Back to Basics

The latest version of the Pelosi/House health care reform is more of the same, and worse.  It includes the same problems of HR3200 including the public option, the health care exchange, mandates requiring everyone to buy insurance, mandates requiring employers to provide insurance, penalties if you don’t purchase insurance, penalties on companies for not providing insurance, government real-time access to your bank accounts…more and more of the same.

I briefly reviewed the 1990 page bill and found some additional measures that were equally disturbing.

The bill is supposed to help those who have pre-existing conditions as well as those with chronic illnesses that may not otherwise be able to obtain affordable health care insurance.  The bill does mandate that insurance companies accept everyone, regardless of their medical history.  However, in a transition period, the government has allocated a specific budget to cover these people and this must not result in a deficit.  If the expenditures are expected to exceed the budget there are three options available to solve this problem:  (1) deny services, (2) increase premiums, and (3) put people on a waiting list.  So those with current insurance issues may find themselves no better off once this plan goes into affect since the bill gives the government the right to ration or deny services and increase the cost of your premiums.

There are over 360 pages in the bill that directly relate to medical treatment in the Native American populations.  This amounts to additional studies, addressing alcoholism issues and a number of other issues.  However, the bill also allows the government to take Indian reservation lands for the purpose of medicine.  The government will make those decisions and it did not appear as if the Native American population would have any control over what lands they chose to take, or if the medical facilities is even necessary for this population.  How far does this abuse of power run?

I recently read articles on the Pelosi/House reform and found that it creates 111 new bureaucratic departments and/or programs…more expansion of government.  The cost of this bill is estimated at approximately $1.2 trillion for 10 years.

Likewise, just as disturbing is those people who truly believe that this type of government takeover of the insurance industry is the only way they will be able to obtain health insurance.  They don’t want to even consider any other options that may allow them to be covered but not destroy the health care coverage 83% of the population currently has and likes.  They further expect this coverage, because of the public option, to be FREE; they are not expecting to contribute anything to their health insurance costs.  Nothing is free – you will be paying for insurance premiums, co-sharing costs as well as an increase in your income taxes.  If you don’t wake up now you could find yourself facing a huge medical/insurance bill you will be required to pay.

Behind the scenes in the real world anticipation over the new bills has already made an impact on the insurance industry.  A health insurance agent was at a recent party we attended and she is all for this new mandate, her mouth watering at the prospect of making lots of money from all the policies she will be selling.  As long as the private market can compete with the public option she will make a fortune, as she gets a commission not only when she sells a policy, but will continue receiving that commission as long as you renew your policy – and she may not have to do a thing.  This bill will make her a rich woman.  On the other hand, her ex voiced his opinion at her enthusiasm and stated that all this was at what expense to us.  He understood the consequences.

Another tip of the hand came when it was open enrollment time for my daughter.  Her options had been greatly diminished in health insurance coverage.  Option A would give her a set office visit cost of $30/visit, a $750 deductible and she would be responsible for 40% of her medical bills.  Option B would have given her a set office visit cost of $35/visit, a $1500 deductible and again she would be responsible for 40% of her medical bills.  For this reduction in coverage she would enjoy a minor increase in premiums.  Yes, she can say she is “covered” by health insurance but with the deductibles and cost-sharing responsibilities she cannot afford medical care or treatment!  This is from a very large insurance company, so one has to ask if this is the direction we can expect the government plans to be heading.  Is this the type of coverage that may be offered in a basic insurance plan?  If so, then although the government could claim more people would be insured, it would not necessarily mean people would be able to obtain medical care or treatment because they may not be able to afford it.

While the House healthcare bill does little or nothing to decrease medical costs and is anticipated to actually increase insurance premiums, one has to wonder what the real motives are behind the bill.  Is this just a bill to grant the government more control over our lives and denying us personal freedoms…with more government expansion?  With insurance agents waiting in the wings to jump at the vast money making opportunities, whose interests – or special interests – were really in mind?  Does being insured actually make medical care and treatment affordable…or will the cost of the insurance policy and cost-sharing expenses make it even more unaffordable?

Time is running out.  The House is expected to start debate on this issue this week.  The people spoke this summer at Town Hall meetings.  Did Congress get the messages?  It is time we remind them.  Call, write, fax and email your representatives before it’s too late.  The life you save may not only be yours but the country.

