SCOTUS Upholds Affordable Care Act!

Mardi: i didn't miss your point.  i disagreed with it.

Lifeiswonderful: I think people explained why the government will do better.  Lower administrative costs, no profit motive.  The prime example is Medicare - which was opposed as socialized medicine in the beginning.

How US health care reform will affect employee benefits

What the law says  
Health care reform imposes several new requirements on employer health benefits. Some changes will be incremental; for example, annual and lifetime limits on care must be eliminated, and coverage must be offered to dependents through age 26. Plans with premiums above certain levels will be subject to a so-called Cadillac tax.1
Other requirements are game changing and could prompt employers to completely reconsider what benefits they offer to employees. Reform requires all employers with more than 50 employees to offer health benefits to every full-timer or to pay a penalty of $2,000 per worker (less the first 30). The benefits must provide a reasonable level of health coverage, and (except for grandfathered plans) employers will no longer be able to offer better benefits to their highly compensated executives than to their hourly employees. These requirements will increase medical costs for many companies. It's important to note that the penalty for not offering coverage is set significantly below these costs....

A bigger effect than expected
As we have seen, a Congressional Budget Office report estimated that only 9 million to 10 million people, or about 7 percent of employees, currently covered by ESI (employer sponsored insurance) would have to switch to subsidized exchange policies in 2014. Most surveys of employers likewise show relatively low interest in shifting employees from traditional ESI.
Our survey found, however, that 45 to 50 percent of employers say they will definitely or probably pursue alternatives to ESI in the years after 2014. Those alternatives include dropping coverage, offering it through a defined-contribution model, or in effect offering it only to certain employees. More than 30 percent of employers overall, and 28 percent of large ones, say they will definitely or probably drop coverage after 2014.

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Capital Gains Taxes and the Reward-to-Risk Ratio 

Standard capital asset pricing models suggest that the expected return per unit of systematic risk should be the same across all stocks and for the market portfolio. This is in contrast to empirical evidence that the reward-to-risk ratio does vary across stocks (Harvey, 1989). We show that, in the presence of capital gains taxes, the reward-to-risk ratio can differ across stocks. When the capital gains tax rate is reduced, stocks with higher accrued gains should experience larger increases in expected return per unit of systematic risk than should stocks with lower accrued gains. Examining two separate U.S. capital gains tax rate reduction events decades apart, we find strong empirical evidence consistent with this prediction. Our finding suggests that capital gains taxes affect not only the stock returns as documented in the prior literature, but more importantly, they affect the risk and return tradeoff, the key to all financial investment decisions.... 

Our paper contributes to our understanding of the role of taxes in asset pricing, an under-researched field that will doubtlessly receive increased attention as governments strive to fund burgeoning deficits. The results from this study suggest that altering capital gains tax rates may affect the key determinant for investment decision-making, the reward-to-risk ratio, in ways not previously understood by scholars or considered by policymakers. The fact that a change in the capital gains tax rate can affect stocks differently depending on past price movements should give pause to policymakers in the U.S. and other countries who are contemplating substantial changes in their taxation of capital gains in finding a solution to reduce their budget deficit. 

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Most financial planning models that I've seen that calculate return on investment incorporate the different tax rates for the different investment vehicles within the model.  Return is "net return", i.e. net of investment expenses and taxes.  A change in any of the tax rates may change the investment mix recommended by an investment advisor to his or her client (within the customer's risk profile, of course).  I've never said that a lower cap gains tax is the sole or primary reason to invest in stocks, but a lower cap gains tax does result in a higher net return, and that is part of the equation and factors into the decison on how much will be invested into stocks vs. less risky investment vehicles. 

alexandria, your comment "I do not think that as a society we should be valuing risky investments over hard work" ignores the significant percent of investments that are made by people who do work hard, or who have worked hard over their entire lives and who now need these investments for their retirement. This report indicates that in 2005, 39% of U.S. households owned equities or mutual funds:  Determinants of Individual Share Ownership around the World. Of course everyone wants to increase the tax rates for the Paris Hiltons and Warren Buffets and Mitt Romneys of the world, and of course no amount of tax increase is going to affect how they live or how much they invest.  But they are not representative of the average investor. I am the average investor. A newly retired 66 year old is the average investor. Maximizing "net return" is crucial to the average investor because that's what she buys her groceries with. Keep in mind too that these "risky investments" that you don't think society should value in fact fuel the economy as much or more than all that hard work.

By the way, if hedge fund managers can structure their earned income in such a way as to only pay the capital gains rate, then change that. But don't hurt the 66 year old who is retired and living on her investments. 

Chickadee, yes and no.  Part-time employees are included (on a prorated basis based on hours worked) in the calculation of the number of employees that the company has, so hiring a lot of part-timers won't keep a company below the "50 employee" bar.  However as noted by Scootaloo, the penalty kicks in only if the company does not offer coverage and one of their employees gets subsidized health coverage through credits.  But here's the catch. If just one employee get subsidized coverage, the company must pay the penalty for all their full time employees (less the first 30).  So if a company has 100 full timers and just one gets a health care subsidy, the company will have to pay the $2000 fine for 70 employees (100 less 30).  Or if they have 45 full timers and enough part-timers to qualify them as a "large" employer (i.e. 50 employees) and just one employee gets subsidized coverage, the company will have to pay the fine for 15 employees (45 less 30). 

