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IBC Practitioner Briefing:The State of the U.S. Economy
Robert P. MurphyDecember 17, 2013
I. Fed and Stock MarketI. Fed and Stock Market
Artificially Low Interest Rates Artificially Low Interest Rates
II. Long-Term Budget OutlookII. Long-Term Budget Outlook
Budget Components Budget Components
III. ACA TimelineIII. ACA Timeline
• 3/23/2010 Obama signs ACA into law• 10/1/2013 Open enrollment begins• 1/1/2014 Coverage begins• 1/1/2014 Individual mandate enforced• 3/31/2014 Open enrollment closes (now
need a “major life event” to apply)
IV. Major Planks, all “Mesh”IV. Major Planks, all “Mesh”
• “Universal” coverage
• Minimum standards in plans
• Community rating (for premiums)
• Employer mandate (50 or more full-time, meaning 30+ hours/week)
• Individual mandate Jan 1st 2014,
More on the Mandate More on the Mandate
• “Individual Shared Responsibility Fee”• Based on number of months DON’T
have coverage. Exempt if below 133% of federal poverty line.
2014: $95 per person per year or 1% of income
2015: $325 / person or 2% of income2016: $695 / person / year or 2.5% income2017: Increase w/inflation, or 2.5% income
V. Undesirable ConsequencesV. Undesirable Consequences
• Premium hikes (next slide)
• Employment drop
• Quality suffers, “death panels” (rationing)
• Possible for people to lose coverage!
VI. Feds vs. Heritage FoundationVI. Feds vs. Heritage Foundation
VII. CBO ReportVII. CBO Report
A. Notes on CBO TableA. Notes on CBO Table
• The gross cost to feds of offering ACA insurance coverage (including tax credits) is $1,677 billion; table has net cost of $1,171 because of mandates penalties and tax on “Cadillac” plans.
• “Direct Spending” includes ACA’s projected cutbacks on doctor/hospital reimbursements
• Other revenues includes “Medicare” surtaxes 3.8% investment income and 0.9% payroll
B. Tax on “Cadillac” PlansB. Tax on “Cadillac” Plans
• Starting 2018, 40 percent excise tax on cost of plans in excess of $10,200 for individuals and $27,500 family.
• Ostensibly limits low-deductible and high cap plans to contain medical costs, but what about sick employees?!
• EXACT OPPOSITE of minimum standards. ACA hits both ways.