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.
healthcare
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.
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.
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?
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.
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.
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.
Here is the link to the press release from U.S. Rep. Mike Thompson’s web site.
Here is the link to the bill’s text at congress.gov.
2014 Version Of The Nine Most Terrifying Words In The English language
The 2014 version of the nine most terrifying words in the English language are, “I am Professor Gruber and am here to help.”
I’m sorry I could not resist poking a little fun at Professor Gruber. I tend to agree with Ron Fournier who said that the combination of the Administration’s mistakes with Jonathan Gruber’s embarrassing comments have done more to undermine the Affordable Care Act than all of the efforts by conservatives combined. The Administration is probably thinking that with Professor Gruber as our “friend”, who needs enemies?
Can We Have A Cheaper, Simpler Health Care Without A Change To The Political Process?
Megan McArdle offers several ideas for cheaper, simpler health care alternatives in her article, A Cheaper, Simpler Obamacare Plan, while pointing out that passing any of these alternatives is unlikely because it is not “what progressives wanted”. Frankly I do know what progressives want anymore. They were successful at confusing the American people with the details of the Affordable Care Act and may still be successful at confusing law makers and the courts on the question of subsidies. All of this deception implies that progressives favor a “make it up as we go approach” to health care reform. It is safe to say that approach did not work. If deception about wealth redistribution is all the progressives are bringing to the table I think we can safely return to the old political process and let the states resume their rightful place as the engine of health care reform. Wealth redistribution is just a shell game in health care reform. If you wanted health care to be affordable then Massachusetts was the wrong state to model a national plan after. Maybe this time a state with a greater interest in health care that is truly affordable will adopt a variation of one Megan’s ideas but the Affordable Care Act experiment is dead. As Abraham Lincoln once said, “You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time.”
I Wonder If Mr. Gruber Thinks The Supreme Court Justices Are Stupid
If Mr. Gruber thinks that Americans are stupid, I wonder if his opinion extends to those Americans who serve as Supreme Court justices? I am really looking forward to hearing the questions from the Supreme Court justices in the King v. Burwell case. Let’s see if I understand the question correctly. At the same time the writers of the bill were deliberately looking for ways to make the bill confusing and hard to understand by the American people, it was an accidental and unintended deception of Congress and the court that the Affordable Care Act was written in a way that prevents issuing subsidies to people buying health insurance from the federal exchange. Yeah! That’s the ticket!