There is a separate $3000 penalty that employers who provide coverage may have to pay if any employees can't afford the plan or if the plan covers less than 60% of medical costs and therefore employees have to go to an exchange.  

Summary of Potential Employer Penalties Under the Patient Protection and Affordable Care Act (PPACA) 

Scootaloo, Alexandria, Kam, Mardibra,

To be clear, we're now talking about universal healthcare, not just the ACA.  (There are some parts of the ACA that I agree with - such as raising the age to 26.)

Rationing will be an issue, no matter what type of system we have.  Healthcare will either be rationed by cost (which is the system we have now), or it will be rationed by waiting (the single-payer system).

I agree, btw, that there's too much red tape/bureaucracy/paperwork that is tying up hospitals/doctors offices/etc. and raising the price.  (That's why my breast surgeon does not take insurance.  I paid $600 from a medical account for the first consultation.  Best $600 I ever spent.  Then I dealt directly with the insurance company to cover my surgery.)

But, single-payer systems also have a lot of red tape/bureaucracy/paperwork.  And, when the service is "free", demand will exceed supply, and healthcare will be rationed by waiting.  No matter whom we vote into or out of office.  There's going to be no way around it.

Furthermore, government regulations and intrusion already have been driving the cost of healthcare upward for many years.  A pharmaceutical company has to spend a lot of money and many years of research before the FDA will approve a drug.  That raises costs.  For many years, the AMA has lobbied to limit the number of doctors.  Too many patients and not enough doctors raises the cost of medical care.  Insurance companies don't have to compete across state lines.  That raises the cost of premiums.

The fact that insurance covers every little doctor's visit - a check up, for example - raises the premiums for everyone.  As someone mentioned above, people years ago bought insurance to cover the major medical events and paid for the other visits out of pocket.

Years ago, when I was uninsured with a pre-existing condition, I tried calling hospitals for price estimates.  None would give me one - especially not in writing.  They all said the same thing:  It depends on what the insurance company will pay.  They want to get the most they can from your insurance.  Meanwhile, other doctors would see me without insurance and charge less than if I'd had insurance.

As for spin, both parties engage in it.  But, IMO, the Democrats are masterful at it.

As for spin, both parties engage in it.  But, IMO, the Democrats are masterful at it.

Again, do you have examples??...My gut says I'll see your one example and rasie you one death panel, a Frank Luntz talking point, and the renaming of the ACA ==> Obamacare.  

PatMom -



I don't know the answers to your questions nor do I know every last detail of the ACA though I HAVE read it. The ACA provides millions with access to health care. It limits insurance company price gouging. It prevents denial of coverage for preexisting conditions. (One day you may thank Obama and Congress for that.) It provides assistance for those who need it.



Our president was elected for his platform of health care reform. He instituted reform via the ACA. Recent polls show a majority of Americans favor it. SCOTUS upheld it as constitutional.



Do I think its the best way to deliver health care efficiently and effectively? No. But as long as the naysayers and commie-screamers continue to villify single payer, this is what we have.



And with that, I will bow out of this discussion. You ladies enjoy your day.

I have enjoyed reading this thread and am glad that even with divergent opinions almost everyone has been quite civil.

We all need and deserve health care. It is a basic human right. Some of the same people who say that government could not handle a single payer progam in the US also say that the poor should be covered by charity care. If that was the answer it would already be happening. It is not. Just look through these boards and you will find people who can not afford the health care they need.  Historically (Social Security, Medicare) the government has stepped in when the needy were not being served.

So unless those suggesting charity care for all the poor can provide it for all starting now, we need this plan. Undoubtedly it needs amending but we need something now.

As for not knowing what it will be until it goes into effect, all I can say is so far so good.

Beesie - I stand corrected in the employer mandate - apologies , I'd forgotten about it. I think I know why: that "mandate" is in paper only. It won't change anything. The vast majority of 50-plus employers in this country already provide healthcare to full time employees. Wal Mart has fudged the status of employees to deny them insurance and companies can still rely on part-timers to skirt the requirement.

One of the strongest parts of the ACA is the section where it created the Patient Centered Outcomes Research Insitutute (http://www.pcori.org/) which will fund inquiries into the best way to implement evidenmce-based medicine so that there isn't such a huge gap between what is known, scientifically, about any given disease, and what is actually done about it. (For anyone insisting on the source, here it is: Patient Protection And Affordable Care Act. 111-148. 2010 42 U.S.C. Secs. 11 83, 9511. Go to www.healthcare.gov for the law itself.)That is an exciting advance in the ACA. That and the ACOs (ETA: authorized under section 3022 in case anyone cares) are some of the gems in this very imperfect law. 

