Obamacare costs to taxpayers rise further as HHS reveals more costly fraud
On May 17, 2014, The Fiscal Times reported
that the government is:
“paying incorrect subsidies to more than 1
million Americans for their health plans in the new federal insurance
marketplace and has been unable so far to fix the errors, according to internal
documents and three people familiar with the situation.”
A 7-page slide presentation created by HHS
confirms that one-in-four people who have signed up for Obamacare have “data
discrepancies.”
Reports are that some two million people’s
health care coverage may be at risk. Out of some 8.8 million persons who have
signed up for coverage, about 5.5 million are in the federal insurance exchange
receiving reduced rates, or benefits, to pay for their health insurance
policies.
The sliding scale subsidized policies are
priced based on income, family size, and geographical location of the
individual. Under the law, only citizens and legal immigrants are entitled to
subsidized coverage.
The presentation shows that the data errors
involve information concerning details on income, citizenship and immigration
status.
Julie Bataille, Director of Center for
Medicare and Medicaid’s Office of Communications, says that the discrepancies
can be resolved over the summer, however there is a system in place to “turn
off” benefits for anyone receiving benefits but who are ineligible.
“The fact that a consumer has an inconsistency
on their application does not mean there is a problem on their enrollment,”
said Bataille. “Most of the time what that means is that there is more
up-to-date information that they need to provide to us.”
Illegal immigrants are not eligible for health
care coverage via the exchanges and the current cost of treating uninsured
immigrants who entered this country illegally is estimated by The Center for
Immigration Studies to be $4.3 billion a year, primarily at emergency rooms and
free clinics.
American taxpayers are still paying for those
costs, as well as the cost of subsidies offered through the federal exchanges.
The insurance exchanges involved have been
offering subsidized private coverage to lower-income and middle-class people
who are not able to access private health care via their work or who do not
have work. Some consumers will be asked
to repay if they have received “too generous” of a subsidy.
Because the program has been structured around
tax credits, the IRS can deduct an overpayment from a taxpayer’s following-year
refund. But those deductions can only be made if the individual has a job and
pays taxes.
Of those affected, discrepancies are said to
be:
- 1.2 million related to income
- 505,000 related to immigration
- 461,000 related to citizenship information
- Correcting the issues will require a
“laborious effort requiring hands-on work from a legion of -- workers employed
by government contractor Serco, Inc.”
The administration says it will be
triple-check consumer information to ensure that subsidy benefits are only
being awarded to persons who are eligible due to income, immigration and
citizenship status, among other factors.
In the meantime, the cost of fixing the shoddy
rollout and administration of Obamacare continues to crush the middle class.
From The Heritage Foundation, following are
the five most prevalent and harmful burdens the middle class will be forced to
bear under Obamacare:
1. More taxes. Obamacare imposes $502 billion
of new or increased taxes and fees. Heritage expert Curtis Dubay explains that
several of the taxes “will ultimately be passed on to [middle-income families]
through higher prices. These include the fees on medical device manufacturers,
pharmaceutical companies, and health insurance companies and the new tax on
tanning services.”
The middle class will also be burdened by the
individual mandate to purchase insurance, new restrictions and limits on their
tax-free health and flex savings accounts, and a new tax on high-cost
(Cadillac) health plans.
Starting next year, Obamacare increases the
Medicare payroll tax from 2.9 percent to 3.8 percent for individuals earning
above $200,000 and couples earning more than $250,000 and for the first time
extends the tax to income earned from investment. But the threshold for the
higher rate isn’t indexed to inflation and will impact more middle-class
families each year.
The 2012 Medicare trustees report states, “By
the end of the long-range projection period, an estimated 80 percent of workers
would pay the higher tax rate.”
2. Loss of existing coverage. As many as 35
million people could lose their existing coverage because of Obamacare. This is
because Obamacare creates financial incentives for employers to drop coverage
for their employees.
One report that examined the health insurance
costs of 71 fortune 100 companies estimated savings of $422.4 billion between
2014 and 2023 if they dropped their employee coverage and paid the employer
mandate penalty. Another study predicts that 30 percent of employers will
definitely or probably drop coverage under Obamacare.
3. Higher premiums. Americans who purchase
coverage in the new Obamacare exchanges will find that health insurance is
still very expensive. American Enterprise Institute resident scholar Scott
Gottlieb, MD, explains, “For a family of four, premiums on even one of the
lower priced ‘silver’ options could still cost more than $15,000 annually on
the exchanges.”
A family’s income might exclude them from
subsidies but not be high enough to pay $15,000 for Obamacare’s
government-approved insurance. “A family of four earning $90,000 annually takes
home about $60,000 after local, state, and federal taxes. If they lose
workplace coverage, and move onto the exchanges, they could find themselves
spending as much as 25 percent of the family’s take home pay for an average
policy ($15,000 for the ‘silver’ plan).”
4. Rising health care costs. As premiums and
overall health care costs continue to rise, middle-class families, including
those receiving a subsidy, will be left paying more. Beginning in 2019,
Obamacare’s cost-containment strategy for the exchanges is to hold the total
cost of the subsidies to 0.504 percent of GDP.
Charles Blahous, a Medicare trustee, concludes
that “this limitation would likely cause the federal subsidies to grow less
rapidly over the long term than the cost of health care and thus require
low-income individuals in the exchanges to shoulder a steadily increasing
percentage of their health costs.
5. More government control of health care.
Obamacare transfers massive authority over to the Secretary of Health and Human
Services and expands the role of government in delivering care and coverage.
This huge expansion of government’s role in
health care delivery means that, by 2020, more than half of all Americans will
be dependent on the federal government for health care and government
bureaucrats will be in charge of deciding what you can and cannot buy and the
level of health care you will receive.
With Americans paying for insurance via the
exchanges, a repeal of the law becomes increasingly impossible. Meaning that the program will continue to be
funded via higher premiums for those who are not eligible (i.e., working) for
subsidized coverage and increased consumer taxes.
GOP pollster David Winston, who advises House
Republicans, says that “Obamacare” has remained unpopular”.
“The challenge for Republicans is to make this
a policy fight, not a political fight. It’s incumbent upon Republicans to come
up with an alternative. For most people, going back to where we were is not an
option.”
Winston does not expect the laws popularity
among Republicans to change much before the November midterm elections, saying,
“the challenge, and opportunity, for Republicans is to come up with solutions
to new issues voters are experiencing, such as unexpectedly high deductibles.”
“This plan has created a whole new raft of
problems, and what they want to see is those problems resolved, and so the idea
of shifting back to the previous set of problems versus the existing set of problems
is not necessarily where they’re focused.”
“While health care is a very important issue,
Republicans must focus on what is the overwhelmingly top issue — jobs and the
economy, just like they did in 2010 with the question ‘Where are the Jobs?’ ”
said David Winston.
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