Healthcare

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Kennedy’s Dilemma, Is Deferring To The IRS A Wise Decision?

Nicholas Bagley highlighted the primary dilemma confronting the Supreme Court in the King v. Burwell case. I do not think anyone will argue that the Affordable Care Act is a fatally flawed bill. So how do we fix it? Here is what Justice Kennedy asked:

Well, if [the statute is] ambiguous, then we think about Chevron. But it seems to me a drastic step for us to say that the Department of Internal Revenue and its director can make this call one way or the other when there are, what, billions of dollars of subsidies involved here? … And it—it seems to me our cases say that if the Internal Revenue Service is going to allow deductions using these, that it has to be very, very clear.

Mr. Bagley argues that it is appropriate to defer to the agencies best judgment when it confronts big, difficult questions that arise in the course of administration. He argues in an amicus brief that:

It is then that the agency’s expertise and political accountability are most essential—and where the structure of the federal government most forcefully counsels judicial restraint.

If I follow his logic correctly then the agency’s expertise and political accountability must be beyond reproach if this is to work.  We recently learned that despite President Obama’s admonition that there is not “even a smidgen of corruption” in the IRS scandal, Ms. Lerner’s Lerner’s e-mail records were “right where you would expect them to be.” A year ago, the IRS claimed after two months of looking that the e-mail records were irretrievably lost so it is not surprising that the Inspector General is looking at a criminal investigation of the IRS for its role in obstructing an ongoing investigation.  Recently I looked at the Form 990 for the Clinton Foundation and for kicks I decided to compare it to one of the organizations that was targeted by the IRS, True The Vote. I was shocked to find out that True The Vote raised only $64,687 in 2010. This amount would be a round-off error on the transportation budget for the Clinton Foundation so I find it incredulous that the IRS decided to pursue them. Regardless of the legality it shows that the IRS was incredibly short-sighted politically. They gave their professional credibility away for nothing. Were there any adults in the room for that decision? So the Supreme Court justices are stuck with the dilemma of how to fix the Affordable Care Act if most of the people view the IRS as an incompetent if not corrupt organization? Are we comfortable with letting an organization who says it cannot find Ms. Lerner’s emails make a decision involving billions of dollars of subsidies? If you agree with Mr. Bagely’s argument that deferring to the IRS is okay, then you have to address the question under what circumstances should the Supreme Court send fatally flawed bills back to Congress to fix if billions of dollars of subsidies is not sufficient cause? If expediency is our only concern then the easiest solution is to send a box of blank paper to the IRS and tell them to fix the flawed legislation. Unfortunately the IRS cannot fix this bill or any other bill without input from Congress and their adversarial relationship with Congress should immediately disqualify them from this special task. To restore a less adversarial IRS-Congress relationship, Congress has to be very, very clear on the parts of laws involving the IRS. If we are to learn anything from the many mistakes made by the Affordable Care Act supporters, we need some adults in the room to craft bipartisan agreements that actually reform health care. As long as the American people want laws that work, the importance of the legislative process is not dead.

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Did Jonathon Gruber Advise The FCC Commissioner On How To Pass Net Neutrality?

As a long time IT guy I am embarrassed to say how much time I wasted trying to figure out what the FCC’s version of “Net Neutrality” means? It was as if the FCC was deliberately trying to make their reasons for increasing internet regulation as difficult to understand as possible. They seem to be using the same lack of transparency tactic Jonathon Gruber made famous. Whether you are lying about health care policies or Internet regulations, it looks like political suicide on the big stage. As both a retail and commercial Internet client I have no idea what problem they are trying to solve that would not be solved faster and better via the marketplace.