Is this another monster program in the making?  After hearing so much about Cap and Trade on the news, I decided to take a look at the bill.  I was again amazed at the items in this bill.

This bill contains pages upon pages of regulations for light bulbs.  Energy efficiency is great, but do we really need another piece of legislature to dictate what type of light bulbs can be sold, and another government agency to make sure the regulations are followed.  Has the government even attempted to work with the manufacturing companies making these light bulbs to address energy efficient bulbs without legislation?  How about providing consumer information so the customer can make energy efficient choices?  Anyone concerned about the environment would welcome accurate information on the benefits of choosing an energy efficient bulb.  Government legislation isn’t necessary.  I was wondering why so many pages were dedicated just to light bulbs.  I also found it interesting that California and Nevada have exemptions from some of these regulations.  I guess energy efficiency isn’t necessary in those states.

The bill also creates a government owned, tax exempt, corporation – the Clean Energy Deployment Administration – wholly owned by the government.  The Administrator of this new corporation would be appointed by the President, and board members would include various secretaries of the government and 4 additional members appointed by the President.  Where in the constitution does it allow the government to create a government owned corporation?  I am baffled by the number of businesses the government wants to own and that Congress would actually approve these actions.  Does anyone see a problem here?  Why isn’t someone doing an investigation?

The bill actually admits it will put a great number of people out of work.  Because of this, the taxpayers will get the privilege of paying a large percentage of their salaries for the next three years.  In a time of high unemployment, why would you pass a bill that guarantees an increase in the number of unemployed people?  You can’t collect taxes to pay for any government programs if people aren’t working – they have no income to tax!  Does anyone understand economics!

Estimates are that this bill would increase the cost of energy to each household by $175 a month, quite a substantial amount for most Americans.  That is only the direct cost.  Everything will go up in price because as businesses see their operating costs rise, they will pass those expenses on to the consumers in the form of higher prices.  So in a recession, why would you pass legislation to further deepen a recession?  But that seems to be the theme of this administration.

If the government is truly concerned about the environment and greenhouse gas emissions then they would be encouraging everyone to do their part without concern of the potential loss of income to the electric companies or the loss of tax by the government.  This ploy of environmental concern is just another means to increase profits to utility companies and more tax money for the government to waste.

People could do so much more.  There are alternative means of producing energy for homes – like solar power or geothermal systems.  Most people have not incorporated these into their homes because the cost is too high.  Whenever there is an incentive program offered, the companies selling the products (liked solar) increase their prices so the consumer doesn’t see the savings; instead these companies reap the benefits.  Those tactics should be stopped and instead efforts should be made so homes can incorporate alternative energy sources.  If the environment is the concern, then the reduction of use from power companies should not be a negative deciding factor.  Homeowner’s associations should not be able to restrict energy saving devises like solar power either.

A gentleman in Australia invented a product that could be put on the electrical system of a home and actually double the output to the home.  What a concept!  He envisioned putting these units into homes to reduce the amount of electricity required to operate that home; and the cost was supposed to be affordable.  However, the patent was sold to China.  Big business took over and attempted to use the technology to get twice the output from the electrical companies.  The plan failed and the technology is lost.  Greed has again destroyed a great idea.  The environment wasn’t the concern, just the ability of big business being able to make the buck.

That is much of the problem.  As new ideas are developed, they are often to the benefit of the consumer with the decreased dependency on big power business.  Big business cannot have this decrease in demand because it would decrease their profits, so they squash any of these ideas.  People could make a huge positive impact on the environment, but big business wants control.

So, if the environment is the concern, instead of taxing the people yet again, create ways to make alternative power affordable for people to install.  The people would save on their electric bills and the electric companies would be more environmentally friendly because they wouldn’t have to produce all that extra power – isn’t that what the whole light bulb issue is?  If the concern is truly environmental then stop trying to make the big bucks over it!  Otherwise the alternative name “cap and tax” is more appropriate.

Under the title of Public Health & Workforce Development are a number of grants, scholarships and other programs, providing training, services and a whole new array of studies relating to health care – a lot of money being spent to support the expansion of government, special interests, illegal immigrants and labor unions, but little to help solve the health care issues.

