SCOTUS Upholds Affordable Care Act!

1Athena1

jankc: re: countries and population: what matters in terms of cost is the size of the economy. We have the world's largest economy and have one of the highest per capita incomes (Gross Domestic Product divided by population). Financially, we are more than capable of insuring everyone.

Speaking in really global terms, one disadvantage we have compared to similar economies (say, Japan and Western Europe) is that we spend much, much more on defense and less on social welfare. That is how our priorities have gone in the last several decades. Bush's two tax cuts for the rich and the war of choice in Iraq are two examples, but Bush is hardly the only president do act like that. The very general trend since WWII has been that European democracies have declined in power, relied more on the US for defense and also expanded their social welfare nets. We rose to military pre-eminence and entered the Cold War, still fight lots of wars and have a very big defense budget.

We are still fighting, in this country, to decide whether arms are more important than people's health. That is a constant tug of war in congress and it still divides fairly clearly along party lines.  This issue doesn't get nearly the mention it deserves, but historically, it will become more apparent (and already is to social scientists, historians and others who think - ie: NOT pundits or journalists).

alexandria58

Monday:

     On the question of health care as a universal right versus other necessities

      Many believe that eating and housing are universal rights.  That's why we have food stamps for people below the poverty level, and many places provide for subsidized housing.

       However, let us also recognize a significant difference between health care and other purchases.  Republicans keep talking about letting the free market rule and choice in health care.  Let's compare the two.  The grocery question.  You are on a fixed income.  You want to buy something to eat.  You could buy chicken or steak or you could buy lentils and rice.  All will provide the nourishment that you need, and even on a budget, you will still have some choice in foods that will be healthy and filling.   You can make the choice based on price. Also grocery stores can more freely compete, because they can cut prices in other to lure more customers.

    Same thing with housing.  There are all sorts of levels of housing available, including subsidized housing for the poor.   You can decide to go to apartment x because it is cheaper than apartment y. and landlords can adjust their prices depending on the market.  There will always be high end and low end housing.

   Now take health care.  You are diagnosed with a serious disease, oh, say, breast cancer.  There may be some choice in the doctor, there may be some choice in treatment, but ultimately, you are picking treatments and doctors not because of their price but because of what you think will give you the best chance to beat the disease and live a full life.  If you choose peanut butter over steak, there is no real consequence except that you may or may not enjoy your food - although I suppose in the long run, choosing steak does have life consequences.  If you choose a drug that is less effective but cheaper, you may not live as long. No one is going to say, come to us, we have cheaper cancer care.  They will say, come here, we'll save your life.  That's why the idea of price competition in health care doesn't work. Health care is unlike many other commodities in that the vaunted "choice" is somewhat illusory. 

     I was just listening to NPR on the history of health insurance and health care in this country.  One possible solution to the rising cost of health care is the Mayo clinic model - where doctors are salaried and the institution is non-profit.

      The ACA is not perfect, but it's a start.

QuinnCat

Kay - You are so correct about the time period Democrats held a majority in Congress.  First of all, Al Franken wasn't sworn in until July of 2009...6 months of the 2 year "majority" lost.  Joe Liebermann was counted as a Democrat, but he is actually an Independent who often went with Republicans during this period (including supporting John McCain for President).  Oh yeah...Ben Nelson, the DINO amongst DINOs.

 I am so sick of hearlng that "politicians didn't know what was in the bill."  I watch most of the Sunday news shows and I lost count of how many times one of the R's would say "the 2700 page bill that no one actually read."  Implying that it is too complicated (or they can't read, lol)..healthcare is complicated.  Their new mantra is they want "patient-centered healthcare" without saying what "patient-centered healthcare" is, but it fills the dead air created when the interviewer asks them what they would replace ACA with if they should successfully repeal it.  Never heard this term from their lips until last week.  Too bad for them they didn't actually get on the same page with the is it a "tax" or is it a "penalty" conundrum.  All silly stuff.  ACA was hashed out for months and months.  It's not the best solution but it attempts to get us there and the pro private sector crowd should be very happy as insurance companies and hospitals are the big winners.

Chickadee

Everyone of those "illiterate" politicians have large staffs whose only responsibility is to read and digest the proposed legislation on Capitol Hill and provide their boss with information. If they didn't read it or get a synopsis from their staff, they are lazy jerks who should be voted out.

bluedahlia

Chickadee, you're not being civilized!

