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The latest news on Obamacare from Business Insider

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    Barney Frank

    Five years ago, former Rep. Barney Frank (D-Massachusetts) loaned his name to a law that would come to define post-crisis financial regulation.

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted five years ago on Tuesday, was designed to improve accountability and transparency in the financial industry, end "too big to fail," and protect taxpayers and consumers.

    Some elements of the law have yet to be fully realized – like part of the controversial Volcker Rule that prohibits banks from engaging in proprietary trading and investing in hedge funds and private equity firms. Other elements have already been repealed in Congress.

    But Frank is convinced that the heart of the law will stay intact for some time. He points to the lack of organized opposition from Republicans in Congress, versus more regular attacks on the Affordable Care Act.

    "The Republicans voted against the financial reform bill as heavily as they voted against healthcare, but the financial reform is much more popular with the public," Frank said in an interview. "That’s why they repeatedly move to repeal all of healthcare but they have never offered or had a vote on repealing all of financial reform."

    Business Insider caught up with Frank to discuss financial reform, Wall Street, and how the 2016 presidential election will shape the industry. Here's a (lightly edited) transcript:

    Business Insider: The last time I heard you speak, you didn’t sound completely opposed to amending or updating the law. Is that right?

    Barney Frank: I never have been. I never expected that everything we did – there were political compromises that had to be made. For example, I do believe that we should have put in some upgrades on that $50 billion [threshold for banks considered to be potentially systemically risky.] ... I’m in favor of raising the $50 billion. To what number, I don’t know ... I’d want to have hearings and listen to what the implications would be.

    obama chris dodd barney frank

    BI: Five years from now, will the act still exist in its current form?

    BF: I believe it will. The Republicans – it’s an interesting contrast between the healthcare and this bill. The Republicans voted against the financial reform bill as heavily as they voted against healthcare, but the financial reform is much more popular with the public. That’s why they repeatedly move to repeal all of healthcare but they have never offered or had a vote on repealing all of financial reform.

    There have been a couple of the changes they’ve proposed I don’t like, but not nearly a wholesale repeal.

    Even if you have a Republican president, House, and Senate, I suppose they will try to weaken some of it, but that’ll be a tough fight because there’s a lot of public opposition to weakening it.

    BI: What do you think Wall Street will look like in five years? Will it still be an attractive industry for bright young college students?

    BF: Oh for some, for sure. Probably not as many as before, but I think that’s healthy. I think we had an over-emphasis ... Look, financial entities are a vital part of our economy and we never thought that it wasn’t and we never tried to stop them from doing the things they were doing. We did argue they should do them in a more responsible way.

    Our basic view was if they were able to take a lot of risks with selling credit default swaps or issuing residential mortgages and packaging them into securities, without having to stand behind those risks, without having the money to put up if the risks went bad... We never, the bill [never] told them what risks to take or not to take, only that they have to be responsible for them.

    I think what you may see is a smaller set of activities in some areas. ... But there’ll still be a very important role for the financial community in helping finance the economy.

    Lloyd Blankfein

    BI: Recently, Goldman Sachs CEO Lloyd Blankfein and JPMorgan CEO Jamie Dimon became billionaires – something that could become a new trend for bank CEOs. Do you think that says something about the industry?

    BF: It does raise the question from the broader economic position about whether, the way they’ve been structured, a larger percentage of the money goes to the people at the very top. But it also disproves the argument that somehow we’ve passed a law that was crippling them ... I think it is restrictive of irresponsibility, but not of their basic function.

    BI: Let’s talk about 2016 some more. Which candidate do you think would be the most dangerous for the American economy?

    BF: Oh I think any of the Republicans who are running now, because they’re gonna be committed to go to the right, and I think they will be resisting efforts to do something about economic inequality which I think has both social and economic negative implications.

    And the more they are likely to try and undermine this bill, the worse it will be. ... It looks to me like all the Republicans at this point are likely to do as much as they can to undermine it.

    BI: What are your thoughts on Donald Trump?

    BF: I never thought that we Democrats would be as lucky as we are to have him running for president as a Republican.

    BI: You have commended Elizabeth Warren for choosing not to run. Why?

    BF: Absolutely ... I think it’s very important for the Democrats to get behind Hillary Clinton. The Republicans have an overwhelming amount of money. I think, frankly, we have a certain advantage by getting behind one candidate, and I think Hillary Clinton has been a very solid liberal.

    I think Elizabeth Warren correctly understands that a primary fight would not be helpful ... I also think from her standpoint she has a great deal of influence right now, because nobody can accuse her of being politically minded.

    Elizabeth Warren

    BI: What do you think about her recent push to bring back Glass-Steagall?

    BF: Oh I disagree with her on that.

    BI: Why?

    BF: Because Glass-Steagall is an 80-year-old law … It would not have prevented the crisis. I do think that we should be dealing with complexity, but I do not think that the fact that the banks do not do just commercial banking – I do not think that that, in and of itself, is a bad thing.

    BI: What about Bernie Sanders? He’s seen a rise in popularity with a campaign blasting billionaires and millionaires. What does that say?

    BF: He reflects the fact that there’s a lot of anger in the country over the fact that we have such income inequality that increased wealth has gone overwhelmingly to a very small percentage of the people ... I think, by the way, Hillary Clinton agrees with him on much of that.

    BI: The SCOTUS marriage ruling: What did you think? Was it a long time coming?

    BF: I’m very happy with it ... We’ve had same-sex marriage in Massachusetts for 11 years.

    It hasn’t had any negative effect. All these fears – nobody’s been forced into anything they don’t want to do. Certainly no religion has to have marriages they don’t approve of, even when they aren’t same-sex marriages. Catholic priests don’t have to marry a divorced Catholic to somebody else.

    So I think it was a good thing and I think people are going to see that it will make the lives of a lot of the people who choose to get married, and their families, better. And it will have zero effect on everybody else.

    SEE ALSO: Elizabeth Warren just laid out all the financial reforms she wants to push through

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    BALTIMORE (Reuters) - The prime contractor hired to build Maryland's flawed health exchange website will pay $45 million to the state and federal governments to avoid legal action over its performance, the state's attorney general said on Tuesday.

    Maryland’s health exchange program made national headlines last year when the state had one of the worst sign-up rates for state-run exchanges set up under President Barack Obama's Affordable Care Act.

    Noridian Healthcare Solutions LLC has agreed to pay $20 million up front and an additional $25 million in annual installments of $5 million over five years, state officials said.

    The payments represent a recovery of 61 percent of the total paid to the company for the failed website development and launch in 2013.

    "This company never delivered on what it promised, and, as a result, tens of millions of taxpayer dollars were wasted, and thousands of Marylanders suffered delays and frustration," Maryland Attorney General Brian Frosh said in a statement.

    "This settlement sends a message that the performance was unacceptable, and that those responsible will be held accountable," he said.The agreement, which is subject to regulatory approvals, will lead to the recovery of funds for both Maryland and the federal Centers for Medicare and Medicaid Services, which provided significant funding to develop the exchange.

    It was not immediately clear how the $45 million would be split between Maryland and the federal government. Given the constraints on Noridian Healthcare Solutions’ finances, officials said it was highly unlikely Maryland would have recouped a higher settlement amount from the company even if a larger judgment was obtained through litigation.