Scoot - don't go...."don't leave me now"....(I'm thinking of Pink Floyd's The Wall

Sorry - formatting problems. For anyone interested, economists say that the fairest way to compare healthcare spending in the US and other countries is to compare it as a percentage of GDP. This enables one to account for differences in size and wealth of a country and basically tells us how big a chunck of that country's arm and leg is involved. So here is the correct table:

Total Health Expenditure as a Share of GDP, U.S. and Selected Countries, 2008

Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en (Accessed on 14 February 2011).
Notes: Data from Australia and Japan are 2007 data.Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates.

If you missed the US, they are waaaaaaaay at the right hand side of the table in orange, spending about 16 percent og GDP. France comes a distant second at 11.2 percent.

ETA: This is pre-ACA, of course.

The people who just show up and are treated anyway end up with big bills. They can make payment plans but if they don't or if they fall behind because for example, their illness makes them incapable of working,their account goes to a collection agency. Not something that I think should happen.

Life - can you clarify your statement above (to me). I'm not sure what you are trying to say.  Chalk it up to my chemo brain

There is a poignant story at Huffpost today about a single mother and healthcare insurance.  Why Obamacare would have helped her during colon cancer:

http://www.huffingtonpost.com/politics/2012/07/05/stephanie-miller-obama-health-care_n_1652714.htm/?utm_hp_ref=politics

Haven't mastered the art of linking....if you get to page above, atleast today, you'll see the headline about Heartbreak near the top.

Anyone can show up at the emergency room and receive care.

Unfortunately, that is not the case. If you are having an emergency (such as with a car accident or a heart attack) that is true, although you may receive no follow up care. If you have, say, a lump in your breast, they will not treat you. I've seen it happen. They will say "call your health provider" or suggest a free clinic, of which there are few and far between. People are denied care routinely and only get treated when they are extremely ill.

In fact, from the purely financial perspective, the reliance by indigent patients on ER care is part of what pushes up prices for ALL of us. It creates an inflationary effect because hospitals and doctors take losses from indigent care into account when pricing services for those who can pay, such as insurers (who then pass the cost on to premium payers).

It is in everyone's interest that we all have access to preventive care and routine care. Aside from the paramount moral consideration, it also saves the economy money.

There's a reason why the US is more burdened by healthcare costs than other industrialized nations, while leaving almost 1/6 of its people with no coverage. When different forms of universal coverage manage 100 percent coverage at lower costs, I think it's time to realize they may be doing something right and we might be able to learn from them. All of the countries studied in the table I just posted have universal care. They cover everyone. We leave 1/6 of our population without coverage and we are STILL more expensive.

I'm a US citizen living in Switzerland. I'll probably never return to the US - not to live, anyway. Having said that, I'm happy that the ACA has been upheld - it's far from perfect, but they need to start somewhere.

One of the biggest problems with health insurance in the US is that it's provided by employers. Lots of people stay at jobs they hate for the benefits, and many people who could do something more creative, interesting, beneficial are tied to jobs because they have health insurance. 

 Switzerland doesn't have "socialized medicine".  Everyone is required to purchase a basic level of health coverage (which, as it turns out, is pretty comprehensive). Low income families get subsidies for their insurance, and the cost of insuring children is fairly low. There are quite a few insurance providers - in that way, it's not terribly efficient. If you're between the ages of 30 and 80 (I think, might have the boundaries wrong), you pay the same amount - women pay a little more than men, and your monthly rate depends on where you live. You cannot be denied based on pre-existing conditions, and you don't pay more for them either - thus, the risk pool is very large. 

The money in Switzerland is Swiss francs (CHF), and about  CHF .95 = $1 (US), so a franc is more or less equal to a dollar. My husband and I each pay on average CHF 375 for our monthly insurance (I pay a bit more, he pays a bit less), we have a yearly deductable of CHF 300, and then pay the 10% of everything else until we've hit CHF 700 out of pocket (of CHF 7000 of expenses). THis includes drugs. In some ways, the system is very simple - no stupid copays, just a flat 10%. The nice thing is that if I start to work, or my husband changes his job, we still keep the same insurance. 

Now the system has flaws, it's expensive (not as expensive as the US), and there are some inefficencies. It's also dependent on where you live - Switzerland has 26 kantons, rather like states in the US. Obviously the more populated areas have more, and often a better choice of doctors and facilities. But I am so happy that I was diagnosed and treated here. I had excellent doctors, the same standard of care that you'd get at a top US university (all of my doctors did fellowships in the US at good places like Mayo, Mass General, UCSF), etc, no crap with copays, and no hassle from the insurance company. I never worried for a minute that we'd end up in financial difficulties because of my treatment. 

I know that the US system is far more complex, and the Swiss system might not work in the US. I believe that Massachussets used a model like the Swiss system. But what I'd wish for the US is a simplified system, abolishment of the absurd copay structure for procedures and meds, and coverage that's not tied to your job - or at least the option for everyone to have the same coverage as someone in a large risk group (E.g., a large employer-based group).