MN03 Paulsen OpEd : $267 Billion HIT on the Deficit

The OpED [highlights below]

Let’s find bipartisan solution to rising health care costs

Providing Americans with access to quality, affordable health care is not a partisan issue. The need to curb rising health care costs is something both sides of the aisle agree on. Unfortunately, partisan politics have gotten in the way of lawmakers actually doing something about it.

But, as we write this, we’re optimistic that lawmakers can take action to improve our health care system. Together, we can make sure that more families see lower health care costs.

One way Republicans and Democrats can act right now is to prevent the return of the Affordable Care Act’s Health Insurance Tax, or HIT.

The HIT jeopardizes the progress we have made in improving access to quality, affordable health care by increasing premiums for hard-working families and seniors. It would make health care unaffordable for those who need it most.
Congress approved a bipartisan, one-year moratorium stopping the HIT for 2017. But without immediate action, the HIT will return on Jan. 1, 2018.

According to the actuarial consulting firm Oliver Wyman, the HIT would increase health insurance premiums for 100 million Americans in 2018. Those impacted would see $22 billion dollars in rising in health care costs next year alone. Businesses will be some of the hardest hit. Employer premiums would increase $500 dollars per employee for family coverage. Meanwhile, seniors enrolled in Medicare Advantage will see premium increases of $245 dollars and benefit reductions.

None of this makes sense – from a financial or a public health perspective. We need to focus on building a smart health care system that keeps health insurance affordable for everyone.

It’s time we put partisan politics aside and work together to find solutions that address rising health care costs and market instability. Our constituents are counting on us. Let’s get it done.

OK … so there is a lot to digest … including the obvious conclusion that since ObamaCare increased coverage (essential benefits as well as increased participation), “the progress we have made in improving access to quality, affordable health care“, must be due to the Affordable Care Act.

That said, it is pretty safe to say that Congressman Paulsen will still advocate for repealing the ACA … and this OpEd is really an image-building diversion.

The scare tactics prove that.
Premium increases is something that everyone can relate … and as an added emphasis, the citation of Medicare Advantage programs will surely draw the attention of seniors.

The legislation proposed in the House is H.R.246 – To repeal the annual fee on health insurance providers enacted by the Patient Protection and Affordable Care Act.
This is a permanent repeal … since there is no offset; the cost to the deficit is projected at $267 billion over the next ten years (2018 to 2027).
The Senate has a one year repeal S.1859 – Healthcare Tax Relief Act so it has a cost of $14.3 billion for 2018.

So, what Congressman Paulsen is advocating is a tax cut that will add to the deficit … (yep, just another example that Congressman Paulsen is a Fiscal Fraud.)

And who will get this tax cut ?
Well, did you see the CNN Cassidy-Graham-Klobuchar-Sanders Healthcare Town Hall ?
If so, you probably remember this comment

GRAHAM: But what I’m not going to do is continue the same old crap and tell you everything is fine. Let me tell you what’s happened since Obamacare passed.
Anybody have stock in Anthem? These are the big blues, 270 percent increase.
Humana, 420 percent increase.
Aetna, 470 percent increase.
Cigna, 480 percent increase.
Where’s the money going?
It’s going to insurance companies who are not delivering for you.

The tax cut will go to insurance companies.

The tax was designed to be borne by insurance companies that participate in the health care market (actually it is broken down based on the size of the insurance company, the small insurers do not pay anything while the larger ones pay the most.)
This tax is meant to help fund the law by taxing insurers who profit the most off of the expansion of coverage under the ACA. It’s actually one of the larger funding mechanisms in the ACA … but Congress has been stalling it for years … thus the rising stock prices of insurers.

The repeal of this tax is being pushed by House GOP members who want to see ObamaCare dismantled and defunded piece by piece … hence HR 246 is sponsored by 162 Republicans including Congressmen Emmer, Lewis and Paulsen.

Repealing the tax is a bad idea unless it is replaced with a smart solution that does a better job at tackling the issue of who foots the bill.
Congressman Paulsen hasn’t offered a solution … just happy talk.

Yet, ya gotta ask a couple of questions.

#1. Since insurers have finalizing rates for 2018 policies, does that mean that they have already factored in paying higher taxes?

#2. Since the HIT is based on premiums collected, wouldn’t that encourage more use of smaller insurers ? Health insurance providers with annual net premiums less than or equal to $25 million are not subject to the fee, and those that are between $25 and $50 million are charged less.

#3. Should Congressman Paulsen mention that self-insured employers, government entities, and voluntary employees’ beneficiary associations (VEBAs) are not subject to HIT ?

#4. Since MedicareAdvantage policies are optional, could consumers just elect not to purchase the additional coverage ?

#5. The “$22 billion dollars in rising in health care costs next year alone” assertion is based on the insurance companies ratcheting up the cost of the tax by 35% to pay federal income tax … yet, most insurers corporate tax rate are in the 21% range … and once again, refer to #1 … this means that insurers have already included that increase in the premiums we are asked to pay.

#6. Since Congressman Paulsen cited increased premiums, why didn’t he mention what happens in Minnesota ? [The answer, Minnesotans have a lower increase than the average state, thus, this does not help his argument.]

All that aside, HR 246 (or some version like it) will assuredly be enacted by the Republican-controlled Congress … hence, Congressman Paulsen’s OpEd is really written to project him as a “moderate Republican concerned with your healthcare” not a Member of the Washington Establishment beholden to the insurance industry.

Seriously, Congressman Paulsen, if you are truly concerned about America’s fiscal future, isn’t this just another debt that future generations will be asked to pay.

Tags: , ,