Summary: House Republican leaders unveiled a "Pledge to America" yesterday to repeal the health care overhaul law, along with other promises like canceling the unspent stimulus money. The New York Times asked me to write a short Op-ed for “Room for Debate.” The question at hand: “Can the Republicans gain traction on a promise to roll back benefits that are now in place? Conventional political wisdom says you can't sell a negative. But in what situations has such an approach won voter support?” You’ll find my piece, along with opinions from three other contributors, here.
Below, the original version of my piece, restoring some information I cut to fit the Room for Debate format. You can Enter the Discussion on the Times site, and/or comment here.
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Even Sen. Tom Coburn (R-Okla.), who signed the pledge to “Defund” the Accountable Care Act (ACA) confesses: “There is only a certain limited amount of things you can do” to undo reform. “You can get a vote to repeal it, and the first thing [Obama] will do is veto it. That is an exercise in futility. What you have to do is go to the specific areas where money is spent to implement it and put a limitation on the expenditures.”
Easy to say; hard to do. “I wouldn’t dismiss it, but I would be surprised if it actually happened,” Gail Wilensky, an economist and senior fellow at project HOPE, recently told Politico.com reporter Carrie Budoff Brown. “You hear this periodically when there are core groups that don’t like something. … It is easy to talk about rhetorically; it seems to have been very hard to pull off.”
And Wilensky, who directed Medicare and Medicaid from 1990-1992, and served as Deputy Assistant to President (GHW) Bush for Policy Development, from 1992-1993, has been around Washington long enough to know what is and isn’t doable.
Consider the precedents: Medicare, Social Security and the Civil Rights Act all met fierce opposition, even after they were passed. Yet over time, the legislation was accepted and expanded. Conservatives are fond of pointing to the Medicare Catastrophic Care Act (MCCA), which was overturned shortly after it was passed in 1988. But this was because seniors alone were asked to carry the full burden of funding through higher premiums and an income tax surcharge. (Former Congressman Dan Rostenkowski –once the chairman of the US House Ways & Means Committee– would never forget the angry mob of seniors who chased him down the street and then swarmed his car, like hornets.) Those grey panthers were extremely well organized and focused on a single issue. Those who oppose the ACA are not.
Unlike the MCCA, the Affordable Care Act (ACA) spreads costs, raising fees for insurers, drug-makers and device-makers, cutting overpayments to Medicare Advantage insurers, and raising taxes only for the top 2 percent (individuals earning over $200, 000 or couples earning over $250, 000). The ACA stipulates that Medicare co-pays and premiums cannot be raised.
Meanwhile, today, popular provisions of the ACA begin to kick in, including requirements that insurance companies offer coverage for dependents under 26 —and for children under 19 suffering from pre-existing conditions. Once you roll out social programs, it’s difficult to take them back.
Republicans vow that they’ll “defund” reform. But, while some programs require discretionary funds from Congress, many major provisions are funded with mandatory spending. Medicaid expansion might seem vulnerable; the poor have few lobbyists. But any change in the Medicaid provision would require separate, free-standing legislation. Conservatives can’t take back the funding simply by making routine changes during the appropriations process. Finally, if opponents killed the bill, they would have to find a way to pay for the estimated $143 billion reduction in federal deficits created by the law.
Some call for repealing the least popular plank in the ACA—the individual mandate. But the mandate supports the most popular provision—which says that insurers cannot discriminate against those suffering from pre-existing conditions. Without the mandate, many would simply wait until they were sick before signing up for insurance, safe in the knowledge that insures must take them and can’t charge them more. And if healthy customers stayed out of the insurance pool until they fell ill, premiums would sky-rocket.
We can only hope that this not funded.
While I agree that repeal of the bill would be difficult (and undesirable, in my view), there are a number of changes that could be made to address specific issues. Here are just a few:
1. Most of the major insurers announced that they will no longer sell new child only policies because of the likelihood of adverse selection. This could be addressed by allowing for an open enrollment period during which people could apply. If there were only one open enrollment period per year, or two at most, people could not sign their child up for insurance immediately after they got sick unless it happened to be during an open enrollment period.
2. The requirement to file a Form 1099 documenting every vendor from whom the healthcare provider purchased $600 or more of goods and services during the year is enormously burdensome administratively. This provision is about tax compliance, not healthcare reform. It could easily be repealed without affecting the rest of the bill. At the very least, the threshold for Form 1099 reporting could be raised significantly to at least $5,000 from $600.
