Forty-one of the 50 states have become more dependent on the federal government since 2001 — with federal dollars accounting for an increasing share of their total revenues.

 

 

EXography: State government dependence on federal funding growing at alarming rate

By David Freddoso | APRIL 15, 2014 AT 5:18 AM

Source: Annual Survey of State Government Finances, U.S. Census Bureau

Percent of budget coming from the feds went from 37% in 2001 to 45% in 2012. Federal money per...

View Interactive map here  

Only 11 states depended on the federal government for more than one-third of their total revenues in 2001. By 2012, 24 states found themselves in this situation.
State-by-state data from the U.S. Census Bureau, compiled by the State Budget Solutions nonprofit, illustrates the trend of increasing state dependence on federal financial assistance.
Forty-one of the 50 states have become more dependent on the federal government since 2001 — with federal dollars accounting for an increasing share of their total revenues.
This trend of increased state dependency on Washington reduces state and local control, while threatening the states' long-run autonomy.
The reason is that with federal patronage comes federal leverage. The original Obamacare plan, for example, was to force states to expand Medicaid by threatening them with loss of all federal matching Medicaid funds if they refused.
Although that particular scheme was struck down by the Supreme Court, state governments hate to turn down revenue, and federal dollars have strings attached that force states either to operate as Washington prefers or lose the money.
This problem is exacerbated by the federal government's control of the currency and ability to borrow virtually unlimited amounts of money.

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Healthcare cuts canceled amid election-year opposition from congressional Democrats.

April 07, 2014, 05:15 pm

Healthcare cuts canceled after Dem complaints

By Jonathan Easley

Getty Images

The Obama administration announced Monday that planned cuts to Medicare Advantage would not go through as anticipated amid election-year opposition from congressional Democrats.
The cuts would have reduced benefits that seniors receive from health plans in the program, which is intended as an alternative to Medicare.
Under cuts planned by the administration, insurers offering the plans were to see their federal payments reduced by 1.9 percent, which likely would have necessitated cuts for customers.
Instead, the administration said the federal payments to insurers will increase next year by .40 percent.
The healthcare law included $200 billion in cuts to Medicare Advantage over 10 years, in part to pay for ObamaCare.
The Centers for Medicaid and Medicare Services (CMS) on Monday said changes in the healthcare market meant it did not need to make those cuts to Medicare Advantage this year.
It cited an increase in healthy beneficiaries under Medicare, which it said has lowered projected costs for that program.
CMS separately is delaying a risk assessment proposal that was set to take affect under ObamaCare.

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Obama administration proposes 1.9% cut in Medicare Advantage payments

February 21, 2014 8:08 pm by Mary Agnes Carey

Medicare Advantage plans could see payment reductions of 1.9 percent next year under proposed rates announced Friday by the Centers for Medicare & Medicaid Services.
Insurers, who have led a fierce lobbying campaign against payment reductions, have said the combination of the health law’s lower payment rates, new fees on health plans and other factors, including automatic federalspending cuts known as "sequestration," mean that Medicare Advantage plans will see their Medicare payment rates drop by 6 percent – or even more -- in 2015.
CMS said Friday its preliminary estimate is "the combined effect of the Medicare Advantage growth percentage and the fee-for-service growth percentage."
America's Health Insurance Plans said they are reviewing the details of the announcement to determine the total impact of the federal payment rates. In a statement, AHIP President and CEO Karen Ignagni was critical of the proposed rates, saying, "The new proposed Medicare Advantage cuts would cause seniors in the program to lose benefits and choices on which they depend."

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• Capitol Hill Blue

Obama flip-flops on Medicare drug coverage

By DAVID MORGAN
March 11, 2014

(REUTERS/Jonathan Bachman)

The Obama administration, in an abrupt about-face, said on Monday it would drop proposed changes to Medicare drug coverage that met wide opposition on grounds they would harm health benefits for the elderly and disabled.
Late last week, more than 370 organizations representing insurers, drug makers, pharmacies, health providers and patients urged the Centers for Medicare and Medicaid Services (CMS) to withdraw changes it had proposed for Medicare Part D.
One of the federal government’s most successful and cost-effective healthcare programs, Part D provides drug benefits for the elderly and disabled through private insurers to 36 million enrollees.
Critics said the changes, if adopted in coming months, could not only undermine Part D benefits but impact drug benefits available through Medicare Advantage, a program that allows Medicare beneficiaries to obtain their major medical coverage through private insurers.
“Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time. We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years,” CMS Administrator Marilyn Tavenner advised in a letter sent on Monday to members of the Senate and House of Representatives.
The proposals were opposed by both Republicans and Democrats in Congress. The Republican Party had already begun to look for ways to leverage popular anger over the changes into campaign attacks on Democratic incumbents who could be vulnerable in November’s election showdown for control of Congress.
Elated critics of the proposed changes said the government had effectively agreed to start over in the face of broad, bipartisan opposition.