    Noridian Healthcare Solutions’ parent company, Noridian Mutual Insurance Co, has agreed to guarantee at least $40 million of the settlement payment. The settlement agreement also releases Maryland from all contractual obligations with Noridian Healthcare Solutions.Investigation of claims against other companies involved in the development and implementation of the Maryland exchange is continuing.

    Noridian could not immediately be reached for comment on Tuesday.

    (Editing by Dan Whitcomb and Eric Beech)

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    Health insurer Anthem is close to finalizing negotiations to acquire peer Cigna and could announce a roughly $48 billion deal as early as this week, according to a person familiar with the matter.

    Most issues that were preventing a deal, such as price and the role of Cigna Chief Executive David Cordani, have been resolved, the person said, without offering details.

    Anthem has slightly improved on its previous cash and stock offer of $184 per share, the person added.

    The Wall Street Journal earlier reported that Anthem was nearing an agreement to pay about $187 per share for Cigna.

    Anthem and Cigna did not immediately respond to requests for comment.

    Cigna shares jumped 6.5 percent in after-hours trading to $161 while Anthem's shares were marginally lower after closing at $155.10 on Wednesday.

    A merger between the two health insurers would follow Aetna Inc's deal to buy Humana Inc for $37 billion, part of an industry consolidation following the Supreme Court's decision to uphold the Obamacare reforms.

    Anthem said in June that it had made several offers for Cigna but a deal had been delayed due in part to differences over who would lead the company and corporate governance. Cigna also said it was concerned that other members of the Blue Cross Blue Shield Association would be an obstacle.

     (Editing by Ken Wills)

    SEE ALSO: A 29-year-old former Wall Streeter bought an Alzheimer's drug that failed clinical trials — and now his company is worth $3 billion

    CHECK OUT: Watch John Oliver skewer the cozy relationship between doctors and pharmaceutical companies

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    Mitch McConnell

    Senate Republican leaders will use a must-pass highway bill to start another fight over the president's health care law.

    Senate Majority Leader Mitch McConnell plans to introduce an amendment to the transportation bill to fully repeal "Obamacare."

    McConnell's spokesman says that would set up a likely vote on the health care amendment on Sunday.

    The Senate is rushing to complete the highway legislation before states face a cutoff of highway and transit aid one week from now.

    The House has voted about 50 times to repeal Obama's health law, but the Senate was under Democratic control until this year and has not followed suit.

    The health law survived a critical challenge at the Supreme Court last month.

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    Teva Pharmaceuticals

    Israel-based drug company Teva Pharmaceuticals is reportedly in talks to merge with Allergan's generic drug company, the Wall Street Journal reports.

    An official announcement on the deal — valued at $45 billion — could come as early as Monday, according to sources cited by The Journal. Allergan's generic drug unit would be "spun off and combined with Teva," The Journal says.

    Before news of the potential Teva-Allergan link-up, Teva had been unsuccessfully pursuing another merger with generic drug-maker, Mylan Pharmaceuticals.

    Teva's primary motivation for the Allergan deal is to increase its position in generic, WSJ reports, because the margins for low-priced drugs are "razor thin."

    It's another in what has been a flurry of health care and biotech mergers since the Supreme Court last month handed down a key ruling on the Affordable Care Act (ACA) that effectively ensured its continued existence in the near term.

    But, despite the high court's ruling last month, the mergers also signal a pushback by health care giants aiming to remain competitive in the marketplace. President Barack Obama has said one of the goals of the ACA — better known as Obamacare — was to ensure increased competition that would, ideally, offer more choices for consumers and keep costs low.

    During a forum on health care mergers at Wharton School of the University of Pennsylvania, health care management professor Mark Pauly said the increased M&A activity could be broken down as a two-pronged initiative. Pauly says on one hand, it's "a kind of counterattack on the part of insurers," who may seek to reduce the number of competitors and avoid being "stabbed in the back" by rivals who could try to undercut them on prices.

    On the other hand, Pauly says, Obamacare contains provisions specific to Medicare that affect so-called "provider-side" entities known as accountable care organizations (ACOs). These ACOs — which house doctors, hospitals and other health care providers — are also closing ranks, which could potentially give them leverage in bargaining with insurers.

    Pauly effectively boils down all of this in one sentence:

    "What we're seeing here is a reaction to that consolidation by insurers saying, well, if the providers are now going to gang up on us, we better gang up on them."

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    Barack Obama smile

    It's been nearly two years since the Affordable Care Act was fully implemented. And a new study suggests it's succeeding at one of its basic goals: improving access to care.

    Through the first two open-enrollment periods, the US Department of Health and Human Services (HHS) reported that as of March 2015, 11.7 million people signed up for private insurance through federal and state marketplaces.

    And an additional 12.2 million have been enrolled in Medicaid and the Children’s Health Insurance Program since September 2013.

    Previous studies have documented the sharp decline in the uninsured rate.

    And a new study published in the Journal of the American Medical Association found that the implementation of the law colloquially known as Obamacare has led to improved national trends in coverage and access.

    Fewer Americans are uninsured, the study showed. Fewer Americans are having trouble getting the medicines they need. And there was a significant plunge among people who reported an inability to afford needed care.

    The study also found that the largest improvements in coverage and access occurred among racial and ethnic minorities, which could lead the law to reducing long-standing racial and ethnic disparities in access to care.

    Here's a look at key trends from the study, which measures the law's first two open-enrollment periods:

    • The number of people insuredincreased, compared to pre-ACA trends, by 7.9 percentage points.
    • The number of people who did not have a personal physician dropped by 3.5 percentage points.
    • The number of people who had difficulties getting medications dropped by 2.4 percentage points.
    • The number of people who who were unable to afford care dropped by 5.5 percentage points.
    • The number of people who reported fair/poor health, dropped by 3.4 percentage points.
    • The number of days with activities limited by health decreased by 1.7 percentage points.

    The biggest decrease in the rate of uninsured people was among Latino adults. The uninsured rate in that demographic dropped by 11.9 percentage points, compared to about 6.1% among white adults.

    healthcare affordable care act sign

    Low-income adults in states where Medicaid was expanded also reported more coverage — with a 5.2% point drop in the uninsured rate. They also reported better access, with a 2.2% bigger drop than states where the program was not expanded.

    Coupled with other recent reports corroborating those findings, the study's authors said it shows that expansion of Medicaid to even more states would result in benefits for low-income populations. Twenty states have declined to expand the federal Medicaid program under the Affordable Care Act. The study, however, did not find statistically significant changes in self-reported health for Medicaid patients, which other studies had previously displayed.

    The study looked at six different measures to identify how the ACA and Medicaid had influenced people's health in the last two years: being uninsured, not having a personal physician, difficulties in getting medications, difficulties affording medical care for someone in the past year, overall health status, and the percentage of days over the past month in which poor health limited activities.

    Data from more than half a million adults was used in the study. Researchers analyzed data from the Gallup Healthways Well-Being Index (WBI), which is based on a cell phone and landline telephone survey from US adults all over the country.

