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Revisiting Obamacare
Eagleye Blog ^ | September 12, 2012 | Bethany Stotts

Posted on 09/12/2012 12:13:25 PM PDT by eagleye85

Could one of the main provisions of Obamacare be used to “reopen” a discussion of the law in the legislature? Cato Scholar Michael Cannon argues that state-run exchanges, or the absence thereof, can be used for this purpose.

Obamacare is unstable, he argues, because it instructs insurance companies to charge citizens of the same age the same premium regardless of their health risk. “That creates a huge incentive for those people not to purchase health insurance, to wait until they get sick to purchase health insurance,” said Cannon at a recent Capitol Hill briefing. “And when the healthy people aren’t buying health insurance that makes the market very unstable. That raises the average premium, and could cause the entire health insurance market to collapse, because as the premium goes up more people decide to opt out.”

To balance this preexisting conditions aspect, Obamacare includes an individual mandate and calls for each state to establish a state-run insurance exchange subsidized by refundable federal tax credits. Cannon said this would be a conduit for federal dollars straight into the pockets of insurance companies.

However, currently only 14 or 15 states have taken steps to create these exchanges and the vast majority have not, said Cannon. “The Secretary of Health and Human Services has estimated that she may have to create exchanges for as many as 30 states because states are so reluctant to create these on their own,” he said. “Outside experts have said that number may be too small; it may be closer to 40.”

The IRS recently issued regulations which would ensure that refundable tax credits are offered to citizens regardless of whether they are working through federal or state-based exchanges. This directly contradicts the law, which several times restricts these tax credits to state-based exchanges, according to Cannon. (Others disagree about the intent of these sections). “So how does the law work without the IRS rule?” he asked. “Well, if there are no state exchanges and there are no tax credits, that means no penalties against employers.”

Cannon argues that if many states do not participate in the exchanges, and if this regulation is overturned, then these monies would not go to insurance companies. “So, under the law as written, if states don’t create these exchanges, then they’re gonna, then those interest groups are gonna have a huge incentive to lobby Congress to reopen this law,” he argued.

“The money involved in these tax credits and the money that’s gonna go out of the federal treasury’s door as a result of this IRS rule, a very small share of that is … due to tax reduction — only 22 percent,” said Cannon. “78 percent of the money that we’re talking about is government outlays, checks that are written straight to insurance companies.”

Others do not agree. “The courts are unlikely to find the ‘established by the state’ language a ‘scrivener’s error,’” argued Washington and Lee University professor Timothy Stoltzfus Jost at a recent House Committee hearing, according to his official testimony. “But the courts will interpret the ambiguous language in the context of the [Affordable Care Act’s] structure and purpose, in light of the ACA’s legislative history, and putting great weight on the [Health Care and Education Reconciliation Act] amendment, and find that federally facilitated exchanges can in fact issue premium tax credits.”

“The IRS is explicitly authorized by Congress to interpret the statute and its interpretation of the law will be given deference by the courts,” argues Professor Jost, who is also a representative to the National Association of Insurance Commissioners and an elected member of the Institute of Medicine. “None of your constituents will be denied the tax credits made available through the ACA to ensure them access to affordable health insurance,” he argues.

TOPICS: Government; Health/Medicine; Politics; Society
KEYWORDS: healthinsurance; obamacare; ppaca

1 posted on 09/12/2012 12:13:32 PM PDT by eagleye85
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To: eagleye85

Repeal. End of discussion.

2 posted on 09/12/2012 12:15:35 PM PDT by EagleUSA
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To: eagleye85

I thought that was obvious from Day One. Unless you have employer provided health care insurance, why bother buying it. Wait until you get sick, then go buy it. Pay the fine.

3 posted on 09/12/2012 12:15:59 PM PDT by Qwackertoo (Romney/Ryan 2012 The Future of Our Children and Their Children are at stake.)
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To: EagleUSA
"Repeal. End of discussion."

The campaigning about MediCare is wrong headed.

Under ObamaCare, Socialized Medicine, already the law of the land and implemented for two years now, Medicare is ObamaCare. Everyone now has cradle to grave socialized medicine, there is no Medicare after 2016.

Republicans should concentrate on what is the law of the land, Socialized Medicine. What's with this "fix Medicare"?

Repeal Socialized Medicine!!!


4 posted on 09/12/2012 12:22:06 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

I don’t agree with all the statements of “fact” you made, but I refuse to get drawn into that aspect of your post.

Focusing like a laser beam on the existing Medicare is heavily utilized by the elderly, right here and right now. Without it they are dead, literally. And they know that. Therefore, it would be mindless to go around shouting repeal all socialized medicine including medicare. These people vote, and right now they are more against Obama and Obamacare than any other group.

They paid in. I have paid in. Millions upon million have paid in. That isn’t enough to cover the cost, but it IS different from Obamacare. It causes the elderly to look at it like they do Social Security, which they also paid into. Doesn’t cover the cost going forward, but they paid in. And either are partially, or fully, dependent on it to survive, right here and right now.

Romney/Ryan are dealing with what is current reality. When they look down the road, they want to change things for younger people, and by saying that, I am not ready to support everything they propose without question. All I’m saying is, all in good time. One step at a time. They can do nothing if they run around screaming to dump the elderly off of medicare because it’s socialized.

Meanwhile, you have the luxury of pontificating on the internet with zero responsibility for the outcome of anything.

5 posted on 09/12/2012 1:07:14 PM PDT by txrangerette ("HOLD TO THE TRUTH...SPEAK WITHOUT FEAR." - Glenn Beck)
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