Fix Health Care Policy

Fiscal Cliff Deal Undoes Part of Obamacare

Though the government’s entitlement spending is still spiraling out of control, taxpayers have finally caught a break: The recently passed “fiscal cliff” deal included the repeal of one of Obamacare’s worst provisions, the Community Living Assistance Services and Supports (CLASS) Act.

The CLASS Act was a new entitlement program included in Obamacare. CLASS was created as a voluntary, government-run long-term care (LTC) program. It was supposed to be fully funded from the premiums paid by its beneficiaries and require no federal taxpayer dollars.

But the program was so poorly designed—much like the rest of Obamacare—that even the Obama Administration had to admit it wouldn’t work. A letter to Congress in 2011 from a CLASS administrator warned of extreme adverse selection in the program, stating that “if healthy purchasers are not attracted to the CLASS benefit package, then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market. This imbalance in the beneficiary pool would cause the program to quickly collapse.”

Many experts warned that the program would require either a mandate to participate or a permanent taxpayer bailout.

Read the rest on The Foundry…

Tags: CLASS Act, deal, fiscal cliff, ObamaCare, poorly designed, taxpayer dollars

Medicare Cuts vs. Medicare Reform

As the discussions over the fiscal cliff continue, the debate over entitlement reform is getting confused. The issue is not only how much savings constitutes reform, but also the underlying policies that get you there. Thus far in the fiscal cliff negotiations, Republicans have pushed for greater spending cuts, namely in Medicare.

To that point, a National Journal article commented, “In just a few short weeks, the dominant Republican line on Medicare has shifted from attacking the Democrats for making cuts to the program to demanding a new round of cuts to reduce the federal deficit.”

But this claim cannot be taken at face value, as all spending reductions are not created equal.

There are major distinctions between Obamacare’s Medicare cuts and Medicare reforms that would reduce spending and extend the life of the program.

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Tags: fiscal cliff, market competition, Medicare, ObamaCare, premium support, price controls, unsustainable

To Stop Taxmageddon, Repeal Obamacare

Unless President Obama and Congress take action soon, Taxmageddon will hit on January 1, 2013. Taxmageddon is a $494 billion tax increase for 2013 alone. It is made up of several expiring tax policies and the implementation of new Obamacare tax increases that all kick in at the start of next year.

Five of Obamacare’s 18 new taxes begin in 2013, and they would raise $23 billion for the year. Heritage tax policy expert Curtis Dubay explains that two of them will be especially harmful: an increase in the Medicare payroll tax and a new medical device tax.

Starting January 2013, Obamacare increases the Medicare payroll tax from 2.9 percent to 3.8 percent for individuals with income over $200,000 a year ($250,000 for couples). This increase will hinder economic growth and deter job creation for small businesses.

(Read the rest on The Foundry…)

Tags: fiscal cliff, Medical device tax, Medicare payroll tax, Obamacare tax hikes, tanning tax, Taxmageddon

Premium Support Proposals: Key Elements and a Comparison

A new poll by Reason-Rupe shows that Americans support the structural reform of a premium support model for Medicare.

The current Medicare program has made $38 trillion of unfunded promises to seniors over the next 75 years, and the Part A trust fund is predicted to be bankrupt as soon as 2024. The gravity of Medicare’s fiscal mess makes reform inevitable.

With premium support, the government provides a contribution toward the cost of a health plan of the beneficiary’s choosing. Reason states, “For people not yet in the program and under the age of 55 right now, 65 percent of Americans favor changing Medicare into a program that would give recipients a credit that could be used to purchase private health insurance.”

Premium support proposals have been gaining popularity, even across party lines. There are now five major plans that include premium support for Medicare: (1) The Heritage Foundation’s Saving the American Dream, (2) the fiscal year 2013 House budget resolution (i.e., the Ryan proposal), (3) the Burr–Coburn plan, (4) the Wyden–Ryan plan, and (5) the Domenici–Rivlin proposal.

(Read the rest on The Foundry…)

Tags: bankrupt, fiscal cliff, Medicare, premium support, trustees report, unfunded promises