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The latest news on Obamacare from Business Insider

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    Mike Lee Utah

    Today, Sen. Mike Lee (R-Utah) said that Republicans need to advance a substantive agenda to uplift middle class families. True!

    Unfortunately, his speech to the Faith and Freedom Coalition made clear that he doesn't have one.

    Here is the entire policy-focused section of his speech:

    It is time for a new approach to taxes, to not only lower rates to spur economic opportunity, but to eliminate tax discrimination against parents and families.

    It is time for a new approach to education, to break up the special-interest cartels that hold back our young children, and our young adults. Education is opportunity, and government has no business telling students where they can and can’t go to get it.

    It is time for a new approach to transportation. New roads mean new neighborhoods, new communities, new jobs, new families, and new opportunities.

    Yet today, infrastructure money states could be spending on those opportunities, Washington instead spends on bureaucratic waste and special-interest giveaways.

    It is time to rethink a dysfunctional welfare system that holds poor families down. And to reform a corrupt corporate welfare system that props big businesses up.

    Very little of this is new, and none of it directly addresses the key problems facing middle-class families today: The financial system is fragile and susceptible to depression-inducing crisis. Unemployment is persistently high. Wage growth has not kept pace with economic growth. Health care and higher education are increasingly unaffordable.

    What is there in Lee's plan for the middle class? His biggest idea is the end to "tax discrimination against parents and families." This sounds like a nod toward proposals from Ramesh Ponnuru, Robert Stein and others for "pro-family" tax policies like much larger child tax credits.

    Ponnuru and Stein recognize that bigger tax credits for families have a fiscal cost, and that prioritizing them means shifting focus away from cutting tax rates. But Lee makes this proposal in the same breath that he calls for lower tax rates. He's not acknowledging the fiscal trade-off: if the GOP hopes to devote more fiscal resources to the middle class it will have to devote fewer to people with high incomes.

    It also runs directly counter to Lee's own tax plan, which would replace all federal taxes with a 25 percent flat tax on consumed income. That would shift the tax burden dramatically away from wealthy families toward those with low- or middle-incomes.

    On education, Lee is offering the same Republican hand-wave on education as ever: freer markets will fix the problem. On infrastructure, he is saying he is for good projects and against waste — like everybody else.

    And on welfare, what does he mean when he says we must "rethink a dysfunctional welfare system"? Well, he has endorsed a Heritage Foundation plan that would cap most welfare spending at inflation-adjusted 2007 levels and then limit its growth to inflation (or, in the case of health spending, health inflation).

    That would mean the government could not respond to increased needs during recessions; as rising unemployment made more families needy, Congress would be forced to find ways to cut back welfare programs. And it would mean that welfare spending would have to decline, over time, as a share of the economy.

    The plan would also repeal Obamacare and Medicaid and replace them with a uniform, $2,000-per-person tax credit that would still leave health insurance out of reach for many people. (Poor families with children would be eligible for an enhanced benefit, but it would still leave gaps.)

    "Reform" is one thing and there are very real poverty traps in the welfare system. But as is typical for Republicans, the key focus of legislation Lee supports isn't reform — it's cutting spending on entitlements in order to make space in the budget for tax cuts.

    Lee understands the need to convince middle America that the conservative economic agenda is good for them. But it isn't. The only way to make that sale is to change the agenda.

    Join the conversation about this story »


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    Jan Brewer Arizona Medicaid expansion

    With a loud, very public finger wag 18 months ago, Arizona Gov. Jan Brewer became something of a conservative symbol for opposition to President Barack Obama. 

    The image on the tarmac couldn't be further from memory after Brewer became one of Obama's biggest conservative allies in expanding Medicaid, a key provision of the Affordable Care Act that many Republican-controlled states are still resisting. 

    Brewer made her position on Medicaid expansion well-known in January, but she faced backlash from a Republican-controlled legislature. Brewer argued that the logistics for expanding the program made simple sense: It will expand coverage to more than 240,000 poor residents next year, while the federal government picks up the tab for the first three years of the program's expansion. 

    “As an elected official of more than 30 years, I know that this process was not easy or without political risk," Brewer said in a statement after a bipartisan coalition of moderate Republicans and Democrats in Arizona's legislature sent her a bill on Thursday.

    "By joining me in extending health coverage to hundreds of thousands of Arizonans, legislators of my own party have come under sharp criticism in some quarters. Some have had threats made not just against their political future, but also their personal livelihood," she said, in reference to threatening calls and letters sent to state legislators during the heated debate.

    Brewer took a scorched-earth approach, however, to getting her way. After it became clear she would face staunch opposition among a confounded group in the legislature, she vowed to veto all bills until the state addressed Medicaid expansion and passed a state budget.

    She made good on that threat, vetoing five bills in late May after Arizona state Senate President Andy Biggs decided to test her resolve.

    jan brewer and obama"It is disappointing I must demonstrate the moratorium was not an idle threat," Brewer said in a statement after vetoing all five bills. "I respectfully ask that legislators join me to resolve our budgetary and health care challenges. Once these primary issues are behind us, I am happy to once again consider unrelated legislation."

    In getting her way, Brewer has made Arizona the 23rd state to embrace Medicaid expansion, according to the Kaiser family foundation. Twenty states are against expansion, and seven states are still undecided.

    Some of those seven states are due for a similarly heated debate as Arizona's. In Michigan and Ohio, Republican governors Rick Snyder and John Kasich face opposition from Republican-controlled legislatures.

    Michigan's House recently approved the expansion, and Scott has pushed the more Republican-controlled Senate to follow suit. In Ohio, meanwhile, Kasich has gone to extraordinary lengths to advance support, suggesting it's something that former President Ronald Reagan would do.

    Join the conversation about this story »


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    Barack Obama spying WASHINGTON (AP) — There's no guarantee that President Barack Obama's health care law will launch smoothly and on time, congressional investigators say in the first in-depth independent look at its progress.

    But in a report to be released Wednesday, the congressional Government Accountability Office also sees positive signs as the Oct. 1 deadline approaches for new health insurance markets called exchanges to open in each state — in many cases over the objections of Republican governors.

    Additionally, the report discloses that the administration had spent nearly $400 million as of March to set up the infrastructure of a sprawling system involving major federal agencies, every state, hundreds of insurance companies, and millions of citizens, among them many individuals seeking coverage for the first time.