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    A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the website in New York in this October 2, 2013 photo illustration.   REUTERS/Mike Segar

    NEW YORK (Reuters) - The U.S. government expects healthcare spending to increase by 5.8 percent annually on average from 2014 through 2024 as more Americans gain insurance coverage and the improved economy drives patients to visit doctors and hospitals.

    The aging population's higher healthcare costs will also push health spending higher starting in 2019, according to a study from the Office of the Actuary at the Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services.

    Prior to 2014, healthcare spending rates were running around 4 percent per year as the weak economy made people cut back on medical care that they could not afford.

    That trend reversed in 2014, when the national healthcare reform law, often called Obamacare, extended insurance to millions of Americans through the expansion of the Medicaid program and new individual insurance plans.

    The insurance expansion, as well as the price of new hepatitis C medicines that were introduced last year, contributed to a projected rise of 5.5 percent in 2014 in healthcare spending, the study found.

    healthcare subsidies

    Average projected 2015 spending will decline slightly to 5.3 percent because the number of newly insured will ease compared with 2014 and because of lower hepatitis C drug prices this year, the study found.

    Projected spending for the 2019 to 2024 period will increase to 6.2 percent per year on average due to the aging population, which will increase the number of people covered by Medicare, the insurance program for elderly people and the disabled. The aging population will also increase costs for people with Medicaid coverage, government researchers said.

    People enrolled in the Medicare and Medicaid programs have higher medical costs than average Americans.

    Hospital gloves

    Medical prices are expected to rise above 2 percent per year starting in 2016, the first increase since 2011 and after years of historically low levels. That is partly due to expectations for higher healthcare wages related to the stronger economy.

    Changes in private insurance that have shifted the cost of healthcare to individuals from insurers and employers through higher deductibles and co-pays will hold back further spending increases, the study found. Cuts in payments to doctors from the Medicare program will also hold back costs from rising further.

    The government's annual study, published in the August edition of the Health Affairs journal, increased its 10-year projected spending increase to 5.8 percent from the 5.7 percent it predicted in last year's study.

    (Reporting by Caroline Humer; Editing by Chizu Nomiyama)

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    surgeon, doctor, OR

    WASHINGTON (AP) — It's lasted six years. But now welcome relief from rising U.S. health care costs seems to be winding down.

    Health care spending will outpace the nation's overall economic growth over the next decade, the government forecast on Tuesday, highlighting a challenge for the next president, not to mention taxpayers, businesses and individual Americans.

    A combination of expanded insurance coverage under President Barack Obama's law, an aging population, and rising demand will be squeezing society's ability to pay.

    By 2019, midway through the next president's term, health care spending will be increasing at roughly 6 percent a year, compared to an average annual rise of 4 percent from 2008 through 2013.

    The higher rate of increase is still "relatively modest," says the report from the Office of the Actuary in the Health and Human Services Department. The forecast, through 2024, does not foresee a return to pre-recession days of torrid health care inflation, as the government and private employers try to revamp the way they pay hospitals and doctors to emphasize quality over quantity.

    Even so, the report is "not great news," said economist Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank.

    "The main point is that the bill will continue to grow faster than the economy, which is what pays the bill," he added. "The next president faces the task of reining in the growth of federal entitlement spending."

    "I do think this becomes something of a liability for anybody coming into office, and they need to have a very proactive policy to address it," said Dan Mendelson, CEO of Avalere Health, a market analysis and consulting firm. Mendelson served in the Clinton White House as a health policy expert.

    U.S. President Barack Obama delivers his speech during a  joint news conference with Kenya's President Uhuru Kenyatta after their meeting at the State House in Nairobi, Kenya July 25, 2015. REUTERS/Thomas Mukoya

    Health care as a share of the nation's overall economy is projected to grow from 17.4 percent in 2013 to 19.6 percent in 2024, the report says, accounting for nearly $1 of every $5 spent.

    Growth in the nation's health care tab slowed dramatically during the 2007-2009 economic recession.

    Then came several years when health care increases tracked closely with the economy as it started to stir again. The health care law's Medicare cuts helped keep spending in check, as did across-the-board cuts enacted later.

    As taxpayers, Americans benefited from the slowdown. But many working people saw their own medical bills rise, as employers shifted costs to employees and their families.

    Things changed in 2014, the report says, with coverage expansion under the new health care law. Some 8.4 million gained coverage that year, and people with health insurance use more medical services and prescriptions than do the uninsured.

    At the same time, expensive new drugs that can cure hepatitis C are boosting spending on medications. In 2013, prescription drug spending rose by 2.5 percent. For 2014, the projected increase is 12.6 percent, according to the report. Hepatitis C is a viral infection that gradually destroys the liver, afflicting about 3 million Americans.

    Spending on Medicaid, the federal-state health insurance program for low-income people, also has jumped. The 2013 increase was 6.1 percent. But the program is projected to have grown by 12 percent in 2014, again boosted by coverage expansion under the health care law.

    Male Doctor

    Expanded Medicaid is one of two paths for covering the uninsured under Obama's law. The other is subsidized private insurance. Spending on private insurance is projected to have grown by 6.1 percent last year, more than double the rate in 2013.

    The effects of expanded coverage won't be as dramatic in the years ahead, the report says. Likewise, the spike in drug costs will work its way through the system as government programs and insurers demand rebates from the manufacturers of hepatitis C drugs.

    But the other big factors pushing spending higher may harder to deal with. An aging population means older and sicker Medicare beneficiaries who will need more services, and more intense medical attention. Also, economic recovery creates demands for higher pay, and hospitals and doctors' offices are labor-intensive enterprises.

    Government will become a more dominant player as the federal, state, and local government share of health care rises to 47 percent in 2024, from 43 percent in 2013.

    The health care spending report was published online by the journal Health Affairs.

    SEE ALSO: The 'Biggest Fiscal Development' Of The Last 3 Decades Is The Stunning Slow Down In Healthcare Spending

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    IRS John Koskinen

    WASHINGTON (AP) — About 1.8 million households that got financial help for health insurance under President Barack Obama's law now have issues with their tax returns that could jeopardize their subsidies next year.

    Administration officials say those taxpayers will have to act quickly.

    "There's still time, but people need to take action soon," said Lori Lodes, communications director for the Centers for Medicare and Medicaid Services, which runs

    The health care law provides tax credits to help people afford private insurance. Nationally, that aid averages $272 a month, covering roughly three-fourths of the premium.

    By funneling the aid through the income tax system, Democrats were able to call the overhaul the largest middle-class tax cut for health care in history. But they also spliced together two really complicated areas for consumers: health insurance and taxes. Confusion has been the result for many.

    Consumers who got health care tax credits are required to file tax returns that properly account for them, even if they are unaccustomed to filing because their incomes are low. Unless they follow through, "they will not be able to receive tax credits to help lower the cost of their health insurance for 2016," Lodes explained.

    Treasury officials said 1.8 million households are at risk of losing subsidies for next year, and that number breaks down as follows:

    • About 710,000 households that have not filed a 2014 tax return, although they were legally required to account for health insurance tax credits that they received.
    • Some 360,000 households that got tax credits and requested an extension to file their returns. They have until Oct. 15.
    • About 760,000 households that got tax credits and filed their tax returns omitted a new form that is the key to accounting for the subsidies. Called Form 8962, it was new for this year's tax filing season.

