Surprise in Obamacare

Obamacare was passed so quickly that, admittedly, lawmakers did not have time to so much as read the multi-volume bill.  Hardly anyone, opponent or proponent, knows everything that Affordable Health Care law will do.  So as it is being implemented over the next two years, we will probably keep getting surprises.  Here is the latest, from the Associated Press:

Your medical plan is facing an unexpected expense, so you probably are, too. It’s a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama’s health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a “sleeper issue” with significant financial consequences, particularly for large employers.

“Especially at a time when we are facing economic uncertainty, [companies will] be hit with a multi-million dollar assessment without getting anything back for it,” said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

via Surprise: New Insurance Fee in Health Care Reform Law – DailyFinance.

Yes, it’s nice that pre-existing conditions will be covered.  Yet another thing we don’t know (“hard-to-predict”) is how much this will cost.  Normally, businesses–and especially insurance companies with their actuarial charts and calculations–would need to have those figures.  I doubt that $63 dollars per insured person would come anywhere near paying for the nation’s pre-existing conditions.  But at least something is budgeted for it.  Still, this amounts to a tax on everyone with health insurance, whether paid by the company or the insured.  I believe we were told that taxes would only go up for the wealthy.

HT:  Jackie

Short sellers’ fiscal cliff

The Bush tax cuts aren’t the only measures that expire on New Year’s Day.  So will the Mortgage Forgiveness Debt Relief Act of 2007.  Without that law, homeowners who have negotiated a short sale–that is, have part of their mortgages forgiven by the lender because they are so far underwater when they sell their home–will have to count the amount chopped off their mortgage as income for tax purposes.

Say a person owes $200,000 on his house but it’s only worth in today’s market for $100,000.  If the mortgage is held by the federally regulated lender Fannie Mae or Freddie Mac, there is a federal program that makes it possible for the underwater amount to be forgiven when the home is sold at market value.  So in a short sale, the person might be able to sell the home for $100,000 but be clear of the mortgage.  But after New Year’s Day, he will have to declare the $100,000 that Fannie Mae wrote off as if it were money that he actually received.  And then pay taxes on it!

Various bipartisan bills have been proposed to extend the Mortgage Forgiveness Debt Relief Act, but no votes are scheduled, and it isn’t part of the package that either side is proposing in the fiscal cliff negotiations.

 

via Short sellers may be hit with big income tax bills if Washington doesn’t act – The Washington Post.

Supreme Court to rule on gay marriage

The Supreme Court has agreed to hear two cases that may settle the legal status of gay marriage in this country.  The court will rule on the constitutionality of the Defense of Marriage Act, which defines marriage in federal law as being between one man and one woman.  It will also rule on Proposition 8, the referendum in which California voters rejected gay marriage, only to have the vote stricken down by a federal court.

Supreme Court to hear same-sex marriage cases – The Washington Post.

What do you predict will happen?

Our legal system has long been tinkering with what marriage is supposed to be.  For example, the definition of marriage as a permanent, for-better-or-worse estate was changed by no-fault divorce laws, but I don’t recall anyone complaining much.

Suing negative reviewers

You know those user reviews on online sites like Yelp, Angie’s List, Yahoo, and all those restaurant and travel sites?  Some businesses are striking back at negative reviews by suing the reviewers.

A Fairfax County woman being sued for defamation over negative reviews she wrote on Yelp and Angie’s List must delete certain accusations and is barred from repeating them in new posts, a judge ruled Wednesday.

The preliminary injunction was hailed as a victory by a D.C. contractor, who took the woman to court claiming that her online reviews of the work he did on her home were false and cost him $300,000 in business. He is suing her for $750,000.

“It’s a win on morality, integrity and truthfulness,” contractor Christopher Dietz said after the hearing in Fairfax County Circuit Court. “This is permanent damage. I can’t undo what she did.”

Jane Perez hired Dietz to perform cosmetic improvements in June 2011 on her newly purchased townhouse, but she quickly soured on Dietz and gave him a scathing one-star review on Yelp and a similar treatment on Angie’s List.

The list of accusations over the job were long, but included damage to her home, an invoice for work Dietz did not perform and jewelry that went missing when Dietz was the only other person with a key to her home. Dietz denies those claims. . . .

In Virginia, someone can be found liable for defamation if he states or implies a false factual statement about a person or business that causes harm to the subject’s reputation. Opinions are generally protected by the First Amendment. . . .

Lawyers say legal actions over reviews on Web sites such as Yelp are on the rise, as the sites have grown in popularity and online reputations have become more important for doctors, dentists and a host of other professionals.

Some reviewers and free speech advocates view such suits as attempts to stifle freedom of speech, while business owners say they are being forced to fight back because a false post online can cause serious damage to their businesses.

via Judge says homeowner must delete some accusations on Yelp, Angie’s List – The Washington Post.

Should consumer reviewers have the freedom to say whatever they want?  Or do businesses need some recourse against exaggerating individuals who can ruin their reputation?

Whatever happened to crime as an issue?

Charles Lane says that Republicans are victims of their own success when it comes to the issue of crime.  What was once a potent issue for Republicans have faded from the public’s mind, as crime rates have fallen dramatically, due largely to Republican-initiated policies that now even Democrats support.

Americans were unhappy about many issues as 2012 began. In one area, though, contentment reigned. By a margin of 50 to 45 percent, a Gallup Poll reported, the public felt “satisfied” with the nation’s policies on crime.

It was a well-founded sentiment. In 2010, Americans were less than a third as likely to be victimized by violent crime as they had been in 1994; the murder rate had declined by roughly half. Today we are approaching the low murder rates of the 1950s.

For the Republican Party, this is a triumph — and a disaster, as the 2012 election results proved.