3. If the basic benefits package proves too expensive for too many people and subsidies turn out to cost more than expected, plans with higher deductibles and co-pays and/or fewer covered services could be allowed.
4. If the minimum medical loss ratio (MLR) rules cause more disruption to the individual and small group markets than expected, they could be reduced or eliminated or a phase in period could be approved. Similar required loss ratios do not exist in auto, homeowners and other personal property and casualty insurance lines and those markets work perfectly fine. The rules as passed are unnecessary and they will be even less necessary after 2014 when people can’t be turned down due to pre-existing conditions but will be required to purchase insurance.
Barry–
I’m sure adjustments will have to be made. We’ll learn as we go along, and refine the legislation in various ways.
For example, I’m guessing that we may have to raise the penalties for those who decide not to buy insurance.
And I’m pretty sure that we’ll have to change the provision that lets insurers charge older adults three times as much as they charge younger adutls. Too many 55-65 year old Americans who earn a little too much to qualify for subsidies will find insurance unaffordable if premiums are triple what they are for everyone else.
This may mean raising premiums for younger adults–or raising taxes to provide subsidies for 55-65 year olds who cannot afford sky-high premiums. (I’m thinknig of a couple with joint income of $75,000–too rich for subsidies, but not in a position to pay $20,000–$25,000–for a family plan (in today’s dollars.)
Much depends on whether insuers decided that they must charge older adults 3 times as much, or whether they compete for the older adult businesses by trying to keep premiums as low as possible while providing all required benfits . . .
Much also depends on how much waste we can squeeze out of the system.
Turnign to your recommendataions:
1) From what I have read, insurers are less worried about parents signing up a child who suddenly becomes sick than they are about suddenly having a large number of chronically ill children (suffering from cancer etc.) who couldn’t get insurance in the past (or only at exorbitant rates) suddenly on their rolls.
The insurers want the (presumably healthy) parents to sign up with the child to balance things out. The problem is that until subsidies kick in, many parents of seriously ill children cannot afford insurance for themselves.
So if insurers won’t sell a policy to the child only, some seriously ill children will remain uninsured.
For this reason, I think that insurers should be required ot sell insurance to children only –until 2014 when the mandate and subsidies kick in.
If an insurer can show that it suddenly has a disproportionate share of very sick children in its pool–and is paying out a disproportionate share of premiums to care for these kids– then perhaps the insurers should get some type of help from the govt–until 2014.
2. It shouldn’t be that hard for a business to fulfill the 1099 provision–assuming it does proper book-keeping. (If someone is running a largely cash business without keeping good books–and evading taxes, that’s another thing.–I may have mentioned that a year or so ago I went to a Park avenue doctor who only takes cash–no credit cards, no insurance. He reception told me that that this doctor has always run a cash-only business . . )
Today, with computer programs, it’s just not that hard to keep track of vendors and purchases. (Other readers who seemed knoweldgable about small busiensses have suggested this.) I suspect people who are really unhappy about this may be evading taxes–or physicians running a pretty sloppy business without decent book-keeping. And of course vendors who are evading taxes don’t want a record of purchases. But we need those taxes.
3. We definitely don’t want to raise co-pays and deductibles–too much evidence that people don’t get the care they need when we do that. One of the strongest planks in the bill is no co-pays for preventive care that is deemed effective.
And we can’t cover fewer services– the whole point of universal coverage is to make sure that everyone has access to all effective care.
If the insurance proves too expensive, we can lower fees for “over-valued” services (the secretary of HHS has the power to do that; she doesn’t have to go through Congress. She also can raise fees for “undervalued services” –for example, palliative care.)
We also need to take a close look at brand-name hospitals that have huge clout in the marketplace and are overcharging. (As you know, I like the Maryland plan where all hospitals are paid the same fees for the same services–with adjustments for teaching hospitals and for hospitals that treat a poorer, sicker population.
There is no reason for a brand-name hospital to charge Medicare or an insurer twice as much to treat a broken arm– or for a normal delivery. We all wind up paying for that in the form of higher premiums and Medicare deductibles, premiums and taxes.
If a hospital offers certain amenities (valet parking, gourmet food, two think-screen TVs in every single room, spa, whatever) then it should charge patients who want those amenities extra—and the patients should pay out of pocket.
