By Zachary A. Goldfarb and Sandhya Somashekhar, Published: in the Washington Post

The White House on Tuesday delayed for one year a requirement under the Affordable Care Act that businesses provide health insurance to employees, a fresh setback for President Obama’s landmark health-care overhaul as it enters a critical phase.

The provision, commonly known as the employer mandate, calls for businesses with 50 or more workers to provide affordable quality insurance to workers or pay a $2,000 fine per employee. Business groups had objected to the provision, which now will take effect in January 2015.

The decision comes as Obama is working to secure his domestic legacy, urging Congress to pass an overhaul of immigration laws and using his executive powers to combat climate change. With the prospects for immigration reform uncertain in the House — and new environmental regulations still more than a year way — implementation of the 2010 health-care law has singular importance.

The White House portrayed the delay as a common-sense step that would reduce financial and regulatory burdens on small businesses. Republicans, who are planning to target “Obamacare” in the 2014 midterm campaigns, said the delay is an acknowledgment that the health-care overhaul is flawed.

The decision will spare Obama what might have been a major distraction as officials begin to implement the centerpiece of the health-care law, which remains in place: a requirement, starting in 2014, that most Americans obtain insurance through their employer or through federally backed and state-backed marketplaces, known as exchanges.

The decision by Obama, who was on Air Force One returning from Africa on Tuesday when the announcement was made, to delay a controversial part of the law underscores his willingness to use the power of the executive branch to help to protect the legislation’s image at a defining moment.

“We believe we need to give employers more time to comply with the new rules,” Valerie Jarrett, a senior adviser to Obama, wrote in a blog post Tuesday evening. “This allows employers the time to . . . make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers.”

Republicans say they expect higher costs as a result of the law. House Speaker John A. Boehner (Ohio) said the decision “means even the Obama administration knows the ‘train wreck’ will only get worse.” He added, “This is a clear acknowledgment that the law is unworkable.”

Bob Kocher, a former top health-care aide to Obama, said he was disappointed by the delay because it will create uncertainty about what parts of the law will take effect. “It confuses people,” he said, adding that it “will undermine all the other rules because people will expect delay.”

The health-care law, which had been a source of confusion for years, is expected to have a bumpy rollout. The employer mandate would have added complexity.

Small businesses, many of which would have had to install systems to track and report which employees are receiving coverage, had been complaining about the difficulty of complying with the requirements, giving way to fears that companies might reduce their workforces to fall below the 50-worker threshold.

The decision comes as a result of years of bumps and setbacks for the overhaul, including legal challenges and political opposition that have hampered its implementation. Last summer, the Supreme Court upheld the law but struck down a mandatory expansion of Medicaid. State officials and businesses held off changing their policies through the 2012 presidential campaign because Obama’s GOP opponent, Mitt Romney, had promised to repeal the law.

Some populous states, including Florida and Texas, have decided not to set up exchanges, putting a far bigger burden on federal health officials to serve Americans. The exchanges are being designed to offer a variety of insurance plans; the federal insurance exchange is set to begin in less than three months.

One year ago today the Supreme Court found the Affordable Care Act constitutional. The new health care exchanges begin enrollment in 3 months but Obamacare is still confusing for most of us. Wonkblog’s Sarah Kliff explains what we can expect.

Although the overhaul was passed in 2010, federal officials continue to issue clarifications to its language. Many of the rules critical to employers were issued this year, or remain in draft form. As a result, businesses have been scrambling to understand their obligations, said Larry Levitt, senior vice president of the Kaiser Family Foundation, a nonpartisan health think tank.

“When I talk to large companies, even though they already offer coverage they are still scrambling to understand the rules so they can comply,” he said. “Employers were feeling like they had to make these decisions under some amount of pressure, and this gives them a year to be more deliberative about it.”

A senior White House official said the administration’s decision goes beyond delaying the employer mandate. Officials also are working to simplify the depth of information that businesses will have to provide to the government about the coverage they offer.

The launch of the exchanges is a landmark moment in the overhaul, and White House officials have been warning that there will be rough spots. The White House hasn’t received the funding it requested to implement the law, and officials have expressed concern that Americans eligible for coverage won’t know how to get it.

Earlier this year, the administration said businesses that buy health plans for their workers through health exchanges would not have access to the full range of options in 2014, promising to have them in place a year later.

The decision to postpone the employer mandate is not expected to have a major impact on employees. Those workers who would have received coverage from their employers as a result of the law will now be expected to use the exchanges. Employees who cannot afford coverage on their own are eligible for federal subsidies.

