Two-Thirds Of Louisianans Oppose Gov. Jindal’s Plan To Cut Taxes For The Rich, Raise Them On The Poor

Louisiana Gov. Bobby Jindal (R) is among the Republican governors pushing an overhaul of his state’s tax code that would abolish the state income tax and replace it instead with increased sales taxes. Such plans are inherently regressive, and Jindal’s is no exception: one analysis found that it would raise taxes on 80 percent of the state’s residents while giving large tax cuts to the richest.

Perhaps its no surprise, then, that a recent poll from Southern Media Opinion & Research found that Jindal’s plan is “particularly unpopular” with Louisianans:

Gov. Jindal’s proposed tax reform plan was particularly unpopular. Sixty three percent opposed the plan to abolish personal and corporate income taxes and raise state sales taxes, while only 27 percent supported it.

Louisiana’s tax system is already regressive, and Jindal’s plan would raise taxes by an average of $395 on the poorest 20 percent of the state’s residents; the richest 1 percent, meanwhile, would see a tax cut totaling more than $25,000. And while Jindal is pushing the plan as a way to boost the state’s economy, evidence suggests the plan wouldn’t do much to help. The Center for Budget and Policy Priorities examined states that cut taxes in the mid-1990s and found that their resulting economic and job growth was slower during the next economic cycle than it was in states that did not cut taxes.

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Obamacare Wellness Programs Could Raise Health Costs

One part of the Affordable Health Care Act that kicks in with the rest of Obamacare in 2014 is a greater monetary incentive for employers to implement wellness programs.

Worker wellness programs — ways for employees to get healthier through such items as checkups, workout and weight loss programs, smoking cessation as well as vaccinations — have been around for more than 30 years with the associated financial rewards and punishments regulated by the federal government.

And even though it's not a mandatory provision — employers can choose to avoid implementing any worker health program — many more firms are expected to take part in setting up these plans next year in an effort to cut down on health care costs.

What it means economically for workers whose employers do participate can be a mixed bag depending on their habits. There are bigger financial rewards for healthier workers along with more costly punishments — specifically increased insurance premiums — for those who are considered health risks. (Read More: South Carolina Workers Could Pay More for Health Care)

For instance, under the 2014 provisions, health insurers will be able to charge 50 percent more on insurance premiums for someone who smokes. The previous rule, set in 2006, was a top increase of 20 percent. So, a 60-year-old smoker without dependents could end up paying nearly $5,100 more for health insurance each year at work starting next year, instead of around $1,100 now, according to insurance industry estimates.

On the flip side, a reward would offer up to a 30 percent reduction in premiums for someone who takes part in smoking cessation programs or who lowers their cholesterol. Other benefits for better health results could also include rebates and taxable gift cards.

"These wellness programs will be set up by the companies, and they can offer the carrot or the stick or both to get workers involved," said Amy Gordon, an employee benefits lawyer at McDermott Will & Emery.

"There are even rewards if you do almost nothing, such as just taking a diagnostic test and the outcome doesn't matter. It just depends on how the firm sets it up," Gordon said.

Employers can even include workers' children and spouses for the reward and punishments if they are part of a worker's insurance coverage.

"Families tend to drive up the cost of health insurance for a firm as much as workers, so it does make sense to look at a worker's dependents and whether they should be included," Gordon said.

"And a firm can often look at what type of ailments are driving up costs, say diabetes for example, and base their incentive programs on how workers are testing for it," she said.

Wellness programs started in the 1970s as a way for employers to improve worker productivity and cut down on absenteeism. As the U.S. became more health conscious over the years, workers began to ask their firms to include health programs, like gyms and flu shots.

By 2008, according to the Center for Health Affairs, about 88 percent of large companies in the U.S. (more than 200 employees), and about half of small companies (three to 199 workers) offered wellness programs. In 2006, the government established guidance rules for the percentage workers could get for punishments and rewards. (Read More: Report Faults High Fees for Out-of-Network Care)

The standard was up to 20 percent in premium hikes or reductions, or rebates. In 2014, it will be 30 percent top, with smoking penalties up to 50 percent in additional health insurance premium costs.

For employers, the costs of worker habits have become expensive. The U.S. Center for Disease Control and Prevention reports that more than 75 percent of an employer's health care costs and productivity losses are related to employee lifestyle choices.

According to the CDC, workplace alcohol, tobacco and other drug use costs American companies over $100 billion each year and obesity costs $147 billion a year.

"Firms are more aggressive these days on certain health issues like weight loss, smoking or having vaccinations," said Tom Vincz, a spokesman for Horizon Blue Cross Blue Shield of New Jersey, which counsels companies on setting up wellness programs. "When we look at a firm, our goal is to set up the best program for the company and the workers."