    "Whether (the administration's) contingency planning will assure the timely and smooth implementation of the exchanges by Oct. 2013 cannot yet be determined," the report concluded. A copy was provided to The Associated Press.

    The administration is taking the lead in setting up the markets in 34 states, the report said — a heavy lift unforeseen when the law was passed. The computerized clearinghouse for the entire system — a federal "data hub" designed to deliver real-time eligibility rulings — has only undergone initial testing. And states have yet to complete many of their assignments.

    "Much progress has been made in establishing the regulatory framework and guidance required for this undertaking, and (the administration) is currently taking steps to implement key activities of the (exchanges)," the report said. "Nevertheless, much remains to be accomplished within a relatively short period of time."

    Translation: most of the specs have been written, but the all wiring hasn't been laid, and what will happen when they flip the switch nobody really knows. And remember, Oct. 1 is less than four months away.

    GAO also issued a similar assessment for small-business health insurance markets scheduled to open concurrently.

    The study shows "this law isn't ready for prime time, and come October millions of Americans and small businesses are going to be the ones suffering the consequences," Sen. Orrin Hatch, R-Utah, said in a statement. Hatch is the ranking Republican on the Senate committee that oversees health care financing.

    Health and Human Services Secretary Kathleen Sebelius has steadfastly maintained the new insurance markets will open on schedule in all 50 states and Washington, DC.

    Middle-class people with no access to job-based coverage will be able to buy private insurance, in most cases with new tax credits to help pay premiums. Low-income people will be steered to public programs like Medicaid in states that opt to accept an expansion offered under the law. Coverage starts Jan. 1.

    An estimated 7 million individuals are expected to sign up through the exchanges next year, while Medicaid rolls will grow by 9 million. Those numbers are projected to steadily increase as Americans get more familiar with the law and its benefits. Exchanges are supposed to deliver the same basic service, connecting consumers with new coverage, whether they're run by states or by the federal government.

    Most people currently covered by employers are not expected to see major changes, although some companies with many low-wage workers may decide it's better for their bottom lines to drop their plans.

    The GAO report did not address one of the major obstacles to the rollout of the health care law — entrenched opposition from Republicans in Congress and from many GOP state leaders.

    Having failed to get the Supreme Court to strike down "Obamacare" last year, Republicans in Congress have kept trying to repeal it, managing to block administration requests for additional implementation funds. In the states — with some notable exceptions — Republican governors and legislatures have generally refused to set up state-run exchanges or expand Medicaid.

    However, the report found that some states where the law has run into resistance also seem to be simultaneously trying to accommodate it. GAO said that of the 34 states in which the federal government is taking the lead in setting up the new markets, 15 are expected to carry out at least some functions of the exchanges. That could be a stepping stone to full state control later.

    The report also included a breakdown of spending on the federal exchanges and the data hub, which the administration had not previously provided, despite ongoing requests by media organizations.

    As of March, the administration had spent almost $394 million, mostly through payments to 55 different contractors. That figure does not include the salaries of hundreds of government officials dedicated to the massive project. That project is forever linked to Obama's legacy.

    The largest single ledger item: $84 million for the federal exchange computer infrastructure, being designed and built by CGI Federal, Inc., a Virginia-based government contractor.

    The contractor building the data hub, Maryland-based Quality Software Services, Inc., received $55 million.

    Third on the contracting totem pole was Booz Allen Hamilton, which received nearly $38 million to provide technical assistance for enrollment and eligibility.

    The report said the administration will need another $2 billion in the next fiscal year to establish and operate the federal exchanges. Of that, Congress would have to provide $1.5 billion, while user fees paid by insurers account for the remainder.

    It's unclear if congressional Republicans will sign off on the funding.

    Join the conversation about this story »


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    Barack Obama climate change

    Today, President Barack Obama laid out an aggressive regulatory agenda to reduce carbon emissions, most of which won't require any approval from Congress.

    Now, Republicans have two options.

    They can respond to his plan with maximum political and legal resistance. This strategy comes intuitively to Republicans, and the conservative base would like it.

    According to an April Gallup poll, 64% of Republicans think the threat of global warming is overstated and only 18% think it will pose a serious threat to themselves in their lifetimes.

    But it's not likely to be an effective strategy for shaping policy. Obama is acting under legal authority he already has and a Supreme Court decision that forces the EPA to regulate carbon.

    Republicans should instead do something they're not used to: Work with Obama to come up with a better alternative to his plan.

    Obama has only taken a heavy-handed regulatory approach because that's what he can do without congressional action; if Republicans would agree to a carbon tax or a cap-and-trade system, he'd gladly take that over the plan he laid out today.

    The R Street Institute has been a lonely but relentless conservative voice on this issue. Senior Fellow Andrew Moylan wrote today:

    Regardless of one’s views on climate change, the simple reality is that federal policy is going to address the matter. That can happen through ill-advised regulations, like those proposed by the President today, or it can happen through a vibrant market with clear price signals attached to all fuels. Conservatives should seize the opportunity to once again emphasize the superiority of free markets over central planning.

    He's right. But if the health care fight is any guide, Republicans are not likely to listen.

    The Republican strategy of total resistance to health care reform led to a bill passing only with Democratic votes. That meant a bill that was less market-oriented than it would have been with Republican input.

    Obama also had to buy off more constituencies than he would have needed with a broader coalition, so the bill contained costly accommodations to doctors, hospitals, pharmaceutical companies and more. If Republicans had played ball, we would have gotten a health bill that was both more aligned with conservative ideas and substantively better.

    Of course, conservatives don't like to hear this observation: pointing it out is what got David Frum fired from the American Enterprise Institute. Three years after passage, Republicans still haven't come to terms with the fact that Obamacare is the law.

    They shouldn't make the same mistake with climate change. But they probably will.

    Join the conversation about this story »


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    grandpa

    We're months away from cutting the ribbon on the new online marketplace for health insurance, but the vast majority of uninsured Americans — the very people the Affordable Care Act is meant to help — still have no idea whether they'll be in the shopping mood or not. 

    According to a recent survey, nearly two-thirds of uninsured Americans say they haven't decided whether or not they'll buy health insurance by the Jan. 1, 2014 deadline (even though they'll have to pay a penalty if they don't).

    Another 10% say they flat out won't buy in at all.

