This year’s new analysis of tax complexity from National Taxpayers Union Foundation (NTUF) found some startling lead figures: a $234 billion cost to the economy due to 6.1 billion lost hours of productivity and $32 billion spent out-of-pocket to comply with America’s insanely complicated tax system.
As always, there is much more to the story.
Since 2010, tax complexity costs have remained sky-high, at well over $200 billion each year. From fiscal year 2005 to 2013, the Treasury’s paperwork burden rose from 6.4 billion hours to 7 billion hours never making up less than 74 percent of the burden imposed by all government agencies combined.
While last year’s (covering 2013) totals actually trended downward compared to the previous year (2012), there was little reason to believe that was the beginning of a trend toward continued relief.
Early this summer the Supreme Court will render a decision on King v. Burwell, the case challenging the IRS workaround that allows ObamaCare subsidies to be paid through federal exchanges. Many on the right believe that if the justices rule against the administration, it would be the final stake in the heart of ObamaCare. Nothing could be further from the truth.
Millions of Americans would lose their federal subsidies and therefore be unable to pay for expensive ObamaCare coverage. In that case we can expect President Obama to declare immediately a crisis that can only be fixed by more government. As Rahm Emanuel, the president’s former chief of staff, once said, you never want a serious crisis to go to waste.
If the court rules against him, President Obama’s response will be diabolically simple and highly effective. He will ask Congress to pass a one-sentence bill allowing the subsidies to flow through federal exchanges. At the same time he will offer governors a contract to convert their federal exchanges into state exchanges with a simple stroke of a pen.
HONOLULU (AP) — Hawaii officials are scrambling to provide information to the federal government to satisfy concerns about financial problems at the state’s health exchange.
All state-run insurance exchanges that are part of President Barack Obama’s Affordable Care Act are supposed to be financially sustainable this year. But without an infusion of cash, the Hawaii Health Connector won’t have enough money for its operations. The Legislature hasn’t yet approved the organization’s request to issue $28 million in bonds or loans.
Without a solid path to sustainability in place, the federal government is telling the state it may have to eventually move some technology functions to a federal system, said Jeff Kissel, CEO of the Hawaii Health Connector.
“This is a contingency that is being imposed on any state-based exchange that doesn’t have a funded sustainability plan in play,” Kissel said. “I don’t know of any other exchanges that are having to do this because it seems to me that everyone else is funded.”
Earlier this year the U.S. Supreme Court heard arguments in King v. Burwell, a case critical to the future of the Affordable Care Act (ACA, or so-called Obamacare). Readers interested in the details of the case should find them elsewhere. Suffice it to say here that the case concerns whether individuals can receive tax credits for buying health insurance on exchanges established by the federal government, though the text of the ACA indicates such subsidies are provided for those buying coverage through an “exchange established by the State.”
The case has the potential to invalidate substantial subsidies now being provided by federal taxpayers to millions of Americans using federal exchanges in 37 different states. Given the uncertainty created by the pending case, legislators on both sides of the aisle are considering how to react to various possible scenarios arising from a court decision. The House and Senate each recently passed budget resolutions allowing budget targets to be revised in the event of subsequent legislation modifying the ACA. The Senate resolution specifies that such legislation must be deficit-neutral.
Has the effort peaked to sign up uninsured Americans for coverage? The announcement that the nonprofit organization Enroll America is laying off staff and redirecting its focus in the face of funding cuts comes amid inconsistent sign-ups during the second Affordable Care Act open-enrollment period and concerns about affordability.
A recent New York Times analysis compared Kaiser Family Foundation estimates of potential enrollees with sign-up data from the Department of Health and Human Services. While some states that signed up few people in 2014 recovered during the 2015 open enrollment, other states lagged: “California, the state with the most enrollments in 2014, increased them by only one percentage point this year, despite a big investment in outreach. New York improved by only two percentage points. Washington’s rates are unchanged.”
Most states could not post consistent gains in both open-enrollment periods. An official from Avalere Health, a consulting firm, told the Times that she was “starting to wonder if we’ve overestimated the whole thing.”
The Centers for Disease Control and Prevention (CDC) has released early estimates of health insurance and access to health care for January through September 2014. The National Health Insurance Survey (NHIS) is (in my opinion) the most effective survey of health insurance, because it asks people three different but important questions: Are they uninsured at the time of the survey? Have they been uninsured for at least part of the year? Have they been uninsured for more than a year?
As shown in Figure 2, the proportion of long-term uninsured is about the same as it was circa 2000. The proportion of short-term uninsured has shrink a little in Obamacare’s first year.
New analysis from Avalere finds that while exchanges have succeeded in enrolling very low-income individuals, they continue to struggle to attract middle and higher income enrollees.
Specifically, as of the close of the 2015 open enrollment period, exchanges using HealthCare.gov had enrolled 76 percent of eligible individuals with incomes between 100 and 150 percent of the federal poverty level (FPL) or $11,770 to $17,655. However, participation rates declined dramatically as incomes increase and subsidies decrease. For instance, only 16 percent of those earning 301 to 400 percent FPL picked coverage through an exchange, even though they may be eligible for premium subsidies.
“People receiving more generous subsidies are expected to enroll in the exchanges at higher rates. However, participation levels decline as incomes increase, even among individuals who would be eligible for both premium subsidies and cost-sharing reductions,” said Elizabeth Carpenter, director at Avalere.
April 15 is right around the corner, and millions of Americans will find themselves paying more in taxes than ever thanks to Obamacare.
The law is more than a fundamental change to the country’s health care system. It also is a massive tax hike. As The Heritage Foundation’s Federal Budget in Pictures shows, according to the most recent scores, Obamacare will increase taxes by nearly $800 billion for the period of 2013-2022.
Obamacare contains 18 separate tax increases. A few of the biggest include a tax on “Cadillac” health insurance plans, which doesn’t take effect until 2018, long after President Obama and many in Congress who voted for the tax in 2010 have departed Washington. Also, there is a tax on health insurance premiums and a higher rate on the Hospital Insurance payroll tax for single filers with incomes above $200,000 ($250,000 for married filers) that also applies to investment income.
It’s spring in Washington, and time to resume one of the capital’s favorite sports. No, not baseball, but throwing mud at the Supreme Court. Pending cases include the legal status of same-sex marriage and whether the IRS can provide billions of dollars in Obamacare subsidies without explicit congressional authorization. Partisans have launched a preemptive bid to undermine the legitimacy of the forthcoming decisions by accusing the court of “activism” for involving itself at all.
These increasingly transparent attempts to discredit the court should be rejected.Every case involving plausible abuses of power requires judicial engagement — conscientious, impartial truth-seeking, grounded in evidence — rather than reflexive deference to the political branches.
Take the Obamacare case. At issue in King v. Burwell is a section of the Affordable Care Act concerning tax credits for buying health insurance from government-operated healthcare exchanges. Congress wanted states to set up their own exchanges, but it lacks constitutional authority to force them. So Congress opted for a stick-and-carrot approach, authorizing tax credits for insurance policies purchased “through an Exchange established by the State.” As a backup, the ACA directed federal bureaucrats to set up federally operated exchanges in states that declined to set up their own.
Forbes– By Jonathan Ingram, Nic Horton and Josh Archambault – Mr. Ingram is Research Director, Mr. Horton is Policy Impact Specialist and Mr. Archambault is a Senior Fellow at the Foundation for Government Accountability.
Last week, the Foundation for Government Accountability released a groundbreaking poll of voters in federal exchange states that provides valuable insight into how voters want policymakers to respond to the pending King v. Burwell Supreme Court ruling.