    "I think it was definitely confusing for people," said Elizabeth Colvin of Foundation Communities, an Austin, Texas, nonprofit that helps low-income people with health insurance and taxes. "It could have been worse, quite honestly. I think a lot of tax preparers didn't know how to do these (forms) either."

    The 1.8 million households with tax issues represent 40 percent of 4.5 million households that had tax credits provided on their behalf and must account for them. The rest had their returns successfully processed by the IRS as of the end of May.

    Earlier this summer, a Supreme Court decision preserved health care tax credits for consumers in all 50 states, turning back a challenge from conservatives opposed to "Obamacare." Because of the law's built-in complexity, some of those consumers may now be at risk of losing their assistance.


    Administration officials say they're working hard to prevent that. An estimated 16 million people have gained health insurance since opened for business in late 2013, and the White House does not want any slippage.

    The IRS has started reaching out to consumers with tax issues. is reporting an increase in tax-related calls to its consumer assistance center.

    That telephone number is 1-800-318-2596. The Health and Human Services department plans another outreach campaign in the fall, coordinated with the start of the 2016 sign-up season on Nov. 1.

    "What the IRS is doing here is sending these people a not-so-gentle reminder that they need to file or they will put their subsidy at risk," said Mark Ciaramitaro, vice president for tax and health care at H&R Block, the tax preparation company.

    He cautioned that many consumers will find the process cumbersome, so they should waste no time getting started.

    Despite a thinning out of taxpayer services due to budget cuts, IRS Commissioner John Koskinen says the tax-filing season went relatively smoothly, even with the health care law added.

    Nonetheless, he acknowledged that there's a learning curve for everybody on health care.

    "This is the first year for this new provision," Koskinen wrote in a letter to lawmakers last month. "We expect that taxpayers will continue to better understand this process as it becomes more routine."

    The administration and the health law's supporters could be doing a better job educating consumers, said Judy Solomon of the Center on Budget and Policy Priorities, which advocates for low-income people.

    "There is definitely room for improvement to make sure people understand how it works," she said. "They are getting an advance payment of a tax credit, and to finish the process they need to file a tax return. They have to look at it as a process that is a year long and has multiple steps."

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    The number of Americans without health insurance has been dropping dramatically in the last two years.

    A new Gallup survey asking Americans if they have health insurance shows that in every state except Wyoming, the proportion of residents without health insurance has dropped since the major provisions of the Affordable Care Act — state- and federal-run insurance exchanges and an expansion of the federal Medicaid program — went into effect at the end of 2013.

    But it's not an even distribution. States that have embraced the law are more likely to have seen sharp plunges in their uninsured rates. The red-leaning states of Arkansas and Kentucky, for example, either expanded the Medicaid program or brokered a deal with the federal government as a compromise. They had the two largest declines in their uninsured rates over the past two years.

    Here's the percentage-point drop in the rate of people without health insurance in each state between 2013 and the first half of 2015. States that expanded Medicaid are marked with asterisks. The darker the shade, the more significant the drop:

    change in uninsurance rates

    Overall, the seven states with the biggest drops in their uninsured rates both expanded the federal Medicaid program and chose to run their own insurance exchanges or have a partnership with the federal government.

    Meanwhile, there's only one state where more than 20% of its residents remain uninsured: Texas, where Republican presidential candidate former Gov. Rick Perry (R) has made his opposition to the law a key part of his campaign plank. 

    "Collectively, the uninsured rate in states that have chosen to expand Medicaid and set up their own state exchanges or partnerships in the health insurance marketplace has declined significantly more since 2013 than the rate in states that did not take these steps," Gallup's Dan Witters wrote.

    "The uninsured rate declined 7.1 points in the 22 states that implemented both of these measures by Dec. 31, 2014, compared with a 5.3-point drop across the 28 states that had implemented only one or neither of these actions."

    The National Center for Health Statistics also reported on Wednesday that more than 7 million people who didn't have health insurance last year gained coverage this year. About 9.2% of people of all ages, the report said, still do not have health insurance.

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    MINNEAPOLIS (AP) — Republican presidential candidate Scott Walker's plan for replacing President Barack Obama's health care law would extend refundable tax credits to help pay for private health insurance based on age instead of income, restructure Medicaid and allow people to shop for insurance across state lines.

    The Wisconsin governor provided details of his proposal to The Associated Press in advance of a Tuesday speech in suburban Minneapolis where he was to outline his first major policy initiative of the presidential campaign.

    Walker's plan does not include cost figures or an estimate of the number of people who would be covered, making it nearly impossible to compare with current law. For the period from April to June of this year, 11.4 percent of U.S. adults were uninsured, which translates to about 16 million people gaining coverage since the rollout of Obama's health care law in 2013.

    Walker's campaign said the plan would be paid for by eliminating $1 trillion in taxes that are levied under the current law and by making other changes to Medicaid and how health insurance is taxed.

    Walker and other Republican candidates have insisted they would repeal the law, starting on the first day of a GOP presidency. The biggest hurdle Walker, and any opponent of the law, faces is getting it repealed. That would take 60 votes in the Senate, and Walker's plan does not address how he would undo the law in any other way.

    The Supreme Court in June upheld a key portion of the Affordable Care Act allowing for federal subsidies to defray the cost of coverage, a major defeat for opponents of the law. Walker and other Republicans have been fighting against the law both in court and on the campaign trail since 2010.

    Topher Spiro, vice president for health policy at the Center for American Progress, a think tank often aligned with the White House, said Walker's plan would be a step backward.

    "The math only adds up if he's slashing Medicaid and increasing taxes on middle-class people with employer plans," Spiro said.

    While the Walker plan would repeal the Affordable Care Act, it appears to use some similar kinds of tools to promote coverage. For example, there would be no requirement for individuals to carry health insurance or face fines, as there is currently. But, in order to be guaranteed affordable coverage without regard to pre-existing medical problems, individuals would have to "maintain continuous, creditable coverage."

    There's merit to Walker staking out his position on the issue, even though he doesn't explain how the law would be repealed, said economist Douglas Holtz-Eakin, president of the American Action Forum, a center-right think tank.

    "There's a lot of this that is fairly standard conservative health policy reform," Holtz-Eakin said. "The basic plan looks familiar."Scott Walker

    Walker, similar to current law, would also provide tax credits to help with the cost of coverage. But unlike current law, those credits of between $900 and $3,000 would be based on age and not be keyed to a person's income. So they may not help low- to moderate-income people as much as the existing tax breaks do.

    Walker's plan calls for eliminating unspecified regulations in the current law, a move that Walker claims would lower premiums by 25 percent.

    Other elements of the plan would include extending a $1,000 refundable tax credit for anyone who signs up for a health savings account, allowing people to shop for health insurance across state lines, reorganizing Medicaid into smaller programs, and giving states more regulatory authority.

    He would also allow for new health insurance purchasing agreements and deregulate the long-term care insurance market.

    The reality of outright repealing the law as Walker wants to do is stark: Doing away with it completely would kick 19 million people off insurance in the first year, according to the Congressional Budget Office.

    Walker isn't the first Republican to put forward a detailed plan for replacing Obama's law. Louisiana Gov. Bobby Jindal released his plan last year. And while alternatives have been introduced in Congress, none has gotten traction as Republicans have yet to coalesce around any particular idea.

