Tag Archives: obamacare

Spend, Spend and More Spend

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Categories: Government, Tax/Finance

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Few will argue with the idea that federal government spending is out of control. The Heritage Foundation's Federal Spending by the Numbers is a comprehensive look at the situation. We'll share a few of the many bullet points that just make me (and I'm sure many of you) wonder why our political leaders can't realize that the current course is a disastrous one.

  • Over the past 20 years, federal spending grew 71 percent faster than inflation.
  • In 1962, defense spending was nearly half the total federal budget (49 percent); Social Security and other mandatory programs were less than one-third of the budget (31 percent). Two major entitlement programs, Medicaid and Medicare, were signed into law by President Johnson in 1965.
  • In 2012 entitlements were nearly 62 percent of total spending, while defense dropped to less than one-fifth (18.7 percent) of the budget.
  • Federal spending per household reached $29,691 in 2012, a 29 percent increase (adjusted for inflation) from $23,010 in 2002. The government collected $20,293 per household in taxes in 2012.
  • The excess of spending over taxes produced a budget deficit of $9,398 per household in 2012.
  • For every $6.80 the federal government collected in taxes in 2012, it spent $10. Consequently, $3.20 out of every $10 spent was borrowed.
  • Major entitlements (Social Security, Medicare, Medicaid, Children's Health Insurance Program, Obamacare) will increase from 44 percent of federal spending in 2012 to 57 percent in 2022.
  • In 1993, Social Security surpassed national defense as the largest federal spending category, and remains first today.
  • Federal energy spending has increased steadily over the past decade with the government increasingly subsidizing activities like energy efficiency, energy supply, and technology commercialization. An unprecedented $42 billion was spent in 2009 as part of the stimulus, a nine-fold increase over the 2008 spending level.
  • Interest on the debt is the fifth largest federal spending category, even at today’s low interest rates.
  • All entitlements (excluding net interest) total nearly 62 percent of all federal spending today.
  • Spending on the largest, Social Security, Medicare, and Medicaid, will leap from 10.4 percent of GDP in 2012 to 18.2 percent by 2048.
  • The big three entitlements alone will absorb all tax revenues by 2048. Other spending, such as national defense or interest on the debt would have to be financed completely on borrowed money.
  • Medicare is the fastest-growing major entitlement, growing 68 percent since 2002. Medicaid grew 38 percent and Social Security 37 percent.

CBO Estimate of Those Who Will Lose Employer-Provided Health Insurance Under ACA Doubles

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Categories: Health Care

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The Washington Times reports that many more Americans than previously thought will lose employer-provided health insurance due to the newly enacted health care law, supported by President Obama. This unfortunately contradicts his campaign rhetoric during the 2012 debates and speeches on the matter.

President Obama's health care law will push 7 million people out of their job-based insurance coverage — nearly twice the previous estimate, according to the latest estimates from the Congressional Budget Office released Tuesday.

CBO said that this year's tax cuts have changed the incentives for businesses and made it less attractive to pay for insurance, meaning fewer will decide to do so. Instead, they'll choose to pay a penalty to the government, totaling $13 billion in higher fees over the next decade.

But the non-partisan agency also expects fewer people to have to pay individual penalties to the IRS than it earlier projects, because of a better method for calculating incomes that found more people will be exempt.

Overall, the new health provisions are expected to cost the government $1.165 trillion over the next decade — the same as last year's projection.

With other spending cuts and tax increases called for in the health law, though, CBO still says Mr. Obama's signature achievement will reduce budget deficits in the short term.

During the health care debate Mr. Obama had said individuals would be able to keep their plans.

Worst of the Worst in 2012 Regulations

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Categories: Environment, Government, Health Care

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There’s room for one last "Bottom 10" list of 2012. With thousands of new government regulations each year, it’s difficult to select the worst new rules put into place. Two Heritage Foundation experts give it a try, starting with 1,099 pages of new mortgage disclosure rules that have the stated goal of simplifying home loans.

(10) Mortgaging the Future: New mortgage disclosure rules were released in July by the newly created Consumer Financial Protection Bureau, with a stated goal of simplifying home loans. The rules run an astonishing 1,099 pages. The net result of this and similar rules? Fewer consumer mortgage lending options and increased costs.

(9) Tracking Your Travels: In December, the Department of Transportation proposed that electronic data recorders, popularly known as "black boxes," be required in most cars starting in 2014. The stated goal is to collect more information about car accidents. But this spooks privacy advocates, who warn that federal bureaucrats could misuse this information.

(8) Essential Choice Cutbacks: Under the Obamacare "essential benefits" rule, health insurers will be forced to cover health care services that the government deems essential, whether you want to buy them or not. The net result will be to increase health care costs, increasing the burden on consumers, employers and taxpayers.