The first expansion is the establishment of the Public Health Investment Fund, which requires deposits from the revenues of the Treasury in the amount of $88,700,000,000 over 10 years. This money is authorized to be appropriated by the Committee on Appropriations of the House and Senate for carrying out the activities under the designated public health provisions. These areas include Community Health Centers, National Health Service Corps Program, National Health Service Corps Scholarship and Loan Repayment Programs, Primary Care Loan Funds, Primary Care Education Programs, Nursing Workforce Development, The National Center for Health Statistics and the Agency For Healthcare Research and Quality.

To make these programs even more appealing is the stipulation that “Amounts appropriated under this section, and outlays flowing from such appropriations, shall not be taken into account for purposes of any budget enforcement procedures including allocations under section 302(a) and (b) of the Balanced Budget and Emergency Deficit Control Act and budget solutions for fiscal years during which appropriations are made from the fund.” More spending without any concern for balancing the budget or controlling the country’s deficit. We don’t have it, but let’s spend it!

The first program – Community Health Centers – will obtain increased funding in the amount of $38,800,000,000.

The National Health Service Corps is being amended allowing the Secretary to issue waivers to individuals who enter into a contract for obligated service to pay for their education. It further raises the loan repayment amount from $35,000 to $50,000 and will be adjusted thereafter to reflect inflation. Additional appropriated funds for this program are $796,000,000 over the next 10 years. Additional funding is authorized in the amount of $3,171,000,000 over 10 years to cover the National Health Corps Scholarship and Loan Repayment Programs.

The Frontline Health Providers Loan Repayment Program will be established to address unmet health care needs in certain areas, populations, or facilities as designated by the Secretary. Individuals participating in this program must agree to serve for a period of 2 years in a health professional needs area specified in the program. This program has a clause that if there are an insufficient number of applicants for the program, then all excess funds from the program will be transferred to the National Health Service Corps to recruit more people to take advantage of this fund.

The Secretary shall establish a primary care training and capacity building program consisting of grants and contracts to plan, develop, operate or participate in accredited professional training in the field of family medicine, general internal medicine, general pediatrics or geriatrics. Funds for this program are from the Public Health Investment Fund in the amount of $3,023,000,000 for 10 years and will include the following:

• Capacity Building in Primary Care – grants to specialties of family medicine, general internal medicine, general pediatrics or geriatrics, with preference given to entities that train individuals who are from underrepresented minority groups or disadvantaged backgrounds.
• Training of Medical Residents in Community-Based Setting – a program established for the training of medical residents in community-based settings, with preferences given to entities that support teaching programs addressing the health care needs of vulnerable populations or are a Federally qualified health center or rural health clinic, as well as preference to those training individuals from underrepresented minority groups or disadvantaged background.

• Training for General, Pediatric or Public Health Dentists and Dental Hygienists – grants and contracts to plan, develop, operate or participate in an accredited professional training program or oral health professionals, with preference given to individuals who are from underrepresented minority groups or disadvantaged backgrounds.

Grants for Health Professionals Education – Advanced Education Nursing Grants is being amended, including increases in dollar amounts for the Nurse Faculty Loan Program. Funding for this program is $1, 450,000,000 over 10 years.

The Public Health Workforce Corps is being amended and expanded by the following: Creating the Public Health Workforce Scholarship Program, Public Health Workforce Loan Repayment Program, Enhancing the Public Health Workforce, and Preventive Medicine and Public Health Training Grant Program. Appropriations for these programs total $642,000,000 over 10 years. The Enhancing the Public Health Workforce even includes provisions for veterinary medicine! I’m not sure how veterinarians will provide quality health care to people or decrease health care costs, but it’s nice to see even our animals will be included in the grant programs.

Under the Subtitle “Adapting Workforce to Evolving Health System Needs” there are a number of grants and programs including:

• Health Professionals Training for Diversity, which includes scholarships for disadvantaged students, loan repayments and fellowships regarding faculty positions, and educational assistant in health professions regarding individuals from disadvantaged background.

• The Nursing Workforce Diversity Grants is being amended and adding the Coordination of Diversity and Cultural Competency Programs.

• The Secretary will establish a cultural and linguistic competency training program for health care professionals, including nurses, consisting of grants and contracts to develop and implement models of cultural and linguistic competency training. Preference will be given to entities that address cultural and linguistic needs of the population and health disparities, and placing health professionals in regions experiencing significant changes in the cultural and linguistic demographics of populations, including communities along the United States-Mexico border. Obviously this program will benefit all the illegal immigrants coming from Mexico to obtain free health care.