The vast majority of businesses — 96 percent, according to the White House — have fewer than 50 employees and therefore are exempt from the mandate. And nearly all firms of 200 or more workers offer their employees some sort of coverage, according to the Kaiser Family Foundation.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mark J. Mazur, an assistant Treasury secretary, wrote in a blog post. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

Mazur wrote that Treasury, which oversees part of the law, will issue more details about the delay within a week.

Several business groups praised the administration, saying the delay will give businesses time to adjust to the new requirements.

“This one year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment,” Neil Trautwein, a top official with the National Retail Federation, said in a statement. “We appreciate the Administration’s recognition of employer concerns and hope it will allow for greater flexibility in the future.”

But others maintained that the provision will never be workable.

“Temporary relief is small consolation,” said Amanda Austin, director of federal public policy with the National Federation of Independent Business, which last year lost the landmark Supreme Court case challenging the law’s constitutionality.

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As reported by Jeffrey Young Huffington Post 112012

 

Health insurance consumers won’t be discriminated against because of pre-existing conditions, can’t be charged more because of gender and will be guaranteed a basic set of benefits under historic new federal regulations published Tuesday.

Think of them as the Patients’ Bill of Rights that eluded former President Bill Clinton more than a decade ago. The regulations carry out the promises of President Barack Obama’s health care reform law, which will extend health insurance coverage to 30 million people over a decade and outlaw some of the industry’s most notorious practices.

Health insurance companies, state regulators and consumer advocates have eagerly awaited these rules since Obama enacted the health care overhaul in March 2010.

The details contained within the 331 pages of regulations are crucial for health insurance companies and states preparing for the new options that will be available to uninsured people and small businesses starting in 2014. The health insurance exchanges, online marketplaces where consumers can shop for plans and determine whether they qualify for tax credits to pay for private insurance coverage or Medicaid benefits, are slated to be open for business on Oct. 1, 2013.

“Americans in all 50 states will have access to an exchange and the benefits of the new law,” Health and Human Services Secretary Kathleen Sebelius said on a conference call with reporters Tuesday. “Beginning in October next year, families and small-business owners everywhere will be able to shop for affordable, quality health coverage.”

The Department of Health and Human Services published three separate regulations Tuesday. Broadly, the rules restate the health insurance market reforms in Obama’s health care law. But health insurance companies and state officials that aren’t actively resisting the implementation of Obamacare need the details to ensure that health insurance exchanges are ready, and health plans available for sale on time.

One lays out the rules requiring health insurance companies to sell coverage to anyone who applies, prohibits charging women more than men, limits how much people must pay additionally based on age, where they live, family size and whether they use tobacco, and guarantees renewal of health coverage every year.

A second set of regulations spells out which benefits all health insurance plans sold on the exchanges must cover — 10 categories of medical care, including emergency services, hospital stays, maternity care, prescription drugs and preventive medicine. In addition, the rule explains how states must designate an insurance product already on the market as a “benchmark plan” to serve as a model for what the new insurance products will cover starting in 2014. This regulation also sets up how health insurance companies must prove their plans will cover at least 60 percent of a consumer’s average annual medical expenses.

The cost of health insurance on the exchanges will be subsidized using tax credits for people with incomes up to 400 percent of the federal poverty level, which is $44,680 this year. People who make up to 133 percent of poverty, $14,856 in 2012, will qualify for Medicaid in states that opt into an expansion of the health program for the poor.

The Obama administration published a third rule on “wellness” programs that employers include in workers’ health benefits, such as discounts to employees who quit smoking, lose weight or lower their cholesterol. The new regulations are designed, in part, to prevent companies from using the programs to set prices to discriminate against workers who don’t meet the wellness programs’ standards.

Publishing these regulations is just one small step toward 2014, however, and major obstacles remain. As of Monday, just 17 states and the District of Columbia had committed to creating a health insurance exchange themselves as the law sets out, according to a tally by the Henry J. Kaiser Family Foundation. The federal government will have to step in, and partially or completely establish these exchanges in the rest of the states, including those run by Republican governors like Rick Perry of Texas who have vowed continued opposition to the law.

“Now that the law is here to stay, I’m hopeful that states and other partners will continue to work with us to implement the law,” said Sebelius, who offered to meet with governors who have outstanding questions about states’ role in carrying out the health care reform law. Florida Gov. Rick Scott (R), an ardent opponent of Obamacare, last week wrote Sebelius requesting a sit-down.

The administration hasn’t yet detailed how it will handle the workload of establishing so many health insurance exchanges on its own but Gary Cohen, the director of the Center for Consumer Information and Insurance Oversight, vowed that it would get  done. “Absolutely, we will be ready. There will be an exchange in every state open for business on Oct. 1 of next year,” he said on the conference call.