Mardibra

Kayb - my reason for pointing out that I have never met anyone who had a claim denied is that it cant be a frequent thing.  So, because most people are currently covered by insurance and they like that coverage, ACA or anything beyond it scares the crap out of them.  These people also vote.  So, who knows what will happen?  I sure dont.

Chickadee

Blue, so sorry. Everyone of those "gentlemen or ladies" who were remiss in their homework should consider other careers.



Is that better?



50 years of living in and around DC tends to color my observations.

QuinnCat

You get to keep your health insurance under ACA!!

pupmom

And I, like so many others here, love that aspect of ACA! My insurance company has been completely awesome! 

Anonymous

Promises were made to post every bill on the internet at least 48 hours before a vote.  This bill wasn't posted in its entirety before the vote.  So many changes were made to the healthcare bill that eventually became ACA that even someone who had read everything that was available a week before would have had a hard time knowing what was actually included in the final version and what had been shifted out.  It is difficult if not impossible to read what doesn't exist.

If you know that something will fundamentally change a significant portion of the economy and you can't get a stratight answer about what those changes will be, sane people vote against making those changes until they get the answers needed to make an informed decision.

"We have to pass the bill to find out what is in the bill" - Nancy Pelosi.

rosemary-b

I have had a claim denied and I know many people who have. Insurance companies even deny treatments they are supposed to cover, by contract, because when most people read on their EOB that something isn't covered they believe it. I have fought the insurance company many times and won in all cases but one. Then the insurance company would not cover two ER visits is the same day for my son's asthma, no matter what I did.

If someone has a serious illness I think it is reprehensible for an insurance company to deny them the benfits they paid for and make them fight for them but it does happen.

CLC

I think the bottom line is that the ACA is the best anyone has managed to get through.  And the republicans have nothing to replace it with if they do manage to repeal it. 

Chickadee

I repeat, they all have staff whose sole responsibility is to parse the documents and inform their boss.



Then again with one party simply determined to do nothing so as to make the current admin look bad, perhaps you shove something down their throats to get movement, any kind of movement.



This is the sad state of our elected representatives.



Watched something the other night, a lobbyist being interviewed. Most interesting statement. Paraphrasing, There is no difference between dems and reps now, they are all owned by corporate interests.

alexandria58

There is some difference between dems and reps, though, even though I agree that we need to get the money out of politics.

The Republicans, frankly, frighten me, and I do think that the current crop of Republicans would like to end Medicare and Social Security as we know them,  and do nothing for people who are uninsured or uninsurable. And global climate change - a myth- as everyone living in the middle of the country knows.   

The Dems, well, they could be better, but they are not quite as scary.

bluedahlia

Whenever I read their rhetoric, it scares the crap out of me too, and I don't scare easy.

Beesie

So much discussion since last night.  I could say a lot more (I always can!) but I'll leave it to these 4 points:

First, Kam170, you said "Beesie - The reason you risk is for the possibility of great reward. The possible reward is what motivates one to take a risk...not the capital gains tax rate." Well thank you so much for telling me why I invest! One little thing though. You are wrong. The fact that I am able to keep more of the net proceeds of anything earned through capital gains is a huge incentive.  If I invest $1000 and earn 2% ($20) through an interest bearing vehicle, after tax I will net about $13.75.  If I invest that same $1000 and earn that same 2% ($20) through capital gains, after tax I will net about $16.90. That's a huge difference and it's a big incentive.  Believe me, if the capital gains tax were not beneficial financially I would change my investment strategy, as would many other people. 

Second, 1Athena1, you said "Beesie: The ACA is fiscally responsible. The pay-go rules were applied." I know that. However if you read my post you'll see that I never mentioned the government deficit. I mentioned businesses, who are being burdened with a requirement to cover healthcare costs of their employees, or pay a fine.  I mentioned insurance companies, who are being mandated to cover services for which they have not been paid, such as pre-existing conditions; this is likely to drive some insurance companies out of business and cause others to stop offering medical insurance.  I mentioned individuals, who I expect will be hit with insurance premium increases from those insurance carriers who remain in business and who still need to deliver profit to their shareholders.  When you put a financial burden on businesses and individuals, and drive other businesses out of business, that just can't be good for the economy.  That's why I say that the ACA is not fiscally responsible.