(7) Instant Union: In April, the National Labor Relations Board issued new rules that shortened the time allowed for union-organizing elections to between 10 and 21 days. This leaves little time for employees to make a fully informed choice on unionizing, threatening to leave workers and management alike under unwanted union regimes.

(6) Don’t Let Them Eat Cake: The Department of Agriculture in January published detailed new nutrition standards for school lunch and breakfast programs. More than 98,000 elementary and secondary schools are affected – at a cost exceeding $3.4 billion over the next four years. The new rules sparked protests, and even a few hunger strikes, from students nationwide.

(5) Cleaned Out: Regulators admit that the new Energy Department rules governing dishwashers will do little to improve the environment. Rather, proponents claim they will save consumers money. But they will also increase the price of dishwashers, and only about one in six consumers will keep their dishwasher long enough to recoup the cost.

(4) Soda Socialism: On Sept. 13, at the behest of Mayor Michael Bloomberg, the New York Board of Health banned the sale of soda and other sweetened drinks in containers larger than 16 ounces. New Yorkers apparently are still allowed refills, at least for now. No word on how many NYC cops will be moved from crime prevention to monitor the city’s soda fountains.

(3) Sticker Shock: Adopted in August, these new automobile mileage rules require a whopping average fuel economy of 54.5 miles per gallon by 2025. Sticker prices will jump by hundreds of dollars. Regulators argue that the fuel savings will make up these costs. Whether consumers want to make such a tradeoff doesn’t matter. The government has decided for them.

(2) Increasing Energy Costs: The Environmental Protection Agency in February finalized strict new emissions standards for coal- and oil-fired electric utilities. The benefits are highly questionable, with the vast majority being unrelated to the emissions targeted by the regulation. The costs, unfortunately, are certain: estimated to be $9.6 billion annually. The regulations are likely to undermine energy reliability and raise energy costs across the entire economy.

(1) Conscience Denial: The Department of Health and Human Services on Feb. 15 finalized its mandate that all health insurance plans include coverage for abortion-inducing drugs, sterilization procedures, and contraceptives. The mandate allows no exception for church-affiliated schools, hospitals and charities whose religious principles conflict with the mandate. To date, 42 lawsuits representing more than 110 plaintiffs have been filed challenging this restriction on religious liberty as a violation of First Amendment.

Noblesville’s RMI Expanding Business, Adding Talent

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Categories: Business News, Health Care, Technology

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Historically, RMI in Noblesville has focused on orthopedic solutions for spinal surgeries, as well as hip and knee replacements. It’s had quite a bit of success in this industry, but RMI leadership now sees an opportunity to expand its focus.

"More recently, we’ve been looking for opportunities for growth in the non-medical field," President James Evans explains. "So we’re in the process of getting our aerospace certification."

Evans relays that expansion is one of the key reasons the company moved to Noblesville from Rochester in fall 2011. He explains the move gave the company more access to talent, and provided a more central location and close proximity to customers. While quite an undertaking, 19 of RMI’s Rochester staffers made the move south with the company, which currently has 25 employees (although that number will grow to 28 in the near future and well beyond once it expands into aerospace).

"We build low volume precision components out of exotic materials for the medical industry," Evans clarifies. "It’s a natural outgrowth opportunity to build products for other markets. Aerospace (and government, high-reliability military and aviation industries) all have requirements for the kind of capability that we have. Fairly high value componentry and assemblies are what we specialize in. In the spinal parts we build, the cervical plates, the hooks, the rods, the screws, which are mainly out of titanium and stainless steel and exotic plastics — we could really apply those to other markets."

Evans adds that the company has worked to evolve from just a component supplier and has expanded into full assemblies, which now comprise 40% to 50% of its business.

"When you start adding components together as part of an assembly, you have all of the interferences and system-level issues that you uncover," he notes. "And frankly, most of our competitors don’t want that hassle — so we look for more of those opportunities and that separates us from the competition."

He adds that the company now focuses on getting products to market faster by increasing engineering staff and adding equipment, which has helped build customer satisfaction and loyalty.

Evans remarks that RMI now serves more second tier developers.

"In 2005, most of our business was with large OEMs (original equipment manufacturers), and we had very little flexibility in defining the manufacturing of these products," he says. "We had little say in product improvements, and now we’re with customers who are competitive with large OEMs; they’re design houses and they’re working with orthopedic groups. … they look to us for manufacturing solutions."

Challenges still face Hoosier companies in the medical device industry.