Eight states also already have declared they would not participate in the Medicaid expansion, which will curtail Obama’s goal of extending health coverage to the poorest people in those states. When the U.S. Supreme Court upheld the health care law in June, it also permitted states to refuse the Medicaid expansion, which the Congressional Budget Office says will result in 3 million fewer people gaining health coverage.

The benefits and consumer protections in the new regulations are in addition to other provisions of the health care reform law already in place, such as forbidding insurance companies from denying coverage to children with pre-existing conditions, and allowing young adults to remain on their parents’ health plans until they turn 27.

As reported by Mike Sacks for the Huffington Post

WASHINGTON — After the Supreme Court oral arguments in the health care case Tuesday morning, the Obama administration better start preparing for the possibility of a future without the individual mandate.

From the very start, things did not go well for the government’s argument that the requirement under the Affordable Care Act that virtually all Americans have health insurance or pay a penalty is constitutional.

U.S. Solicitor General Donald Verrilli began his argument not with his usual calm and clear delivery, but rather with a case of coughs that seemed to take him off his game.

And just as he was starting to recover his composure, Justice Anthony Kennedy, a key swing vote, asked, “Can you create commerce in order to regulate it?” Kennedy’s question adopted the framing of the case put forward by those challenging the mandate.

From there, the barrage against Verrilli did not relent until he sat down nearly an hour later.

The conservative justices appeared particularly concerned that if they upheld the mandate, Congress would be loosed to regulate nearly anything else it deemed a national problem.

Verrilli argued that the health care market’s unique features allow Congress to require the uninsured to purchase health insurance.

“The health care market is characterized by the fact that, aside from the few groups that Congress chose to exempt from the minimum coverage requirement, … virtually everybody else is either in that market or will be in that market,” Verrilli said. Plus, he said, “people cannot generally control when they enter that market.”

Chief Justice John Roberts responded, “The same, it seems to me, would be true, say, for the market in emergency services: police, fire, ambulance, roadside assistance, whatever.”

When Verrilli said those services do not constitute markets, Justice Samuel Alito asked what would keep the government from applying to burial services — which Verrilli conceded do constitute a market — the same rationale about preventing cost-shifting that it used for health care.

Verrilli never quite answered that question, pointing instead to the “billions of dollars of uncompensated costs” that distort the health insurance market.

Alito then flipped the tables, saying that the mandate will require young, healthy people to pay more per year for insurance than they would pay for health care out-of-pocket, thus forcing them “to subsidize services that will be received by somebody else.”

“If you’re going to have insurance, that’s how insurance works,” Justice Ruth Bader Ginsburg argued back, in the first of the four-justice liberal bloc’s attempts to shore up the government’s case.

She and Justices Stephen Breyer and Sonia Sotomayor would all leap in to make the government’s case themselves after Justice Antonin Scalia invoked the prospect of a broccoli mandate.

Verrilli could not gain traction with his alternative arguments that the mandate falls within Congress’ ability to pass laws “necessary and proper” to effectuate its constitutionally enumerated power to regulate commerce. Scalia, who relied on this clause in 2005 to uphold a federal ban on cultivating marijuana for personal consumption, said the individual mandate may be necessary to carry out the Affordable Care Act, but it is not proper “because it violated the sovereignty of the States.”

“If the government can do this, what, what else can it not do?” Scalia asked.

After a brief halftime, Paul Clement, a former U.S. solicitor general, began his argument on behalf of the 26 states challenging the mandate.

If Verrilli struggled, Clement shined. The conservative justices remained largely silent as he skated through the liberals’ heavy questioning.

“The mandate represents an unprecedented effort by Congress to compel individuals to enter commerce in order to better regulate commerce,” he began, employing the same terms Kennedy used to describe the mandate throughout the government’s argument.

When Breyer rolled out a multi-part question seemingly designed to be his tour de force on the mandate’s obvious constitutionality, Clement cut the legs out from under it, noting that Breyer was talking about the wrong constitutional provision.

Roberts then asked Clement to address the government’s contention that “everybody is in this market, so that makes it very different than the market for cars.” But it was hard to view this question as anything but diplomatic after Roberts’ own clear antagonism to the same contention during Verrilli’s hour.

Instead, Roberts appeared to favor the challengers’ belief that the mandate regulates the insurance market, not the health care market, and the consumption of insurance, unlike health care, is not an inevitable fact of life.

“We don’t get insurance so that we can stare at our insurance certificate,” Justice Elena Kagan responded when Clement offered her that argument. “We get it so that we can go and access health care.”

Clement parried that remark and concluded his time before the justices apparently unscathed by the liberals’ attacks.

Michael Carvin, representing the National Federation of Independent Business and several individuals, used his half hour as a sort of end-zone dance for the seeming defeat of the mandate, going so far as to chuckle at questions from Breyer and Sotomayor.

