Health Care

Policy Feature Issue: Read Outs from the Committees on Energy and Commerce and Small Business Oversight Hearings

Policy • December 5, 2013

Readout from Energy and Commerce Health Subcommittee Hearing on Medicare Advantage: What Beneficiaries Should Expect under the President’s Health Care Plan

Feature Witnesses:  Douglas Holtz-Eakin, President, American Action Forum; Bob Margolis, CEO, HealthCare Partners; Jon Kaplan, Senior Partner, Boston Consulting Group; and Marsha Gold, Senior Fellow, Mathematica Policy Research

The president sold his health care law on a number of important promises including, “If you like your doctor, you can keep your doctor. If you like your health care plan, you can keep your health care plan.”

The committee’s hearing confirmed that for Medicare Advantage beneficiaries, like so many other Americans, this is simply not true. Former CBO Director Doug Holtz-Eakin explained that it couldn’t be: “The regulations and the funding are at odds with the promise. The promise can’t be held true.”

Obamacare raided Medicare by $716 billion, including $300 billion from Medicare Advantage. The cuts to the MA program will begin to be realized next year, at which point the seniors and those with disabilities who rely on the MA program will be negatively impacted.

Holtz-Eakin testified, “The Medicare Advantage cuts are already having a negative impact on enrollment and seniors’ plan choice. Those most hurt by the cuts are low-income seniors in rural areas without other options for supplemental Medicare coverage. Additional scheduled cuts in the future will broaden the damage to Medicare Advantage.”

As Chairman Upton said, Obamacare has already “wreaked havoc” on the health care plans of Americans across the country. Beginning next year, the cuts the law is making to the MA program will directly hurt some of America’s most vulnerable.

This is just one more broken promise being realized.

Jon Kaplan, an expert health care consultant, explained that, “Medicare Advantage plans are an example of a successful public-private partnership.” The MA program should serve as an example for the Medicare program overall as a means to improve the quality of care and choices for beneficiaries. Instead the health care law has raided the program in order to pay for the flawed new entitlement.

Obamacare has ended Medicare “as we know it.” We now know it is leaving our nation’s most vulnerable more uncertain about what their health care will be in the coming weeks, months, and years.

 

Read Out from Small Business Committee Hearing on Health Care Law’s Application of the Internal Revenue Code’s Business Aggregation Rules to Determine Which Employees Are Attributed to a Business for the Employer Mandate

Witnesses: certified public accountants, small business owners, and an insurance executive

The health care law’s application of the complex business aggregation rules, which were developed as part of the ERISA laws in the 1970s, is another example of provisions in the law that are confusing and unworkable for small businesses

The rules can couple businesses in completely different industries in different states, not directly owned by the same person, with no relationship to each other, so the businesses together will be subject to the employer mandate

Small businesses with less than 50 full-time equivalent employees independently wouldn’t be required to provide health insurance, but the aggregation rules will group them together, subject them to the employer mandate, and increase the cost of doing business for each of them

Even some Certified Public Accountants do not have the specialized expertise needed to decipher the rules

The rules are a complicated test for taxpayers, and will lead to inefficient and unwarranted economic behavior

To avoid the application of the rules, some small business owners with capital may avoid investing in other businesses, so small companies will be deprived of  the benefit of scarce capital

Business owners are refraining from hiring so they are not close to the 50-worker employer mandate threshold

One restaurant owner witness said the health care law is draining resources form the companies that would otherwise be used to grow the businesses

The law is causing premiums to rise.  One small business owner witness said her current plan is being cancelled, and her new plan has 40-44% higher premiums and reduced benefits

Young people are not enrolling in coverage, even with low premiums, because they would rather have the money.

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