    Walker had Wisconsin join the legal fight against the law the day he became governor in 2011. He broke from other Republican governors, like fellow presidential candidates John Kasich of Ohio and Chris Christie of New Jersey, in rejecting federal money to expand Medicaid in 2013.


    Associated Press writer Ricardo Alonso-Zaldivar in Washington contributed to this report.


    Follow Scott Bauer on Twitter at

    Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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    John Kasich Speech

    In recent weeks, Gov. John Kasich of Ohio has been enjoying a surge in polls of the Republican presidential primary field

    And as Kasich has been making gains, some of his rivals are arguing he is noticeably to the left of the other GOP contenders.

    An operative for an opposing GOP campaign pointed Business Insider to comments Kasich made about the Iran deal at an event on Monday as evidence of his liberalism relative to the rest of the field.

    While many of the other leading GOP contenders have suggested they would nullify the nuclear agreement — with some pledging to rip it up on their "first day" in office — Kasich suggested he would keep it in place and police it. Though he noted that he "wouldn't have" made the deal and hoped "against hope" that the Senate would "reject this deal," Kasich said he would watch it "every step of the way" if he took office after the 2016 election.

    The rival operative characterized this remark as suggesting Kasich was "the furthest to the left on standing up to Iran and defending Israel, which is emerging as a huge issue in the primary." The operative also argued that this was not the only issue on which Kasich was out of step with the rest of the Republican field.

    Specifically, the operative pointed to Kasich's support for expansion of Medicaid under the Affordable Care Act and his past comments indicating he was unconcerned with the budget cuts that stemmed from sequestration and have hit the military. Opposition to both the Affordable Care Act, colloquially known as Obamacare, and the sequester's defense cuts are widely seen as litmus-test issues for the GOP primary.

    "He wants to keep the sequester, keep the deal with Iran, and expand Obamacare," the operative said. "Why not just vote for a Democrat? We need someone who's going to be unintimidated to take on the big fights in Washington — not just rearrange the desks in Obama's White House."

    John Kasich Chris Christie

    Another aide for a separate rival Republican campaign agreed with this criticism of Kasich. In fact, this operative argued that Kasich was to the left of the GOP primary field "both on policy and rhetoric."

    "A nonpolicy example, since those are kind of obvious, is how he refuses to criticize Hillary even when asked," the aide said. 

    As evidence, the aide pointed to what the aide described as "a really strange exchange" that occurred when Kasich was interviewed by conservative radio host Hugh Hewitt last month. During that conversation, Hewitt asked Kasich to "talk about Hillary for a moment." Kasich declined.

    "Hugh, there's going to be plenty of time to talk about Hillary," Kasich said. "Can we just, can I just talk about me and my record, and what I want to do, please?"

    Before Kasich's recent rise in the polls, many observers predicted that being a relative moderate could actually be an asset for Kasich and help him stand out in the crowded GOP field. This conventional wisdom has been challenged by liberals who dispute the notion that Kasich is more in line with their views than other Republicans. The idea Kasich is relatively left-leaning has also been vigorously denied by the man himself

    Indeed, Kasich campaign spokesman Rob Nichols sent Business Insider a point-by-point rebuttal of the comments made by the two rival GOP campaign operatives. Nichols pointed out that Kasich had said he would get rid of the caps on defense spending imposed by the sequester and that Kasich's interview with Hewitt included him vowing he was the Republican best suited to taking on Clinton. Additionally, Nichols argued that Kasich wanted to repeal Obamacare and had a record of opposition to the law.

    "The governor is not for Obamacare but is committed to repealing it and replacing it with something actually reduces healthcare costs," Nichols said. "As governor, he said no to a state exchange, no to federal regulation of Ohio's health-insurance market, and no to a federal takeover of Ohio's Medicaid eligibility determination. He's on record calling for Obamacare's repeal and replacement from the beginning, and that hasn't changed."

    Potential Republican 2016 presidential candidate Ohio Governor John Kasich speaks at the First in the Nation Republican Leadership Conference in Nashua, New Hampshire, in this file photo taken April 18, 2015.  REUTERS/Brian Snyder/Files

    On Iran, Nichols similarly pointed to Kasich's stated opposition for the deal. He also argued that Kasich's suggestion he would "watch" the agreement if he became president didn't rule out the possibility he would nullify it. Rather, Nichols said it simply wouldn't be smart for Kasich to "telegraph" to Iran how he would handle the situation if he took office.

    "The governor strongly opposes the Iran deal, would never have made it, and hopes Congress rejects it," Nichols said. "What others promise today they'll do to the deal if they're elected — and Congress fails to reject it — as proof of their so-called toughness, actually only betrays their inexperience.

    "Experienced leaders don't telegraph their punches, presume to be able to predict the geopolitical landscape 15 months in the future, or ever make statements on foreign policy that restrict their freedom to maneuver. Since it's not a treaty, the Iran deal isn't even binding on future administrations. The goal is to deny Iran a nuclear weapon, and people should keep their eye on the goal."

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    Barack Obama John Boehner

    Republicans in the US House of Representatives have standing to proceed with a lawsuit against US President Barack Obama's administration over his signature healthcare law, a federal judge said Wednesday, handing them a significant and somewhat unexpected victory in the ongoing legal battle.

    US District Court Judge Rosemary M. Collyer ruled Wednesday against the Obama administration's motion to dismiss the case. Collyer said House Republicans do have the standing to pursue their challenge, which argues that the Obama administration violated the US Constitution by spending money on the law that had not been appropriated by Congress.

    That was a key question in the lawsuit, which the White House and House Democrats have continually dismissed as a "political stunt."

    In her ruling, Collyer rejected that argument, calling the House's challenge valid.

    "Despite its potential political ramifications, this suit remains a plain dispute over a constitutional command, of which the Judiciary has long been the ultimate interpreter," she wrote.

    The case centers on the more than $175 billion the administration will spend over the next decade under a cost-sharing program with health-insurance companies. The Obama administration has said it's spending previously allocated money.

    The attorney for the House, Jonathan Turley, called Collyer's decision "historic and profound."

    President Barack Obama at American University in Washington August 5, 2015. REUTERS/Jonathan Ernst

    "The ruling today means that the United States House of Representatives now will be heard on an issue that drives to the very heart of our constitutional system: the control of the legislative branch over the power of the purse," he wrote in a statement posted to his website. "We are eager to present the House's merits arguments to the Court and remain confident that our position will ultimately prevail in establishing the unconstitutional conduct alleged in this lawsuit."

    House Speaker John Boehner (R-Ohio), who's leading the lawsuit against the president, said he was "grateful" for the court's ruling.

    "The president's unilateral change to Obamacare was unprecedented and outside the powers granted to his office under our Constitution," Boehner said in a statement. "I am grateful to the court for ruling that this historic overreach can be challenged by the coequal branch of government with the sole power to create or change the law. The House will continue our effort to ensure the separation of powers in our democratic system remains clear, as the Framers intended."

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    Obamacare Protest

    The GOP-controlled House scored an important victory on Wednesday in its long-standing complaint about executive overreach by President Obama.

