Misunderestimating* income for Obamacare

The New Neo Posted on by

Mickey Kaus tackles a question that occurred to me many months ago when I was immersing myself in the Byzantine weirdness of the way Obamacare subsidies would be working (see this, for example). Here’s Kaus’ question:

We know what happens when people who claim subsidies on the Obamacare exchanges underestimate their income”“the IRS will grab the unwarranted part of the subsidy back at tax time. And we know what happens if they overestimate their income”“they’ll be refunded the subsidy to which their lower income entitled them.

But the poorest Americans don’t qualify for subsidies on the exchanges. If they make less than the poverty line ”“about $20,000 for a family of three”“they’re steered to Medicaid. (In states with expanded programs, they’re apparently sent to Medicaid if they make less than 138% of poverty, according to the Kaiser subsidy calculator). So what if someone is near the income boundary between the two programs”“and what if this person overestimates their income, and thinks they qualify for a subsidized policy on the exchange”“but it turns out they didn’t make what they thought they’d make. Maybe they didn’t get some work they usually got in the past, or their wages got cut, or they got laid off. According to the income they actually earned, they should have been sent to Medicaid. They didn’t just get too much or too little subsidy. They used the wrong program.

What’s the IRS going to do to them?

That question leaped into my mind back in October or November, when I learned about the claw-back rule concerning overestimates and underestimates of income, a particular problem for the self-employed, whose incomes can vary quite wildly.

Kaus says he doesn’t know the answer to the question. Neither, of course, do I. But I would guess that the government does, for the simple reason that, even before Obamacare, Medicaid eligibility was predicated on income estimates, and underestimation of income could affect a person’s eligibility for those benefits. So when I was considering the question for Obamacare I came up with a guess at the answer, which was that such underestimations would just be ignored ex post facto, and that the original estimate—if made in supposed “good faith”—would be allowed to stand. An Emily Litella “never mind” attitude will probably prevail, because the alternative of trying to sort out these cases after the fact would be so onerous and result in so little government reward, especially since the people involved don’t for the most part have a whole lot of excess income to claw back. However, people who had underestimated their income in this way in order to qualify for Medicaid would probably find they no longer qualified for Medicaid for the coming year.

It’s hard to find much online about this, but in a quick perusal I discovered the following, which I think may be relevant:

Everyone applying for [Obamacare] subsidies must estimate their 2014 income. For the poor, the difference between qualifying [for Obamacare vs. Medicaid]– or not — could be $1,000 or less a year. Since many rely on hourly or seasonal work, their incomes often fluctuate by a few thousand dollars each year. That’s one reason why people often lose eligibility for Medicaid, the state federal insurance program for the poor.

While there are steep fines for knowingly lying on a government application for financial assistance, if someone merely miscalculates their income above the poverty level in 2014, and is later found to have made less than the poverty level, they won’t have to pay any money back, according to the Treasury Department.

“There’s little risk because under the rules you don’t have to pay anything back,” said Richard Trembowicz, vice president for Celtic Insurance Co., a subsidiary of Centene Corp. which is offering plans on several exchanges, including Mississippi.

Is Trembowicz correct? I guess we’ll see, but my hunch is “yes.”

As time goes on, people on the income cusp may learn how to game the system under the Obamacare rules, deciding whether they would prefer Medicaid (where they’ll pay virtually nothing but will have fewer choices of doctors and services) and Obamacare (where they’ll pay a little something but will have more choices), and estimate their incomes accordingly.

[*In case you don’t remember the provenance of that wonderful word, see this.]

I wonder if…

The New Neo Posted on by

…the science about this was considered settled before the new evidence came to light.

Speaking of science and geology (and we were, weren’t we?), recently I was reading a book called Europe Between the Oceans: 9000 B.C.—AD 1000, and was entranced by a series of maps

I say I was “reading” the book, but it would probably be more accurate to say I was looking at the pictures. It’s a big beautiful book with about 500 pages of text, but it’s the illustrations that attracted me most. Some of them feature works of art from a time in early Europe I know very little about, and I’ve been surprised by their beauty and especially their sophistication.