    We understand the hesitation. Change is hard enough when it's simple to understand, let alone when it has to do with things like insurance, health care policy, and your own financial and personal well-being. 

    "People just don't understand how this is going to affect their wallet, what prices are going to be and what this could really cost them," said Laura Adams, InsuranceQuotes.com senior insurance analyst. 

    Here's what you need to know:

    What is this new health care exchange all about? 

    The health care exchange (aka The Marketplace) is the centerpiece of the Affordable Care Act, an online marketplace where consumers can shop around for health care plans, just like auto insurance. All 50 states will have their own marketplaces, some of which will be run by the federal government and some of which will be run by individual states.

    Delays notwithstanding, the marketplace opens on Oct. 1, 2013 and people will have until Jan 1, 2014 to pick up a policy if they want to escape penalties.  There, you'll be able to choose from four different varieties of plans, platinum (highest benefits), gold, silver, and bronze (lowest benefits).

    Does everyone need to sign up for a health plan? 

    The health care exchange is open for every U.S. resident, but only the uninsured will face penalties for skipping out. If you are enrolled in your employer's health plan or pay for your own plan already, you can keep on keepin' on, although we'd at least recommend shopping around to see if there are more affordable plans out there. 

    What if you don't think you can afford it?

    Obviously, if everyone could afford to enroll in health care, chances are we wouldn't have an Obamacare plan to deal with at all. As it stands, 61% of the uninsured respondents surveyed by InsuranceQuotes cited money issues as the main reason they haven’t purchased health insurance. 

    To help, the government has put in place tax credits that are specifically designed to help low-income households cover the cost of a health care plan. 

    To qualify, individuals or families can earn household incomes up to 400% of the federal poverty level ($94,200 for a family of four in 2013). You can claim the tax credit in advance, rather than paying upfront for your health care plan and then waiting for a refund after tax season, Adams notes. 

    Generally, the government will apply those credits directly to your health insurer, which will reduce your premium cost.

    To find out how big a tax credit you can expect, use the Kaiser Family Foundation's calculator.

    What if you just don't want to enroll?

    To make the reform easier to swallow, lawmakers have thrown consumers a couple of bones: For starters, the Jan. 1, 2014 deadline for enrollment is a soft one. You can start signing up when the exchange opens on Oct. 1 and you have until March 31 to enroll.  

    That gives people a three-month cushion to get their ducks a row. And on April 1, when the penalties begin, they start small and rise on a tiered scale up until 2016: 

    2014:

    Families — $285 or 1% of total household income, whichever is greater.
    Individual adults — $95 or 1% of total household income. 

    2015:

    Families — $975 or 2% of income, whichever is greater. 
    Individual adults — $325 or 2% of income.

    2016:

    Families — $2,085 or 2.5% of income, whichever is greater. 
    Individual adults — $695 or 2.5% of income. 

    "It's designed to be this kind of gentle nudge that becomes not so gentle in a couple years," Adams says.

    Some analysts predict young people will look at the first year penalties and shrug. If you're under 26, you can always sign up for your parents' health care plan. And paying a $95 fee may not seem all that tough a burden  when you compare it to the potential higher cost of a year-round health care plan. 

    It's not the end of the world if that happens, but it could mean some trouble for Obamacare. A lot of the new plan's success rides on whether it can attract consumers who are both young and healthy along with the older, unhealthy sect in order to keep costs affordable for everyone. If young, healthy, uninsured people decide they'd rather pay a fee than shell out hundreds of dollars per year for a health policy they doubt they'll use, leaving mostly unhealthy, older people enrolled, it could throw things out of balance and make policies more expensive. 

    But given the results of this Kaiser Family Foundation poll, in which nearly 77% of 18- to 25-year-olds said health care is very important, those worries may be overblown.

    What about Medicaid? 

    Families and individuals who earn less than 138% of the federal poverty level will still have access to Medicaid.

    At best, Medicaid coverage in states will be expanded under Obamacare. At worst, states will exercise their right to skip an expansion in favor of the status quo. So far, about 13 states have opted out of an expansion. This map shows where each states stands as of June 14.

    How much can I expect my health care costs to rise? 

    We wish there were an easy way to answer this question. Because each state is in the process of submitting estimates from insurers, we can only guess at premium costs as numbers trickle in. The Wall Street Journal analyzed estimates from eight states and pretty much confirmed what experts had predicted — that the new health care plans will be more expensive for the young and the healthy.

    "Healthy consumers could see insurance rates double or even triple when they look for individual coverage under the federal health law later this year, while the premiums paid by sicker people are set to become more affordable," the WSJ's Louise Radnofsky reports.

    Even so, there's still a chance rates could decrease over time if insurance regulators decide to lower them in order to compete in the marketplace. And if that happens, then, well, Obamacare is officially doing its job. We've already seen that happen in Oregon, and as Politico's Jason Milliman points out, since all rates have yet to go through the state review process, anything could happen.

    "The prices that many people can expect to pay, though, may remain a mystery for a few more months," he writes. "The feds, who are reviewing rates for exchange plans in more than half the states, have released limited information so far about who’s even asked to sell on federal-run insurance marketplaces, let alone what they’d like to charge."

     

    The bottom line: It's up to you whether or not you can afford to skip out on health care. For now, kick back and wait until the exchange opens in October until you start to worry. You can do some searching and see what rates are really out there before making your decision. Any speculation on costs before then is basically white noise as far as we're concerned. 


    SEE ALSO: This German woman has been living without money for 16 years >

    Join the conversation about this story »


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    Barack Obama climate change speech

    The White House will delay until 2015 the enforcement of a requirement for businesses to provide workers health insurance under the Affordable Care Act, the Treasury Department said today.

    More detail is set to come later in the week.

    The mandate would require most businesses with 50 or more full-time employees to provide health insurance meeting certain minimum criteria — or pay a penalty of $2,000 per worker.

    The purpose of the employer mandate is to discourage employers from dropping coverage and leaving employees to buy subsidized insurance in the Obamacare exchanges at greater taxpayer expense. The delay does not affect the individual mandate, the requirement that most Americans purchase insurance, nor does it halt the implementation of marketplaces where individuals and businesses can sign up for insurance coverage. 

    In the absence of an employer mandate next year, Treasury says it will "strongly encourage employers to maintain or expand health coverage." Treasury noted that most employers already provide their workers with health insurance.

    If firms respond to this delay by dropping health coverage or waiting to expand it, the cost of Obamacare to taxpayers is likely to increase.