    A federal court judge in Washington, D.C., granted the House legal standing to bring a lawsuit against the administration for illegally spending billions of dollars on cost-sharing provisions of the Affordable Care Act without specific congressional authorization.

    In the latest in a long series of court cases challenging Obamacare, U.S. District Judge Rosemary Collyer ruled that the House was justified in challenging the administration in spending money never appropriated by Congress to cover the law’s cost-sharing provisions, including reduced deductibles and co-payments for low-income people. The Congressional Budget Office estimated the cost-sharing subsidies totaled $3 billion in 2014 and would amount to $175 billion between 2015 and 2024.

    Collyer, nominated to the court by President George W. Bush,` wrote in a 43-page decision that if that if the Republicans’ allegations prove to be true, then the House has been “injured in a concrete and particular way” by Health and Human Services Secretary Sylvia Mathews Burwell and Treasury Secretary Jack Lew and that the improper spending can be remedied by the court.

    “Neither the President nor his officers can authorize appropriations; the assent of the House of Representatives is required before any public monies are spent,” Collyer wrote. “Congress’s power of the purse is the ultimate check on the otherwise unbounded power of the Executive.”

    The ruling places in jeopardy an important component of Obamacare essential to enabling federal and state health insurance exchanges to offer reasonably priced insurance to millions of low- and middle-income Americans.

    ObamacareUnder the law, the governemnt essentially pays insurance companies to significantly reduce the cost of deductibles and co-payments for many low-income families and individuals. While those people would still be entitled to much larger federal subsidies to defray the cost of their premiums, an adverse ruling by the court would strip away any funding for cost-sharing subsidies, making insurance coverage look more expensive to those lower-income people.

     “This case isn’t quite going to the jugular or the core” of the Affordable Care Act, Thomas P. Miller, a resident fellow at the American Enterprise Institute and an expert on the health law, said in an interview on Wednesday. “But it is still significant that a federal court judge has said that [the administration] had passed the normal stopping point of following the law.”

    Equally important, however, would be the political ramifications of a House GOP victory in court.

    House Speaker John Boehner (R-OH), Senate Majority Leader Mitch McConnell (R-KY) and scores of other Republicans have long complained that Obama has far exceeded his executive authority in the administration of the much-reviled Affordable Care Act, imposition of tough restrictions on emissions from coal-fired power plants and other measures lacking legislative backing.

    The lawsuit challenging spending policies for Obamacare was filed last November literally a day after Obama announced he would use his executive powers to prevent the deportation of millions of illegal immigrants — a decision that touched off another furious political and legal battle.

    Women Illegal Immigrants Immigration ProtestBoehner said in a statement at the time that House lawmakers had no choice but to act to protect the Constitution. “Time after time, the president has chosen to ignore the will of the American people and rewrite federal law on his own without a vote of Congress,” he said in a statement.

    The White House was highly dismissive of the Obamacare legal action, according to The Wall Street Journal, saying that Boehner and the House Republicans were squandering hundreds of thousands of dollars in pursuing a lawsuit “without any sound legal basis.”

    Many political observers at the time agreed with the White House that it was a frivolous, politically motivated lawsuit and that the House probably lacked legal standing to even bring the case. Moreover, it had taken the House the entire summer and fall to get its act together and find a law firm willing to take the case.

    Jonathan Turley, a George Washington University law professor and member of the House’s legal team, issued a statement yesterday saying: “The ruling today means that the United States House of Representatives now will be heard on an issue that drives to the very heart of our constitutional system: the control of the legislative branch over the ‘power of the purse.’ We are eager to present the House’s merits arguments to the Court and remain confident that our position will ultimately prevail in establishing the unconstitutional conduct alleged in this lawsuit.”

    The House GOP lawsuit also charges that the administration acted illegally by twice delaying enforcement of the requirement that larger businesses offer their employees insurance coverage or get hit with a penalty. But Collyer ruled that the House doesn’t have the right to sue over that issue.

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    ObamaLast July, as the price tag for the Obamacare enrollment system climbed to $2.1 billion, a scathing report by the Government Accountability Office accused the Centers for Medicare and Medicaid Services (CMS) of negligent management practices and lack of oversight of contractors hired to create and fix—the primary portal to enroll Americans in Obamacare.  

    Today, the Inspector General for the Department of Health and Human Services went further. They reviewed 20 of the 62 contracts that were awarded to create the federal marketplace for Obamacare—worth a cool $600 million—and found that CMS failed to manage each contract properly. 

    The audit accuses the public employees responsible for these contracts of flaunting federal oversight procedures, not indicating when contract deliverables were met, and not keeping accurate records of each project. 

    As a result, the IG report concludes:

    1. Contractor delays and performance issues were not always identified.
    2. A contractor incurred unauthorized costs that increased the cost of the contract.
    3. Contracting officers in all Government agencies did not have access to contractor past performance evaluations when making contract awards.
    4. Critical deliverables and management decisions were not properly documented. 

    Last year’s GAO report put the original cost overruns at $150 million but then added $175 million to that number to include the cost of fixing the original website, which was a disaster. That disaster cost President Obama a major failure, the head of HHS lost her job and taxpayers got soaked. 


    It should not surprise anyone that a government agency that’s actually running a health services business would foul up so completely. But the obvious is true—the federal government is horrible at developing technology.     

    A study by the Standish Group, which spanned 2003-2012, showed that only 6 percent of federal IT projects costing more than $10 million were successful. Slightly more than half had cost overruns, and 42 percent were total failures. 

    During the early stages of the launch, Luke Chung, a software developer in Virginia, told The Fiscal Times, “As I got more involved with the fiasco, my views changed from basic programmer incompetence to purposeful, systemic problems in the procurement system, which incentivizes large government contractors to make the mess they’ve made. As we saw with CGI Federal, they got paid extra for delivering a failed product.” 

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    The Census Bureau on Wednesday released estimates of how many Americans had health insurance in 2014 and how that compares to previous years.

    Though the Bureau releases annual statistics on health insurance, this year's data is particularly interesting. 2014 was the first year in which the major provisions of the Affordable Care Act — the state and federal health insurance exchanges and the expansion of the federal Medicaid program — were fully implemented.

    Comparing 2014 to 2013 and other recent years gives us a good first look at how the healthcare law has performed in its main goal of making sure more Americans have health insurance.

    By that measure, the law appears to be working. According to the Census Bureau's Current Population Survey Annual Social and Economic Supplement, which asks respondents in March of each year whether they had health insurance at any time in the previous year, about 13.3% of Americans lacked insurance in 2013. 

    That percentage dropped nearly three percentage points to 10.4% in 2014. This represents 11.6 million more Americans with health insurance in 2014 than in 2013.

    This chart from the report on the new data shows that the uninsured rate — the percentage of Americans without any health insurance — stayed about level from 2008 through 2013, but then dropped dramatically between 2013 and 2014:

    Census Bureau health uninsurance rates

    The uninsurance rate dropped in every state between 2013 and 2014. States that had relatively high uninsurance rates before the law went into effect, and that adopted the Medicaid expansion (indicated with an * next to the state's abbreviation), saw the biggest declines in the percentage of residents without insurance:

    drop in uninsurance

    Actual 2014 uninsurance rates vary widely between the states. Only 3.3% of residents of Massachusetts, where a statewide system of health insurance similar to Obamacare had already existed since 2006, lacked insurance last year. Meanwhile, nearly one in five Texans still remain uninsured — Texas is one of 20 Republican-led states that have refused to expand the federal Medicaid program.