I think we can agree that the Internet is a fairly, robust free market. On the other hand health care is a heavily regulated market and the additional Affordable Care Act regulations did not make health care more efficient or result in better health care outcomes. So if the government cannot wring out increased health care efficiency in a heavily regulated market like health care, what do you think the chances of continued Internet improvements are when the government is converting a robust free market into a heavily regulated market. Is this change as potentially disruptive to the internet market as the federal government’s last technology flop, healthcare.gov, was to the health care market? The government technology track record is pretty dismal. They violated practically every software development best practice known to man in developing healthcare.gov and then acted surprised that the site did not work and ran over-budget. This Administration is not technologically savvy so it is way too early to risk killing our golden goose for nothing.

May be it is best to listen to the concerns expressed by FCC commissioner, Ajit Pai. Click on this link to view the Bloomberg interview.

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Will Congress Help Small Businesses By Reviving HRAs?

Christina Merhar wrote a nice post over at Zane Benefits updating the status of reviving HRAs in the current Congress. Although I would like to move on from the HRA subject, I cannot. The most cost effective health care plan available is my grandfathered health insurance plan from Aetna-AARP and I would like to pay those insurance premiums with pre-tax money like I did in 2014. Although my company tried to make do with a bad situation by giving me a raise, the bottom line is that I will have un-reimbursed health insurance costs in 2015 because of the payroll taxes on the raise. For a healthy family that last made an insurance claim in the 1990s, this is unacceptable. Here is my reason to revive HRAs.

Yes, I think they should revive HRAs and allow them to pay for grandfathered health insurance plans. I will encourage my congressman to support the bill as one of those bipartisan changes to the Affordable Care Act that makes it less evil. I will go a step farther. I want to keep my existing plan and HRA until the Affordable Care Act reforms actually result in falling costs and more cost effective plans being offered via the exchanges. This is what the President promised and I think we should hold him to his promise.

Here is part of the press release from Representative Boustany(R-LA) web site in which he says, “ObamaCare Delay Not Permanent Solution.”

Boustany questions Treasury Secretary Lew on the Administration’s policy on HRA’s.

Last year Representative Boustany(R-LA) and Representative Mike Thompson (D-CA) introduced the Small Business Healthcare Relief Act last year that permanently reverses this guidance, giving employers and employees more flexibility in choosing coverage. This legislation is supported by the United States Chamber of Commerce, the National Federation of Independent Business (NFIB), the National Association of Manufacturers (NAM), the Retail Industry Leaders Association (RILA), the National Association of Homebuilders (NAHB), the National Association for the Self-Employed, and the Council for Affordable Health Coverage (CAHC).

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HRAs Were A Smart, Affordable Way For Small Businesses To Pay For Health Care To Employees That The ACA Screwed Up

I was reading a post over at Hot Air, Administration delays another Obamacare rule, this time for small businesses, when I realized there is still a lot of confusion over what HRAs are and how they pay for health care. HRAs were adopted by small businesses because the individual health insurance market had better prices than the group market. Small businesses really liked the idea that the employee could get the best bang for their health care dollar with a portable plan available in the individual insurance market while the business could take a health care tax deduction just like the big companies. As an example my 2014 HRA was funded at $500 per month. The HRA funding was adequate enough to reimburse me for my health insurance premiums, my out of pocket health care expenses, and to roll $3,000 over to 2015. I think everyone would agree that the ACA never intended to change HRAs. Due to misguided rulings by the IRS in 2014 we find that many HRAs are not in compliance with the ACA and small businesses are royally pissed! Small businesses who were nice enough to offer HRAs were hoping they can redo their HRA before they get penalized. As a last resort they could choose the safe alternative that is both bad for the company and the employee. As an example since my HRA is no longer being offered as a benefit, my company opted to give me a $500 per month raise. When you remove the payroll taxes from the raise, it is not enough to pay my 2015 health insurance premium. Both the company and I are paying more. The only beneficiary of this scheme is the government who is collecting higher payroll taxes. So it is not surprising that the IRS has decided to show leniency to the small businesses they just screwed. It was the least they could do! Last year H.R.5860 – Small Business Healthcare Relief Act of 2014  was introduced with bipartisan support to try and overcome the hardships the ACA inadvertently created for small businesses. Maybe it will pass in 2015 and small businesses can go back to growing their businesses.

