Author Archive

How the IRS Monitors Tax Credits

It’s not looking good for the essential enforcement mechanism of ObamaCare. It turns out that not only is the IRS prone to apply a political litmus test to applicants for tax-exempt status, but it isn’t even very good at issuing legally required tax credits.

One of the lesser-known provisions of the Affordable Care Act was an expanded tax credit for families that adopt children. According to a report from the National Taxpayer Advocate, domestic adoptions can cost up to $15,000 for fees and legal expense, so in 1996 Congress adopted a tax credit of up to $5,000 to help families offset some of those costs. The amount of the credit grew over time and was up to $11,650 by 2008. This was a credit against existing taxes, so only families that actually paid taxes would benefit, even though other families also were on the hook for the costs of adoption.

As part of the Affordable Care Act, Congress increased the amount of the credit to $13,170 per child and made it refundable for the tax years 2010 and 2011, so any family that adopted a child would be eligible even if they did not otherwise pay taxes. It put the IRS in charge of issuing these credits.

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Jun 05, 2013 | 23 comments | by

The Fourth Scandal

While most of the media are fixated on Benghazi, the IRS abuses, and the DOJ’s interest in reporters’ phone calls, the biggest scandal of all may be Kathleen Sebelius’ shakedown of health care companies to pay for activities Congress has refused to fund.

It is illegal for government officials to solicit money from companies they regulate, according to Sarah Kliff from The Washington Post. She writes –

Federal regulations do not allow department officials to fundraise in their professional capacity. They do, however, allow Cabinet members to solicit donations as private citizens “if you do not solicit funds from a subordinate or from someone who has or seeks business with the Department, and you do not use your official title,” according to Justice Department regulations.

That should be a no-brainer. But Ms. Sebelius has violated the law before. Michael Cannon of the Cato Institute reminds us that in 2012 –

…the U.S. Office of Special Counsel concluded that Sebelius violated the Hatch Act by campaigning for President Obama and other political candidates while traveling on official business, an offense for which other federal workers are fired.

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May 22, 2013 | 27 comments | by

The “Burden” of High Deductibles

The folks at Harvard really, really hate cost sharing (i.e., deductibles, coinsurance and co-pays) in health care. They are much less concerned about high premiums or taxes. At least that is the conclusion one might draw from a new article in Health Affairs.

The authors examined the fate of 393 families enrolled in high-deductible plans through Massachusetts’ Commonwealth Connector. The families were well off enough to be unsubsidized and enrolled in a Harvard Pilgrim health plan. These were compared to similar families in plans with no deductible. They were looking for –

…respondents’ reports of any financial burden, higher-than-expected out-of-pocket costs, or discussions of costs with doctors. To measure financial burden, we asked enrollees whether, in the prior twelve months in the Connector plan, they or a family member had had problems paying or had been unable to pay medical bills; had had to set up a payment plan with a hospital or doctor’s office; or had had trouble paying for other basic needs such as food, heat, and rent because of medical costs. An affirmative answer to any of these three questions was considered an indication of financial burden.

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May 16, 2013 | 34 comments | by

You Can Lead a Horse to Water…

I want to make just one observation based on Avik Roy’s outstanding write-up of the Oregon Medicaid project.

Most of the commentary has been shocked that there was no statistically significant improvement in health measures between people who were enrolled in Medicaid and those who were not.

I want to focus on a different issue, one that I have been hammering on in these pages ― that ObamaCare is unlikely to increase the number of people with insurance.

Before we even get to the outcomes question is the issue of whether very many people want to have insurance coverage, even when it is totally free.

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May 02, 2013 | 18 comments | by

Will the Number of Uninsured Rise Under ObamaCare?

It is cruelly ironic, but the massive law that was enacted to solve the problem of the uninsured in America is more likely to worsen it. This would be true even if the program is perfectly implemented and all the provisions come online on time and within budget.

How could this be? It is a multistep process. Stay with me for a second.

The more things change,
The more they stay the same.

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Apr 24, 2013 | 33 comments | by

Michael Novak Anticipated ObamaCare Thirty Years Ago

In his landmark 1982 book, The Spirit of Democratic Capitalism, Michael Novak identified why socialism was failing and capitalism was prevailing. This was before the policies of Ronald Reagan and Margaret Thatcher had really begun to have an impact on their economies and well before the collapse of the Soviet Union.

He noted that even dedicated Marxists had already begun to reinvent themselves in anticipation of the crushing change of fortunes. They were moving on to what they called democratic socialism, but Novak saw that as a contradiction in terms. You cannot have democracy without individual (not collective) rights, including the right of property, yet socialists continued to insist on collective ownership, or at least control over all property.

Novak cites a 1974 conference held in England to redefine what socialism means. One of the conference organizers, Stuart Hampshire said −

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Apr 12, 2013 | 28 comments | by

Medicare FFS Cut by 2 Percent

You may have been under the impression that the sequester cuts were aimed solely at defense and discretionary spending and that entitlements such as Social Security and Medicare would be unaffected. CMS recently issued this notice that Medicare will cut two percent from provider payments in its fee-for-service (traditional Medicare) program starting April 1 –

This listserv message is directed at the Medicare FFS program (i.e. Part A and Part B). In general, Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013, will incur a 2 percent reduction in Medicare payment. Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by 2 percent based upon whether the date-of-service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

HT: Donna Kinney.

Apr 10, 2013 | 11 comments | by

Dr. Carson on Health Care

Dr. Ben Carson made quite a splash at the National Prayer Breakfast the other day. Elsewhere I discuss the moral vision he provides in his book, America the Beautiful: Rediscovering What Made This Nation Great. But here I want to look at his recommendations for health reform.

Most people who saw the speech were thrilled (or appalled) that he called for universal Health Savings Accounts beginning at birth. This is a fascinating idea that would merit some deeper analysis. Unfortunately, he doesn’t mention it in his book, even though he devotes a chapter to health care.

Instead, his writing offers up some off-the-cuff emotional reactions to problems he has experienced. They are not well thought through and I expect he would write something very different if he had an opportunity to dig a little deeper. Let me start that rethinking here.

drCarson

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Apr 01, 2013 | 31 comments | by

Bill Frist Wants to Ban FFS

Here we go again. Once an idea gets fixed in certain minds, it never goes away. Politico reports –

The National Commission on Physician Payment Reform is calling for eliminating the fee-for-service model within seven years, starting with a five-year transition period to a blended payment system.

This commission is chaired by Bill Frist, MD, former Senate Majority Leader. He also wrote an op-ed with Steven Schroeder in which he says we can abolish FFS within five years. He writes –

Lawmakers, care providers and insurers must act now to change physician pay incentives to ultimately improve how care is delivered and ensure that the cost of that care is affordable for generations to come. That means moving away from fee-for-service now.

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Mar 27, 2013 | 17 comments | by

HRAs and Defined Contribution − Follow-Up

My last post, “Feds Ban Defined Contribution” generated quite a flurry of comments, both on the list and directly to me. The comments were all from people I respect and admire — and they were split about evenly between people who strongly agreed with my conclusion and people who vehemently disagreed. Wow.

Clearly it is an important topic that needs more attention. Fair warning, though, for those readers who are not into benefits issues — this is not an easy subject and it will not be resolved here. Most likely, if the law survives, it will be like ERISA and endlessly litigated. For a quarter of a century, it seemed that the Supreme Court issued ERISA decisions almost annually, and even then very few people really understood ERISA or how it applied to real life situations.

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Mar 26, 2013 | 30 comments | by
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