But people who don’t go to the brand-name hospital shouldn’t have to pay for the amentities in the form of higher premiums.
4. Auto, homeowner and property insurance premiums have not been spiralling by 6-7% a year for the last 15 years. Health insurance has. You and I agree that most of the inflation is caused by the fact that providers are charging more and doing more–using more medical technology that becomes more expensive each year.
But many insurers have not been as efficient as they could be. Too often, they agree to over-pay for popular drugs and over-pay certain hospitals–they haven’t fought back to keep prices under control. (And that’s part of their job. ) Since 2000, they’ve just been passing on the higher costs in the form of higher premiums.
Also seven-digit executive salaries set the wrong tone. The very best non-profits offer significantly better benefits at the same price. (I think of Kaiser’s smoking cessation programs, it’s program that has greatly reduced mortalities as a result of heart disease in Northern California. I think of Peugot Sound Community Clinic’s preventive care programs . . .
If you look at the history of medical loss ratios, it becomes clear that it is not that difficult to pay out 80% of premiums, even in a market where you’re dealing with many individuals and small busineses. That’s Cigna’s market,. In the latest quarter, Cigna reported a medical loss ration of 79%– and yet they are leading the charge fighting the new law. As if they can’t handle that extra 1% . .
Under reform,their administrative costs should be significantly lower: they won’t need underwriters to decide who to insure and how much to charge them; they won’t need to do nearly as much advertising–the Exchanges will be bringing information to the public comparing the plans. They won’t be selling to very small businesses and individuals (which is administratively expensive)– those small businesses and individuals will be grouped together in the Exchanges. Finally, they won’t have to pay fat commissions to insurance brokers to sell their plans to small businesses and individuals. (Many of those brokers add little value to the system–talk to small non-profits about how much good those insurance brokers do them.)
With all of those savings, I can’t imagine why Cigna couldn’t get from 79% to 80%.
“It” is already funded and ready to go, despite naysayers who would have “it” otherwise, Peter.
And it’s far too late coming for poverty stricken seniors who lost their means of income and insurance coverage because of insurance company overcharging for health care for those over 55 years of age! That went on for 20 years, and at 75 years of age, those seniors in forced retirement, have little energy to tackle the workplace again.
I’ve proposed many times, that the VA’s system of care should be combined with that for civilians, to save money and have high quality standards for all, that are monitored and upheld.
Having mental health care on an equal basis with that for physical health may some day reduce the ever increasing homeless caseloads. Early, preventative treatment while those who suffer such illnesses, are young would benefit everyone. Why Republicans would want such a program “rolled back and defunded”, escapes me. I know that those who have much more money than most of the population want to preserve their monetary superiority at the expense of other humans on this earth. That is crass selfishness, and must be curbed, which it will be!
Maggie –
Regarding the child only insurance policies, whether it’s a child with cancer or a parent trying to apply for insurance right after a child gets sick, I think the industry is right to fear adverse selection. It cannot be expected to sell policies at a price that will most likely generate a loss. Without a mandate and appropriate subsidies to acquire insurance, there would probably need to be a state funded high risk pool to cover very sick children who aren’t already covered by a policy acquired before the new law took effect.
With respect to the 1099 forms, I think the business world is more complicated than you suggest. As I understand it, this rule applies to all businesses and not just medical providers. I think it would be quite difficult to keep track of every gas station a salesman or delivery person refueled at, every restaurant he ate at, every hotel or motel he stayed at, and then, if more than $600 was spent at any of these places in a year to provide the name, address and tax ID number of the business. Computers or no computers, this is plenty burdensome. Even for large companies like the one I work for, it’s a complex process to keep track of all this.
On insurance policy deductibles, the basic benefits package in Switzerland, which is very comprehensive, allows for a deductible of between $300 and $2,400 or so which each individual or family can specify. The higher deductible policies are about $100 per month cheaper than the low deductible plans. While there may be some risk than people with high deductible plans will forgo some necessary care, I think the fears are overblown and the level of risk from a societal perspective is well within acceptable limits.
Finally, the insurance MLR issue boils down to whether or not you think the industry will be sufficiently competitive without it. I think it will be plenty competitive which renders the MLR limits unnecessary. You apparently don’t agree. It’s a difference of opinion and philosophy.