The maps in question feature the area we know as northwest Europe and the British Isles from 18,000 to 5,000 BC. At the beginning, ice sheets covered the latter (especially Scotland). But the whole was one big land mass, because so much water was bound up in the ice that there was no English Channel, and the North Sea was a narrow finger of the ocean. It wasn’t until 6,500 BC that the British Isles became “isles,” when the waters rose significantly and separated them from the rest of Europe.

Here’s an excerpt from the book, describing a period when the European ice caps began to melt and the land of northern Europe rise, beginning around 18,000 BC:

While these changes were taking place, the north-western extremity of Europe, now the islands of Ireland and Britain, were gradually being reshaped. Two river systems developed. The precursor of the Elbe and most of the rivers of eastern Britain flowed northwards into the Norwegian Trench—a deep water channel hugging the coast of Norway—while the Thames, Rhine, and Seine flowed south into the river Channel which drained the water south-westwards into the Atlantic, forming a wide estuary between Cornwall and Brittany. The remnants of the Scottish ice cap drained southwards through what is now the Irish Sea. Relative sea level continued to rise and by 8,000 BC Ireland had become separated from the mainland. By 6,500 BC Britain itself had become an island, though there were still large stretches of dry land remaining for several more millennia in what was eventually to become the North Sea.

In the maps in the book that show what scientists think the area looked like before Britain became an island, you can see the Thames and Rhine connected in an almost straight line. The following isn’t a map from the book, but it’s similar:

doggerland

Something about all of this not only reminds me how much climate and geological change there has been on the earth, but how relatively recently some of it has occurred. Who would have thought the British Isles became “isles” that short a time ago?

Also, there’s something mysteriously wonderful about the Thames and the Rhine having once been connected, or at least part of the same river system.

[NOTE: There’s a lot more here about Doggerland, as the early land mass is sometimes called.]

The new liberal line about jobs and work

The New Neo Posted on by

In order to justify the latest Obamacare news, the party line is that growing unemployment as a result of Obamacare would be good because it frees people from the drudgery of jobs:

An editorial in the Times celebrates the projected decline in work as “a liberating result of the law. . . . Workers . . . will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families.”

Given the high deductibles and narrow networks that make ObamaCare policies unattractive, we wonder if the CBO’s estimate might not turn out to be on the high side. And here’s another puzzlement: Working for pay is supposed to be liberating for women because it frees them from dependency on men. How can one square that with this new claim that dependence on the government is liberating because it allows people not to work?

Well, consistency is not the point. Work is liberating when it suits the party agenda, senseless drudgery when it does not.

Of course, it would be naive to say that work is not sometimes tiresome labor. Some of our laws—setting the number of hours, or amount of time devoted to breaks—are designed to reduce some of its more onerous elements. Much work is intrinsically boring. But whose duty is it to relieve people of that, and who will pay for that relief? The need for health insurance is just one thing that might keep a person “locked into a job they don’t like because they need” something or other. Is the new goal to redesign the world so that everyone loves his/her work? Good luck with it.

Now might be a good time for a quote from none other than Martin Luther King Jr.:

If it falls your lot to be a street sweeper, sweep streets like Michelangelo painted pictures, sweep streets like Beethoven composed music, sweep streets like Leontyne Price sings before the Metropolitan Opera. Sweep streets like Shakespeare wrote poetry. Sweep streets so well that all the hosts of heaven and earth will have to pause and say: Here lived a great street sweeper who swept his job well. If you can’t be a pine at the top of the hill, be a shrub in the valley. Be be the best little shrub on the side of the hill.

Be a bush if you can’t be a tree. If you can’t be a highway, just be a trail. If you can’t be a sun, be a star. For it isn’t by size that you win or fail. Be the best of whatever you are.

