Your Host: Anthony Galvez

Author: Anthony Galvez

Health Care Reform, No Problem, Just Read It and Vote

This is not a rant solely against the health care reform law.  It is an indication of what our legislators on both sides of the isle are doing on the job when they write legislation.  I focused on this portions of the health care reform law because of its reach and complexity but most legislation is written in the same fashion.

I perform contract administration tasks as an integral part of my business and make sure the Contract parties execute what is in the Contract.  We will make some simple assumptions in this article for role players in the new Reform Law (aka Contract that all parties must abide by) as follows:

  • Executor (Contract Administrator): The President’s administration in its entirety,
  • The Law (The Contract the parties must abide by) :  “Health Care and Education Reconciliation Act of 2010’’
  • Parties (Stakeholders) to the agreement:  All citizens of the United States, Health Care Insurers, Physicians, and Hospitals for the most part.

That was easy enough.  Now, let’s administer this jewel.  Here is the text that is the first order of business addressed in the law as presented on pages 2 and 3 of this 55 page reconciliation document.  I am sure that all of our legislators can determine the appropriate credit for you and I.

Subtitle A—Coverage
(a) PREMIUM TAX CREDITS.—Section 36B of the Internal Revenue Code of 1986, as added by section 1401 of the Patient Protection and Affordable Care Act and amended by section 10105 of such Act, is amended—                               (1) in subsection (b)(3)(A)—
(A) in clause (i), by striking ‘‘with respect to any taxpayer’’ and all that follows up to the end period and inserting: ‘‘for any taxable year shall be the percentage such that the applicable percentage for any taxpayer whose household income is within an income tier specified in the following table shall increase, on a sliding scale in a linear manner, from the initial premium percentage to H. R. 4872—3 the final premium percentage specified in such table for such income tier:
‘‘In the case of household income (expressed as a percent of poverty line) within the following income tier:

The initial premium percentage is—                                The final premium percentage is—
Up to 133%                                                    2.0%                                                                                      2.0%
133% up to 150%                                        3.0%                                                                                      4.0%
150% up to 200%                                       4.0%                                                                                      6.3%
200% up to 250%                                       6.3%                                                                                      8.05%
250% up to 300%                                       8.05%                                                                                   9.5%
300% up to 400%                                       9.5%                                                                                       9.5%’’; and

(B) by striking clauses (ii) and (iii), and inserting the following:
‘‘(ii) INDEXING.—
‘‘(I) IN GENERAL.—Subject to subclause (II), in the case of taxable years beginning in any calendar year after 2014, the initial and final applicable percentages under clause (i) (as in effect for the preceding calendar year after application of this clause) shall be adjusted to reflect the excess of the rate of premium growth for the preceding
calendar year over the rate of income growth for the preceding calendar year.

‘‘(II) ADDITIONAL ADJUSTMENT.—Except as provided in subclause (III), in the case of any calendar year after 2018, the percentages described in subclause (I) shall, in addition to the adjustment under subclause (I), be adjusted to reflect the excess (if any) of the rate of premium growth estimated under subclause (I) for the preceding calendar
year over the rate of growth in the consumer price index for the preceding calendar year.

‘‘(III) FAILSAFE.—Subclause (II) shall apply for any calendar year only if the aggregate amount of premium tax credits under this section and cost sharing reductions under section 1402 of the Patient Protection and Affordable Care Act for the preceding calendar year exceeds an amount equal to 0.504 percent of the gross domestic product
for the preceding calendar year.’’; and

There was actually more to this small portion of the legislation’s page 3, but I didn’t have the will to make you endure it.

Alrighty then, let’s look at this logically.    We know that the legislators don’t write the bills because of time and competency as most legislation is exacting in language.  They delegate the task to aids, lobbyists, PACS, special interest groups, and all others that want the legislation to pass.   The language must amend any prior laws that may be contradicted and the language must gain the support of the other legislators (note that a majority of Stakeholders need not support it, just the legislators)

Whom among you can say that you have confidence that your Representative or Senator could determine the Tax Credit calculation without the aid of others?   If you answered mine can, you are likely very confident in the abilities of your agents in Washington DC or your state.  If you answered mine can’t, you are likely accurate in your assessment of your agent in DC or your state.

The President has put his appointees for consumer protection initiatives on the news telling us that our credit card and mortgage applications and contracts should be no more than two pages and understood by a high school graduate with a 9o% comprehension level. They believe this will make our consumers less likely to make bad decisions or be mis-lead during the purchase.

Sadly, I suspect no more than 10% of the US population meet that standard.  That said, I suspect less than 4% of the population could read the legislation above, refer to the affected legislation as amended, and determine anyone’s credit.

How can any sane person believe that this legislation is more positive than negative.  There are positive parts of this legislation that I support and would admonish others for not supporting, but you cannot vote affirmative and then enact (sign) a bill simply because it has some good parts.  That is like meeting someone on a weekend, finding out they are gainfully employed, have $10K in their checking account, they are a 7 of 10 on your scale for physical appearance and they go to church, so you marry them.

You find out after the ceremony on the honeymoon they earn minimum wage on a part time job, just received $10k as an inheritance from their grandmother, recently completed 4 plastic surgeries (including a sex change), and are the only survivors of the Branch Davidian church that arrived late at the Waco complex.  They met your short list of good character traits/stats as a partner in your future.

That may sound a little extreme but no one can say in good faith that this Law is the compilation of a careful thought process to establish provision to address a problem, namely high insurance premiums that make private health care less accessible to 30 million +/- Americans and legal residents.

If you have a comment, post it, if not, accept what you just received.


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