    The mandate has been bitterly opposed by many large companies that employ low-skill workers, especially those that compete with small firms that will not have to comply. Executives and franchisees at restaurant chains such as Papa John's have been especially vocal.

    Here's the official statement from Assistant Secretary of the Treasury for Tax Policy Mark Mazur:

    Over the past several months, the Administration has been engaging in a dialogue with businesses - many of which already provide health coverage for their workers - about the new employer and insurer reporting requirements under the Affordable Care Act (ACA). We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.  We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.  We have listened to your feedback.  And we are taking action.  

    The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.  This is designed to meet two goals.  First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law.  Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.  Within the next week, we will publish formal guidance describing this transition.  Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law. 

    Here is some additional detail.  The ACA includes information reporting (under section 6055) by insurers, self-insuring employers, and other parties that provide health coverage.  It also requires information reporting (under section 6056) by certain employers with respect to the health coverage offered to their full-time employees.  We expect to publish proposed rules implementing these provisions this summer, after a dialogue with stakeholders - including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements - in an effort to minimize the reporting, consistent with effective implementation of the law. 

    Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015.  Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015. 

    We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014.  Accordingly, we are extending this transition relief to the employer shared responsibility payments.  These payments will not apply for 2014.  Any employer shared responsibility payments will not apply until 2015. 

    During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage.  Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).

    Join the conversation about this story »


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    jeff saut

    Moments ago, the Treasury Department issued a statement saying that the White House would delay until 2015 the enforcement of the requirement for business to provide workers with health insurance under the Affordable Care Act, aka "Obamacare."

    Jeff Saut, the top strategist at Raymond James, just blasted an email that read: "This is a big deal. A major 2H risk off the table..."

    Under the ACA, businesses employing 50 or more workers would have to offer health insurance or pay a penalty of $2,000 per worker.

    Some economists noted that a reduction in "hours worked" in some industries was a sign that employers were reducing hours intentionally to dodge this cost.

    Market strategists have warned that the ACA would hit the corporate bottom line, whether it be through higher health care costs or penalties.

    For now, it seems that cost will be delayed.

    It will be interesting to see how the market will react.

    SEE ALSO: JPMorgan Put Together The Ultimate Guide To The Market Right Now

    Join the conversation about this story »


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    Obama sad frown

    Late today, the Treasury Department announced that it will delay the "employer mandate" in Obamacare for one year. This is the provision of the law that requires large employers to provide health insurance to full-time employees or else pay a $2,000 per-employee penalty.

    It's a weird move—and their explanation of the move is even weirder.

    To hear Treasury tell it, the delay is all about simplifying reporting:

    We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively... Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.

    Treasury won't be releasing reporting requirements until later this summer, and then it will need to test the requirements, so it needs to wait a year before making them mandatory.

    Then, almost as an "oh, by the way" addition, the Treasury statement adds that since reporting won't be mandatory in 2014, it can't actually impose any penalties on employers that don't provide health insurance until 2015.

    The whole point of the employer mandate is to incent employers to offer health coverage to full-time workers. Firms might otherwise drop coverage and direct employees to buy through the insurance exchanges created under Obamacare.

    That would be costly for taxpayers, as most workers will be eligible for subsidies to help them buy insurance in the exchanges, and often those subsidies will far exceed the value of the tax preferences given for employer-provided health insurance.

    If the real reason for the delay is that Treasury couldn't get its act together on the reporting requirements, that is very embarrassing for the Obama Administration. Unlike setting up health care exchanges and expanding Medicaid, Treasury's administration of tax reporting requirements is a purely federal matter. Problems with it can't be blamed on obstructionist Republicans.

    But the reporting issue may just be a pretext for the delay. The employer mandate is a bad policy that will discourage job creation. The Administration may be looking for a way to avoid imposing it ever.

    The employer mandate is part of a suite of policies aimed at accomplishing two difficult tasks: Expanding health insurance coverage to the 17% of Americans who don't have any, while ensuring the 45% of Americans currently covered through employer-based plans stay put.

    This is very hard to do (if you hand out subsidies to the uninsured, more people will become "uninsured" to get the subsidies) and it's why most approaches to health insurance reform favored by left, right and center health policy wonks involve moving away from employer-based coverage.

    Obamacare's approach to threading the needle might work, but in the process it creates a significant barrier to job creation.

    The loudest objections to the mandate have come from the restaurant industry, and for good reason. Restaurants employ lots of low-skill workers, and either adding health insurance or paying a $2,000 penalty would result in a large percentage increase in the cost of employment.

    Large restaurant chains compete with small businesses that won't be subject to the mandate and will sometimes even be eligible for subsidies to offer health insurance. That means chains will have difficulty raising prices to pass their higher labor costs onto customers. In some cases, that will just mean lower profits, but it will also mean less hiring and less expansion in the sector.

    The tenor of restaurateurs' objections to the mandate has often been obnoxious, particularly when a Denny's franchisee announced his intention to impose an "Obamacare fee" on checks and encourage diners to deduct the surcharge from servers' tips. But that doesn't mean they're wrong on the policy.

    Obama needed the mandate to get Obamacare passed because it would reduce participation in the exchanges and therefore the law's overall costs. One of his key selling points for the law was that it would cut the deficit. Now that the law has passed, his administration is freer to pursue changes that will raise Obamacare's cost to taxpayers but improve its effects on the economy.

    Delaying the employer mandate, perhaps indefinitely, is one way to do that. It's a better reason than "we couldn't figure out how to do the reporting." But it's not one you can say out loud.

    Join the conversation about this story »


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    drew matus

    Yesterday afternoon, the Treasury Department issued a statement saying that the White House would delay until 2015 the enforcement of the requirement for business to provide workers with health insurance under the Affordable Care Act, aka "Obamacare."

    Under the ACA, businesses employing 50 or more workers would have to offer health insurance or pay a penalty of $2,000 per worker.

    Jeff Saut, the top strategist at Raymond James, immediately blasted an email that read: "This is a big deal. A major 2H risk off the table..."

    However, UBS's Drew Matus isn't convinced that it's completely positive.

