06.11.2014

#FullRepeal Daily Digest

Reason: FDA to Save Us From Scourge of Wood-Aged Artisanal Cheese

As part of a new push to enforce certain aspects of the Food Safety Modernization Act (FSMA), passed in 2011, the agency announced that it will no longer allow cheesemakers to use wooden boards in the aging process.
Traditionally, the FDA has mostly deferred cheese inspections to the states. But the FDA recently inspected several New York cheesemakers and cited them for using wooden surfaces to age cheeses.
…Many of the most awarded and well-respected American cheeses are aged on wooden boards, according to Cheese Underground. "The very pillar that we built our niche business on is the ability to age our cheese on wood planks, an art that has been practiced in Europe for thousands of years," Wisconsin cheesemaker Chris Roelli—who developed his cheese recipes specifically to be aged on wooden boards—told the blog.
"Not allowing American cheesemakers to use this practice puts them "at a global disadvantage because the flavor produced by aging on wood can not be duplicated. This is a major game changer for the dairy industry in Wisconsin, and many other states."

Americans for Tax Reform: Obamacare Taxes: Next Filing Season Could Be "one of he most chaotic in years."

Taxpayers applying for credit assistance must be evaluated by government entities ranging from the SSA to CMS to the IRS. The goal is to have an educated estimate, based on the most immediately-available government documents (e.g. prior year tax returns, etc.), of the taxpayer’s probable income for the year--which in turn determines the size of the tax credit. In an effort to get this tax benefit out quickly, the estimated credit is advanced to the insurance company by the IRS, which applies it to customer premiums. This is an important point—the money has left the IRS’ hands up to over a year before the taxpayer actually calculates his final credit amount. The insurance companies have collected it, and they are not required to pay it back.
Press reports this month indicated that the government was having a hard time doing all this, with 1.2 million of the 6 million federal exchange applicants having to be asked for additional income verification information from CMS…Applicants are asked to complete a detailed, confusing twelve-page application which asks for income, family size, etc. It is rather like trying to fill out a 1040 on the fly.
Inconsistencies--some of which are the result of failures of the healthcare.gov system, some of which are poor records from the government, and some of which are mistakes from the individual--are not surprising…So what happens if the flawed, confusing process results in a tax credit larger than what the law calls for?
A hypothetical example might help illustrate: a health exchange customer selects an Obamacare exchange plan. The government estimates that this taxpayer will earn $30,000 this year, which makes her eligible for a $2000 tax credit. This $2000 is paid to the taxpayer’s insurance company to help with premiums.
The next spring, our customer/taxpayer is filling out her tax return. Unfortunately, the government estimated the taxpayer earned too little and paid too large a credit. She actually earned $40,000, and so only had a $1500 credit coming to her. Depending on the taxpayer’s income level and availability of verified affordable workplace insurance, she will have to pay back much or all of the $500 overage to the IRS.
It is also inevitable that many people are receiving tax credits for which they are completely ineligible…There is virtually no way to catch it on the front end — but come tax filing season, many people will end up owing thousands of dollars, and it will be a complete surprise.
[RELATED] The Wall Street Journal: GOP Says Tax Man Cometh for Health Law Enrollees
- The eligibility is also based on the availability of affordable employer-sponsored insurance. Because employers don’t have to report on the insurance they offer employees until the 2015 plan year, applicants could get inaccurate subsidy amounts because the plan was considered affordable, said Douglas Holtz-Eakin, president of the American Action Forum, a conservative policy institute.
- “Although these subsidies are going directly to insurers, next year the IRS will be in the position of recouping overpayments directly from individuals,” said Rep. Charles Boustany (R., La.) “Many of these individuals will end up with unexpected tax debt through no fault of their own.”

Bloomberg: Workers Get Few Choices Under Small-Business Obamacare

Small-business workers getting health insurance through Obamacare were supposed to be able to choose their own plans. Instead, in more than half of states using the U.S.-run version of the program, employers will pick.
It’s a promise of the law that will go unfulfilled next year for people in 18 of 32 states using federal-run small business markets. For example, workers in Texas will have a choice of health plans, while those in neighboring Oklahoma and Louisiana won’t, the U.S. Centers for Medicare and Medicaid Services said today in a website posting.
…It has not gone smoothly. The Obama administration said last year that it would delay what it calls the “employee choice” feature of the small-business exchanges until 2015. Before the exchanges opened in October, the government said small businesses wouldn’t be able to use a website to enroll and would have to use insurance sales brokers instead.

The Wall Street Journal: The Short Unhappy Life of ObamaCare By 2024 there will be more than 40 million uninsured, roughly 10% more than today.

Yet since premium growth has averaged at least 5% over the past five years, it is unlikely the law's federal subsidies will increase enough to make up the difference in out-of-pocket premium costs. As this happens, lower- and even middle-income consumers will be forced out of the private insurance market.
...[they estimate using real exchange data and HHS simulation] The average premium for an individual exchange health plan (Silver) will increase by $1,375 by 2019 while the average family premium for the same plan will increase by $4,198—outpacing the average increases from 2008 to 2013. Consumers who saw spikes in their health premiums last year will experience the same trauma this year. But the steepest price increases will not occur until 2017 and after, when three things happen.
- First will be the Affordable Care Act's "essential benefits" requirements. All plans—including those currently exempted for hardship and old plans extended for various reasons—must provide all of the law's mandated benefits from Jan. 1, 2017. On average roughly 15% of plans offered in 2013 will not qualify for sale on the insurance exchanges once all extensions are completed. Depending on the state, as many as 60% of the plans sold in 2013 would not be permitted for sale.
- The law's "reinsurance" program will also expire in 2017. Health insurers will no longer be able to bill the government for 80% of a patient's health-care costs when they make more than $45,000 in annual claims. The multibillion-dollar risk corridors for insurance companies will also sunset in 2017—ending the taxpayer bailouts that kick in when insurance companies providing ACA plans lose money. Insurance companies will have neither option by 2017, leaving consumers to pick up the tab through premium payments. Federal subsidies will be unable to keep up with such dramatic rate spikes.
- Employer-sponsored coverage will also come under pressure. The data show that an increasing number of businesses are likely to cancel their plans in favor of letting employees get coverage on the exchanges—the same exchanges many will be fleeing. My research indicates that over five million will lose their employer-based insurance by the end of the decade. This is consistent with the Congressional Budget Office estimate that the ACA will lead to a seven-million person decline in insurance provided by employers by 2020. The penalty when an employer drops a health plan is typically cheaper than providing the plan.
Either way, there will be a significant number of uninsured Americans unwilling or unable to pay for the inflated insurance available on the exchanges and forced to pay penalties, which for 2016 and thereafter will be the greater of $695 or 2.5% of income. More will choose this option every year. By 2024, Ms. Frogner and I estimate that there will be more than 40 million uninsured, roughly 10% more than today.

Daily Caller: Obama Admin To Spend Another $60 Million On Obamacare Navigators

The New York Times: Virginia Governor May Try to Expand Medicaid on His Own

Gov. Terry McAuliffe has lost his battle with the legislature over Medicaid expansion, an enormous retreat from the high expectations he set for a liberal agenda. However, he is thought to be studying how to press the issue by executive action — a legally and politically uncertain course.
“Apparently, the problem is the administration is having a difficult time deciding whether or not they can” move ahead without the legislature, said Jeff Ryer, a spokesman for Senate Republicans. “Unless they are relatively certain they’ll lose” in court, he added, “I can’t imagine they won’t go ahead.”