When Verrilli returned for his rebuttal, all he could do was remind the justices of their “solemn obligation to respect the judgments of the democratically accountable branches of government.”

Whether one or more of the Supreme Court’s conservatives will ultimately come to that conclusion, and thereby defy the expectations they set on Tuesday morning, is anyone’s guess.

As reported by Courier Post

Written by
ANGELA DELLI SANTI and BETH DeFALCO

TRENTON — Republican Gov. Chris Christie and Democratic Senate President Stephen Sweeney reached a deal Wednesday to change retiree pension and health benefits by requiring public workers to pay more for both.

The deal, if approved by the Legislature, would require bigger contributions from all public workers beginning July 1, a person who has been briefed told The Associated Press. The person insisted on anonymity because the deal has not been made official.

It would also mean that public workers’ health benefits would be legislated, not negotiated, as they are now. Christie has been pushing for legislative changes; union leaders have been opposed.

An official announcement is planned for later Wednesday. Details were still being worked out by Democrats who control the Senate.

Assembly Speaker Sheila Oliver, also a Democrat, has been involved in the talks over the past several weeks, but it’s not known whether she agrees with the deal. Her spokesman, Tom Hester Jr., declined to comment Wednesday.

The governor’s office did not respond to messages for comment.

The pension and retirement health systems are both underfunded by tens of billions of dollars. The proposal is designed to reduce the long-term indebtedness of both systems.

One provision of the deal would require the state to make its annual pension payment. Governors of both parties have skipped or greatly reduced their pension contribution in most of the past 20 years.

The deal would raise pension contributions immediately by at least 1 percent for public workers such as local police and firefighters; teachers; state police; and state, county and municipal workers. Judges, who now put 3 percent of salary toward their pensions, the least of any public worker group, would see that amount increase to 12 percent.

The deal also would require employees to pay more for health care under a new salary-based contribution formula that would be phased in over four years. The rate could be as high as 30 percent of the cost of the premium for top wage earners and as low as 3 percent for the lowest-paid employees. Most workers now pay 1.5 percent of their salary toward health care regardless of the cost of their plan.

The proposed state budget for the fiscal year that starts July 1 relies on more than $300 million in savings from health benefits reforms.

The Communication Workers of America, the state’s largest public worker union, wants health care to remain a collective bargaining issue. The union representing 55,000 state and local employees is in negotiations with the Christie administration over a new contract; its current contract expires June 30.

“This proposal destroys collective bargaining,” said Hetty Rosenstein, the union’s state director. “It’s completely unaffordable for anybody — it does not one thing to actually save health care dollars, all it does is shift them.”

“All over this country there is a fight to protect collective bargaining,” Rosenstein said, “and we think Democrats in New Jersey should join that fight.”

The union’s health care giveback proposal relies on increased cost-sharing by employees, bulk purchasing of prescription drugs and updated medical record-keeping to reduce costs by $240 million in the fourth and final year of the contract.

 

Written by Arthur Delaney for Huffington Post

Add Pennsylvania and Wisconsin to the list of states considering cuts to unemployment insurance.

The Pennsylvania General Assembly needs to pass a law in order for the state to remain eligible for the federal Extended Benefits program for the rest of the year, which provides the final 20 weeks of checks in Pennsylvania for people who use up 73 weeks of combined state and federal aid. Within the past two months, lawmakers in Michigan, Missouri and Florida permanently slashed state unemployment aid in bills that preserve temporary federal aid.

Two Republican-sponsored measures moving through the GOP-controlled Pennsylvania statehouse would achieve similar results. And in Wisconsin, a proposal by Republican Gov. Scott Walker would restore the Extended Benefits program after local lawmakers let it lapse with virtually no public debate last month. But Walker’s bill would also permanently install a one-week waiting period for new claimants before any jobless claims are paid, relieving Wisconsin businesses of a $45.2 million tax burden. (Wisconsin is one of 13 states that had no waiting week in 2010.)

“Without knowing exactly how the state arrived at the $45.2 million figure, it is safe to say that a roughly equivalent amount will come out of workers’ pockets,” said Mike Evangelist of the National Employment Law Project, a worker advocacy group.

States pay for the first 26 weeks of unemployment benefits, and during recessions the federal government pays for extra weeks. While current federal unemployment benefits will only be around until January barring an unlikely congressional reauthorization, changes to state law will be permanent.

The bill in the Pennsylvania House of Representatives would save the state $632 million chiefly by cutting the average weekly payment from $324 to $277, according to Sharon Dietrich, an attorney with Community Legal Services, a nonprofit group that advocates for poor people in Pennsylvania. The bill in the Pennsylvania Senate — which Dietrich said she considers “way more innocuous” — would, like its counterpart in the House, tighten work-search requirements, but would only result in a net spending decrease of $50 million, Dietrich said. Each bill will reach the floor of its respective chamber early next week.