Third, Scootaloo, put me down with a big YES! to your questions "Do we agree that everyone should have access to affordable healthcare? Do we also agree that insurance companies add to the cost of healthcare?".  On the other hand, lassie11, put me down as one of those "anyones" when you say "It is beyond my comprehension why anyone would object to the baby steps that the health act in the US is taking." Agreeing that everyone should have access to affordable healthcare and agreeing that the ACA delivers very necessary new coverage (pre-existing conditions, for example) does not mean that the ACA is good legislation.  I think the ACA is going to add a financial burden to businesses, insurance companies and individuals and because of that, I simply don't think that the ACA will deliver what it promises to in terms of increasing coverage, reducing costs and allowing people to stay with their current coverage (what happens when a business decides to pay the penalty instead of paying increased insurance costs? what happens when some insurance companies stop offering medical coverage?). The baby steps that the ACA is making sound promising but what if it turns out that the baby is walking towards a cliff?

Fourth, PatMom, I agree 100% with your statement that "The ACA bears no resemblance to the healthcare systems in Canada, or the UK, or in Australia." Those of us who support these systems should not assume that the delivery of healthcare in the U.S. under the ACA will be anything like what is experienced under these systems. The healthcare system under the ACA is a for-profit system with care approved by and paid for by multiple independent insurance companies. Even if the U.S. were to move to a single payer not-for-profit system, we cannot assume that they will follow the same practices that these other countries have implemented. In Canada we can choose our doctors and it's the doctor (hopefully in discussion with the patient) who decides on the tests and treatment plan with no approvals necessary. We don't know that a U.S. system would be the same. The one promising sign is Medicare. Both my parents went through numerous major illnesses & surgeries under Medicare and their care was always exceptional (although pre-approvals often were necessary). Never did they feel and never did I get the sense that anything was being held back because the cost was being covered by Medicare (and supplemental insurance).  In fact I saw the same problem that I'd experienced myself when I lived in the U.S., which was over-testing and too many appointments, most likely because the doctors wanted extra revenue.  And there-in lies one of the problems with a profit based system - not only are costs higher because profit is built it, but a profit based system also provides an incentive for medical practitioners to sometimes do more than is really necessary.  

So I agreed with Republicans, Democrats, Americans and Canadians - and I disagreed with Republicans, Democrats, Americans and Canadians. I just don't see what's happening with healthcare in the U.S. as being a clear black and white issue. I'm always surprised that so many people do see it to be so clear. 

Moderators

Not a clear issue at all - indeed. We know just how touchy this issue is for each of us, and we so appreciate your kind and respectful way of discussing it. 

With appreciation,

Your Mods 

alexandria58

Beesie, I'm still a little confused about your approach to investment. First, are you talking about dividends or capital gains in your example of the yearly return?  Capital gains tax only applies when you sell - and here, the 15 percent only applies if it is the sale of a long-term investment.  Corporate dividends here in the US at least are taxed the same as interest.

   But even if you were describing actual capital gains, your example does not really work.  Of course, if the return from investment in stocks were the same as the interest you could get from banks, there would have to be additional incentive - i.e. tax breaks - to encourage investors.  Who would make a risky investment when they could earn the same money in a secure bank?  But that's not how it works.  Stocks are attractive investments because people believe over the long term, they will earn substantially more than bank interest.  So here's the counter example.  Banks right now offer less than 1 percent interest, let's round it to one percent.  You can put your 1000 in that, and you earn $10, which after being taxed at 33 percent, you'll earn 6.7 dollars.  However, if you put that money in stock and earn a 8.5 percent return,( the one year return on one of Fidelity's Index Funds) you'll earn 85 dollars. Even after being taxed at 33 percent, you'll net 57 dollars, which is 50.3 more than you would have earned had you put your money in a bank. (However, since we have decided to give tax incentives to the more riskier investment, you would actually net. 72.25.)  

    And that why people invest in stocks.  It's riskier, but the potential return is higher.  That is why the government doesn't need to put tax incentives for capital gains.  People do it to earn more money, and they take risks in the hopes of making much more than they could make on safer investments.

    

     

1Athena1

Beesie - businesses don't pay a fine - the penalty or tax is only individual (contrary to conservative misinformation stating otherwise) - the mandate is individual only. It's also unlikely to put insurers out of business - in fact, the mandate that everyone buy in the private market could prove the opposite - and it will ensure that the young and healthy, which are cheap for insurers, make up for the burden imposed by those with pre-existing conditions.

