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[I posted this on the other thread, which seems to have been deleted as a dupe. Sorry if it's against protocol to re-post. But I tried to find both sides, goo

by hzlz 17y ago

[I posted this on the other thread, which seems to have been deleted as a dupe. Sorry if it's against protocol to re-post. But I tried to find both sides, good-and-bad wrt startups.] Some discussion of the impact on startups in the thread at http://news.ycombinator.com/item?id=1208019 http://news.ycombinator.com/item?id=1208019 While it didn't discuss all of these, it seems to me that the things that will directly impact startuppers: Pros - Community rating, no recision, etc will make it easier for people with pre-existing conditions to get coverage. For people who have pre-existing conditions (or who have kids who have pre-existing conditions) and don't have a spouse at a bigco and want to do startups, it makes it possible. - Might also make it easier for bootstrappers to get coverage. Cons: - The new taxes are concentrated on capital gains, so will tax startups and angel investors most of all. [This bill proposes a 3.8% increase on cap gains. The administration is also planning to change the regular cap gains from 15 to 20%, so if everything passes the rate will go from 15% to 23.8%, or a 58.6% increase.] - Shifts costs from the older to the younger, so most startups here will pay more. - In realistic scenarios, will probably increase the deficit, affecting interest rates. But that's long-termand not clear. Pro or con, depending on what you think: - Mandatory coverage will require that you have coverage during a bootstrapping phase. A mix of good and bad for startups, depending on where you are in the process.

jbarciauskas 17y ago
I've heard this a number of times but not heard it detailed: in what way are the CBO estimates unrealistic? What more realistic assumptions would you make, and what is their effect on the deficit? Also how is it shifting costs from the older to the younger? It seems more that it is shifting costs from the near-bankrupt uninsured to those who make significant portions of their income from capital gains, i.e. the wealthy.
- hzlz 17y ago
  I don't want to get into politics on either side, and there are several factors: - The first is the "doc fix". Basically, there's a 21% automatic cut in the payments to doctors in Medicare. That would lower the payouts to the point where doctors would often lose money seeing a patient, and doctors would stop seeing Medicare patents. Like with the AMT, each year congress approves a temporary fix. It is likely that, while under CBO rules the score assumes there won't be more temporary fixes, there actually will be. - There are several areas where the bill promises unspecified future cuts. The CBO numbers takes them at their word. Consensus is that these cuts won't actually happen. - ~$53B comes from the fact that Social Security will take in more money because more companies will pay people wages so they can buy health care on their own instead of the company paying for it. However, it doesn't count the fact that SS will have to pay out correspondingly more. - The CBO looks at a 10-year horizon. Most of the costs are scheduled not to start immediately, but to ramp way up later. There are a bunch of other 'hacks' in the CBO scoring to keep the cost near the promised $900bn. Both sides do it, but they discovered a bunch of new tricks this time around. It means that, going forward, CBO numbers on large bills (from both sides!) are probably worse-than-meaningless. On the older-to-younger q, it's mostly about how community-rating is implemented.
- curtis 17y ago
  I can't imagine any shifting of costs from older to younger can be that big of a deal since we are already on the hook for everyone 65 and older, thanks to Medicare.
- jerf 17y ago
  "in what way are the CBO estimates unrealistic? What more realistic assumptions would you make, and what is their effect on the deficit?" The CBO is bound to look at the next ten years of effects. In order to make it look even remotely palatable, the bill collects four years of revenues before a significant amount of the benefits kick in. It is difficult to imagine a reason for this that doesn't involve gaming the CBO's estimates. (It's not as if our government is all like, "Oh, gosh, we really need to save up some money before we hand this entitlement out." It wouldn't matter anyhow because that wouldn't significantly affect the long term viability of this plan; what matters is steady-state income vs. spending.) Multiplying the estimated cost by 10/6 is a decent start to get a true view of the costs. The CBO itself has also called attention to the fact that the scoring of this bill assumes that the so-called "doc fix", in which the payouts given to Medicare doctors will be cut in accordance with the law back to a certain rate unless a bill is passed to prevent this cut. This bill is passed every year, and there is no reason to believe this Congress will not pass that bill either (and quite substantial reason to believe it will). You can look around for how big that is, but it's pretty big. This bill shifts yet more burden directly onto the States as unfunded mandates, which are not scored as Federal burden (for instance, "Find" the second instance of "mandate" in http://www.wdef.com/news/reaction_to_healthcare_reform_passage_pours_in/03/2010 http://www.wdef.com/news/reaction_to_healthcare_reform_passa... ). Nevertheless, not only will we have to pay them, we will have to pay them in a context where we can't even borrow our way out of it as States ability to borrow is constrained compared to the Feds. I live in Michigan.... WTF is Michigan going to do with another few billion in mandates? The CBO has its scope very tightly defined by law, and it's been getting increasingly gamed over the years. This completes the gaming. They might as well disband the office, IMHO, Congress has figured out how to bypass them. Costs are shifted onto younger people by the mandate for people to purchase insurance or pay a penalty. Many of today's uninsured are young, healthy, and uninsured by choice. You may disagree with that choice, but that's beside the point. The point is that they are not paying into the system. Not all younger people are affected by this due to some other provisions (nothing says government at work like taxing with one hand and crediting with the other), but quite a few are. Coryrc linked this, I'm "borrowing" it: http://www.newsweek.com/id/224020 http://www.newsweek.com/id/224020 Incidentally, I give this provision a very high chance of being struck down on Constitutional grounds, but that of course leaves the entire rest of the bill in place. The CBO estimate can't assume that will happen, but if it does the already-screwy revenue numbers just get screwier. Please carefully read the statements I am making here and note their factual content. I will not deny I think this bill is an enormous, enormous mistake, but it is not my opinion that taxes are collected for four years before benefits are paid out, it is not my opinion that the bill contains unfunded mandates on States, it is not my opinion that younger people will have to buy insurance or pay penalties (the reason why is arguably my opinion but extremely-well founded). It is my opinion the CBO might as well disband. It isn't my opinion that the insurance mandate is facing a constitutional challenge, though of course who will win that is currently a matter of opinion. To the best of my knowledge, these aren't "talking points", these are simply part of the bill as it stands.
- mediaman 17y ago
  To add to the others' responses, the following New York Times article goes into some detail to the CBO estimates and why the author believes their figures are unrealistic, mostly not due to any bias at the CBO but due to strictness of their mandate. http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?src=me&ref=homepage http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html...