    2014 uninsurance rate

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    hillary clinton obama

    Democratic presidential front-runner Hillary Clinton called for a repeal of the US Patient Protection and Affordable Care Act's so-called Cadillac tax, marking a significant break from US President Barack Obama on his signature healthcare law.

    "Too many Americans are struggling to meet the cost of rising deductibles and drug prices. That's why, among other steps, I encourage Congress to repeal the so-called Cadillac tax, which applies to some employer-based health plans, and to fully pay for the cost of repeal," Clinton said in a statement released Tuesday by her campaign.

    Clinton's call to scrap the law puts her on the same page as Democratic presidential rival and US Sen. Bernie Sanders (I-Vermont). Sanders — who caucuses with Democrats in the Senate — and eight Democratic senators introduced legislation to repeal the tax, a 40% excise tax on employer plans whose premiums exceed $10,200 for individuals and $27,500 for families.

    Democrats often argue the provision – which is generally disliked across the political spectrum and is highly unpopular with many unions whose support Clinton's campaign is courting — is more in reality a tax on most employer-sponsored health plans.

    "Some have said that this tax only falls on 'Cadillac' healthcare plans, but the reality is that the plans this bill will tax are more like Chevrolets," Sanders said in a statement last week. "Workers have fought hard to negotiate decent healthcare benefits, often in exchange for lower pay. This excise tax unfairly punishes them."

    For Clinton, the break stands to be part of a series of proposals in which she advocates for building on the law, colloquially known as Obamacare. Last week, for example, she introduced a plan to combat the rising cost of prescription drugs, and she took aim Monday at a pharmaceutical CEO whose company had jacked up the price of a popular drug by more than 5,000%.

    Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, said Clinton's planned schism with the healthcare law would be "big." But he and other experts on the law suggested candidates would have to offer plans on how to make up a large chunk of expected revenue the tax would bring the government.

    According to the Committee for a Responsible Federal Budget, the tax is expected to bring in $87 billion in revenue by 2025 and grow exponentially in the years that follow. It's why the tax counts among its fans many economists and deficit hawks.


    "It's premature to call it dead, though, since it's not at all clear there will be consensus around how to replace the substantial revenues the tax raises and how to constrain healthcare spending," Levitt told Business Insider.

    Added Tim Jost, a professor at the Washington and Lee University School of Law and a supporter of the law: "Somebody still needs to figure out how to pay for a repeal. There is a lot of money involved."

    In her statement, Clinton said her "reforms" to the law would "more than cover" the cost of repealing the Cadillac tax, but she did not offer further specifics.

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    Medical Sick Injection

    Health care costs have been rising at historically modest rates for a decade now, prompting a considerable amount of discussion and debate by economists about whether the trend can continue. Most workers, though, would probably be asking another question: What the heck are they talking about?

    Since 2005, premiums have grown an average of 5 percent a year, sharply lower than the 11 percent average annual increase between 1999 and 2005, according to the Kaiser Family Foundation. That trend continued in 2015, with the average premium rising a modest 4 percent, according to an annual survey of nearly 2,000 employers by the Kaiser foundation and the Health Research & Educational Trust released last week.

    But Drew Altman, the CEO of the Kaiser Family Foundation, says that shift has been “all but invisible” to consumers because deductibles have been climbing at a substantially faster rate.

    “With deductibles rising so much faster than premiums and wages, it’s no surprise that consumers have not felt the slowdown in health spending,” Altman said.   

    deductible chart 1

    And just to be clear, it’s not like premiums are falling: The average premium for an employer-provided family plan is now $17,545, up from $16,834 last year and from $10,880 in 2005. And workers have been paying a greater share of those premiums, as the chart below from Kaiser shows:

    Deductibles, meanwhile, have skyrocketed. The average deductible for all covered workers this year is $1,077, up 67 percent from $646 in 2010. And as high deductible plans are becoming increasingly popular with employers, more employees are enrolled in them than ever. The percentage of employees who are in plans with an annual deductible of $1,000 or more has grown from 27 percent in 2010 to 46 percent in 2015.

    Some analysts argue that the shift to high deductible plans is responsible for the slow growth in premiums. The trend keeps premiums rising at a lower pace, while at the same time increasing the amount that employees are responsible for paying on their own.

    One of the main reasons for the rise in these high deductible plans is the scheduled 2018 kick-in of the “Cadillac tax,” which levies a fee on employers offering high-cost insurance plans. The tax was originally meant to target only the top tier of plans, but the rising cost of health care means that more and more insurance options will be hit with the tax. Members of Congress on both sides of the aisle are trying to repeal the tax before it takes effect, but employers aren’t waiting for Congress to act and are actively taking steps to avoid hitting the Cadillac threshold — like introducing plans with lower premiums and higher deductibles.

    health chart

    A poll released last week by the Mercer benefits consulting arm of Marsh & McLennan found that because of the tax, 41 percent of employers surveyed had already implemented a high-deductible plan or were working on increasing enrollment in such plans, while another 25 percent were thinking about taking such steps. 

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    Jumaane Cook (bottom R), age 5, of Cleveland, Ohio stands with his father James Cook (obscured, holding sign at R) as they join Obamacare supporters demonstrating at the Supreme Court building in Washington March 4, 2015. REUTERS/Jonathan Ernst

    Who says there's no bipartisan consensus in the United States? Based on their campaign promises so far, if any of the leading contenders for the Republican and Democratic presidential nominations actually wins in November 2016, Obamacare as we know it is doomed.

    The Republicans, of course, pledge to repeal the whole thing. The Democrats, by contrast, merely want to hollow it out, by removing a crucial systemic reform, the absence of which will make the Affordable Care Act less able to meet its twin goals of curbing costs and expanding coverage.

    Specifically, Democratic front-runner Hillary Clinton has just joined her main rivals, Sen. Bernie Sanders (I-Vt.) and former Maryland governor Martin O'Malley, in calling for the repeal of Obamacare's excise tax of 40 percent of the value of employer-paid health insurance plans that exceeds $10,200 for individuals and $27,500 for families; the tax takes effect in 2018.

    Health-care economists universally praised this feature of Obamacare because it attacked the wasteful and regressive tax exclusion for employer-paid health plans, a $250 billion-plus annual item, 35 percent of which accrues to the top 20 percent of the income distribution scale.

    Reducing the value of that tax break would help slow health-care cost growth, because it encourages many employers to pay employees not higher wages but generous "Cadillac benefits," prompting the recipients, in turn, to overutilize medical care.

    As it happens, the mere anticipation of the tax has already caused employers to right-size their benefits packages, just as Obamacare's authors intended.

    Cathey Park of Cambridge, Massachusetts wears a cast for her broken wrist with This is one reason, among many, that health-care cost growth has remained moderate even as health reform has brought millions of new consumers onto the insurance rolls.

    Indeed, the latest numbers on coverage are encouraging, with the uninsured having fallen from 13.3 percent of the population in 2013 to 10.4 percent last year, according to the Census Bureau.

