Tuesday, December 29, 2009

My Domestic Church Daily Clips 12/30/2009





  • Employment Discrimination in the Senate Health Care Bill




    WebMemo #2737



    The Senate health care bill includes a well-known "employer mandate" provision that would require employers to either offer a "qualified" health plan and pay 60 percent of the premium or pay an annual tax penalty of $750 per full-time employee.
    What is less well-known is that the provision would also tax companies even if they do offer insurance -- but only if they hire people from low- and moderate-income families who qualify for, and elect to accept, premium subsidies. And the tax penalty for hiring those employees -- arguably the people who need jobs the most -- would be a whopping $3,000 per employee per year.





  • The combination of this tax penalty and the rules for determining who qualifies for premium subsidies would encourage companies to engage in some new and repulsive forms of employment discrimination.





  • (Normally employers do not know the income of their employees' family members, but the Senate bill calls for the IRS to tell employers which employees fall into this category on a monthly basis.)





  • However, once hired, the applicant with the working spouse will have a higher family income, so the single parent is more likely to qualify for a premium subsidy -- which means the company is more likely to face a $3,000 penalty if it hires the single parent. Which means, of course, that it is more likely to hire the applicant with the working spouse.





  • The teenager is not likely to generate a $3,000 tax penalty for the employer, but the adult is -- especially if the adult has children to support. So the employer has a clear incentive to hire the teenager rather than the adult -- especially if the adult is a single parent.





  • Then, suppose one spouse loses his or her job and with it the family's health insurance -- and the other spouse's income is, by itself, low enough to qualify the family for a subsidy.
    In that case, the IRS will notify the other spouse's employer that they now have to subsidize an employee and that they have to start paying the $3,000-a-year tax (monthly, at the rate of $250 per month). This sudden increase in employment cost will encourage the other spouse's employer to lay off the second spouse as well, leaving both of them unemployed.









    • Imagine that: more people insured and the deficit reduced. How do they do that? The short answer is over $1 trillion in Medicare cuts and tax increases. For the longer story, read on.

      First, the ten-year cost of insuring 27 million more people is $871 billion. But that money is not evenly spread over the ten years. The CBO does not make this part totally clear; that cost comes mostly after 2015. In those later years (mostly after Obama is no longer president, even if elected to a second term), the cost per year is easily $165 billion. Call it over $6,000 per person insured per year.

      As a sanity check on that number, my current high-deductible plan costs $4,000 to cover my family of four, or $1,000 per person covered. A "Cadillac" comprehensive plan might be more like $16,000 for a family of four, or $4,000 per person per year. So the federal government will spend over six times as much as my high-deductible plan, and 50% more than even a generous comprehensive one. So much for efficiency.




    • Let me repeat. You get "deficit reduction" by cutting Medicare and raising taxes by more than $1 trillion: Medicare and other program cuts of $483 billion, and an extra $521 billion in new taxes and fees.

      The cuts include cuts across Medicare, Medicaid, and the Children's Health Insurance Program: $186 billion from permanent reductions in payment rates for fee-for-service, $118 billion for payment rate reductions based on bids submitted, and $43 billion from reducing payments to hospitals that serve low-income patients. In all, it's a $483-billion cut from Medicare, Medicaid and CHIP.

      Can you imagine what the Democrats would say if a Republican proposed such a thing? You don't have to imagine. Here is what Senator Max Baucus, one of Obamacare's architects, said when President Bush proposed smaller cuts.




    Posted from Diigo. The rest of my favorite links are here.
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