King was a preacher, after all. And this is an ideal that most people (including me) may not be able to reach. But it’s an attitude that life satisfaction comes from what we bring to it, and that there is dignity to work well done.

The undead

The New Neo Posted on by

Communism/Socialism is an idea whose time has always come, ever-fresh and ever-new. It keeps rearing its ugly head wearing a new mask, like some vampire who keeps returning in a new guise. But can’t we finally drive a stake through its wretched heart?

Robert Stacy McCain writes an essay describing the latest renaissance of the idea that persists in the face of all empirical evidence to the contrary, and which was correctly critiqued by the economist Ludwig von Mises not long after the soviets came to power:

In his classic work Socialism, Mises explained that the attempt to replace the market system with central economic planning could not succeed, because the planners could not possibly have the information necessary to make all the decisions which, in a market economy, are made by individuals whose needs and desires are reflected in prices: “The problem of economic calculation is the fundamental problem of Socialism.”

“Everything brought forward in favour of Socialism during the last hundred years,” Mises wrote in 1922, “in thousands of writings and speeches, all the blood which has been spilt by the supporters of Socialism, cannot make Socialism workable. …. Socialist writers may continue to publish books about the decay of Capitalism and the coming of the socialist millennium; they may paint the evils of Capitalism in lurid colours and contrast with them an enticing picture of the blessings of a socialist society; their writings may continue to impress the thoughtless — but all this cannot alter the fate of the socialist idea.”

The rest of the McCain article is worth reading. My response is that this persistence of the idea of socialism/Communism despite evidence of its awfulness when put into practice in the real world should not be at all surprising. And I don’t think we’ll ever find the proper stake to drive into its still-beating heart, because the nature of this beast is that it represents an idea with strong appeal to a vast number of human beings. No amount of empirical or historical evidence can permanently teach enough people otherwise.

The rhetoric of Socialism/Communism has intrinsic appeal to certain groups of people and some members of each group are always likely to fall under its spell: the guilt-ridden wealthy and/or their even-more-guilt-ridden spawn, the poor who feel they’ve been screwed by society, the politically and economically naive intelligentsia who feel they know better than others, the religious and/or idealistic who want everyone to be loving and good and selfless, and those who just like the idea of power and control over others and plan to be the ones in charge.

Combine all that natural appeal with the undeniable propagandist skill of the left—including their willingness to lie in the most brazen manner—and you have an even greater effect. And then combine all of that with ignorance of history and economics, our culture’s reluctance to teach the young our good points and its eagerness to harp on our bad ones, and the fact that people only tend to really learn something through bitter and personal experience.

The wonder is that more people don’t believe that socialism/Commmunism is the answer to the world’s prayers, not that so many succumb to it in the first place. Never imagine that the fight, especially in the intellectual and educational and propaganda spheres, can be over. It would be too bad if each generation had to learn the lesson through personal suffering rather than in the realm of ideas.

California’s Obamacare network woes continue

The New Neo Posted on by

I’ve written about Obamacare’s narrow networks in California before.

But the LA Times has a lot more today on the topic.

And it the LA Times is writing about this, you better believe the situation is bad and cannot be ignored.

For example:

A month into the most sweeping changes to healthcare in half a century, people are having trouble finding doctors at all, getting faulty information on which ones are covered and receiving little help from insurers swamped by new business.

Experts have warned for months that the logjam was inevitable. But the extent of the problems is taking by surprise many patients ”” and even doctors ”” as frustrations mount…

Aliso Viejo resident Danielle Nelson said Anthem Blue Cross promised half a dozen times that her oncologists would be covered under her new policy. She was diagnosed last year with non-Hodgkin’s lymphoma and discovered a suspicious lump near her jaw in early January.

But when she went to her oncologist’s office, she promptly encountered a bright orange sign saying that Covered California plans are not accepted.

“I’m a complete fan of the Affordable Care Act, but now I can’t sleep at night,” Nelson said. “I can’t imagine this is how President Obama wanted it to happen.”

If only, if only, if only Stalin knew!!