I think the problem is money driven medicine, not insurance for money driven medicine. We have not touched the actual problem, just a symptom.
No good, no good.
Again a very valuable article, thanks for sharing and keep up the great work.
Barry& Joe Says–
Barry–As we know, the state high- risk funds don’t work well to protect patients.
If a child has cancer, I think you and I agree that he deserves the best care available–and if an insurance company has to take a loss on that customer to provide that care, so be it. (The family should not be bankrupted; the child should receive the same care you or I would want for our child.)
Insurance companies also make large gains on healthy patients who rarely go to the doctor.These are the trade-offs of the insurance biz.
As I suggested, companies that attract a great many very sick children may need some help from the govt.
But large companies should be able to handle the risk. Small companies, that have survived mainly by cherrying picking in the individual market may not make it under reform. Unless they can attract more customers and figure out more efficient ways to deliver care through very efficient networks, they may have to get out of the comprehensive health care business. (Some will no doubt wind up selling supplemental care like MediGap policies.)
For-profit health insurance companies barely existed before 1980. It is not clear that this is a lucrative business model–especially for small companies–when they are no longer allowed to shun the sick, by denying coverage, or charging so much that a middle-class family cannot afford the coverage.
This is simply a business model that we have tried out for the past 20 or 25 years, and the results have not been great. We have done great harm to many middle-class Americans who had the misfortune to become seriously ill.
Moreover, we cannot afford to bail out more companies that can’t provide the service or product that they are supposed to provide at a reasonable cost.
And, by and large, small insurers just aren’t an efficient way to deliver care–just as using insurance brokers as middleman is not efficient.
Non-profit HMOs like Peugot Sound have found that they can provide high quality Medicare without needing to be over-paid by the government. When for–profit insurers got out of the Medicare business in the late 90s, dumping customers because they weren’t making enough money, Peugot sound continued to provide Medicare. They’ll survive under reform.
The for-profits that can’t deliver Medicare without over-charging are the ways that are likely to get out of the health insurance business.
Non-profits like Geisinger that both deliver care and provide insurance are very successful. This appears to be a very efficient business model, and it’s likely to replace models that don’t work as well. (This is the way capitalism is supposed to .
work. It is not supposed to be dependent on gov’t handouts–i.e. corporate welfare.)
When we are spendign more than 17% of GDP on something, and its a necessary service, we as a nation cannot let the private sector (or anyone)do it inefficiently.
We also cannot afford to pay doctors more for services because they choose to operate solo or very small practices with very high overhead–and no economies of scale.
In other words, we can no longer afford to operate healthcare as a cottage industry–either of insurers or of providers.
And if we wind up with fewer, large insuers, they will have more clout when negotiating with those hospitals that, today, are wasteful (not focusing on errors, over-expanding over-building, investing too much in hotel-like amentities) and over-charging insurers.
Switzerland isn’t a good model for reform. Like the U.S., they are running into major financial problems. They also don’t have the huge number of low-income, working poor and poor citizens that we do.
Switzerland is large upper-middle-class and middle-class. That makes a huge difference. More people can afford to pay out of pocket when they have a high deductible. In this coutnry, reserach shows that too often, the people who choose the high dedutible are low-income workers who cannot afford to pay out of pocket.
As for compeition among insurers–for-profit insurers have had decades to make market competition work to bring down premiums. They have failed.
Joe says–
I agree that the problem is money-driven medicine–not insurance, per se.
But the legislation does address “money driven medicine.”
For example, the legilsation allows the Secrtary of HHS to lower physician’s fees for any service which she feels is over-valued (i.e. we are over-paying for that service.)She doesn’t have to get permission from Congress.
In any year that Medicare costs grow by more than a certain amount (ultimately the consumer price index plus 1 percent) the Independent Payment Advisory Board can make cuts to Medicare spendindg to reduce waste, etc, as long as it doesn’t cut benefits (i.e. effective care), or raise co-pays or
deductibles. These cuts go into effect immediately, without Congressional approval (which means lobbyists cannot meddle) unless Congress can come up with equal Medicare savings–without raising premiusm, co-pays, changing eligibility, or cutting benefits. Congress has a limited amount of time in which to do this. If it doesn’t act, the Board’s recommendations immediately become law.