    First, here's the good news:

    The Administration announcement of a one-year delay in the employer mandate component of the Affordable Care Act, or “Obamacare”, could help boost payroll growth. Although the delay is only temporary, for those employers on the cusp of the 50 employee threshold this delay may prompt them to hire as they may be unwilling to continue to postpone hiring to avoid being subject to the mandate. Additionally, employers may delay plans to cut back employee hours to keep them from being classified as “full time” (the law considers employees who work 30 hours per week full-time).

    But:

    Although we see the most likely scenario being that the delay will have a mild positive effect on payrolls over the next few months, the risk exists that another change in regulations only adds to the uncertainty facing businesses. Increased uncertainty could create an even greater sense of caution among hiring managers and may crimp hiring at the margin, on net.

    In other words, companies got a delay in cost increases in exchange for longer-term uncertainty.

    SEE ALSO: JPMorgan Put Together The Ultimate Guide To The Market Right Now

    Join the conversation about this story »


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    Barack Obama

    By itself, the Obama administration's decision to delay by one year the so-called employer mandate will only affect about 4% of businesses in the United States. 

    But with the Affordable Care Act's glitches piling up, it was logical and easy for Republicans to turn the news into something symbolic of the overall "train wreck" that has come with the law's implementation — ripe with implications for the near-term future and the long-term outlook that includes the 2014 midterm election.

    The latest setback means that there will be no penalties imposed on companies with 50 or more full-time equivalent employees that fail to provide certain minimum-criteria health insurance to their workers.

    "The president's health care law is already raising costs and costing jobs," House Speaker John Boehner said in a statement late Tuesday.

    "This announcement means even the Obama administration knows the 'train wreck' will only get worse. I hope the administration recognizes the need to release American families from the mandates of this law as well. This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms."

    Some conservatives are already calling for the House GOP's focus to shift when it returns from the July 4 recess next Monday. The Weekly Standard's Bill Kristol advanced that idea in a column on Friday, arguing that the news gives Republicans an opportunity to attack on Obamacare while giving them an excuse to put off another issue — immigration. 

    A senior House GOP aide said that's a possibility. And reaction statements from some of the House and Senate's top Republican leaders signal that new efforts to repeal the health care law could ensue.

    "Rather than continuing to delay the predictable pain until another election day has passed, we should scrap this entire law and instead implement patient-centered reforms before any more damage is done to our economy or the health care families depend on. The best delay for ObamaCare is a permanent one," said House Majority Leader Eric Cantor.

    Politically, the Obama administration seems to be banking on the notion that the bad PR backlash that will come with this decision won't be nearly as bad as the potential disastrous implications of the employer mandate's implementation next year. 

    Still, it won't help the overall perception of confusion and skepticism toward the law. Public polls still show that the public still doesn't know much about the law and how it will affect them, which contributes to overall disapproval of the law. A recent Wall Street Journal/NBC poll found that more Americans than ever viewed Obamacare negatively.

    Those numbers and Tuesday's delay have already given fresh ammunition to Republicans. 

    "Pushing the implementation of the employer mandate until after the 2014 election confirms the law was a historic mistake," said Sen. Lamar Alexander of Tennessee, the top Republican on the Senate Health, Education, Labor, and Health Committee, in a statement.

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    The Obama Administration has announced its intention to delay the implementation of the employer mandate in Obamacare for one year. This policy would have fined large firms $2,000 for every full-time employee they didn't provide with health insurance.

    The idea was to save taxpayers money by reducing the number of workers who get federally subsidized health insurance outside their jobs. But the mandate was also likely to discourage companies from hiring low-skill workers.

    Delaying the mandate should improve next year's job growth picture, but without a permanent repeal, firms may still be reluctant to hire.

    Reihan Salam and I discuss why the mandate had to be delayed, why it will be hard for both parties to agree on a permanent fix, and why Washington politicians are drawn to policies that emphasize budget savings instead of growing the economy.

    Watch below.

     

    Produced by Justin Gmoser

    SEE ALSO: NYSE Trader Explains The Importance Of The VIX

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    Mitch Mcconnell

    The official reason given by the Administration for delaying, by one year, the Affordable Care Act’s mandate that employers with more than 50 full-time workers provide insurance coverage or face fines, is that employers need more time to implement it. The unofficial reason has more to do with the Republicans’ incessant efforts to bulldoze the law.

    Soon after the GOP lost its fight against Obamacare in Congress, it began warring against the new legislation in the courts, rounding up and backstopping litigants all the way up to the Supreme Court. Meanwhile, House Republicans have refused to appropriate enough funds to implement the Act, and have held a continuing series of votes to repeal it. Republican-led states have also done what they can to undermine Obamacare, refusing to set up their own health exchanges, and turning down federal money to expand Medicaid.

    The GOP’s gleeful reaction to the announced delay confirms Republicans will make repeal a campaign issue in the 2014 midterm elections, which probably contributed to the White House decision to postpone the employer mandate until after the midterms. “The fact remains that Obamacare needs to be repealed,” said Senate Republican leader Mitch McConnell, on hearing news of the delay.

    Technically, postponement won’t affect other major provisions of the law — although it may be difficult to subsidize workers who don’t get employer-based insurance if employers don’t report on the coverage they provide. But it’s a bad omen.

    The longer the Affordable Care Act is delayed, the more time Republicans have to demonize it before average Americans receive its benefits and understand its importance. The GOP raged against Social Security in 1935 and made war on Medicare in 1965. But in each case Americans soon realized how critical they were to their economic security, and refused to listen. 

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    The number of people working as part-time employees surged in June, something Republicans pounced on as a sign of the Affordable Care Act's effects on job creation. 

    The number of people working "involuntarily" as part-time workers jumped by 322,000 in June to 8.2 million, according to the Bureau of Labor Statistics. 

    "These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job," the BLS said in a statement. 

    There's some important context here: Year over year, the seasonally adjusted number of involuntary part-time workers is up only 16,000. The average workweek was unchanged at 34.5 hours.

    Here's a chart from the St. Louis Federal Reserve that shows the changes in employment levels for involuntary part-time workers:

    Fred graph part-time work

    Nevertheless, Republicans tied it to the news this week that the Obama administration would delay the so-called employer mandate of the Affordable Care Act.

    That means there will be no penalties imposed on companies with 50 or more full-time equivalent employees (working more than 30 hours a week) that fail to provide certain minimum-criteria health insurance to their workers.

