Research Briefing

List Of “Losers” From ObamaCare’s “Bait-And-Switch” Grows

 “FINE PRINT” OF OBAMACARE TAX CREDIT MAKES SOME SMALL BUSINESSES “LOSERS”

Small Business Owner From Springfield, IL Discovered His Business Won’t Qualify For ObamaCare’s Small Business Tax Credit. “Zach Hoffman was confident his small business would qualify for a new tax cut in President Barack Obama's health care overhaul law. But when he ran the numbers, Hoffman discovered that his office furniture company wouldn't get any assistance with the $79,200 it pays annually in premiums for its 24 employees.” (Ricardo Alonso-Zaldivar, “FACT CHECK: Tax Cut Math Doesn't Add Up For Some,” The Associated Press, 5/20/10)

• Hoffman: “It Leaves You With This Feeling Of A Bait-And-Switch…” (Ricardo Alonso-Zaldivar, “FACT CHECK: Tax Cut Math Doesn't Add Up For Some,” The Associated Press, 5/20/10)
• Hoffman Says He’d Have To Cut Jobs, Slash Wages To Benefit From The Credit. “To get the most out of the new federal credit, Hoffman said he'd have to cut his work force to 10 employees and slash their wages. ‘That seems like a strange outcome, given we've got 10 percent unemployment,’ he said.” (Ricardo Alonso-Zaldivar, “FACT CHECK: Tax Cut Math Doesn't Add Up For Some,” The Associated Press, 5/20/10)

Because The Credit’s Much-Touted “Broad Eligibility” Falls Short As “The Credit Drops Off Sharply” If You Read The “Fine Print.” “When the administration unveiled the small business tax credit earlier this week, officials touted its ‘broad eligibility’ for companies with fewer than 25 workers and average annual wages under $50,000 that provide health coverage. … Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages.” (Ricardo Alonso-Zaldivar, “FACT CHECK: Tax Cut Math Doesn't Add Up For Some,” The Associated Press, 5/20/10)

And Is Just Another Example Of The “Winners And Losers” Created By ObamaCare. “It's an example of how the early provisions of the health care law can create winners and losers among groups lawmakers intended to help—people with health problems, families with young adult children and small businesses. Because of the law's complexity, not everyone in a broadly similar situation will benefit.” (Ricardo Alonso-Zaldivar, “FACT CHECK: Tax Cut Math Doesn't Add Up For Some,” The Associated Press, 5/20/10)

LARGE EMPLOYER-PROVIDED PLANS WON’T COVER YOUNG ADULT CHILDREN IMMEDIATELY, AS OBAMA PROMISED 

New Survey From Consulting Firm Towers Watson Finds 78% Employers Aren’t Going To Offer Coverage To Their Employees’ Young Adult Children Ahead Of ObamaCare’s Deadline. “Among 661 employers responding to the survey by New York-based Towers Watson & Co., 16% said they would extend the coverage before the required effective date, 78% said they would wait until the effective date and 6% did not yet know. The law requires the extension to be made on the first day of the plan year that starts after Sept. 23. For calendar-year plans, which are the most common, the effective date is Jan. 1, 2011.” (Jerry Geisel, “Most Employers Waiting To Cover Adult Children: Survey,” Business Insurance, 5/18/10)

• Randy Abbott, Senior Consultant For Towers Watson: “Early Adoption Means More Communications And More Administrative Issues To Deal With. At A Time When Many Employers Are Resource-Constrained, They Are Prepared, Unless There Is Overwhelming Demand, To Wait Until The Effective Date…” (Jerry Geisel, “Most Employers Waiting To Cover Adult Children: Survey,” Business Insurance, 5/18/10)

“The Obama Administration Strong-Armed 65 Insurance Companies Into Providing Coverage For Young Adult Dependents Months Before The Law Actually Kicks In. This Gave Them An Immediate Benefit To Point To In Their Health Reform Pitch. But What If The President Points To A Benefit That Does Not Exist?” (Sarah Kliff, “Brewing Fight Over The 'Doc Fix' Today -- Employers Won't Play Ball With Early Age 26 Extension -- Republicans Bring Back Deal Panels -- How Health Reform Played In Arkansas Election,” Politico’s “Pulse,” 5/20/10)

CASH-STRAPPED STATES STRUGGLE WITH OBAMACARE’S UNFUNDED MANDATES

Cash-Strapped States Look To Make Cuts To Medicaid To Balance Their Budgets, But “Under Health-Care Reform, They Can't Eliminate Existing Programs.” “Across the country, budget-strapped states are focusing on Medicaid. Created in 1965, it is now a $379 billion program, including state and federal funds. State spending grew an average 7.9% in fiscal 2009 as the economic crisis hit and more people signed up for Medicaid. It was the highest growth rate since the last downturn six years ago. Spending is expected to keep growing at that pace for the next decade because of rising costs and growing enrollment. But states don't have much flexibility when it comes to what they can and can't cut inside Medicaid. … States can't reduce Medicaid eligibility this year because of a condition attached to federal stimulus money, and under health-care reform, they can't eliminate existing programs.” (Clare Ansberry, “Disabled Face Hard Choices As States Slash Medicaid,” The Wall Street Journal, 5/20/10)

219 Members Of Congress Asked Congressional Leaders To Extend Emergency Medicaid Funding To States Because “States Will [Otherwise] Be Forced To Make Severe Cuts To Medicaid Providers And Benefits.” “Citing letters from 219 Members of the U.S. House of Representatives and 47 Governors urging congressional leaders to immediately extend federal Medicaid relief as states cope with the ongoing national recession, the leaders of the American Health Care Association (AHCA) and Alliance for Quality Nursing Home Care today implored Congress to pass a pending six month extension to the Medicaid Federal Medical Assistance Percentage (FMAP). The emergency relief is scheduled to expire December 31, 2010 – and federal lawmakers warn ‘states will be forced to make severe cuts to Medicaid providers and benefits’ unless the provision is passed.” (American Health Care Association, “Federal Lawmakers: “Severe Cuts To Medicaid Providers And Benefits” Imminent Unless Congress Passes FMAP Extension To Help States Cope With Ongoing Budget Crises,” Press Release, 5/18/10)