In fact, one of the reasons why many liberals dislike the ACA is that it could be a boon to insurers, not the opposite. Had the law allowed more government participation, things may be different. But the overwhelming government participation in this law is not directly in market share (since the Medicaid expansion is unlikely to affect those who can afford insurance) but in regulation.  

The ACA puts limits on how insurance companies can raise premiums, and it sets limits on how much insurers may pay in non-operational costs, but it does that by percentage. Costs are likely to be lower for insurers - not higher. The individual, as well as certain healthcare industry manufacturers/providers will be hit in the pocket, and the insurers' profits will be slightly curtailed. There are a variety of taxes and checks and balances.

In fact what is incredible is how a bill mandating that we buy from private pockets is being miscommunicated by others as a government takeover. The only "take over" that really happened is that President Obama has scored a political and presidential victory, and too many people HATE that the black man has gotten away with success. So they invent reasons to dislike the law - even though they proposed these changes themselves years ago (the ACA follows broadly on Republican plans, not democratic ones).

QuinnCat

Thank you Alexandria-couldn't have said it better, re: capital gains!

Beesie

OY!  Or maybe I should say AHHHH!!

Believe me, I understand how the financial models work for interest, for dividends, for cap gains.  I understand that one is not taxed on cap gains until one sells (which of course means that a gain this year that is not cashed, claimed and taxed could be lost next year).  I appreciate that the belief is that one can expect over the long-term to earn more through capital gains than through dividends or interest.   

But let's not look at the model only based on a single point in time, i.e. today when the interest rate is less than 1%.  Consider back to when you could get 4% or 5% interest from a CD.  Or how about the years when you could get 10% or even 15%?  The market during those times sometimes outpaced those rates, but not always and not always by much. And consider that while the stock market generally rises (rewarding those who take the risk), it has a history of  'corrections' after which it take many years to recover to the previous highs. The Dow closed at 11,500 at the end of 1999 and didn't reach that level again until late 2006. The market peaked at 14,164 in October 2007, dropped to 6,629 by March 2009 and at best has skirted with 13,000 since.  And yes, I use the Dow only as an example - I know it doesn't represent all market but all markets do undergo the same types of ups and downs and corrections.  If you have invested in the market since the beginning of time, you are doing well.  But at any point in time or over any number of years you may not be doing well at all.  You may in fact be losing money with stocks.  The last few years are a good example.  People who invested in long-term interest bearing vehicles before the recession (back when interest rates were good) have done better on average than those who had their money in the market.

The arguments people here are making assume that the risk never happens and the reward always does.  We know that's not how it really works.  That's why I used an example in which the return was the same whether it was interest (or dividends) and capital gains. That example shows the benefit of the lower capital gains tax and that benefit is unquestionably one of the reasons why some people are willing to take the risk of investing.  

So please, do not presume to tell me why I, and many others, invest.  And especially don't tell me that I'm wrong about my reasons and rationale after I explain it. Trust me, I understand what I am doing and why I do it. 

alexandria58

Beesie,

     Individuals invest for different reasons.  I have an aunt who only buys Israeli bonds - for personal reasons. I am not presuming to tell you why you choose any of your investments.

     However, after practicing law for 4 years on Wall Street (not to mention a number of really tedious classes in law school) I do know the general theory behind investing in stocks.  And the general theory is that people generally, not you necessarily, but the average investor - put money in riskier investments - i.e. stocks- because they believe on the whole those investments will return, over time, a much greater return than putting their money in interest bearing accounts.  Of course there's a risk that investors will lose everything  but that's why it pays more.

    And actually, people who bought long-term bonds, say ten years ago,  probably aren't doing that much better - because bonds have call provisions. In other words, after a certain period of time, the issuer of a bond has a right to buy them back,  And believe me, the bonds paying more than 4 percent don't just float out there.  I am a trustee on a trust that has invested heavily in municipals, and every month, bonds are being called.

    Having known a lot of people in the financial world, while they welcome and embrace the lower tax rate - of course - they would continue investing in stocks   even at the regular income tax rate.  And I'm going to again note that hedge fund managers, can structure their earned income in such a way as to only pay the capital gains rate.  

     It is my personal view that we do not need to give special tax rates to people deciding on a more risky investment.  I do not think that some poor slob laboring 15 hours a day to make ends meet should pay more income tax than a hedge fund manager.   