Medicare will be running pilot projects experimenting with moving away from fee-for-service and paying doctors and hospitals in different ways that no longer incentivize money-driven–medicine (doing more to make more money).
When those pilots are successful, Medicare can roll them out natoinwide, without Congressional approval.
Doctors and hospitals that don’t want to particpate won’t have to–but , mosts cases, that means they won’t be getting bonsues or raises unless they find other ways to achieve better outcomes at a lower cost..
Hospitals with too many preventable readmissions won’t be paid for those readmissoins–this encourages safe, higher-quality care.
Insurers won’t be able to raise premiums unless they can justify the increases to state or federal regulators. Some of those regulators will be very tough.
I could go on, but by changing how we pay for care, and how care is delivered, Medicare reform will be addressing Money-Driven Medicine.
And private insurers will follow Medicare’s example (as they do now.)
Maggie,
The four opinion pieces and accompanying comments in the NYT cover a majority of the political spectrum. The final analysis is that neither political philosophical position has an answer to the healthcare cost problem, and from what I can see, nor do they want to.
The bottom line they and the media should be asking the American people is this;
If you are paying $250 per month for health insurance now in 2010, you will be paying $450-$550 per month in 2020 and your yearly wage increase won’t come close to keeping up with the increased monthly health insurance premiums. That’s if you are lucky enough to keep your job because the company sent it over seas or down sized because of increasing health care costs. The remaining workers will have do more for less. Neither political party has ideas to changes this fact, NOW, WHAT DO
YOU WANT TO DO?
It will not matter whether you are a conservative or liberal, tea partier or progressive, watch Glenn Beck or Keith Oberman, black or white, man or women, gay or straight. The forces of nature and the market forces really don’t care and for that matter don’t care who wins. The problem is the rhetoric from both sides is all about winning an election, not solving healthcare costs. The real crime is the answer is staring us right in the face, but the political atmosphere has made the American population impotent.
I think Barry is correct that the 1099 provision is for ALL businesses, not just healthcare.
I have no sympathy for those who would deal in cash and evade taxes, but I think the reporting requirement is burdensome and could possibly be used to pave the way for a VAT-type tax.
“Insurance companies also make large gains on healthy patients who rarely go to the doctor. These are the trade-offs of the insurance biz.”
When people buy insurance before they need it, the insurance model works fine whether it’s health insurance, homeowners, auto, umbrella liability or whatever. If a parent failed to insure his child for 10 years and the child receives a cancer diagnosis, the parent shouldn’t expect to suddenly be able to purchase health insurance at standard rates just as he shouldn’t expect to buy auto insurance right after an accident or fire insurance while his house is engulfed in flames. Waiting to buy health insurance until you or a family member are sick is adverse selection which is what the industry fears under the regulations as currently written with respect to children with pre-existing conditions. I notice that you didn’t recommend that hospitals and doctors should be required to treat the child without being paid or paid very little. Why should insurers have to insure children after they get sick?
As for insurance industry consolidation, I’m all for it. We probably don’t need more than a half dozen health insurance companies. In Switzerland, with a population of 7.8 million (less than NYC), there are 84 insurers though the six largest control 80% of the market. Even today in the U.S., though, non-profits, mainly the Blues plus Kaiser, Harvard-Pilgrim, Geisinger and a few others, control close to 50% of the market. By the way, I was in Switzerland last month and learned a bit more about their economy and their healthcare system. I was told that the average income is $5,000 – $6,000 Swiss Francs (and dollars) per month. Most people live in apartments because they can’t afford to own a home and they drive tiny cars. There are plenty of people who are struggling financially. In Geneva, which is incredibly expensive even for locals, many live across the border in France and commute to Geneva from there because it’s cheaper. Lots of people who opt for high deductible health insurance policies do so out of economic necessity.
Regarding controlling healthcare costs, employers are finally starting to show more interest in limited network and narrow network insurance products. There are quite a few areas in healthcare where there is wide price variance among providers but little or no quality variance. This includes brand name vs. generic drugs, some pharmacies sell the same drug for less than others, non-hospital owned imaging centers charge far less than hospital owned facilities for the same image and comparable quality, and many routine procedures, including surgeries, can be done equally well for a lot less money at a community hospital as compared to a teaching hospital with a marquee name. Robust price and quality transparency tools for both patients and referring doctors would make this information better known while tiered in network insurance products could help to steer patients toward the most cost-effective providers.