    House Majority Leader Eric Cantor focused his entire statement on the uptick in part-time jobs:

    Today’s report is an encouraging sign for the working men and women who found a job last month, and those who are still looking. However, earlier this week the White House reminded us once again that its policies have held back the job growth that we should expect from an economic recovery. Obamacare has been predicted to be a drain on employment since before its passage and that outcome was confirmed by the Obama Administration’s delay of the employer mandate. The added costs and regulations to businesses across our nation mean less jobs and less economic growth. Delaying the inevitable for one year will bring no solace. We must have a permanent delay of Obamacare before we can realize our full job creating potential.

    Needless to say, this will be something to watch as implementation revs up over the next few months.

    SEE ALSO: The June jobs report was the Mother of all Goldilocks reports >

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    jobs unemployment career fair

    Today's bullish jobs report was not without its ugly details.

    While U.S. companies did add jobs in June, most of them were part-time.

    According to the Bureau of Labor Statistics' household survey, part-time jobs jumped by 360,000 to 28,059,000 while full-time jobs fell 240,000 to 115,998,000.

    Some economists have attributed this trend to the Affordable Care Act, aka Obamacare.  Specifically, they blamed the employer mandate, which forced businesses employing 50 or more workers  to offer health insurance or pay a penalty of $2,000 per full-time worker.

    Generally, workers are considered to be full-time if they work over 30 hours per week.

    In their efforts to dodge this mandate, some companies are thought to have begun scaling back hours.

    But earlier this week, the Treasury Department issued a statement saying that the White House would delay until 2015 the enforcement of this requirement.

    UBS's Drew Matus speculated that this would likely be good news for hiring in the near-term.

    The Administration announcement of a one-year delay in the employer mandate component of the Affordable Care Act, or “Obamacare”, could help boost payroll growth. Although the delay is only temporary, for those employers on the cusp of the 50 employee threshold this delay may prompt them to hire as they may be unwilling to continue to postpone hiring to avoid being subject to the mandate. Additionally, employers may delay plans to cut back employee hours to keep them from being classified as “full time” (the law considers employees who work 30 hours per week full-time).

    Again, this likely to be only temporary.  But it is a trend to keep an eye on in the near-term.

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    obama health carePremiums, choice and consumer experience: How Obama's health law is faring on 3 key questions

    WASHINGTON (AP) — Three months before uninsured people can start shopping for coverage, some big unknowns loom over President Barack Obama's health care overhaul.

    The surprise announcement this past week that the White House is delaying a requirement that many employers offer coverage raised questions about other major parts of the biggest expansion of society's safety net since Medicare nearly 50 years ago.

    One delay may not matter much in the end. People will judge Obama's law on three main points: premiums, choice and the overall consumer experience.

    Only partial answers can be gleaned now, and they don't necessarily fall along predictable lines.

    Basic economics suggests premiums will be higher than what many people who buy their own coverage pay now, especially the young and healthy. The new policies provide better benefits, and starting next year, insurers won't be able to turn away the sick. But the pocketbook impact will be eased by new tax credits and other features that people soon will discover.

    As for choice, Obama's plan isn't likely to deliver the dozens of options available to seniors through Medicare. But limited choices may not be seen as a step backward because in most states the individual health insurance market is now dominated by a single insurer.

    The consumer experience shopping online for insurance remains the biggest unknown — and a risk.

    Squads of technology experts — federal, state, insurer and contractor employees — are trying mesh government and private computer systems together in ways that haven't been tried before. It may not feel like Amazon.com. Many people could default to enrolling the low-tech way, through call centers or even through the mail.

    Health care politics divided the nation even before the passage of the Affordable Care Act in 2010, and the law's full implementation four years later is shaping up as a tale of two Americas.

    The rollout might go well in mostly Democratic states that prepared, while it clatters and clunks in mainly Republican ones that resisted Obama's law. Millions of poor people will be denied coverage next year because they live in states that are refusing the law's Medicaid expansion. But most workers now covered on the job should not see major changes.

    With political strategists already honing health care attack lines for next year's congressional elections, a former U.S. health secretary has an admonition for both parties. Mike Leavitt put in place the Medicare prescription drug plan for President George W. Bush in 2006 and now heads a consulting firm that advises states on Obama's law.

    "It's important for all of us to remember that it's not political parties who are affected in the long run, it's people," Leavitt said recently. "It will be millions of people ... many of whom are the less fortunate, and those who have dramatic health problems."

    A closer look at the three big questions:

    PREMIUMS

    The Obama administration sees encouraging signs in states that have released premiums for next year, as well as from rates filed directly with the federal government but not yet publicly revealed.

    "We are seeing increased choice and affordable premiums," said Mike Hash, head of the Department of Health and Human Services' health reform office.

    But what will consumers see?

    The data-crunching company Avalere Health found that in nine states that have released premiums, the rates appear to be lower than the Congressional Budget Office estimated when the law was being drafted in 2009.

    But Avalere vice president Caroline Pearson acknowledges that doesn't represent the cost comparison a consumer might make. Most people who now buy policies individually could see an increase from what they're now paying.

    "The benefit design is going to be richer than what is typically purchased and available today ... and the rules require insurers to sell a policy to whoever wants it, regardless of health status," she said.

    That still doesn't get you to the bottom line because most consumers will be eligible for income-based tax credits to help pay premiums. The plan they pick also could make a big difference.

    Jeremy Gilchrist, a self-employed meteorologist from Winooski, Vt., has been uninsured about four years. In his mid-30s, he's in good health, and he says he can't afford premiums on a skimpy budget.

    "For most people, it's going to be a financial decision," Gilchrist said.

    According to the online Kaiser Family Foundation's health reform subsidy calculator, Gilchrist would be eligible for a tax credit of nearly $2000 on a standard "silver" policy that costs $3,000, leaving him with $1,000 to pay.

    But he can also take that $2,000 tax credit and use it to buy a cheaper policy called a "bronze" plan, leaving him with only about $500 to pay annually. The bronze plan meets the new requirement that virtually all people in the United States have health insurance. But if you get seriously sick or injured you'll wind up paying more out of your own pocket.

    Still, the premium would come to $42 a month for Gilchrist. "The bronze plan would be lower than my car insurance," he said.

    But wait.

    If Gilchrist were a smoker, which he is not, the law would allow insurers to tack on a penalty of up to 50 percent of the premium.

    With time, the decisions of millions of individual consumers will reveal a true bottom line.