Note, also, that Ms. Viejo describes herself in the present tense as a “complete fan” of the ACA, rather than as a past fan. Her belief in Obamacare and in Obama himself is quite intact, and I’m not sure what it would take to pry her loose from it.

She’s not alone.

Spinning the new CBO report on Obamacare’s economic effects

The New Neo Posted on by

Before I even begin, let me just ask: why would anyone trust the CBO’s projections about Obamacare’s effects? You don’t even have to believe that the CBO is purposely lying about anything to perceive that such prognostications are inherently suspect because of the complexity of the matter and the possibility of unforeseen and/or unintended consequences galore. Plus, it’s not my impression that the CBO’s track record on these sorts of things is especially good.

But it’s what they do so they’ve got to go ahead and do it, and everybody seems to have to talk about it. And here I am, talking about them talking about it.

Reading the responses to the CBO’s latest on Obamacare it’s clear how easy it is to spin it one way or the other, and how difficult it is for most readers who are not well-versed in economics and statistics (and that would be “most people”) to try to wade through it all and come to something approximating the truth—if they’re even inclined to do so in the first place.

The liberal LA Times, for example, says the CBO Obamacare news is great; the predicted loss of workers from the labor force will be from people who are ill and near retirement and shouldn’t be working anyway. On the other hand, John Podhoretz characterizes the report as a “death blow” to Obamacare. He lists a lot of reasons, but emphasizes a very different phenomenon re the labor force:

First, the report says Americans will “choose to supply less labor ”” given the new taxes and other incentives they will face and the financial benefits some will receive.”

Here’s why: Poor people get certain subsidies, which disappear once a worker achieves a certain level of compensation. So it may be better to work less, or not work at all, rather than reach that higher pay level, because the pay increase won’t offset the loss of the subsidy…

As the report says, “If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates [the tax rates applying to their last dollar of income], thus discouraging work.”

There’s a problem on the other end as well ”” among those whose tax dollars pay for the whole shebang: “If the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed.”

Thomas Lifson at American Thinker evaluates some of the liberal versus conservative responses. His article is worth reading, but here’s a sample of his conclusions:

The cold hard facts are that CBO says that the availability of subsidies will induce people to work less. And therefore earn less, and pay less taxes (or get larger earned income tax credits, aka welfare by another name, not to mention Food Stamps, Section 8 Housing subsidies, and all the other taxpayer subsidies available in the new leftist welfare utopia). As Stephen Hayes of The Weekly Standard pointed out on Special Report with Bret Baier last night, this contention of Furman’s directly contradicts the traditional liberal assertions that welfare availability does not induce people to work less. Now they are admitting that people choose to work less when government subsidies are available. And they are celebrating it as liberation from drudgery.

The only problem is that the rest of us remained chained to drudgery in order to support their self-fulfillment. And we get to pay higher taxes in order to support all the people who are taking advantage of our involuntary largess.

I’ve been analyzing Obamacare myself for many months, crunching not the CBO-type numbers but the numbers that applicants themselves would deal with in applying for Obamacare. I learned how the subsidies work and it became glaringly and almost immediately obvious how the subsidies would act as disincentives to earning more money. I quickly discovered plenty of other facts too numerous to mention in this post, but described at length in the many many posts I’ve written on the subject since the rollout last October. And yet somehow I have a feeling that we ain’t seen nothing yet in terms of how bad this will be.

But maybe all of this CBO stuff, and then spin on the CBO stuff and evaluation of the spin, is just so much hot air for most Americans, who will evaluate this on their own. Obamacare is not some distant abstraction. It will affect almost all of us personally, in ways most people can understand and feel. It will affect their friends, their family, their workplace, the economy in general. And it may be that even the spinmeisters can’t hide what it will do.

[ADDENDUM: Megan McArdle is always worth reading on this sort of thing. Interestingly enough, her article seems to agree with my basic premise in the first paragraph of my post. Also worth reading are the comments to her article.