"With people out of work, they don’t have insurance and put off having surgeries," Evans offers. "People are also doing tigher inventory controls, so purchasing habits have changed and so we don’t get as many large orders as we used to get. And of course Obamacare has had its own set of challenges, as well as the medical device tax — those things will affect the marketplace."

When asked about Indiana’s pipeline of talent for his industry, Evans explains central Indiana provides more access to talent, but he believes the state has room for improvement.

"The people who actually run our machinery, they need to be trained machinists and need to know a lot about metallurgy and inspection processes, and we have to train every one of them that comes in here," he asserts. "So there’s always a talent gap."

Would you like to know more about RMI or its products? Reach out to Evans at jevans@rmi.us.com.

Health Care Reform: What Happens Now? (Seminar, ePub Can Help)

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Categories: Health Care

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The Supreme Court has upheld the Affordable Care Act.  The Court’s decision means that employers are facing upcoming compliance obligations and important strategic decisions. Join us for a half-day seminar that will discuss the Supreme Court’s opinion and what it means for future compliance with the ACA. Among the topics to be discussed are:

  • The creation and distribution of the Summary of Benefits and Coverage
  • Form W-2 reporting obligations to disclose the cost of group health plans
  • New fees imposed on health plans for patient-centered research
  • New limits for health flexible spending accounts
  • State-based health insurance exchanges
  • Employer penalties for failing to provide minimum essential health coverage and effects on future plan design
  • The expansion of the Department of Labor’s audit program to include demonstrations of health plans’ compliance with the ACA

The Chamber will also soon be offering an ePub (onlne publication) to help you comply ($99 or $74.25 for members). Set for an October release, you can pre-order the book online.

Botht the seminar and the publication are put together by Ice Miller LLP.

Governors Faced with Difficult Medicaid Decision

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The Medicaid expansion decision for each state is one of several critical aspects of the Affordable Care Act, which was recently deemed Constitutional by the Supreme Court. Although federal dollars are at stake, it’s not a given that states (including Indiana) will agree to the changes to the program for low-income residents. Stateline offers a strong summary.

Although the lineup is shifting, more than a dozen Republican governors have suggested they might decline to participate in the Medicaid expansion. Governors in Florida, Iowa, Kansas, Louisiana, Nebraska, Texas, South Carolina and Wisconsin have said they will not participate. GOP governors in Alabama, Georgia, Indiana, Mississippi, Nevada and Virginia indicate they are leaning in that direction.

Meanwhile, about a dozen Democratic governors have said their states will opt in. The rest have not declared their intentions.

According to data from the Congressional Budget Office, the federal government would spend $923 billion on a full Medicaid expansion between 2014 and 2022, and states would spend about $73 billion. But nobody is sure how many people will enroll in the Medicaid expansion. According to a 2010 report by the Kaiser Family Foundation, states’ share of the Medicaid expansion could range anywhere from $20 billion to $43 billion in the first five years.

According to Kaiser, most states opting into the expansion likely would have to ramp up their Medicaid spending between 2014 and 2019, but four would spend less (Hawaii, Maine, Massachusetts and Vermont) and several others would have to boost state spending only slightly.

Mississippi’s Medicaid program, for example, cost a total of $4 billion in 2011—the federal government paid $3 billion, and the state paid $1 billion. Expanding that program to everybody at or below 138 percent of the federal poverty line would cost the state as much as $581 million between 2014 and 2019, according to Kaiser’s 2010 study.  That’s a 6.4 percent increase in state spending compared to what Mississippi would spend without an expansion

The day after the Supreme Court ruled the Medicaid expansion was optional, Mississippi Governor Phil Bryant, a Republican, said: “Although I am continuing to review the ruling by the Supreme Court, I would resist any expansion of Medicaid that could result in significant tax increases or dramatic cuts to education, public safety and job creation.”

A Statement on Today’s Health Care Decision by the Supreme Court

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Categories: Chamber News, Health Care

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Indiana Chamber of Commerce President and CEO Kevin Brinegar reacts to the U.S. Supreme Court’s ruling on the Affordable Care Act, announced today:

Conventional wisdom and national polls showed many Americans favored repeal of the measure, so we are surprised by the Court’s decision.

"Our concern is the impact the health care law — now that it’s going forward — will have on Hoosier businesses and their workers. Mandating coverage for pre-existing conditions and extending coverage for dependent children to age 26 will cause increases in health care costs; there is no way around it.

"That will force many employers to make the difficult decision to stop offering coverage and push employees into the federal plan. It puts the nation on the road to universal health care.