    And paying for this expanded coverage over the long run, without increasing the deficit (another Obamacare tenet), depends in no small part on revenue from the tax, projected to be $87 billion between 2018 and 2025, according to the Congressional Budget Office.

    So if the ACA is achieving its goals, cost containment and broader coverage, thanks to a key provision that President Obama and his advisers fought hard to include in the law — why would Clinton and other supposed "progressives" join with Republicans in condemning that provision?

    There's a smidgen of a genuine policy concern here: To avoid the tax, some employers are providing workers plans that rely on higher deductibles and co-pays to hold down health-care consumption and, accordingly, costs. For some low-wage workers, the additional out-of-pocket expense can be burdensome.

    A case can be made for adjustment of the tax to account for the specific characteristics — age, overall chronic disease prevalence — of a given employer's workforce.

    Demonstrators in favor of Obamacare gather at the Supreme Court building in Washington March 4, 2015.  REUTERS/Jonathan Ernst    But the main consideration for Clinton and her fellow candidates, by far, was politics. To wit: The labor unions weigh heavily in internal Democratic Party deliberations, and the unions hate the Obamacare excise tax.

    The reason is obvious: Collective bargaining in this country developed under a system of employer-based health insurance, subsidized via the tax exclusion. Dickering for health benefits is much, if not most, of what unions do in return for member dues. By and large, union health plans enjoy low co-pays and deductibles, especially those in the taxpayer-funded public sector.

    Limit those benefits by limiting the tax subsidy for them, and how will unions justify their existence, both to current members and to new ones they seek to recruit?

    To the extent the Obamacare tax on employer-paid plans funds Obamacare exchanges, where individuals can shop for affordable plans, often subsidized through an individual tax credit, it erodes the entire job-based model of health insurance; that can't be good for a set of institutions, unions, that are also job-based.

    So labor leaned on Clinton, and the other Democrats, heavily. She caved; it's no accident that the first indication she would call for repeal came in a message to Randi Weingarten, the president of the American Federation of Teachers, according to the New York Times.

    Clinton promises she'll come up with new ways to reduce costs via "delivery system reform," and to offset the $87 billion in lost revenue — which should be interesting. The best hope to save the excise tax, in fact, may be congressional resistance to the tax increases it would take to pay for a repeal.

    Bottom line: To the list of threats to the Affordable Care Act we must now add, next to right-wing politicians, self-serving labor unions and the Democratic presidential candidates who pander to them.

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    Hillary Clinton Barack Obama

    The Affordable Care Act was signed into law on March 23, 2010. On March 24, and ever since, Republicans have fought tooth and nail to chip away at and dismantle President Barack Obama's signature domestic achievement.

    The newest threat to the law, though, is unique. It came this week from one of Obama's friendliest allies — the Democratic front-runner to succeed him in the Oval Office.

    Hillary Clinton, Obama's former secretary of state, said Tuesday that she favored repealing the law's so-called Cadillac tax

    "Too many Americans are struggling to meet the cost of rising deductibles and drug prices. That's why, among other steps, I encourage Congress to repeal the so-called Cadillac tax, which applies to some employer-based health plans, and to fully pay for the cost of repeal," Clinton said in a statement.

    Repeal of the tax, which isn't scheduled to be implemented until 2018, doesn't necessarily represent a threat to the law itself. Coverage expansion, both through federal- and state-based insurance marketplaces and through the federal Medicaid program, can go on without the tax.

    But its repeal would pose a significant problem for one of Obamacare's main goals: constraining healthcare costs in the US.

    Clinton's statement quickly set off a firestorm. In the days that have followed her statement, economists and deficit hawks, who favor the tax, have expressed concern and defended the important role they claim it will play in the overall effectiveness of the law.

    The tax, however, is reviled by just about everyone else — especially labor unions, which represent a major Democratic constituency. It has crept into the presidential campaign, as both top Democratic contenders are now calling for its repeal. 

    "It's big,"Larry Levitt, the senior vice president for special initiatives at the Kaiser Family Foundation, told Business Insider of Clinton's call for repeal. "It is hard to think of a healthcare issue that unifies politicians and interest groups more than the 'Cadillac' plan tax."

    obama hillary

    Democrats often argue the tax — a 40% excise tax on employer plans whose premiums exceed $10,200 for individuals and $27,500 for families — is in reality more a tax on most employer-sponsored health plans. 

    Proponents say that over time, employers will likely maneuver around the excise tax by looking for cheaper, more efficient plans with more affordable premiums. But critics say employers are more likely to shift the costs to workers with higher deductibles, co-payments, and other costs. Labor unions, in particular, have taken pride in negotiating premium benefits for their workers — and some of those resulting plans would likely be affected by the tax.

    Sen. Bernie Sanders (I-Vermont), Clinton's main rival in the Democratic presidential primary race, and eight Democratic senators recently introduced legislation to repeal the tax. When introducing the legislation, Sanders dismissed the conventional wisdom that a "Cadillac" tax would disproportionately affect more well-off plans.

    "Some have said that this tax only falls on 'Cadillac' healthcare plans, but the reality is that the plans this bill will tax are more like Chevrolets," Sanders quipped.

    They have public opinion on their side — a recent poll from the Kaiser Family Foundation found that 60% of Americans said they oppose the tax. (Such vehement opposition changes when respondents heard more about the tax, including that it could help reduce healthcare costs.)

    But there's a catch — an $87 billion catch. According to the Committee for a Responsible Federal Budget, the tax is expected to bring in $87 billion in revenue by 2025. Revenue brought in from the tax is expected to grow exponentially in the years that follow. 


    Economists and those who have pushed the US to rein in healthcare costs consider it essential to balance out the cost that comes from one of Obamacare's other major goals: universal health coverage.

    On Thursday, 101 health economists signed a letter to key congressional players defending the controversial tax. The letter included names from the administrations of both Republican and Democratic presidents who hold different views on the law as a whole.

    Some of the more notable signers of the letter included Jonathan Gruber, the MIT economist and Obamacare architect who came under fire last year for comments he made about the law leading up to its passage; Douglas Elmendorf, the director of the Congressional Budget Office from 2009 until earlier this year; and Ezekiel Emanuel, a senior fellow at the Center for American Progress whose brother, Rahm, was Obama's chief of staff

    "We, the undersigned health economists and policy analysts, hold widely varying views on other provisions of the Affordable Care Act, and we recognize that measures other than the Cadillac tax could have been used to restrict the open-ended health insurance tax break," the economists wrote.

    bernie sanders

    Emanuel and Bob Kocher, a former special adviser to Obama on healthcare and economic policy, further expanded on their stance in a New York Times op-ed on Friday. They argued that the rich benefit more from the current government subsidy of employer-sponsored health insurance that the tax would fix.

    "The subsidy has created serious problems. For one thing, it is hugely regressive. The rich receive nearly triple the financial benefits from the tax exclusion than those with lower incomes because they are taxed at a higher rate and tend to have much more expensive health insurance," they wrote.

    They added: "The health care tax exclusion is the single largest tax break in the United States, reducing federal revenue by more than $250 billion per year."

    SEE ALSO: Hillary Clinton has made a major break with Obamacare

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