“On June 11, approximately 45,000 unemployed Pennsylvanians who currently qualify for federal extended benefits will be dropped from the unemployment rolls unless we slightly modify the state law,” State Sen. John Gordner (R) said in a statement.  “It costs the state no money to qualify for these fully funded federal benefits through the end of the year, and results in an estimated $150 million in economic benefits.”

South Carolina is also considering cutting state aid, and lawmakers in North Carolina and Tennessee are still debating measures to revive the EB program after they let it die last month.

And in the U.S. Congress, Republican lawmakers are pushing a bill that would give states leeway to trim federal aid to the unemployed to use the money instead to repay federal unemployment government loans

KEVIN FREKING   02/19/11 08:42 PM   AP

As reported in Huffington Post

WASHINGTON — State officials had plenty of warning. Over the past three decades, two national commissions and a series of government audits sounded alarms about the dwindling amount of money states were setting aside to pay unemployment insurance to laid-off workers.

“Trust Fund Reserves Inadequate,” federal auditors said in a 1988 report.

It’s clear now the warnings were pretty much ignored. Instead, states kept whittling away at the trust funds, mostly by cutting unemployment insurance taxes at the behest of the business community. The low balances hastened insolvency when the recession hit, leading about 30 states to borrow $41.5 billion from the federal government to pay unemployment benefits to their growing population of jobless.

The ramifications will be felt for years.

In the short term, states must find the money to pay interest on the loans. Generally, that involves a special tax on businesses until the loan is repaid. Some states could tap general revenues, making it harder to pay for schools, roads and other state services.

In the long term, state will have to replenish their unemployment insurance programs. That typically leads to higher payroll taxes, leaving companies with less money to invest.

Past recessions have resulted in insolvencies. Seven states borrowed money in the early 1990s; eight did so as a result of the 2001 recession.

But the numbers are much worse this time because of the recession was more severe and the funds already were low when it hit, said Wayne Vroman, an analyst at the Urban Institute, a liberal-leaning think tank based in Washington.

The Obama administration this month proposed giving states a waiver on the interest payments due this fall. Down the road, the administration would raise the amount of wages on which companies pay federal unemployment taxes. Many states probably would follow suit as a way of boosting depleted trust funds.

Businesses pay a federal and state payroll tax. The federal tax primarily covers administrative costs; the state tax pays for the regular benefits a worker gets when laid off. The Treasury Department manages the trust funds that hold each state’s taxes.

Each state decides whether its unemployment fund has enough money. In 2000, total reserves for states and territories came to about $54 billion. That dropped to $38 billion by the end of 2007, just as the recession began.

Over the next two years, reserves plummeted to $11.1 billion, lower than at any time in the program’s history when adjusted for inflation, the Government Accountability Office said in its most recent report on the issue. Yet benefits have stayed relatively flat, or declined when compared with average weekly wages.

“If you look at it from the employers’ standpoint, they’re not going to want reserves to build up excessively high because then there’s an increasing risk that advocates for benefit expansion would point to the high reserves and say, ‘We can afford to increase benefits,'” said Rich Hobbie, executive director of the National Association of State Workforce Agencies.

A review of state unemployment insurance programs shows how states weakened their trust funds over the past two decades.

In Georgia, lawmakers gave employers a four-year tax holiday from 1999-2003. Employers saved more than $1 billion, but trust fund reserves fell about 40 percent, to $700 million. The state gradually has raised its unemployment insurance taxes since then, but not nearly enough to restore the trust fund to previous levels. The state began borrowing in December 2009. Now it owes Washington about $588 million.

Republican Mark Butler, Georgia’s labor commissioner, said his state had one of the lowest unemployment insurance tax rates in the nation when the tax holiday was enacted.

“The decision to do this was not really based upon any practical reasoIt was based on a political decision, which I think, by all accounts now, we can look back on and say it was the wrong decision,” Butler said. “Now we find ourselves in a situation where we’ve had to borrow money and that puts everyone in a tight situation.”

In New Jersey, lawmakers used a combination approach to deplete the trust fund. The Legislature expanded benefits and cut taxes, as well as spending $4.7 billion of trust fund revenue to reimburse hospitals for indigent health care. The money was diverted over a period of about 15 years and helps explain why the state’s trust fund dropped from $3.1 billion in 2000 to $35 million by the end of 2010. The state has had to borrow $1.75 billion from the federal government to keep the program afloat.

“It was a real abdication of responsibility and a complete misunderstanding of how you finance an unemployment insurance fund – to make sure you have sufficient money in bad economic times,” said Phillip Kirschner, president of the New Jersey Business and Industry Association. “In good economic times you build up your bank account, but in New Jersey, they said, ‘Well, we have all this money, let’s spend it.'”