Vincz said Horizon has seen the benefits of its own wellness program.

"We have some 89 percent of our 5,000 workers involved," he said. "We embraced a weight loss program in 2011 and we've seen the benefits of that with a huge reduction in weight for many workers."

But some companies will likely pass on putting in any wellness program in 2014 they might not have already started, Gordon said.

"Companies are mixed on wellness programs," Gordon said. "Some say it's a great opportunity, while others say it's not their business to regulate the health of our workers." (Read More: Rule Limits Aid to Families Who Can't Afford Employers' HealthCoverage)

While most workers cannot be forced to join a wellness program, many firms have implemented provisions like asking their employees to declare whether they smoke. A yes answer can raise a worker's health insurance premiums purchased through work or even deny coverage.

For example, Scotts Miracle-Gro bans employees on its health insurance policy from smoking, regardless of whether it is done on company or personal time.

Cadmus Community Corp. of Richmond, Va., requires employees and their spouses to submit to health-risk assessments in order to obtain health insurance. Iowa-based Principal Financial Group has a similar policy in which workers must undergo health exams that track things like weight, blood pressure and use of tobacco to qualify for coverage.

Some workers, like members of the Oregon State Police, have filed lawsuits against their wellness program — one that docks them a monthly fee of up to $30 if they don't participate in an online health survey.

Another issue drawing the ire of workers is what constitutes a pre-existing condition — something health insurers cannot deny consumers through Obamacare.

Some workers contend obesity, diabetes and smoking are pre-existing conditions and therefore those who smoke or are overweight can't be denied health insurance coverage or have their premiums raised because of wellness programs.

Many of the lawsuits against the programs are based on regulations under the Health Insurance Portability and Accountability Act of 1996. Those rules say that employer-sponsored group health plans may not vary premiums or contributions, or provide different discounts or rebates, to similarly situated individuals as a result of a health factor.

Whether any wellness programs are getting people healthier or not is unclear yet, said Gordon.

But In the end, she said it's up to the companies and workers to decide how healthy they want to be.

"I'm a big proponent of wellness programs because I think taking proactive steps is the right thing to do," Gordon said. "If we can drive down medical costs and getting people healthier, I can't see the harm in that."

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Supreme Court Won’t Raise Standards For Drug-Sniffing Dogs

The U.S. Supreme Court on Tuesday upheld the validity of an alert by a drug-sniffing dog whose certification had expired. In a unanimous decision on one of two drug-sniffing dog cases before the court this term, Justice Elena Kagan said the Florida Supreme Court imposed requirements far too onerous on police to establish the reliability of police dogs. She wrote:

The question—similar to every inquiry into probable cause—is whether all the facts surrounding a dog’s alert, viewed through the lens of common sense, would make a reasonably prudent person think that a search would reveal contraband or evidence of a crime. A sniff is up to snuff when it meets that test.

The decision was narrow in its scope, holding only that Florida’s “strict evidentiary checklist” for establishing the reliability of a dog was inconsistent with flexible standards for establishing the probable cause necessary to justify an arrest. In particular, it criticized the court’s reliance on records of a dog’s performance, noting that determinations of “success” may not account for dogs’ sniffing of trace amounts of drugs or well-hidden drugs that the police never find. Justice Souter found otherwise when he documented the pervasive use of dogs with error rates as high as 60 percent in a 2005 dissent. He wrote then:

The infallible dog … is a creature of legal fiction. Although the Supreme Court of Illinois did not get into the sniffing averages of drug dogs, their supposed infallibility is belied by judicial opinions describing well-trained animals sniffing and alerting with less than perfect accuracy, whether owing to errors by their handlers, the limitations of the dogs themselves, or even the pervasive contamination of currency by cocaine. … In practical terms, the evidence is clear that the dog that alerts hundreds of times will be wrong dozens of times.

Today’s decision does not revisit the majority’s opinion in that 2005 case, and thus does not question the expansive police authority to use the dogs without reasonable suspicion of drug offenses. Another police dog case coming down the pike this term, however, will question whether use of such dogs can be expanded to the front door of someone’s home without probable cause.

While today’s decision is narrow and reasonable, holding only that the court may not impose a too-onerous requirement on police, it leaves open the policy concern that police maintain broad discretion in their use of dog sniffs, with no national standards and little oversight to ensure that these dogs are even reliable. In 2011, more people were arrested for drugs than for anything else, according to FBI statistics. And without more rigorous standards, police maintain the discretion to use drug sniffs as a cover for stops and searches that could not otherwise be justified by police.

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Raise the Age for Medicare & Soc. Security?