    ___

    CHOICE

    The typical Medicare recipient has about 30 private insurance plans from which to choose. There may not be nearly as much choice for families and individuals under the health care law. How much that will matter remains to be seen.

    It's partly because in most states a single insurance company currently controls more than half the market for individual coverage.

    The administration says that's going to change for the better. In three-quarters of the markets the federal government will run, there will be at least one new insurer.

    But areas of concern are emerging. New Hampshire could end up with just one insurance company offering plans through the new marketplace. In 36 of Mississippi's 82 counties, no insurer has yet signed up to offer coverage. Bigger states, however, don't seem to be having problems attracting insurers.

    "The individual market for 2014 will look a lot like the individual market today — one or a handful of carriers dominant in most states," said Larry Levitt, a leading expert with the nonpartisan Kaiser Family Foundation.

    But people will be able to move more easily from insurer to insurer, he added, which should bring more competitive pressure.

    ___

    CONSUMER EXPERIENCE

    For people without job-based coverage, shopping for insurance under the new system is supposed to be as smooth as using a major online site such as Travelocity or Expedia.

    But in a recent report, the Government Accountability Office raised concerns about the sheer technological complexity of the task and the short time left to accomplish it.

    The goal is for consumers to be able to find out the amount of the tax credit they're entitled to and sign up for a plan in real time or close to it. For that to happen, the computer systems of several major federal agencies, the states and dozens of insurance companies have to be able to talk each other, and the information exchanged must be accurate.

    Testing the connections is underway. "We really feel very much on target for Oct. 1 and ready for open enrollment," said Chiquita Brooks-LaSure, a top HHS official overseeing the rollout. "We are meeting critical implementation deadlines."

    "My guess is some of these states are not going to be up and running on time," said Dan Maynard, president of Connecture, a health technology company building three marketplaces.

    That wouldn't necessarily mean some consumers will have to wait. People could sign up through call centers.

    "You could have a very light online (marketplace) and have a lot of things drop to the call center and claim success," said Maynard.

    ___

    Online:

    Health care site: https://www.healthcare.gov

    Kaiser Foundation's subsidy calculator: http://kff.org/interactive/subsidy-calculator

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    Barack Obama health care Obamacare

    NEW YORK (Reuters) - The stock of U.S. insurer UnitedHealth Group could rise 40 percent over the next two years as Obamacare is fully rolled out, business weekly Barron's said in its July 8 edition.

    "Its Optum business will help drive down costs for its health plans, giving it a competitive edge," Barron's wrote.

    UnitedHealth Group is set to report second-quarter earnings on July 18.

    The price of UnitedHealth Group's stock is up 22 percent for the year to date. The stock hit a 52-week intraday high of $66.36 on July 1, according to Thomson Reuters data. On Friday, the stock closed at $66.17.

    (Reporting by David Randall; Editing by Jan Paschal)

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    If you're baffled about the new state health care exchanges being created as part of health insurance reform, you're far from alone. Nearly half of more than 1,200 people surveyed this spring said they've heard "nothing at all" about their state's plans for an exchange, the Henry J. Kaiser Family Foundation found. A survey done for InsuranceQuotes.com, a Bankrate-owned website, found 90 percent of Americans don't know when they'll be able to shop for health insurance using the exchanges.

    Here are answers to a few key questions about the exchanges, which are an important part of the Affordable Care Act, also known as Obamacare.

    Hospital: © Matthew Cole/Shutterstock.com, question background: © grmarc/Shutterstock.com, top woman, wounded man, umbrella, question man, calendar men, mechanic, doctor and patient shaking hands: © The Last Word/Shutterstock.com, sun: © P.Piboon/Shutterstock.com, precious metals: © PILart/Shutterstock.com, map: © maraga/Shutterstock.com, computer: © gameanna/Shutterstock.com, internet background: © notkoo/Shutterstock.com, U.S. map: © alicedaniel/Shutterstock.com, shopping cart: © Mathee saengkaew/Shutterstock.comBankrate.com Bankrate.com insurance

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    Barack Obama health care Obamacare

    (Reuters) - A U.S. appeals court on Thursday rejected a Christian university's challenge to President Barack Obama's 2010 health care overhaul, which the school said unconstitutionally imposes costly burdens on large employers and infringes religious liberty.

    The 4th U.S. Circuit Court of Appeals in Richmond, Virginia, rejected Liberty University's argument that the law violated the constitution's Commerce Clause by forcing large employers to provide health insurance to full-time workers and violated First Amendment religious protections by subsidizing abortions.

    The 3-0 panel decision addressed issues that the U.S. Supreme Court did not take up in June 2012, when by a 5-4 vote it upheld most of the health care law known as "Obamacare."

    In that case, the court upheld the individual mandate requiring people to buy insurance or pay a tax. It said the mandate was a valid exercise of Congress' taxing power, though it exceeded Congress' power under the Commerce Clause.

    Mathew Staver, the dean of Liberty's law school, said in a phone interview that the university plans to appeal the decision to the Supreme Court this month.

    "It goes against the principle that the Supreme Court laid down that Congress cannot force individuals to buy an unwanted product," he said. "We believe the same principle applies to employers. If we win on the employer mandate, then the mandate would be gone for religious and non-religious employers."

    The U.S. Department of Justice, which defended the law at the 4th Circuit, was not immediately available for comment.

    Dozens of groups and individuals supported either Liberty or the federal government during the appeals process.

    Liberty, based in Lynchburg, Virginia, was founded by the late U.S. evangelist Jerry Falwell. It had filed its lawsuit shortly after Obama signed the health care law in 2010.

    EMPLOYER MANDATE NOT A "MONSTER"

    In its decision, the 4th Circuit said the employer mandate does not require employers to buy a product they do not want, saying that employers are free to and often do self-insure.

    It also said Congress had a rational basis for the mandate because it substantially affects how easily workers can move from state to state. The court also rejected the argument that the mandate imposes a penalty rather than a tax.

    "The employer mandate is no monster; rather, it is simply another example of Congress's longstanding authority to regulate employee compensation offered and paid for by employers in interstate commerce," the panel said.

    In finding that the law did not violate the right to freely exercise religion, the 4th Circuit said the law let individuals and employers use plans that do not cover abortion services except in cases of rape or incest or to protect a mother's life.

    Circuit Judges Diana Gribbon Motz, Andre Davis and James Wynn, all appointed by Democratic presidents, co-wrote the decision. Most federal appeals court decisions are written by one judge or are unsigned.