California took its own road to trust fund insolvency. Lawmakers kept payroll tax rates the same, but gradually doubled the maximum weekly benefit paid to laid-off workers to $450. The average benefit now is about $300 and is paid for about 20 weeks.

Loree Levy, spokeswoman for the California Employment Development Department, said lawmakers were warned of the consequences.

“We testified at legislative hearings that the fund would eventually go broke and would become permanently insolvent if legislation wasn’t passed to increase revenue,” Levy said.

California has borrowed $9.8 billion to keep unemployment insurance payments flowing. It owes the federal government an interest payment of $362 million by the end of September.

In Michigan, unemployment insurance tax rates declined from 1994 through 2001. The trust fund prospered during those years because of the healthy economy and low unemployment rate. Then the recession arrived and reserves plunged. In response, Michigan lawmakers passed legislation that lowered the amount of wages subject to unemployment taxes from $9,500 to $9,000. They increased the maximum weekly benefit from $300 to $362. The trust fund dropped from $1.2 billion to $112 million over the next four years. In September 2006, Michigan was the first state to begin borrowing from the federal government.

Other states held their trust funds purposely low as part of an approach called “pay-as-you-go.” Texas is a nationally recognized leader of this effort. Its philosophy is that, in the long run, it’s better for the economy to keep the maximum level of dollars in the hands of businesses rather than government. Texas had to borrow $1.3 billion in 2009. State officials have no regrets about their policy.

“By keeping the minimum in the (trust fund), Texas is able to maximize funds circulating in the Texas economy, allowing for the creation of jobs and stimulation of economic growth,” said Lisa Givens, spokeswoman for the Texas Workforce Commission.

The pay-as-you-go approach goes against the findings of a presidential commission that looked into the issue of dwindling trust funds in the mid-1990s.

“It would be in the interest of the nation to begin to restore the forward-funding nature of the unemployment insurance system, resulting in a building up of reserves during good economic times and a drawing down of reserves during recessions,” said the Advisory Council on Unemployment Compensation, which President Bill Clinton appointed.

Hobbie, from the association representing state labor agencies, said there’s no way to tell which approach is better over the long haul. He acknowledged that keeping reserves at the minimum in good times goes against one of the original aims of the program – to act as an economic stabilizer in bad times. That’s because businesses are asked to pay more in taxes, which leaves them less money to invest in their company.

A survey from Hobbies’ organization found that 35 states raised their state unemployment taxes last year.

Hobbie said he suspects that some states allowed reserves to dwindle out of complacency.

“I think we just got overconfident and thought we wouldn’t experience the bad recessions we had in, say the mid ’70s, and then this big surprise hit,” he said.

 

Friday, January 21, 2011

This whole health-care thing isn’t quite working out the way Republicans planned. My guess is that they’ll soon try to change the subject – but I’m afraid they’re already in too deep.

Wednesday’s vote to repeal President Obama’s health insurance reform law was supposed to be a crowning triumph. We heard confident GOP predictions that cowed Democrats would defect in droves, generating unstoppable momentum that forced the Senate to obey “the will of the people” and follow suit. The Democrats’ biggest domestic accomplishment would be in ruins and Obama’s political standing would be damaged, perhaps irreparably.

What actually happened, though, is that the Republican majority managed to win the votes of just three Democrats – all of them Blue Dogs who have been consistent opponents of the reform package anyway. In terms of actual defectors, meaning Democrats who changed sides on the issue, there were none. This is momentum?

The unimpressive vote came at a moment when “the will of the people” on health care is coming into sharper focus. Most polls that offer a simple binary choice – do you like the “Obamacare” law or not – show that the reforms remain narrowly unpopular. Yet a significant fraction of those who are unhappy complain not that the reform law went too far but that it didn’t go far enough. I think of these people as the “public option” crowd.

A recent Associated Press poll found that 41 percent of those surveyed opposed the reform law and 40 percent supported it. But when asked what Congress should do, 43 percent said the law should be modified so that it does more to change the health-care system. Another 19 percent said it should be left as it is.

More troubling for the GOP, the AP poll found that just 26 percent of respondents wanted Congress to repeal the reform law completely. A recent Washington Post poll found support for outright repeal at 18 percent; a Marist poll pegged it at 30 percent.

In other words, what House Republicans just voted to do may be the will of the Tea Party, but it’s not “the will of the people.”

“The test of a first-rate intelligence,” F. Scott Fitzgerald wrote, “is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” By this standard, House Republicans are geniuses. To pass the “Repealing the Job-Killing Health Care Law Act,” they had to believe that the work of the nonpartisan Congressional Budget Office is both authoritative and worthless.