Pres. Obama’s Health Care Plan in Limbo

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Categories: Government, Health Care

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Businesses everywhere are anxiously awaiting how the Supreme Court will rule on President Obama’s federal health care reform plan this week. The decision will have many ramifications for businesses — and could even force some to reverse adjustments they’ve been making since 2010. CNBC reports:

First, an important caveat: Most of the employer provisions of the health care reform law apply only to businesses with 50 or more employees. So, if your business is smaller than that, you’re mostly off the hook — and you won’t be required to provide health insurance to your employees regardless of what the court decides.

But if your company is larger — or if you’re already growing and expect to someday employ more than 50 people — there’s a lot of unsettled business. Bigger firms that fail to offer their employees insurance could wind up paying government fees, which would kick in when employees obtain insurance independently. At the same time, the law would create exchanges and subsidies for individuals who buy insurance on the open market, and would also expand the Medicaid program.

Of course, there are many other provisions and exceptions. For example, even though companies with more than 50 employees would be required to provide insurance, they would also be allowed to skip paying the $2,000-per-employee government fee for the first 30 employees who didn’t have health insurance. (If you’re having trouble with that exception, rest assured that we had to think it through a dozen times before it made sense, too.) The truth is that once you get deep in the regulations  —many of which haven’t even been written yet —nobody really knows how things will settle out.

The Individual Mandate

Most of the legal attention has been focused on the so-called "individual mandate," which requires people to purchase health insurance, either through their employers or on the market. It was this provision that garnered the most pointed questions from the justices at oral argument in March.

"Can you create commerce in order to regulate it?" Associate Justice Anthony Kennedy asked at the time, apparently trying to figure out how the United States could justify requiring people to buy health insurance under the Commerce Clause of the U.S. Constitution. He later added that he believed the government faced "a heavy burden of justification," and was "changing the relationship of the individual to the government."

Under the mandate, individuals who fail to acquire insurance would be subject to government fees — although the exact nature of those fees, and whether they would amount to taxes, penalties or something else — is one of the more esoteric but important issues in the case before the court.

Despite the 2,400-page law’s complexity, the possible outcomes really fall into three categories. The court could strike down the law, uphold the law, or strike down some provisions. If that happens, it’s most likely that the court would get rid of the individual mandate will while upholding the rest of the law.

Also, Barbara Lewis of Inside INdiana Business spoke with Ice Miller’s Greg Pemberton about the possibilities and what they mean for the business community.

Small Businesses: Avoid These Mistakes When Buying Health Benefits

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It’s a tough world out there for small businesses. That’s one of the big reasons Chambers like ours exist, I suppose. But in recent years, the burdens of health insurance have grown remarkably, often being a key reason some have had to close their doors. So here’s a valuable blog from Forbes about the top 10 mistakes small businesses make when buying health benefits. Here’s the list, but read the full article for more detail:

  1. They fail to hire a qualified agent, broker or consultant to help.
  2. When selecting an agent, broker or consultant, they rush through the interviews.
  3. They fail to decide in advance what they can afford.
  4. They do not research the market.
  5. They release their employees’ personal information while shopping.
  6. They’re afraid of high-deductible medical plans.
  7. They offer their employees “free” benefits.
  8. They forget to make parts of the plan optional.
  9. They are careless when discussing healthcare options with employees.
  10. They enjoy shopping for health care plans too much.

 

Supreme Court to Fill Week With Health Care Arguments

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When the federal health care reform law of 2010 began winding its way through various lower courts, it was not clear whether the ultimate destination would be the Supreme Court. The justices, after all, weigh many factors in determining their caseload.

But some conflicting rulings along the way made it less of a surprise when the "Supremes" recently indicated they would indeed consider various issues surrounding the far-reaching law. Now, even more information has come out about the unprecedented level of attention coming in early 2012. The Washington Post reports:

The high court scheduled arguments for March 26th, 27th and 28th over the Patient Protection and Affordable Care Act, which aims to provide health insurance to more than 30 million previously uninsured Americans. The arguments fill the entire court calendar that week with nothing but debate over President Obama’s signature domestic health care achievement.

With the March dates set, that means a final decision on the massive health care overhaul will likely come before Independence Day in the middle of Obama’s re-election campaign. The new law has been vigorously opposed by all of Obama’s prospective GOP opponents.

The justices will start the week of arguments that Monday with one hour on whether court action is premature because no one yet has paid a fine for not participating in the overhaul. Tuesday’s arguments will take two hours, with lawyers debating the central issue of whether Congress overstepped its authority by requiring Americans to purchase health care insurance or pay a fine. Finally, Wednesday’s arguments will be split into two parts, with justices hearing 90 minutes of debate over whether the rest of the law can take effect even if the health insurance mandate is unconstitutional and an extra hour of arguments over whether the law goes too far in coercing states to participate in the health care overhaul by threatening a cutoff of federal money.