Appropriations for these programs total $1,138,000,000 over 10 years.

Grants and contracts are given to develop training programs to promote the delivery of health services through interdisciplinary and team-based models, with preferences given to entities that demonstrated training to the greatest number of health professionals who serve in underserved communities.

For those who claim there are no additional “taxes” imposed by this bill, they should refer to Title IV, Amendments to Internal Revenue Code of 1986 in which you will find “Sec. 401 Tax on Individuals Without Acceptable Health Care Coverage” as the first item to be added.  This bill not only increases government spending but it WILL INCREASE TAXES in more than one way.  Unfortunately, this section constantly refers to the Internal Revenue Code, so without actually looking at that code it is impossible to tell exactly what is being change.  Many of the references include “strike this and add…” and many times this is an increase in percentages or wording changes, so you would have to refer to the IRS code to determine what affect this has.

There are a number of business related changes to the IRS Code, many of which I could not interpret.  So if you are a business owner, especially a small business owner, I would recommend you read this section to see how it would apply to you.  This whole section reads like Greek, and if you have ever tried to read and interpret the IRS manuals this section of the bill is written in the same manner.  Consult your representative or tax accountant for clarification.  Because of this, I have included only portions of the tax code changes that apply to individuals and some general requirements as they apply to businesses.

The first tax is one imposed on individuals who do not have acceptable health care coverage.  This tax is 2.5 percent of the excess of the taxpayer’s modified adjusted gross income (adjusted gross income increased by the amount of interest received or accrued which is exempt from tax) for the year over the amount of gross income specified in section 6012(a)(1).  (I could not locate the reference in the bill to section 6012, so this may be an IRS code reference.)  This tax cannot exceed the national average premium for the taxable year as determined by the Secretary of Health & Human Services, under a basic plan offered in the Health Insurance Exchange.  If an individual resides outside the US they must get coverage, as well as anyone residing in possessions of the US.

This tax shall not apply to any individual who is a non-resident alien.

Acceptable coverage is (a) Qualified health benefits plan, (b) Grandfathered health insurance coverage, coverage under grandfathered employment-based health plan, (c) Medicare Part A, (d) Medicaid, (e) Members of the armed forces and dependents, including Tricare, (f) VA, and (g) Other coverage recognized by the Secretary in coordination with the Commissioner.

There are requirements for anyone who provides acceptable coverage, including a return that contains the name, address and TIN of the primary insured and the name of each individual obtaining coverage under the policy, the period each individual was provided coverage, and other information the Secretary may require.  If the insurance is provided by a governmental unit or agency, then the officer or employee who enters into the agreement to provide the coverage shall make the returns.  There is a penalty for failure to file, which amends sections of the IRS code and without referring to that code you cannot tell what is being amended.

If an employer fails (during any period) to satisfy the health coverage participation requirements a tax of $100 is imposed for each day in the period until the failure is corrected.  If a civil penalty is imposed, then this tax will be reduced by the amount of the civil penalty.

If an employer elects not to provide health benefits, in addition to other taxes imposed, an excise tax equal to 8 percent of the wages paid by him with respect to employment (defined in another section) will be imposed.  Small employers will be charged varied percentages from 0-6 as long as the annual payroll does not exceed $400,000.

There are some clauses with regard to the Small Business Employee Health Coverage Credit, which will not allow credit to highly compensated employees – any employee paid over $80,000 a year.

A surcharge on high income individuals is also being imposed, in addition to any other taxes imposed.  This surcharge is a tax equal to 1 percent of the modified adjusted gross income that exceed $350,000 but under $500,000; 1.5 percent of income over $500,000 but under $1,000,000 and 5.4 percent of income that exceeds $1,000,000.

In history we have seen democratic governments come and go and they all share common traits.   Is Obama betting on these events playing out as they have in the past.

Democracies always self-destruct when the non-productive majority realizes that it can vote itself handouts from the productive minority by electing the candidate promising the most benefits from the public treasury. To maintain their power, these candidates must adopt an ever-increasing tax and spend policy to satisfy the ever-increasing desires of the majority. As taxes increase, incentive to produce decreases, causing many of the once productive to drop out and join the non-productive. When there are no longer enough producers to fund the legitimate functions of government and the socialist programs, the democracy will collapse, always to be followed by a Dictatorship.