The CBO, which “scores” the impact of proposed legislation, calculated that the health-reform law will reduce federal deficits by at least $143 billion through 2019. Confronted with the fact that repeal would deepen the nation’s fiscal woes, Republicans simply claimed the CBO estimate to be rubbish. Who cares what the CBO says, anyway?

Er, um, Republicans care, at least when it’s convenient. Delving into the CBO’s analysis, they unearthed a finding that they proclaimed as definitive: The reform law would eliminate 650,000 jobs. Hence “Job-Killing” in the repeal bill’s title.

One problem, though: The CBO analysis contains no such figure. It’s an extrapolation of a rough estimate of an anticipated effect that no reasonable person would describe as “job-killing.” What the budget office actually said is that there are people who would like to withdraw from the workforce – sometimes because of a chronic medical condition – but who feel compelled to continue working so they can keep their health insurance. Once the reforms take effect, these individuals will have new options. That’s where the “lost” jobs supposedly come from.

The exercise in intellectual contortion that was necessary for the House to pass the repeal bill will be an excellent tune-up for what’s supposed to come next. “Repeal and replace” was the promise – get rid of the Democrats’ reform plan and design one of their own. This is going to be fun.

It turns out that voters look forward to the day when no one can be denied insurance coverage because of preexisting conditions. They like the fact that young adults, until they are 26, can be kept on their parents’ policies. They like not having yearly or lifetime limits on benefits. The GOP is going to have to design something that looks a lot like Obamacare.

Meanwhile, Obama’s approval ratings climb higher every week. Somebody change the subject. Quick!

March 17, 6:18 PM Political Buzz Examiner Ryan Witt

By now the health care reform bill has become something like Bigfoot in that everyone talks about it but few know what it really looks like if it exists at all.  For clarification there is in fact a “bill” which is set to be voted on by the House of Representatives this weekend.  The current bill was already passed by the Senate and has been analyzed extensively by experts. However in addition to the Senate bill the House also plans to vote on a “fix” to the bill which will then go back to the Senate.  The “fix” is not all together settled and is still being written after going through markup in the House Budget Committee (picture on left).

Still the fixes are relatively small because they must be in order to be passed through the reconciliation process in the Senate.  We therefore know most everything that the bill would do if it is passed this weekend.  Here is a plain language summary of the major provisions of the health care reform bill.

Would I Be Forced to Purchase Insurance?

Probably not.  If you already have employer-provided insurance you can keep it.  If you do not currently have any insurance you may have to purchase a plan by 2014.  Beginning in 2014 most Americans would have to purchase health care insurance or be forced to pay a fine.  If someone already has insurance (including through their employer) they would not need to worry about this provision.  For those who would be affected they could purchase insurance from anywhere but if they do not they would need to pay either $750 or 2% of their income, whichever is greater.  Exemptions would be granted for those in financial hardship which is measured using the poverty line.

Would My Current Insurance Be Affected?

Yes and no.  Yes in that any new plans would be regulated by the federal government.  The regulation would make plans provide a minimum of amount of benefits but not a maximum.  It would also implement consumer protections and an appeals process for consumers who want to dispute the decisions of their insurance companies on individual coverage.  The Congressional Budget Office estimates that premiums would go down under reform compared to the rate premiums would go up without reform.

Having said all that the reform plan “grandfathers” plans already in existence.  Therefore a plan currently in existence would be exempt to any changes at least for a while under the current bill.

What About This Exchange Idea and the Public Option?

There is no public option or new government provided insurance plan under the current bill.  Instead each state would have a health care insurance exchange where any individual can purchase health insurance.  The insurance plans in the exchange would have to meet federal regulation that would ensure they provide minimum benefits, etc.  Individuals who are currently covered by an employer-provided plan could not purchase form the exchange.  Undocumented immigrants could also not purchase from the plan. 

All plans in the exchange would be regulated by the federal government.  These regulations would include requirements that the plans provide a certain minimum level of coverage, that they do not discriminate based on pre-existing exclusions, that they spend a high percentage of their premiums on actual care (around 80%), and that they follow certain consumer protection laws.  In addition plans could no longer limit how much costs they are willing to cover.  In the past insurance companies would be able to limit their liability to $250,000 for example and stop paying once that limit was reached.

What Would Happen to Medicare?

The proposal would set up a board that would research and propose solution to reduce the costs of Medicare.  The board would be specifically prohibited from proposing anything which would amount to rationing care for the elderly.  Instead the proposal would focus on reducing waste and fraud while making Medicare more efficient.

What if I Can Not Afford Health Insurance?

Individuals who make between 100%-400% above the federal poverty level would be eligible to receive credits to assist them in purchasing health care insurance.  The amount of credit would generally go down the more income an individual made.  For the poorest the credit may pay for all of their health care premiums.