It is a GOP triumph, because the enormous decline in crime over the past two decades coincided with the widespread adoption of such conservative ideas as “broken windows” policing and mandatory minimum sentences.

Whether such policies actually caused the crime decline is a separate, and much-debated, social-science question. The important thing is that many people believe that they did. As a result, conservative crime doctrine remains dominant in politics, with the two parties differing mainly over how to control and punish unlawful conduct most cost-effectively.

Hence the 2012 disaster for the GOP. Beginning with Richard Nixon’s “law and order” campaign for president in 1968, Republicans pretty much owned the issue. Fear of street crime — and its association, accurate or not, with post-’60s moral license, liberal Democratic policies and the rise of an urban black population — converted many a white working-class Democrat into a Republican.

The GOP advantage on crime contributed to Ronald Reagan’s election in 1980, George H.W. Bush’s defeat of Michael Dukakis in 1988 and the GOP takeover of the House of Representatives in 1994.

When Gallup asked voters in January 1995 to name their top priority for the new Congress and President Clinton, 78 percent responded “reducing crime.” Given the murder rate at the time — 9.0 per 100,000 population — this was understandable. Sixty-six percent named “reforming the welfare system.”

Clinton got the message. In 1996, he signed the Anti-Terrorism and Effective Death Penalty Act, a main purpose of which was to limit death-row appeals. And, of course, he signed a historic welfare reform measure.

As the first Democratic president since Clinton, and the first African American one ever, Barack Obama has done essentially nothing to reverse Clinton’s crime and welfare policies. . . .

Indeed, Obama’s assimilation of conservative doctrine extended even to the war on terrorism, an area with which 72 percent of the public pronounced itself satisfied in last January’s Gallup Poll. Closing Guantanamo is out; drone strikes on al-Qaeda suspects are in. After four years of the Obama war on terror, you could almost summarize the two parties’ policies this way: Republicans waterboard, Democrats kill.

It’s true, as many commentators have noted since Nov. 6, that liberals seem to have the upper hand in the culture wars, after years of losing to the GOP. The 2012 electorate favored liberal positions on abortion, gay rights and the role of women in society.

We’ll never know whether 2012 would have played out the same way if crime had staged a comeback during the recession, as many expected. Certainly in the past, crime was as important to the Republican brand as abortion and gay rights, if not more important.

Safer streets, though, have blunted what was once a sharp wedge issue, and, perhaps, freed the electorate to consider social and moral issues in a different light.

via Charles Lane: Republicans a victim of safer streets – The Washington Post.

Setting policies by means of SuperPACS

A case-study in contemporary policy-setting.  The Republicans put off Hispanics, which is arguably demographic suicide.  So how to change the anti-immigration stance associated with the party?  Reason? Discussion?  Debate?  Coming to a consensus?  No.  Start a super PAC that will give money to pro-immigration Republicans and sponsor primary opponents against Republicans who vote the wrong way.

Prominent Republicans are launching a new super PAC they hope will help begin repairing the political damage left by years of anti-illegal-immigrant rhetoric that has dominated GOP primaries and alienated crucial Hispanic voters.

The organization, to be called Republicans for Immigration Reform, aims to undermine what organizers call the “extremists” who have pushed party nominees to stake out far-right positions such as opposing a pathway to legalization for millions of illegal workers, students and children.

Even before it raises money and establishes target races for 2014, the group’s organizers told The Washington Post, it will help smooth the way for wavering Republican lawmakers to vote next year for an immigration overhaul. Such a measure suddenly gained momentum last week after GOP leaders watched President Obama’s dominance among Hispanic voters help carry him to an electoral college landslide.

Spearheading the group is Carlos Gutierrez, the Cuban American commerce secretary under President George W. Bush. He is joined by Washington lawyer Charlie Spies, co-founder of the pro-Mitt Romney super PAC Restore Our Future, which, illustrating the very trend that the new PAC aims to thwart, aired some tough ads during this year’s primaries accusing Romney’s rivals of supporting “amnesty” and being “too liberal on immigration.”

“There’s currently only energy on the anti-immigration reform side, and we want to be able to provide some cover for Republicans that vote in support of an immigration reform approach,” Spies said.

Spies and Gutierrez declined to cite a fundraising goal, but both enjoy close ties to corporate America, which generally favors looser immigration laws. A super PAC can accept unlimited donations. Spies’s pro-Romney group raised $142 million for the 2012 campaign, according to the Center for Responsive Politics.

“This is not small ball,” Gutierrez said. “We’re serious, and we are going to push the debates on immigration reform to a place where I believe the Republican Party should be in the 21st century.”

via New super PAC hopes to give cover to pro-immigration Republicans – The Washington Post.

Let us bracket the issue of immigration reform and whether Republicans need to loosen up on the question and make major efforts to attract Hispanics.  I myself agree that something on this order needs to be done.  So let’s not talk about that.  Let’s discuss this method of forming policy and making laws.

On any issue, we can now expect a SuperPAC to fund one side and probably another SuperPAC to fund the other side.  (I am not disputing their “rights” to do so.  Let’s not talk about that either.)  They work by rewarding, threatening, and punishing lawmakers with money, using campaign contributions–given, withheld, or given to an opponent–as a means of coercing support of a legislative agenda.

Doesn’t this replace democracy with plutocracy, so that money becomes the actual means of governing?  This strike me as a step beyond simply raising money for a campaign.  As we have seen, raising and spending money will not necessarily win you an election.  You get special interests making contributions but that may or may not determine how a lawmaker votes.  This tactic, by contrast, seeks to determine which candidates can run for office in the first place and fixes their position on an issue, which is determined not by the give-and-take of a rational process but by the SuperPAC that has quite literally bought their vote.


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