 Highlight transcript below to create clipTranscript:  Print  |  Email Go  Click text to jump within videoFri 18 Jan 13 | 04:33 PM ET CNBC's John Harwood reports House Republicans are going to propose to extend the debt limit until April 15; and Max Richtman, National Committee to Preserve Medicare; and Bill George, Harvard Business School professor, debate whether eligibility for these programs should be raised to age 70.

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Health Insurers Raise Some Rates by Double Digits

Particularly vulnerable to the high rates are small businesses and people who do not have employer-provided insurance and must buy it on their own.

In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders, according to the insurers’ filings with the state for 2013. These rate requests are all the more striking after a 39 percent rise sought by Anthem Blue Cross in 2010 helped give impetus to the law, known as the Affordable Care Act, which was passed the same year and will not be fully in effect until 2014.

 In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

The proposed increases compare with about 4 percent for families with employer-based policies.

Under the health care law, regulators are now required to review any request for a rate increase of 10 percent or more; the requests are posted on a federal Web site, healthcare.gov, along with regulators’ evaluations.

The review process not only reveals the sharp disparity in the rates themselves, it also demonstrates the striking difference between places like New York, one of the 37 states where legislatures have given regulators some authority to deny or roll back rates deemed excessive, and California, which is among the states that do not have that ability.

New York, for example, recently used its sweeping powers to hold rate increases for 2013 in the individual and small group markets to under 10 percent. California can review rate requests for technical errors but cannot deny rate increases.

The double-digit requests in some states are being made despite evidence that overall health care costs appear to have slowed in recent years, increasing in the single digits annually as many people put off treatment because of the weak economy. PricewaterhouseCoopers estimates that costs may increase just 7.5 percent next year, well below the rate increases being sought by some insurers. But the companies counter that medical costs for some policy holders are rising much faster than the average, suggesting they are in a sicker population. Federal regulators contend that premiums would be higher still without the law, which also sets limits on profits and administrative costs and provides for rebates if insurers exceed those limits.

Critics, like Dave Jones, the California insurance commissioner and one of two health plan regulators in that state, said that without a federal provision giving all regulators the ability to deny excessive rate increases, some insurance companies can raise rates as much as they did before the law was enacted.

“This is business as usual,” Mr. Jones said. “It’s a huge loophole in the Affordable Care Act,” he said.

While Mr. Jones has not yet weighed in on the insurers’ most recent requests, he is pushing for a state law that will give him that authority. Without legislative action, the state can only question the basis for the high rates, sometimes resulting in the insurer withdrawing or modifying the proposed rate increase.

The California insurers say they have no choice but to raise premiums if their underlying medical costs have increased. “We need these rates to even come reasonably close to covering the expenses of this population,” said Tom Epstein, a spokesman for Blue Shield of California. The insurer is requesting a range of increases, which average about 12 percent for 2013.

Although rates paid by employers are more closely tracked than rates for individuals and small businesses, policy experts say the law has probably kept at least some rates lower than they otherwise would have been.

“There’s no question that review of rates makes a difference, that it results in lower rates paid by consumers and small businesses,” said Larry Levitt, an executive at the Kaiser Family Foundation, which estimated in an October report that rate review was responsible for lowering premiums for one out of every five filings.

Federal officials say the law has resulted in significant savings. “The health care law includes new tools to hold insurers accountable for premium hikes and give rebates to consumers,” said Brian Cook, a spokesman for Medicare, which is helping to oversee the insurance reforms.

“Insurers have already paid $1.1 billion in rebates, and rate review programs have helped save consumers an additional $1 billion in lower premiums,” he said. If insurers collect premiums and do not spend at least 80 cents out of every dollar on care for their customers, the law requires them to refund the excess.

As a result of the review process, federal officials say, rates were reduced, on average, by nearly three percentage points, according to a report issued last September.

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Study Predicts Health Law Will Raise Premiums On Young Adults

The study says a provision linking prices for older and younger patients could raise costs on the young.

Young adults will see higher health insurance premiums under the Affordable Care Act (ACA) because of a provision that links prices for older and younger patients, according to a new study.

Actuaries at management consulting firm Oliver Wyman predicted the law's age rating restrictions could mean a 42 percent hike in premium costs for people aged 21 to 29 when they buy individual coverage.

"This means that close to 4 million uninsured individuals … can expect to pay more out of pocket for single coverage than they otherwise would, even given the availability of premium assistance," study authors wrote.

President Obama's signature healthcare law limited the amount insurers can charge older people for their health insurance to a maximum of three times the amount younger people pay.

Supporters say age rating restrictions are necessary to ensure seniors are charged fairly for health insurance.