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New York Times SundayReview

Fear Mongering With Medicare

By THE EDITORIAL BOARDMARCH 1, 2014

The Obama administration’s proposed cuts to Medicare Advantage plans — the private insurance plans that cover almost 30 percent of all Medicare beneficiaries — are fair and reasonable. As it happens, they are also mandated by law. Yet Republicans, sensing a campaign issue, are telling older and disabled Americans that the administration is “raiding Medicare Advantage to pay for Obamacare.” The health insurance industry, for its part, is warning that enrollees will suffer higher premiums, lower benefits and fewer choices among doctors if the cuts go into force.

Some of this could in fact happen, although the industry has cried wolf before and continues to thrive. But the key point is this: Over the past decade, enrollees in Medicare Advantage have received lots of extra benefits, thanks to unjustified federal subsidies to the insurance companies. Now they will have to do with somewhat less, unless the insurers are willing to absorb the cuts while maintaining benefits. Enrollment in these private plans, offered by companies like UnitedHealth and Humana, has more than doubled since 2006, in part because of lower premiums and extra benefits, like gym memberships, that are not included in traditional fee-for-service Medicare.

What made these perks possible was, in effect, a subsidy from taxpayers and other Medicare beneficiaries. The federal government paid the private plans, on average, 14 percent more in 2009 than it would cost to treat the same people in traditional Medicare. The insurers used this extra money to reduce enrollees’ costs and add benefits.

The 2010 Affordable Care Act rightly required that these subsidies be reduced, although it stopped short of completely eliminating them. The reductions began to take effect in 2012, and have not, so far, visibly harmed beneficiaries or the plans. Since enactment of the law, Medicare Advantage premiums have fallen by 10 percent, the opposite of what some expected, and enrollment has increased by nearly 33 percent, according to the administration. But as the law intended, federal payments to the private plans dropped — from 7 percent more than services under traditional Medicare in 2012 to 4 percent more last year. The administration now proposes to further reduce the payments to Medicare Advantage plans in 2015. The loudest criticism has come from Republicans, but plenty of Democrats have chimed in.

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Hundreds of AIDS patients in Obamacare limbo as insurers reject checks

By Reuters
PUBLISHED: 18:28 EST, 8 February 2014 | UPDATED: 18:28 EST, 8 February 2014

Hundreds of people with HIV/AIDS in Louisiana trying to obtain coverage under President Barack Obama's healthcare reform are in danger of being thrown out of the insurance plan they selected in a dispute over federal subsidies and the interpretation of federal rules about preventing Obamacare fraud.
Some healthcare advocates see discrimination in the move, but Blue Cross and Blue Shield of Louisiana says it is not trying to keep people with HIV/AIDS from enrolling in one of its policies under the Affordable Care Act, also known as Obamacare.

The state's largest carrier is rejecting checks from a federal program designed to help these patients pay for AIDS drugs and insurance premiums, and has begun notifying customers that their enrollment in its Obamacare plans will be discontinued.

Blocked: Hundreds of HIV/AIDS patients are in danger of being thrown out of the insurance plan they selected in a dispute over federal subsidies and the interpretation of federal rules about preventing Obamacare fraud

The carrier says it no longer will accept third-party payments, such as those under the 1990 Ryan White Act, which many people with HIV/AIDS use to pay their premiums.
'In no event will coverage be provided to any subscribers, as of March 1, 2014, unless the premiums are paid by the subscriber (or a relative) unless otherwise required by law,' Blue Cross Blue Shield of Louisiana spokesman John Maginnis told Reuters.

The dispute goes back to a series of statements from Centers for Medicare and Medicaid Services (CMS), the lead Obamacare agency.

