e-News October 22, 201010/22/10
1) The Week Just Past: Questions from Business
2) Threatened Tax Increases
3) Negative Consequences of the New Health Care Law
4) In Perspective: The Pelosi/Obama Agenda and Debt
5) By The Numbers: The Obama/Pelosi Spending Spree
6) Fannie Mae: At It Again?
7) Nuclear Regulatory Commission Leadership Warned On Yucca Mountain Project
The Week Just Past: Questions from Business Owners
“I had the opportunity to meet with members of the Somerset Business Partnership on Wednesday morning and to listen to their concerns about the direction of our economy and nation.
“Like the manufacturers and other small businesses I visited this week in Essex and Morris counties, these are the companies in Somerset we are counting on to create jobs in our region. If we are to ever bring down unemployment in New Jersey, these are the companies that will lead the way.
“However, many of them are uncertain about future tax increases and the impact the new health care law will have on their ability to retain their workforce, let alone hire additional employees. Among others, I fielded questions on the extension of the Bush era tax rates, the burdensome 1099 form that all businesses will have to file with the IRS to satisfy a provision of Obamacare, new health savings account regulations and the future of estate tax rates.
“As I listened, the message I heard was that uncertainty in the business community is the enemy of job creation. A heavier tax burden, government regulation and red-tape are choking economic growth.
“And then there’s the issue of the exploding size of the federal government and out-of-control spending. One attendee summed up the views of many when he asked me to utter these words on the floor of the House of Representatives to all my colleagues: ‘Don’t spend ALL the money!’
“Seems like common-sense wisdom to me.”
Threatened Tax Increases
While there is no good time to raise taxes, there is no worse time to raise taxes than during an economic downturn!
When Congress adjourned on September 29 for the fall recess, the House and Senate leadership decided notto act on $3.8 trillion in looming tax increases.
This is among the issues that have New Jersey businesses and families so concerned.
Rodney strongly supported the Economic Growth and Tax Relief Reconciliation Act of 2001and the Jobs and Growth Tax Relief Reconciliation Act of 2003 and it is critical for the long term health of our economy that these tax cuts are made permanent.
For a complete listing of the tax hikes that are now scheduled to occur in January, click here.
Negative Consequences of New Health Care Law Requirements
Back on March 10, Speaker Nancy Pelosi gave a major policy speech about her efforts to pass President Obama’s health care bill. She said, “…we have to pass the bill so that you can find out what is in it.”
The bill was passed and signed into law. Over the last few months, we’ve had the opportunity to “find out what is in it.” Many people do not like what they’re seeing.
In the haste to pass the Patient Protection and Affordable Care Act, many provisions purportedly intended to provide people with health care assistance, have actually had unintended, negative consequences, which the Obama Administration is struggling to repair after the fact.
1. Employers at some of the nation’s largest companies report that they may no longer be able to provide health insurance, known as “mini-med” plans, to their part-time or low-wage employees.
2. Many are dropping health care benefits for retirees due to an expired tax credit that allows companies to provide prescription drug benefits.
3. The U.S. Department of Health and Human Services (HHS) is allowing insurers to charge higher premiums for coverage of children with serious medical problems, if states allow.
4. Insurance companies are dropping Medicare Advantage plans, offering seniors fewer choices.
5. There is no clarity on the minimum medical loss ratio (MLR) requirement, which calculates the percentage of revenue received from premiums that insurers must spend on benefits.
6. We are seeing increased costs for health care plans for individuals and families.
1) Dropping Coverage for Low Income Workers
Many employers and insurers that offer low-cost, low-benefit insurance plans known as "mini-med" plans say they’re not able to comply with certain new requirements without raising monthly premiums to virtually unaffordable levels.
144 companies and organizations have asked to be excused from expensive mandates in the recently-enacted health care “reform” law. In September, the Obama Administration gave 30 companies waivers from this requirement for a year. The waivers were granted to insurance plans and companies that showed that employee premiums would rise or that workers would lose coverage without the waivers.
Waivers went to companies such as McDonalds, Jack in the Box and Cigna. The State of Massachusetts received a waiver for insurance plans for young adults in their state-run universal coverage program. This may be particularly worrisome as the new federal health care law is largely based on the health care system Massachusetts has implemented!
2) Dropping Coverage for Retirees
The new health care law eliminates the tax deductibility of a federal subsidy provided to companies that cover their retirees’ prescription drug expenses. As a result, some companies have informed retirees and workers they will stop offering a group health insurance plan to retirees not old enough to be eligible for Medicare by 2015.
3) Actually Increasing the Cost of Covering Sick Children
The Obama Administration recently informed insurance companies they could actually charge higher premiums for sick children, outside the open-enrollment period, if state laws allowed such practices.
In fact, many insurance companies have stopped offering “child-only” policies due to the Obama Administration’s decision to allow families to buy such coverage at the last minute, when a child becomes ill.
The New York Times declared on October 13 that “The difficulty in preserving access to child-only insurance policies is the latest example of unintended consequences of the new law.”