Would Employers Be Forced to Provide Insurance?

Maybe.  If a business has over 50 full-time employees they will be forced to offer health care coverage or face a $750 fee per employee.  Businesses with less than 50 employees would be exempted from providing coverage.

What About Medicaid?

Medicaid would be expanded to cover all individuals under the age of 65 who make less than 133% of the federal poverty level.  Currently the poverty level is around $18,000 for a family of three.

Does the Bill Pay for Abortions?

The bill keeps the current federal law on abortion funding in that federal funds could not be used directly to pay for abortion or abortion-related services.  The current bill does not include the abortion language in the House bill which put restriction on funding which were even more strict than the current law.  Essentially the House bill would have prevented individual receiving federal assistance from purchasing any health care plan (private or not) that provided abortion coverage.

What About Small Businesses?

Initially small businesses would receive a tax credit for up to 35% of the money they pay to purchase health insurance for their employees.  By 2014 that percentage would increase to 50%.  The idea is to help small businesses pay for health insurance coverage since they currently do not have the bargaining power of larger businesses.

Small businesses would be allowed to join forces in order to purchase insurance for their employees.  In other words five small businesses could all negotiate with an insurance company together in order to get a lower rate as big businesses currently do.

How is It All Paid For?

First there is a cadillac plan tax.  If an insurance plan costs $8,500 for an individual or $23,000 for family it would be taxed at 40% for any amount above those amounts.  Most health care plans cost much less than those amounts in premiums.

Secondly there are taxes on health insurance companies, pharmaceuticals, and medical supply companies.  Each of these companies would be assessed fees.  Pharmaceuticals would pay $2 billion, medical supply companies would pay $2.3 billion, and health insurance companies would pay $2 billion starting in 2011 and increasing to $10 billion by 2017.

Finally the bill would count on increased efficiency and reduced waste in Medicare to offset some of the other costs.  Overall the bill was projected to save a little over $100 billion in the first ten years of its existence and well over $700 billion after that.  Those projections were done by the non-partisan Congressional Budget Office.

Written By Arthur Delaney   reported on Huffingtonpost.com

The U.S. economy lost 467,000 jobs in June as the national unemployment rate rose to 9.5 percent, the government announced on Thursday morning. While that’s only one-tenth of a percentage point from May, the current rate is the highest rate in 26 years.

Heidi Shierholz, an economist with the Economic Policy Institute, said that the loss of 6.5 million jobs since the start of the recession combined with the growth of the workforce means that the gains of the previous business cycle have been completely blown away.

“This is the only recession since the Great Depression to wipe out all jobs growth from the previous business cycle, a devastating benchmark for the workers of this country and a testament to both the enormity of the current crisis and to the extreme weakness of jobs growth from 2000-2007,” said Shierholz in a statement.

The ranks of the long-term unemployed — people out of work for 27 weeks or more — grew by 433,000 in June to a total of 4.4 million. Three in 10 of the unemployed are now long-term unemployed. The collapse of the housing industry contributes to their plight.

“We know right now because of the housing crisis that people can’t move to find another job,” Shierholz said. “People that in previous recessions may have been able to relocate to find another job can’t now.”

The Huffington Post has been profiling people who’ve been out of work for long periods of time. Marvin Bohn of Ohio hasn’t worked for a year and has been paying for his meds out-of-pocket. Steve Dittmann of Kansas said of the unemployed life, “I feel like I’m on the other side of a Plexiglass wall looking in.”

A broader measure of labor underutilization that accounts for people who’ve stopped looking for work hit 16.5% in June, a 0.1 percentage point increase.

“In June, there were large decreases in manufacturing, construction, and professional and business services,” said Bureau of Labor Statistics Commissioner Keith Hall in a statement. “Together, these three sectors have accounted for nearly three-quarters of the jobs lost since the recession began.

Many economists have predicted that even when the recession is technically over with the economy beginning to expand, there will be a “jobless recovery” as unemployment hovers in the double-digits.

Thu May 21, 2009 10:24am EDT

Reporting by Jeremy Pelofsky; Editing by James Dalgleish

WASHINGTON (Reuters) – The U.S. economy will likely start growing again in the second half of this year but unemployment will likely keep rising through 2010 to peak over 10 percent, the Congressional Budget Office said on Thursday.

“The growth in output later this year and next year is likely to be sufficiently weak that the unemployment rate will probably continue to rise into the second half of next year and peak above 10 percent,” CBO Director Douglas Elmendorf said in prepared testimony to the U.S. House Budget Committee.

It will likely take several years for the unemployment rate to fall back to levels seen before the recession hit, in the neighborhood of 5 percent, he said in the prepared remarks.

 

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