In September, CMS informed insurers that Ryan White funds 'may be used to cover the cost of private health insurance premiums, deductibles, and co-payments' for Obamacare plans.

In November, however, it warned 'hospitals, other healthcare providers, and other commercial entities' that it has 'significant concerns' about their supporting premium payments and helping Obamacare consumers pay deductibles and other costs, citing the risk of fraud.

The insurers told healthcare advocates that the November guidance requires them to reject payments from the Ryan White program in order to combat fraud, said Robert Greenwald, managing director of the Legal Services Center of Harvard Law School, a position Louisiana Blue still maintains.

Sick: Hundreds of indigent HIV/AIDS patients are dependent on Ryan White payments for Obamacare because they are not eligible for Medicaid and Obamacare federal subsidies don't kick in until people are at 100 per cent of the federal poverty level

'As an anti-fraud measure, Blue Cross and Blue Shield of Louisiana has implemented a policy, across our individual health insurance market, of not accepting premium payments from any third parties who are not related' to the subscriber, Maginnis said.

On Friday, CMS spokeswoman Tasha Bradley told Reuters that, to the contrary, Ryan White grantees 'may use funds to pay for premiums on behalf of eligible enrollees in Marketplace plans, when it is cost-effective for the Ryan White program,' meaning that having people with HIV/AIDS enroll in insurance under Obamacare could save the government money.

'The third-party payer guidance CMS released (in November) does not apply to' Ryan White programs.

Maginnis did not respond to further requests, sent after business hours, for comment on CMS's Friday statement.

Hundreds of indigent HIV/AIDS patients are dependent on Ryan White payments for Obamacare because they fall into a gap.
They are not eligible for Medicaid, the joint federal-state health insurance program for the poor, because Louisiana did not expand the low-income program, and Obamacare federal subsidies don't kick in until people are at 100 percent of the federal poverty level.


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Roughly 1 million Texans are unable to qualify for Medicaid under Texas' stringent restrictions and unable to afford to purchase plans offered under the Affordable Care Act.

Working poor Texans struggle in Medicaid, ACA gap

by MARK WIGGINS / KVUE News and photojournalist PETER HULL

Bio | Email | Follow: @MarkW_KVUE

kvue.com

Posted on February 5, 2014 at 6:29 PM

Updated today at 6:41 PM

AUSTIN -- For 28-year old Irma Aguilar, raising four young children while working a full-time job is difficult enough.

Suffering from a damaged disc in her neck and debilitating high blood pressure that leaves her dizzy and bouts of anxiety, she needs medical coverage. An assistant manager at a national pizza chain, the San Antonio resident earns too much to qualify for Medicaid, but too little to qualify for discounted plans on the health insurance marketplace.

"It just makes me feel like, how am I supposed to get help? I thought that working hard for your money was supposed to help you go on in life and help you get some kind of insurance, and we can't even get that," said Aguilar. "We're the ones working hard. We're the ones doing everything, and we can't even get a penny out of it. We don't get nothing. So, do I have to stop working and let my kids drain and me drain so that way I can get help? It's just not fair to me, and it's not fair to my kids."

Roughly 1 million Texans are in a similar situation: unable to qualify for Medicaid under Texas' stringent restrictions and unable to afford to purchase plans offered under the Affordable Care Act. On Wednesday, representatives of dozens of organizations gathered at the Texas Capitol to launch a new campaign demanding something be done for them.

"It's a moral responsibility to address this situation," said Sister J.T. Dwyer of the Seton Health Care Family. "Our mission is to care for and improve the health of those we serve with a special concern for the poor and vulnerable. So, wouldn't we be interested in this? These are the vulnerable people who are left out."

With 6 million uninsured individuals, Texas leads the nation in the number of residents without health care coverage. A project of the Cover Texas Now Coalition, Texas Left Me Out is a campaign to compel lawmakers to develop a solution to insuring Texas' working poor who fall in the coverage "gap" resulting from the U.S. Supreme Court's decision not to require states to expand Medicaid to those unable to afford coverage through the health insurance marketplace. 

"The problem is that, because the law was written assuming that the Medicaid piece would be there, they said nobody below the poverty line is going to get the sliding scale of subsidies with premiums in the new health insurance marketplace," said Anne Dunkelberg, associate director of the progressive Center for Public Policy Priorities.