McArdle focuses on those who will quit their jobs entirely, rather than on those who may just reduce their hours and/or their efforts in order to earn less.

Also see this by Ross Douthat.]

Obama the betrayer: part III

The New Neo Posted on by

Have you ever noticed how often the word “betrayed” or “betrayal” occurs in articles about President Obama?

I have. Take a look, for example, at two very recent ones in major newspapers: the WaPo’s “Labor union officials say Obama betrayed them in health-care rollout” and the NY Post’s op-ed “Betrayed by the President and ObamaCare” by Emilie Lamb.

This is unusual (although not unheard of; for example George H.W. Bush and taxes) for a president, at least to the best of my recollection—especially the variety of people and groups betrayed, and ways in which betrayal is said to have occurred. Criticism is not unusual, of course, especially from opponents or people who didn’t vote for that president in the first place. But that’s not usually how the word “betrayal” is used; can you betray those who never trusted you in the first place? I have no sense that Obama has betrayed me, because by Election Day 2008 I had already learned that his specialty was betrayal. No, these are Obama’s erstwhile (and formerly most fervent) supporters who are feeling so betrayed now.

Let’s just think back on Obama’s political career, the first act of which included an audacious act of betrayal. Not an illegal act, mind you; just a betrayal of his mentor Alice Palmer. I will never understand why a man with that history was ever trusted by anyone, but people are funny, aren’t they? Because he seems to have inspired a good deal of trust.

This is the third post I’ve written with the same title: “Obama the betrayer.” That’s how big a theme I see it as having been in his life. The first in the series was posted in November of 2009, so that gives you a rough idea of how early the topic emerged on this blog.

So, how did we still get naivete such as Emilie Lamb’s, who believed in Obamacare and now feels betrayed?:

ObamaCare was supposed to help me.

That’s all I could think as I sat in the House of Representatives last Tuesday night as the guest of my congresswoman, only a few hundred feet away from President Obama as he gave his State of the Union address. Four years ago, I’d have been there cheering for ObamaCare’s passage. But the real ObamaCare has made my life a nightmare…

I’ve had to take a second job in order to pay for my ObamaCare plan. Given my health problems, the physical and emotional drain that this puts on me is difficult to bear. It’s also made it much more difficult for me to care for my ailing mother, who depends on me for help.

For me, the impact of ObamaCare is a health plan that is both unaffordable and uncaring. For a law named “The Affordable Care Act,” this is both backward and perverse.

It’s also not what you promised me when I voted for you, Mr. President. When you were on the campaign trail, you promised that ObamaCare would help me with my medical problems. You promised that people like me with pre-existing conditions would be better off. And you promised that if I liked my health-care plan, I could keep it.

It reminds me of a little child who screams, “But you promised!” to a parent who breaks his/her word on some long-anticipated treat. But Lamb is no child. You might say, “Fool, you made your bed, now lie in it!” But remember that Obama preyed on and nurtured the innocence and gullibility of adults who wanted to believe the best of him, some of whom (like Lamb) are ill and in trouble as a result of believing his con game. And remember also that Lamb is correct when she ends her essay this way:

Mr. President, you’ve now broken all of these promises ”” and not just to me.

The bell doesn’t just toll for Lamb; it tolls for all of us. It tolls for all of us when a politician as smoothly deceptive as Obama is in charge. It tolls for all of us when too many Americans are naive enough to believe him. It’s not just Lamb’s problem; it’s everyone’s.

[NOTE: The WaPo piece about the anger of the labor unions at Obama’s betrayal of them is well worth reading, too. They’re hopping mad at Obama, and I even detect a little anger at themselves:

“We thought that if we made the case to the agencies dealing with regulations to correct problems that hurt, really destroy, self-funded nonprofit health plans, it would be resolved,” Taylor said. “That clearly was naive or stupid.”