4) Fewer Medicare Advantage Plans for Seniors
HHS Secretary Sebelius recently told an AARP group in Florida, "there are more Medicare Advantage plans to choose from, thanks to the new health care law.”
This must come as interesting news to the over one million seniors who have found themselves dropped from their Medicare Advantage plans. Others have fewer plan options to choose from as some insurance companies are withdrawing from the “senior market” entirely.
Rick Foster, Medicare's chief actuary, provided a far different assessment of Obamacare's effect on Medicare Advantage:"less generous benefit packages" and "a large increase in the out-of-pocket costs incurred by Medicare Advantage enrollees.”
5) No Guidance on Medical Loss Ratio (MLR) Requirement
The new health care law will require that commercial insurers spend at least 85 cents out of every premium dollar on medical claims for its large-group policyholders. The remaining 15 cents of each dollar can be used to pay expenses that do not directly benefit customers, i.e. payroll, advertising, overhead and profits.
To enforce this new health care spending requirement - the so-called medical loss ratio (MLR) - regulators are now trying to determine which costs should be classified as “medical” and which are “administrative.”
Many companies fear that their insurers will not meet the MLR requirement for policies for their employees, leaving them unable to provide insurance to their workers!
6) Increased costs for health plans for individuals and families
President Obama promised that his health reform would "fix" rising medical costs and the growing legion of uninsured Americans who were “priced out” of coverage.
However, health insurance charges are rising even faster than before, the number of uninsured Americans is spiraling upward, and the choices people have of doctors and health plans are being sharply limited.
To grapple with an array of popular but costly new mandates that Obamacare imposes, employer-based plans have hiked premiums and are passing more costs onto consumers through rising co-payments.
Recommended Reading: Wednesday’s Wall Street Journal editorial, “Obama Care for some, Step right up and get your waiver.”
Recommended Reading II: Peter Sanders writes in Tuesday’s Wall Street Journal, “Responding to what it says are rapidly rising costs, including some as a result of the new health-care bill, Boeing Co. plans to increase the price of employee health insurance for its non-union workforce over the next few years.”
In Perspective: The Pelosi/Obama Agenda and Debt
The Treasury posted new numbers this week that put the Obama/Pelosi agenda into perspective.
In less than two years, President Obama, Leader Harry Reid, Speaker Nancy Pelosi and their Congressional majority have added $3 trillion to the national debt.
Stated differently, the National Debt stood at $10.626 trillion the day President Obama was inaugurated. The Bureau of Public Debt reported Monday that the National Debt had hit an all time high of $13.665 trillion.
What’s more, the Administration has projected the National Debt will soar in President Obama's fourth year in office to nearly $16.5-trillion in 2012. That's more than 100 percent of the value of the nation's economy and $5.9-trillion above what it was his first day on the job.
Read the CBS News story here.
By The Numbers: The Obama/Pelosi Spending Spree
- 1.3 trillion– The Obama administration has owned up to running a $1.3 trillion deficit for the fiscal year that recently ended. The national debt now stands at an all-time high of $13.665 trillion.
- 37 cents– The federal government borrowed $.37 of every dollar it spent last year from our children and grandchildren.
- 24 percent– Since January 2009, the House Majority has passed more than $3 trillion in new spending increases, with a 24% increase in non-defense discretionary spending.
- $50 billion– President Obama wants to spend another $50 billion on new ‘stimulus’ spending despite saying – as recently as one year ago, apparently – that there’s no such thing as shovel-ready projects.
- Zero – The number of budgets passed by the Congress of Speaker Pelosi and Senate Leader Reid for the fiscal year that started October 1, an unprecedented failure in the modern era.
- 14 months– Unemployment has now topped 9.5 percent for 14 months in a row, the longest such stretch since the Great Depression.
Fannie Mae: At It Again?
Most financial experts agree that one of the causes of the recession was a collapse in the housing market. Clearly, many people with no capability to pay for them were holding mortgages guaranteed by the government-backed Fannie Mae and Freddie Mac. When the housing “bubble” burst, chaos spread across the financial sector.
A recent article indicates that mortgage giant Fannie Mae may be up to its old and dangerous tricks – financing mortgages for people who put as little as $1,000 down on a new home.
Where is Chairman Barney Franks’ (MA) oversight???
Nuclear Regulatory Commission Leadership Warned On Yucca Mountain Project
The nation needs a high-level nuclear waste repository. In 1987, Congress designated Yucca Mountain, Nevada as the geological repository for the nation's commercial nuclear waste and tons of Cold War-era military nuclear waste.
Despite the Nuclear Regulatory Commission’s (NRC) own licensing board ruling that the Obama administration does not have the authority to shut down Yucca Mountain unilaterally, NRC Chairman Gregory Jaczko directed scientists to stop work on a nearly finished evaluation of the project.
As Ranking Republican Member of the House Energy and Water Appropriations Subcommittee, Rodney has sent a warning to the NRC’s leadership.
Read the letter Rodney, along with Jerry Lewis, Ranking Republican Member of the full Appropriations Committee, sent here.