For a $15 billion investment in state money, over the next 10 years Texas would draw down about $100 million in federal funds, which Texans will be taxed for regardless. Gov. Rick Perry has opposed expanding Medicaid, calling the system "broken." Instead, Perry has advocated for a block grant which the federal government has thus far seemed disinclined to provide.

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More New Taxes and Fees: How You’ll Pay for Obamacare in 2014

The Heritage Foundation

Alyene Senger

January 2, 2014 at 6:30 am

Obamacare contains 18 specific tax hikes, mandates, or penalties that cost Americans money, and three new ones take effect in 2014. This is only the beginning—watch how two of these taxes get worse in the years to come.
1. Individual Mandate Tax. The individual mandate is designed to strong-arm individuals into purchasing government-approved health insurance or facing a tax penalty. In 2014, the penalty for not purchasing insurance will be either $95 or 1 percent of annual income (whichever is greater). Very few, if any, people will end up paying just $95, because individuals with an annual income of only $9,500 or less would likely qualify for Medicaid or a hardship exemption from the mandate. The mandate increases drastically in coming years, rising to $325 or 2 percent of income in 2015, and $695 or 2.5 percent of income in 2016—whichever is greater.
2. Health Insurer Tax. One of the largest tax increases in the law is an annual fee imposed on health insurers based on their share of the market. It is estimated to raise $8 billion in 2014 alone. The tax will more than likely be passed on to consumers through premium increases. An actuarial analysis by the consulting firm Oliver Wyman projects that in 2014, this tax will increase premiums by 1.9 percent to 2.3 percent. And the impact will be greater in later years as the tax increases.

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Forbes : Obamacare Will Lift Tax Fraud To A Whole New Level

Photo credit: Mike Licht, NotionsCapital.com

The healthcare.gov website continues to be a nightmare for those Americans trying to enroll and receive subsidized insurance. The law behind it all, the Patient Protection and Affordable Care Act, commonly known as Obamacare, is also causing millions of Americans to lose their current insurance (over 5 million so far). These unfortunate people had low-priced insurance plans with limited coverage, plans that do not meet the minimum requirements for insurance under Obamacare. There is only one group of people that appears set to win from Obamacare: tax fraudsters.
The main feature of Obamacare is a system of subsidies to make insurance affordable for people who earn too much to qualify for Medicaid and too little to afford market price insurance policies. The law also provides coverage for children under 26 on their parents’ insurance and people with pre-existing conditions can now buy insurance at more favorable premiums. However, the main mechanisms for expanding coverage are making people eligible for Medicaid or offering them subsidies.
People who earn slightly more than the poverty level and who were not previously eligible for Medicaid (either because of earning too much or because they are childless adults) will now get Medicaid, free federal government health insurance, if they live in a state that agreed to expand Medicaid to cover that group of people.
People who earn from 133 percent to 400 percent of the poverty line are eligible for subsidies when they purchase insurance policies through a state exchange. There are currently lawsuits over whether it is legal for the federal government to offer the subsidies to people who buy insurance from the federal exchange (the law never says they can). However, the Obama administration plans to offer the subsidies through the federal exchanges whether it is legal or not.
These issues are all fairly well known, but what has been much more sparsely reported is that the law is almost perfectly designed for tax fraud. This tax fraud, which will be at least somewhat legal, will happen in two stages.
First, the way the Obama administration is implementing the law allows people to state their income with little to no verification. By stating a low income, people can qualify for a large subsidy which gets paid in advance. When people receiving 2014 subsidies file their taxes in April 2015, if it turns out their income was higher than they originally stated, you might think they would then have to repay the subsidy.
But now we get to the second part of the tax fraud. Under the law it is not only difficult for the government to get its money back, in some cases it is legally impossible. There are two limits on the ability of the IRS to collect the overpayment.
The IRS is not allowed to place a lien on your property or garnish your wages in order to collect money owed under Obamacare. This applies to both overpayment of subsidies and to the penalty for not purchasing insurance at all. That means unless a person voluntarily pays what is owed the IRS can only collect money from people who would otherwise be owed a refund on their taxes. If someone owes money either for not purchasing insurance or overpayment of a subsidy, the IRS can deduct the amount owed from the refund the person would have received. If they are not owed a refund large enough to collect the entire amount, there is nothing more the IRS can do.

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