     

Anonymous

Beesie, contrary to the misinformation above, you are right, businesses with more than 50 employees do pay a fine if they fail to provide coverage for their employees. 

http://www.homechannelnews.com/article/after-court%E2%80%99s-healthcare-ruling-employers-should-proceed-implementation?utm_source=GoogleNews&utm_medium=Syndication&utm_campaign=ManualSitemap

"The individual mandate, which sparked fierce political and legal debate, requires most Americans to have adequate health coverage starting in 2014 or pay a penalty. Also in 2014, employers with more than 50 employees that fail to offer full-time employees and their dependents affordable coverage with a minimum value likewise will face penalties."

Facts are always helpful. 

Mardibra

You cant base the validity of capital gains tax on hedge fund managers.  Yes, they take advantage of them but lots of individual investors do to.  Im not a hedge fund manager, im not Paris Hilton, I wasnt born with a silver spoon in my mouth.  I make money, it gets taxed, I take some of the proceeds and invest in hypothetical company A with the HOPE - not guarantee - that I will come out on top.  If I do come out on top I expect to be taxed at a lower rate on those gains because without my investment (and many many others) company A would not be thriving, would not be employing others, would not be fueling the economy.  Without the lower tax rate, I will go find myself some less risky investment.

alexandria58

Mardi - if you are investing in order to help the economy, then you are unique. Most people invest to make money for themselves.  Bonds, btw, also are used to finance corporations that provide jobs and they are taxed at 33 percent. 

In any event,  you should choose investments because you or your investment advisor weigh your tolerance for risk against the potential for return, not because of the tax rate, and if, in fact, the tax rate is encouraging people who would otherwise be risk adverse to invest in higher risk instruments, then perhaps that's another reason to raise the rate- in order not to provide incentives for people who otherwise would not risk their money.

And, I do not think that as a society we should be valuing risky investments over hard work.  That's my personal opinion, as someone who has a fair amount of experience with the investment world through my legal training and legal jobs. 

  Mardi- if you don't want to pay taxes on your investments, buy tax-free municipal bonds.  Just try for the triple A ratings.

Mardibra

I invest to help the economic condition in my house. The risk of most bonds is low...hence the low return. The low tax rate absolutely factors into what I buy. I buy certain investments because of the low tax rate. It's my hard work - in financial services btw- that has allowed me to invest. Trust me, I'm very careful with money so I don't invest if I'm not prepared to lose it. Triple A rated bonds pay almost nothing so no thanks, I will let the seniors scoop all those up!

Enjoyful

PatMom...



Thank you for the information though there's no need to be snide about it.



To expand on your "gotcha" moment above, the shared responsibility payment kicks in for employers of 50 or more persons if their employees are low to middle income and taxpayers are subsidizing their coverage through credits. That way, the employer is held partly responsible for their employees' health care. Seems responsible and fair, does it not?



If you think not, then let's uncouple health care benefits from employment and go with single payer.

alexandria58

mardi, you just confirmed what I said.  You don't want to invest in a safer instrument because of the lower return, so you're choosing to take the risk for a higher return.  Which is fine.  But there's no reason that people who work and investors who are deliberately choosing lower risk investments should subsidize your risk taking with a lower rate - which is how it works.

   Governments use different tax rates to create incentives for things that they believe to be worthwhile. hence no tax on munis.  I just don't either see the need for or the benefit to the society at large of lower tax rates on capital gains.   Personally, yes, it might be a benefit, but I don't just advocate for laws that would benefit me.

Mardibra

Your missing my point I think. Yes it benefits me (if there is a positive return) but it also benefits the economy. If every investment guaranteed principle then yes, tax me at ordinary income.

grayeyes

Well, this thread is addictive.  I put my laptop away yesterday to keep from checking it. 

I see that some here have admitted what they really want:  government-run (er, excuse me, "universal") healthcare. 

Question:  If you think insurance companies do a bad job now, specifically WHY does anyone believe the government will do a better one?

The gov't will have to ration healthcare, too.  There's no way around that fact of life.

Yes, healthcare reform is needed, but a great opportunity is being missed to come up with a good plan.  Instead, the Democrats have put a spin on the whole situation, and people are buying right into it.  (And, no, I'm not crazy about the Republican party, either.)

As for the healthcare in Rwanda, the costs there are lower, and here's another viewpoint on why:

http://www.americanthinker.com/2011/02/whats_missing_from_healthcare.html