Finally, last week, I asked my cardiologist / PCP, who practices with several other doctors in NYC, how much of the utilization that he and his colleagues drive is defensive medicine. He said that in virtually all practices in the region that he is familiar with, it’s 15%-20%. That’s why we need tort reform including health courts and robust safe harbor protection from lawsuits for doctors and hospitals which follow evidence based standards where they exist. The recent study in Health Affairs on this subject was far wide of the mark, in my opinion.
Google “form 1099 repeal” and look at all the links.
I have no faith that HHS will reduce fees. The reglators almost always favor the regulated.
Has any regulated industry reduced costs? Ever? If not, why would we believe it would work this time?
Joe Says–
This year, Medicare has reduced fees for imaging done by a doctor who owns or has leased equipment costing more than $1 million (reserarch shows that when physicians profit from the imaging because they have the equipment in their offices, they order twice as much imaging.)
This is just one example of a case where Medicare fees have been reduced.
In the past, fees schedules were adjusted by a committee, made up largely of specialists, which met behind closed doors and kept no minutes. They usually recommended that Medicare raise fees,and Medicare almost always followed their recommendations.
But under reform, things have changed. The Secretary of HHS now has the power to make these decisions at her own discretion. This is extraordiniarly important–and an example of how much power Congress has ceded to the administration to make key health care decisions.
Also, I not sure that everyone realizes how, in this administration, the cast of characters has changed:
Look at Elizabeth Warren, Don Berwick, the deputy director of the FDA . . .these people are activists who will be making changes. And Berwick and the Secretary of HHS (Sebelius) are determined to rein in spending. Sebelius has already begun to get tough with the insurance industry.
Barry, J Davidson DO, Ginger R & James, CAmerican, Muskeln
Barry:
You write: “If a parent failed to insure his child for 10 years and the child receives a cancer diagnosis, the parent shouldn’t expect to suddenly be able to purchase health insurance at standard rates just as he shouldn’t expect to . . .”
Pause for a minute and think. Why would a parent not buy health insurance for his or her child?
Because they are very poor and cannot afford it.
If you look at the research you will find that while people without children may decide to take a chance that they(the adult) won’t get sick, when it comes to their children very, very few people decide to roll the dice.
So you are saying that if the child of a very poor person develops cancer, the parent just shouldnt’ expect medical help . . .
Or at the very least, they should be punished for being poor and having a child with cancer by being bankuprted.
On Switzerland– as you know, anecdotes that you pick up in your travels are not statistics. The fact is that according to the lastest numbers, Switzerland has a median household income, adjustetd for parity purchasing power, of $64,000–the highest in Europe. The U.S. has a median household income, adjusted for purchasing power, of 49,000.
Even more importantly, Switzerland has very little poverty– 2nd only to Sweden, a socialist state.
On Malpractice– see Naomi’s most recent post.
Asking your cardiologist how much of his overtreatment (i.e. recommending angioplasty for someone who has not had a heart attack) is driven by fear of a lawsuit is like asking a baseball fan to what degree “bad luck” accounts for his favorite team’s losing season. . .
In other words, you are not asking an objective source.
JDAvison DO–
As legal and health expert Timothy Jost points out, “Anyone who says there are no savings in the Affordable Care Act just hasn’t read the bill.”
I realize that many conservative politicians and pundits have said there are no savings in the bill. They assume people don’t have time to read it–and will believe them. But they are lying. It’s as simple as that.
They are lying just as they lied when they said there are weapons of mass destruction in Iraq, or that President Obama is not a U.S. citizen.
Keep in mind that, according to the Congressional Budget Office, the legislation the plan would reduce the deficit by some $143 billion over ten years (2010 to 2019) http://www.cbo.gov/ftpdocs/113xx/doc11379/AmendReconProp.pdf while expanding coverage to 32 million Americans who are now uninsured. Over the following ten years (2020 to 2029), CBO projected that reform would pare the deficit by $1.2 trillion.”
And there, the CBO is only counting the savings that can easily be “scored” (like reducing overpayments to Medicare
Advantage insurers.)
There are also savings that cannot be easily “counted” or scored because projections would depend on predicting how hospitals, doctors, patients and others will respond to various financial carrots and sticks designed to bring down spending. Not all of these strategies will work, but we know that some will.