Or maybe both, although “naive” isn’t really something we often connect with the leadership of large labor unions. In this case, though, I believe they actually were naive: they trusted government, and they trusted Obama to fulfill his side of the quid pro quo. But maybe—just maybe—they’re learning a little bit.

Maybe.]

Ryan on immigration bill—“never mind”?

The New Neo Posted on by

Paul Ryan:

Rep. Paul Ryan, R-Wis., said distrust of President Barack Obama runs so deep in the Republican caucus that he’s skeptical the GOP-led House would pass any immigration measure. He said a plan that puts security first could only pass if lawmakers believe the administration would enforce it – an unlikely prospect given Republicans’ deep opposition to Obama.

So, was it all a feint? Or is the above the feint?

Only the Shadow—and perhaps John Boehner—knows.

Obama: degrees of lies

The New Neo Posted on by

So, in President Obama’s interview with Bill O’Reilly Obama mostly bobbed and weaved and evaded answering questions in any meaningful manner. But he also doubled down on his lie on Benghazi, the one that had surfaced with some fanfare in the second debate with Romney.

To O’Reilly:

“When someone is attacking our compound, that is an act of terror and that’s how I characterized it the next day,” Obama said during the live sit-down broadcast from the White House during Fox’s Super Bowl pre-game show.

Obama knows that he will never be fact-checked on this in a way that will matter (bloggers and the right will do it, but the MSM will back him up), and that most people (including those in the MSM) will just allow it to pass into the realm of “things generally thought true.” Wasn’t that settled during the debate, when “moderator” Candy Crowley (who showed a distinct lack of moderation) leapt in to assert that yes, indeed, Obama had called Bengahzi an act of terror the day after it occurred, in his Rose Garden speech?

Anyone who wants a thorough analysis of exactly what Obama said and why it’s the case that he most definitely did not call the attack an act of terror—and just how strange Crowley’s actions in that debate were—please read this, this, and this.

But the larger issue is that we’ve all grown very used to Obama’s lies. Does anyone, including his most avid supporters, expect him to tell the truth anymore? But not all lies are created equal, and most politicians tell lies about something or other, some minor and some major. So what seems different about Obama, besides the volume and variety of his lies?

It’s one thing to lie about something hidden or secret, something that’s hard to ascertain. Is Obama lying, for instance, about how well he knew Bill Ayers back in his Chicago days? Almost certainly, but we don’t know, and we’re almost certainly never going to really know the full extent of their relationship. Is he lying about whether he actually believed that Americans would be able to keep their doctors under Obamacare? A bit easier to ascertain, but not so very easy because we have to assume he had enough knowledge of what was in the bill and how the regulations were going to operate in order to assume he deliberately lied (which he almost certainly did). Did he know about the IRS targeting of the Tea Party? Again, we have to assume that people told him, or that he directed it himself, and that he’s covering up that knowledge. But there’s no smoking gun to implicate him in the IRS offenses (the situation there resembles the speculation about whether Chris Christie knew about the much less important—but still troubling—Bridegate).

But the lie about whether Obama called Benghazi a terrorist act in his Rose Garden speech is of a different order, IMHO. It’s about a matter of easily-obtained public record: his words in a particular speech. And it becomes virtually certain (as I asserted in the posts of mine that I linked to above, where I analyzed the text of the speech very closely), if you look at the words of that speech, that he did not say that. In fact, he pointedly avoided saying it when he had many opportunities to do so.

I can’t recall any previous president, even when lying or shading the truth, saying that he had said something in a public speech when he had not (if you can think of such an incident, let me know). This is what is called a bold-faced lie, an egregious lie—and a lie that depends for its success on the collusion of the press.

And that’s what Obama knows he will get. It’s vitally important. He got that collusion on the first—and most important—time he asserted this particular lie, in that second debate with Romney. I even think there’s at least a 50% chance that the whole thing was arranged ahead of time with Crowley, and you may agree if you actually study the video of the debate.

This is what gives Obama the confidence—the sheer chutzpah—to do this sort of thing without blinking. Because it works for him, and he knows it.