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What Is The Chance Of A Measles Outbreak At Disneyland?

The Instapundit and I are puzzled by the measles outbreak. If Jane The Actuary’s immunization rates are correct then it looks like measles should be pretty difficult to spread. Yet we have this statement in the Yahoo article, Disneyland Measles Outbreak Isn’t Largest In Recent Memory — This Is, that 100 measles cases have been linked to Disneyland.

More than 100 measles cases in half a dozen states have been linked to people who visited or worked at Disneyland in December or exposure to infected people who went there. California health officials on Wednesday reported 99 measles cases including six new infections with a Disneyland connection.

So I understand how measles outbreak in an Amish community would be the largest in recent memory. You probably have a lot of people who were not immunized due to religious reasons. When I think of Disneyland customers, this is wrong demographic to not be immunized for measles for religious or financial reasons. Disneyland customers should be the demographic that exceeds the reported immunization rates. Is there something unique about Disneyland that causes it to attract a crowd with much lower than average immunization rates? I doubt the Amish or other groups with religious objections to vaccinations were Disneyland customers that day. Are our immunization rates suspect? I wonder what the measles immunization rate of Disneyland employees is? The reporting on this outbreak sounds more like demagoguery rather than asking the serious scientific questions of how did measles get to Disneyland and why did so many people get infected.

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Did The Affordable Care Act Improve Health Care Outcomes Or Are We Just Spending More For The Same Health Care Outcomes?

A recent Fox News piece on uncompensated care got me thinking about health care efficiency again. If we really had a $5.7 billion drop in hospitals’ uncompensated care costs because of the Affordable Care Act, where did the money go? Since my health insurance premium went from $407 in 2014 to $479 in 2015, I definitely am not seeing any of this love coming my way! Did we just a get a much larger version of the Oregon Medicaid experiment in which the drop in uncompensated care is replaced with an even larger increase in Medicaid spending and no discernable change in health care outcomes? The reported drop in uncompensated care is sounding like another shell game and the middle class is still stuck with Affordable Care Act supporters who really do not care about health care reforms that matter to the middle class. This is pretty simple. If you are reforming health care in a responsible and sustainable manner then we should be seeing the results in lower health insurance premiums and better health care outcomes. If we do see improvements in both areas then reforming health care has become a façade for increased cronyism and gross incompetence.

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Will we allow ourselves to be sorted into factions and turned against one another?

When I heard President Obama ask this question in the 2015 State of the Union speech I immediately thought of the pressing problem we have with reforming, replacing, or repealing the Affordable Care Act insurance exchanges. ACA exchanges is a dumb policy that is not only inefficient and cumbersome but it has split the American middle class into factions and turned ourselves against one another. It is an easy moral and political argument to make that ACA exchanges as a necessary policy to facilitate wealth redistribution between the rich and the poor. It is a completely different moral and political argument when the ACA is more accurately described as wealth redistribution amongst the middle class. That is how Professor Gruber, one of the architects of the Affordable Care Act,  described it. As a healthy person in the middle class when I see higher health insurance rates I conclude that last year’s pay raise went to pay either someone else’s health insurance, protect insurance companies from bad government policies, or to help build a federal health care bureaucracy. It makes me bitter. As a healthy person I was not supposed to be affected by ACA reforms. Instead of stimulating the economy and creating jobs, increased health care spending is likely causing the middle class to hunker down. When I look at 21,000 pages of new regulations and rising health insurance costs, I think it is fair to describe the ACA as a deal made in political hell between between HHS, Democratic politicians, and insurance companies. It looks and smells like cronyism so it is not exactly the moral high ground that the middle class is likely to rally around. It is the second question he posed in the SOTU speech that goes to the heart of the reform, replace, or repeal debate. How do we recapture the sense of common purpose when the ACA has pitted middle class factions against each other? Is the ACA too morally corrupt to middle class sensibilities that reform is impossible or can we find some non-partisan reforms to make the ACA less evil?