We also know that moving away from fee-for-service
payment means taking away the incentive to “do more” and that overtreatment– unnecessary procedures and tests combined with overpayment (the fact that we pay more for everything) is driving health care inflation.
The legislation addresses this problem in literally hundreds of ways.
Ginger R & James
Yes the law applies to all businesses–and this is a good thing.
The expansion of 1099 reporting was added as a means to capture $2 billion worth of revenue in taxes on income that currently is not reported by smaller businesses, with the intent of offsetting the cost of the health bill.
If small businesses don’t pay the $2 billion that they owe, you and I will wind up paying it for them.
Of course small businesses don’t want to have to file– like everyone else they would like to avoid the hassle, and they would like to be able to dodge the taxes. But this isn’t fair to the rest of us.
And note, they only have to record payments of $600 or more to a single vendor.
This does NOT mean (as Barry suggested on this tread) that they have to keep a record of every time a salesman stops for gas–unless it costs him $600 to fill up. Barry’s’ comment is, I’m afraid, typical of how libetarians and conservatives confuse issues by spreading misinformation.)
As of September 20,the Senate had refused to repeal the bill and it’s likely that it will continue to refuse to repeal.
If it did, it would have to find $2 billion in revenue someplace else.
Or say, “We’d rather let a few million people go uninsured than insist that small busineses pay their taxes.”
If we ever had a VAT (and at this point there is a consensus among the majority of economists that at some point down the road we will), the information could be used to track where money is flowing to assure compliance.
We don’t want to have a “grey” economy-it only helps people evade taxes, which means that the rest of us wind up paying their taxes.
Acam–
I agree with much of what you say.
AT one point, I, too, suggested that perhaps we should expand the VA system and let other Americans buy into it.
But Veterans object–they want to have their own system with their own doctors– people who have chosen to work with Vets.
The VA system is already crowded– Vietnam vets aging, so many Vets returning from Iraq and Afghanistan with serious physical and psychological problems . .
Muskeln–Thank you!
Maggie–
If you are so concerned about these children, why don’t you pay for them yourself. Why do you drag everyone else into your savior complex?
“And note, they only have to record payments of $600 or more to a single vendor.
This does NOT mean (as Barry suggested on this tread) that they have to keep a record of every time a salesman stops for gas–unless it costs him $600 to fill up.”
Maggie –
As John McEnroe used to sometimes yell at tennis match referees: “You can’t be serious!”
The $600 threshold applies to spending with a single vendor over the course of a year. For salesmen, contractors, delivery people, etc., they may stop at many different gas stations, restaurants, hotels, etc. over a twelve month period. They will spend more than $600 with some vendors and less with others but they can’t generally predict which will fall in what category ahead of time. They need to keep track of spending with all of them so they will know which ones they have to file a Form 1099 for at tax time. Moreover, as I said in my last comment, they also need to provide each vendor’s address and tax ID number if a Form 1099 is required. This is why they consider it incredibly burdensome.
Barry —
Even I can easily keep track of all of our auto expenses– whenever we get gas, we put them on one credit card, and at the end of hte year, we get a statement consolidating all spending on gasoline, auto repair, EZ Pass etc (all under “Auto) and showing where we go it.
So if a salesman always fills his tank at one of 3 or 9 or 10 gas stations in a tri-state area and spends over $600 at 7 of them over the course of a year it would be easy, to see at a glance, who they were–and where they are.
Credit card statments also consolidate “restaurant” and “hotel expenses”– providing, dates, amounts, location.
In an era of credit cards (and excellent end of year statements broken down by type of expense) this is something as competent 9-year-old could do.
Your example is another one of those “Big Government is Here to Hurt You” imaginary problems that conservatives make up because they don’t want busineses to be forced to pay taxes
I pay taxes–adding up and reporting free-lance income from magazines, newspapers, op-eds, conferences where I speak and many other places–ranging from $300 to thousands of dollars.
Then I add up all of the unreimbursed expenses associated with traveling to events, meetings, etc.–as well as computer expenses, etc.
Then I subtract expenses that were reinbursed by the Century Foundation.
I find my credit card statements to be incredibly useful.
And I’m just one person running a very, very small business–without a book-keeper, a computer spread sheet, etc. etc.
I do my own taxes–and then hand the info over to an accoutant who knows how much is deductible, checks for mistakes, etc.
If I can do this, any small business can do this.
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