    "It is unusual," Staver said. "I think there was tension among the panel in terms of the direction it wanted to go, and it needed a joint decision to get a consensus."

    The 4th Circuit had in 2011 dismissed Liberty's case, saying it lacked jurisdiction, but was ordered by the Supreme Court to revisit the matter.

    Before the Supreme Court sent the case back, the Obama administration said Liberty's lawsuit lacked merit, but that it had no objection to letting the appeals court consider it.

    Obamacare has spawned many other lawsuits. More than 60 oppose a requirement that employers provide birth control coverage, according to the Becket Fund for Religious Liberty, a nonprofit law firm.

    The case is Liberty University Inc et al v. Lew et al, 4th U.S. Circuit Court of Appeals, No. 10-2347.

    (Reporting by Jonathan Stempel in New York; Editing by Paul Simao and Jim Loney)

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    mom mother daughter

    Key elements of the Affordable Care Act have been delayed, most notably the mandate that employers with more than 50 employees must offer health insurance in 2014.

    In the case of the law's ill-formed, long-term care program, the provision wound up being abandoned. And when it comes to state decisions to expand Medicaid, the law's provisions have been denied in many states.

    Opponents say these steps prove the entire law was misguided and should be tossed out. Supporters argue that such a sweeping set of changes is bound to encounter obstacles, and smart, well-intentioned people should adjust and put the beneficial provisions of the law into practice.

    With Congress unlikely to agree on any meaningful changes to Obamacare, here is a look back at the many health care changes that have been triggered by the 2010 law. Here are 10 that Americans should be happy are in place:

    1. Goodbye doughnut hole. Medicare drug plans (Part D of Medicare) stop providing insurance to people after their claims for covered drugs hit a certain level ($2,970 in 2013), and coverage doesn't resume until spending hits another level ($4,750 in 2013). Health care reform is closing this doughnut hole in annual stages, and it will be totally closed by 2020. Savings to Medicare beneficiaries will be in the tens of billions of dollars.

    2. Free Medicare preventive services. Health care reform greatly expanded the menu of free preventive services to Medicare consumers.

    3. Free preventive services to all women. Health insurance plans have added eight women's health benefits because of the law, in areas including breastfeeding, contraception, domestic violence, gestational diabetes, HIV screening and counseling, sexual diseases and wellness visits. These benefits are free, meaning they involve no co-payment or co-insurance, and women don't need to meet their plan deductibles to use these free services.

    4. Pre-existing conditions. Beginning in 2014, no one can be denied health insurance because of a pre-existing medical condition.

    5. Premium equity. Insurers can't gouge people with pre-existing conditions by forcing them to pay unreasonably high premiums. The law also limits insurers' ability to impose age-related premium increases for private coverage.

    6. End of pre-existing restrictions on children's access to health insurance. The law has ended insurance denials based on pre-existing conditions for the roughly 20 million children under age 19.

    7. Adult dependent insurance coverage. Adult children up to age 26 can now continue to get health insurance on their parent's policies.

    8. Insurance payout limits. The law will end lifetime limits on insurance payouts. It also has been phasing out annual coverage limits, and these will be completely outlawed for insurance plans taking effect next year.

    9. Minimum medical loss ratio for insurers. Health insurers must spend at least 85 percent of their premium dollars on health care (80 percent for smaller group plans) or rebate shortfalls to consumers.

    10. New consumer health coverage reportsConsumers have begun receiving a standardized report explaining their health insurance. This seemingly modest accomplishment is actually a big deal. For the first time, different health insurance plans have to present their coverage details in the same format, using the same language. Consumers can now accurately compare different health insurance plans.

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    Obama press conference obamacare sad

    WASHINGTON (Reuters) - Two U.S. government officials warned on Wednesday that the launch of new state healthcare exchanges could potentially be delayed, raising further doubts about the implementation of President Barack Obama's signature legislation.

    Alan Duncan, an auditor with the Treasury Inspector General for Tax Administration, an Internal Revenue Service agency that monitors performance, said testing the systems needed to implement the exchanges "will be difficult to complete" by the October 1 start date.

    "The lack of adequate testing could result in significant delays and errors in accepting and processing ... applications for health insurance coverage," he told the House of Representatives Oversight and Government Reform committee.

    At the same hearing, Government Accountability Office official John Dicken said the amount of work the federal government needs to do in each state has yet to be determined, raising the risk of missing deadlines. He added that the federal government and the states have already missed some deadlines.

    The House on Wednesday approved a one year delay to the law.

    However, Obama administration officials offered assurances that they were on track.

    "We are on target to have our new systems ready for deployment when open enrollment in the marketplace begins on October 1," Acting Internal Revenue Service chief Danny Werfel told the committee.

    At a separate hearing, Mark Iwry, a health policy senior adviser at the Treasury Department, told lawmakers the administration's healthcare work was on time.

    HEALTHCARE'S PATH AHEAD

    Beginning in October, individuals will be able to buy health insurance through the new exchanges to comply with the Patient Protection and Affordable Care Act, which is also sometimes called Obamacare.

    The exchanges are essential to the healthcare law's "individual mandate," which requires people to have insurance or pay a fine. The exchanges will extend coverage to millions of uninsured Americans by offering subsidized insurance through online marketplaces in all 50 states.

    Many states have refused to set up the exchanges, adding to the federal government's burden in implementing the law, which begins for individuals next year. The federal government has to set up exchanges for individuals in 34 states.

    The U.S. Treasury and White House said earlier this month that businesses would not be required to offer health coverage, or pay a fee, for 2014 to give businesses more time to comply.

    Businesses complained that IRS instructions on how to comply were not published and they would not have time to prepare. The new fee affects businesses with more than 50 full-time employees.

    Congressional Republicans, who have taken more than three dozen votes to repeal the law since it was signed in 2010, are using the delay to argue that the entire law is flawed.

    Also on Wednesday, the Republican-controlled House Appropriations Committee approved a 24 percent budget cut for the IRS in fiscal 2014. The bill prohibits the agency from spending funds to implement the healthcare law's individual mandate.

    Republican efforts to repeal or defund the law have little chance of passing in the Democratic-controlled Senate.

    (Reporting By Patrick Temple-West; Editing by Kim Dixon, Leslie Gevirtz and Andre Grenon)

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