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View Diary: Maneuvering in the middle on fiscal cliff is still veering too far right (189 comments)

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  •  Yeah, except the (4+ / 0-)

    Reublican governors are refusing Medicaid money, and refusing to set up exchanges.  So Seniors will have nowhere to go for help from states either.  Does no one remember the very reason WHY we set up Medicare in the first place?!  Retirees losing their employer paid health insurance, and unable to get affordable health insurance on the private market, because they were OLD and expensive.  Can't make a profit off old folks who are guaranteed to get older and sicker.

    •  Governors cannot keep exchanges from being (1+ / 0-)
      Recommended by:

      set up.  If the states don't run them, the feds will.

      The exchanges will be an option for those kicked off Medicare, but there is a first year problem as the subsidies come in the form of tax credits.

      There could be some cost savings, depending on the number of seniors who purchase coverage from the exchanges.

      Part of the CBO calculation of ACA savings is an estimate that 3,000,000 Medicaid recipients kicked off of Medicaid will opt to go without insurance instead of purchasing insurance through the exchanges.  The CBO estimates that exchange insurance will cost the federal government $9,000 a head by 2020, as opposed to $6,000 for Medicaid, meaning no money is saved if too many of those abandoned recipients sign up for low-cost insurance on the exchanges.

      I imagine that a similar dynamic would apply to Medicare -- enough people go without insurance, money is saved. Otherwise, more money is spent.

      LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

      by dinotrac on Tue Dec 11, 2012 at 08:26:11 AM PST

      [ Parent ]

      •  Bigger problem w/Federal exchange (0+ / 0-)
        but there is a first year problem as the subsidies come in the form of tax credits.
        As was pointed out to me, the PPACA includes a feature to "Provide refundable and advanceable premium credits". I've don't know what form that these will take or how much paperwork this will require but this may not be a big problem.

        A bigger problem with the Federal exchanges is that the PPACA does not actually provide subsidies for those utilizing the Federal exchange, only for those utilizing state exchanges.

        The IRS regulations don't make this distinction (their regulations provide subsidies for clients of the Federal exchange as well) so the IRS is not implementing the letter of the PPACA. This will end up in court unless it is rendered moot by intervening legislation. I think it's likely that the courts will hold that the IRS must implement what the PPACA stated, not what they have specified in the regulations they drafted. However, the legislative history of the PPACA may reveal something that I'm unaware of. Earlier drafts of the PPACA did provide subsidies for clients of both types of exchanges so the omission seems to be intentional rather than just an oversight (IIRC, text was explicitly removed in later versions to limit subsidies to just clients of the state exchanges).

        An employer is only subject to a penalty for not offering health coverage if one of their employees receives a subsidy as a result. Therefore, the party with the best standing to challenge the discrepancy between the IRS regulations and the PPACA is an employer who is assessed a penalty for not offering insurance and whose employee(s) received a subsidy on the Federal exchange.

        Since employers won't be penalized until well after the subsidies have already been paid, if the government successfully fights this based on standing, that would delay the courts' involvement for a while. Hopefully that won't result in the subsidies being "clawed back" if the courts rule against the IRS position.

        Perhaps the IRS can skirt this issue by just not implementing fines on employers whose employees are all in states w/o state exchanges in order to deny these employers standing.

        •  You're making my head hurt. (0+ / 0-)

          Just when I thought I was starting to understand this mess.

          It's worse than I thought.

          Back to reading...reading..reading.

          Thanks, though, for the clarification.

          I think.

          LG: You know what? You got spunk. MR: Well, Yes... LG: I hate spunk!

          by dinotrac on Tue Dec 11, 2012 at 10:41:35 AM PST

          [ Parent ]

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