’s update are flawed interpretations of the new estimates and what they signify. The following explains what CBO has actually projected: basically that the ACA will do less to expand coverage than previously estimated.
For years now, Wall Street has cheered as Obamacare fuelled the stock prices of corporations in the healthcare industry. One of them was eHealth EHTH +0.96%, Inc. (NASDAQ: EHTH), an online health-insurance broker that was founded in 1997.
Obamacare – in case you need reminding – mandates the purchase of private health insurance for working-age Americans above a low income. Last April, The Motley Fool’s Keith Speights speculated that eHealth might have been “Obamacare’s biggest winner”:
Health care premiums are continuing to rise in 2015. While the pace of change has slowed since the dramatic increases of 2014, the savings promised under the Affordable Care Act (ACA) have still not materialized.
Measuring changes in premiums is an important element in understanding the impact of the ACA. In previous analysis, The Heritage Foundation determined that the new regulations and benefit mandates put in place through the ACA caused premiums to increase drastically in 2014, with average premiums increasing more than 50 percent in some states. This Issue Brief examines premium changes in 2015 and finds continued but slower premium growth, indicative of a market going through a sorting process.