Morning Action: Obamacare Means More Taxes and Fewer Doctors
OBAMACARE. One of Obamacare’s new taxes – an excise tax employers will have to pay for each of their employees receiving certain benefits – has caught many employers off guard and has created a great deal of uncertainty. Apparently, the money will go to fund a research institute:
Employers caught a break this month when the Obama administration delayed an Affordable Care Act regulation imposing fines on larger businesses, but other elements of the law remain in place, including a tax that will fall for the first time on many businesses this week.
Most employers that self-insure or offer benefits such as Health Reimbursement Accounts and Flexible Spending Arrangements will have to pay an excise tax of $1 per covered person by Wednesday as part of Obamacare.
New and relatively small, it’s easy to see how the tax could fly under the radar, according to local insurance brokers.
All employers who offer insurance plans will pay the tax. But only those who offer self-insurance or tax-advantaged plans will pay it directly to the Internal Revenue Service. For the others, the insurer, not the employer, pays the tax. Insurance companies then build the tax into their insurance rates, Hughes said.
Even within those regulations, there is uncertainty, said Aaron Newman of Aaron Newman Insurance in Nazareth. Federal guidelines, he said, are unclear if businesses pay the tax on only their employees who use Flexible Spending Arrangements or also on their covered family members. In addition, the FSA tax only kicks in when employers contribute more than $500 to their employees’ benefits, Hughes added.
In addition, Obamacare is causing doctors to turn away both Medicare and Medicaid patients in increasing numbers (sub. req’d):
Fewer American doctors are treating patients enrolled in the Medicare health program for seniors, reflecting frustration with its payment rates and pushback against mounting rules, according to health experts.
The number of doctors who opted out of Medicare last year, while a small proportion of the nation’s health professionals, nearly tripled from three years earlier, according to the Centers for Medicare and Medicaid Services, the government agency that administers the program. Other doctors are limiting the number of Medicare patients they treat even if they don’t formally opt out of the system.
Even fewer doctors say they won’t accept new Medicaid patients, and the number who don’t participate in private insurance contracts, while smaller, is growing—just as millions of Americans are poised to gain access to such coverage under the new health law next year.
OBAMA. In an interview on July 24, President Obama indicated what he thinks of Congress’s role, when asked about what he thinks of assertions that many of the unilateral executive actions he has taken are illegal and/or unconstitutional:
NYT: People questioned your legal and constitutional authority to do that unilaterally — to delay the employer mandate. Did you consult with your lawyer?
MR. OBAMA: Jackie, if you heard me on stage today, what I said was that I will seize any opportunity I can find to work with Congress to strengthen the middle class, improve their prospects, improve their security —
NYT: No, but specifically –
MR. OBAMA: — but where Congress is unwilling to act, I will take whatever administrative steps that I can in order to do right by the American people.
And if Congress thinks that what I’ve done is inappropriate or wrong in some fashion, they’re free to make that case. But there’s not an action that I take that you don’t have some folks in Congress who say that I’m usurping my authority. Some of those folks think I usurp my authority by having the gall to win the presidency. And I don’t think that’s a secret. But ultimately, I’m not concerned about their opinions — very few of them, by the way, are lawyers, much less constitutional lawyers.
I am concerned about the folks who I spoke to today who are working really hard, are trying to figure out how they can send their kids to college, are trying to make sure that they can save for their retirement. And if I can take steps on their behalf, then I’m going to do so. And I would hope that more and more of Congress will say, you know what, since that’s our primary focus, we’re willing to work with you to advance those ideals. But I’m not just going to sit back if the only message from some of these folks is no on everything, and sit around and twiddle my thumbs for the next 1,200 days.
FARM BILL. House Agriculture Committee chairman Fran Lucas (R-OK) says that if the House cannot reach an agreement on food stamps before August recess, the farm bill conference between the House and Senate should proceed:
With the farm bill stalled, House Agriculture Committee Chairman Frank Lucas, R-Okla., says that if the House cannot reach agreement on a bill to reauthorize the Supplemental Nutrition Assistance Program, better known as SNAP or food stamps, before leaving on Aug. 2 for five weeks, the farm bill conference between the House and the Senate should proceed.
The Senate has passed a comprehensive farm bill that reauthorizes farm programs and the food stamp program, but the House has passed a farm program-only bill and has not reached agreement on a food stamp reauthorization that can garner 218 votes for passage.
“My personal goal is by some point next week, if it’s quite clear that consensus cannot be achieved, if it’s just not achievable, then I think we need to recognize that fact and move on conferencing the bill that the Senate’s passed and the House has passed and see what evolves from that,” Lucas said in a radio interview July 24 with the Oklahoma Farm Report.
We have warned that a conference on the unreformed farm bill will certainly produce a bad result for taxpayers and consumers.
TAX BREAKS. Some Senate lawmakers and lobbyists are pushing for new tax breaks through a secret process:
The Senate’s top tax writers’ “blank slate” approach to tax reform was supposed to give Congress the chance to throw out all tax breaks and start fresh. Instead, lawmakers and lobbyists are using their confidential and off-the-record testimony and letters of support to ask for brand new or expanded tax breaks in addition to the old.
It’s a boondoggle that illustrates the difficulty of sorting through hundreds of breaks, which now cost the federal government more than $1 trillion a year and complicate a tax code that’s already four million words long.
Democratic Sen. Christopher Coons of Delaware, for instance, wants renewable0energy companies to receive a new distinction that would make sure they avoided corporate taxes and could instead file through the individual side of the code as a master limited partnership— benefit already granted to oil, natural gas, and coal mining companies.
The real-estate industry, represented by the National Association of Realtors, wants two temporary tax credits made permanent, even though the existing mortgage-interest deduction already is one of the costliest tax breaks on the books.
Manufacturers want a temporary research-and-development credit embedded into the code for the long run. Now, it’s a temporary provision that must be renewed along with a lengthy list of other business tax extenders.