Critics of the law argue the requirement will raise costs for young adults and lead them to forgo health insurance, destabilizing the individual market for coverage.

The lead advocacy group for U.S. health plans recently petitioned the Health and Human Services (HHS) Department to delay its implementation of the 3:1 rule.

"Higher rates for the younger population combined with low mandate penalties during the first years of the ACA implementation will result in adverse selection because younger individuals are likely to choose not to purchase coverage," America's Health Insurance Plans (AHIP) wrote in comments to HHS.

"When these younger individuals do not enroll, destabilization of the individual market will occur, premiums will increase in the individual market for enrollees of all ages, and enrollment will decline."

Oliver Wyman's study predicted that people in their 30s purchasing single coverage will also see an increase in premium costs totaling 31 percent, while people aged 60 to 64 would see premiums increase by about 1 percent.

The study was published in the January/February 2013 issue of Contingencies, an actuarial publication, and distributed by AHIP.

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Norquist: Fiscal deal won’t raise rates

Anti-tax activist Grover Norquist said Monday he was confident that any “fiscal cliff” deal would not raise taxes and said GOP leaders could fight for more cuts using the debt ceiling as leverage.

“This fight does not end in a week, OK? This is a long-slogging fight,” said Norquist, the president of Americans for Tax Reform, on CNN’s “Starting Point.” “We should take as many as the tax cuts off the table as possible.” “I'm working with all of the folks trying to defend taxpayers here in Congress in the House and Senate,” said Norquist.  “I don't think you will see something that actually raises taxes. We may get some tax cuts now and have to fight for others later.”

Norquist said the GOP held leverage to extract further concessions from Democrats.

“Republicans have the clout of the debt ceiling increase, which they effectively used a year and a half ago, and the continuing resolution, where they can dole out money slowly to Obama and the Democrats to spend while reining it in,” he said.

Meanwhile, Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Biden continued negotiations late Sunday night to strike a deal before midnight.

Lawmakers and the White House are looking to avoid the tax-rate rises and across-the-board spending cuts set to take effect in 2013. 

Republicans initially insisted that all current income tax rates be extended, despite President Obama’s call for higher rates on the wealthy. But as the deadline nears, GOP lawmakers have said they will back a deal that hikes tax rates on wealthy earners.

Reid has proposed extending the current tax rates for families with $450,000 or less in annual income and individuals who make $360,000 or less. Republicans have countered with a proposal to set the threshold at $550,000 for families and $450,000 for individuals.

Rep. Tom Price (Ga.) on Monday predicted the House would pass a bill along those lines.

Norquist last week backed Speaker John Boehner’s (R-Ohio) controversial “Plan B” proposal which would have extended rates for 98 percent of taxpayers.

Boehner said that the plan would place pressure on Democrats to come to the table with spending cuts. But a vote on the plan was canceled after leaders realized there was not enough support within the GOP caucus to pass the measure.

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GOP Senators Want To Take Debt Ceiling Hostage In Order To Raise Retirement Age

Two Republican senators want to use the threat of an economic meltdown to raise the retirement age and cut Medicare. Sens. Bob Corker (R-TN) and Lamar Alexander (R-TN) introduced a plan today that would raise the federal debt limit by $1 trillion in exchange for $1 trillion in cuts to Medicare, Medicaid, and Social Security, as The Hill reported:

The Corker-Alexander dollar-for-dollar plan has several components.

It would structurally reform Medicare by creating competing private options giving seniors greater choice of healthcare plans. It would not, however, cap Medicare spending.

The plan would also give states more flexibility to manage Medicaid programs and prevent states from “gaming the federal share of the program with state tax charges.”

It would gradually raise the Social Security retirement age and use the “chained CPI” formula to calculate cost-of-living adjustments, curbing the growing cost of benefits.

In exchange, it would direct the debt limit be increased by the same amount as the savings generated from entitlement reform.

The U.S. will hit its debt limit on or around December 31st. The Treasury Department estimates that, using extraordinary measures, it could avoid default for another two months or so. Allowing the U.S. to default on its debt via not raising the debt ceiling could cause a complete financial meltdown. The 2011 debt ceiling debacle — during which House Republicans nearly pushed the country into a default due to their intransigence on taxes — cost the country about $19 billion in higher interest payments and at least one million jobs.

Corker and Alexander are threatening more economic chaos in order to achieve one of the most regressive potential policy changes. Though lawmakers point to America’s increasing life expectancy in order to justify raising the retirement age, life expectancy is only increasing for wealthier workers in non-physical jobs. As the Center for Economic and Policy Research put it, “there has been a sharp rise in inequality in life expectancy by income over the last three decades that mirrors the growth in inequality in income.”

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