Will we allow ourselves to be sorted into factions and turned against one another — or will we recapture the sense of common purpose that has always propelled America forward?

Many politicians believe that “America is great because America is good.” and  “If America ever stops being good, it will stop being great.” Tocqueville attributed American exceptionalism to the fact their “morals can turn the worst laws to advantage”.

So how do we reform health care if America stops being good?

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The Affordable Care Act’s Missed Opportunity To Control Health Care Costs

For a person who has concluded that the Affordable Care Act was not only bad legislation but a missed opportunity to do something meaningful about controlling health care costs. Chris Conover highlighted this problem in the article, Steven Brill On Obamacare: Right Diagnosis, Wrong Prescription, on Forbes.com.

And perhaps most disturbing of all, when Stahl presses him “is there any way now to go back and add cost containment” Brill opines “it was impossible then; it’s more impossible now”  ultimately concluding that only when it becomes a fiscal crisis will we do anything to rein in spending.

I disagree with Mr. Brill.  The task has become more difficult but the VA model will not be a solution in my lifetime. That political bridge to a single payer system was burned with the scandal. Now we are negotiating health care cost efficiency reforms without Medicaid expansion to lure politicians to the table. You have to start somewhere and there is no other choice!

Next time someone starts whining about income inequality tell them controlling health care costs would have been a good first step at putting money back into the middle class’s pocket book.

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My HRA Is Not Dead… It Can Pay Bills in 2015 With Existing Funds

Yesterday my boss told me that our existing HRA plan which I was told would terminate on December 15, 2014 can pay bills in 2015 with funds that were committed in 2014. I guess that since it has funds we can keep on going until it runs out. This is short term solution since the company cannot add additional funds to the HRA in 2015. My boss is hoping that H.R.5860 – Small Business Healthcare Relief Act of 2014 will pass and allow companies to catch up on 2015 funding and payments.

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It Is Time To Ask Your Representative To Support H.R.5860 – Small Business Healthcare Relief Act of 2014

For those of you who still feel that Health Reimbursement Accounts is a great way to encourage small businesses to pay for your health insurance then it is time to contact your Representative about supporting H.R.5860 – Small Business Healthcare Relief Act of 2014. Congressman Charles W. Boustany, Jr., M.D., (R-LA) and Congressman Mike Thompson (D-CA) have introduced a new bill to restore health reimbursement accounts for small businesses. Here is my summary of the bill:

Amounts paid by an eligible small employer on behalf of an employee of the employer for premiums for a qualified health plan shall be treated as employer-provided coverage for medical expenses under an accident or health plan and shall not be considered a group health plan for purposes of section 9815.

The bill sounds like it will restore HRAs for small businesses by exempting small business HRAs from the group plan rules. Applying group plan rules to HRAs was one of those Affordable Care Act idiosyncrasies that drives me nuts. Why do our Affordable Care Act bureaucrats keep making decisions that makes health care less affordable? Whose side are they on? The only question I have is whether my grandfathered health insurance plan is a qualified health plan under this law. Since my grandfathered health insurance plan costs 52% of the lowest cost bronze plan and has a much smaller deductible, this is a big deal.

Here is the link to the blog post at Zane Benefits.

http://www.zanebenefits.com/blog/proposed-act-aims-to-revive-health-reimbursement-arrangements-for-small-businesses

Here is the link to the press release from U.S. Rep. Mike Thompson’s web site.

http://mikethompson.house.gov/newsroom/press-releases/thompson-introduces-small-business-healthcare-relief-act

Here is the link to the bill’s text at congress.gov.

https://www.congress.gov/bill/113th-congress/house-bill/