by hzlz 17y ago

jbarciauskas 17y ago

I've heard this a number of times but not heard it detailed: in what way are the CBO estimates unrealistic? What more realistic assumptions would you make, and what is their effect on the deficit? Also how is it shifting costs from the older to the younger? It seems more that it is shifting costs from the near-bankrupt uninsured to those who make significant portions of their income from capital gains, i.e. the wealthy.

hzlz 17y ago
I don't want to get into politics on either side, and there are several factors: - The first is the "doc fix". Basically, there's a 21% automatic cut in the payments to doctors in Medicare. That would lower the payouts to the point where doctors would often lose money seeing a patient, and doctors would stop seeing Medicare patents. Like with the AMT, each year congress approves a temporary fix. It is likely that, while under CBO rules the score assumes there won't be more temporary fixes, there actually will be. - There are several areas where the bill promises unspecified future cuts. The CBO numbers takes them at their word. Consensus is that these cuts won't actually happen. - ~$53B comes from the fact that Social Security will take in more money because more companies will pay people wages so they can buy health care on their own instead of the company paying for it. However, it doesn't count the fact that SS will have to pay out correspondingly more. - The CBO looks at a 10-year horizon. Most of the costs are scheduled not to start immediately, but to ramp way up later. There are a bunch of other 'hacks' in the CBO scoring to keep the cost near the promised $900bn. Both sides do it, but they discovered a bunch of new tricks this time around. It means that, going forward, CBO numbers on large bills (from both sides!) are probably worse-than-meaningless. On the older-to-younger q, it's mostly about how community-rating is implemented.
curtis 17y ago
I can't imagine any shifting of costs from older to younger can be that big of a deal since we are already on the hook for everyone 65 and older, thanks to Medicare.
jerf 17y ago
"in what way are the CBO estimates unrealistic? What more realistic assumptions would you make, and what is their effect on the deficit?" The CBO is bound to look at the next ten years of effects. In order to make it look even remotely palatable, the bill collects four years of revenues before a significant amount of the benefits kick in. It is difficult to imagine a reason for this that doesn't involve gaming the CBO's estimates. (It's not as if our government is all like, "Oh, gosh, we really need to save up some money before we hand this entitlement out." It wouldn't matter anyhow because that wouldn't significantly affect the long term viability of this plan; what matters is steady-state income vs. spending.) Multiplying the estimated cost by 10/6 is a decent start to get a true view of the costs. The CBO itself has also called attention to the fact that the scoring of this bill assumes that the so-called "doc fix", in which the payouts given to Medicare doctors will be cut in accordance with the law back to a certain rate unless a bill is passed to prevent this cut. This bill is passed every year, and there is no reason to believe this Congress will not pass that bill either (and quite substantial reason to believe it will). You can look around for how big that is, but it's pretty big. This bill shifts yet more burden directly onto the States as unfunded mandates, which are not scored as Federal burden (for instance, "Find" the second instance of "mandate" in http://www.wdef.com/news/reaction_to_healthcare_reform_passage_pours_in/03/2010 http://www.wdef.com/news/reaction_to_healthcare_reform_passa... ). Nevertheless, not only will we have to pay them, we will have to pay them in a context where we can't even borrow our way out of it as States ability to borrow is constrained compared to the Feds. I live in Michigan.... WTF is Michigan going to do with another few billion in mandates? The CBO has its scope very tightly defined by law, and it's been getting increasingly gamed over the years. This completes the gaming. They might as well disband the office, IMHO, Congress has figured out how to bypass them. Costs are shifted onto younger people by the mandate for people to purchase insurance or pay a penalty. Many of today's uninsured are young, healthy, and uninsured by choice. You may disagree with that choice, but that's beside the point. The point is that they are not paying into the system. Not all younger people are affected by this due to some other provisions (nothing says government at work like taxing with one hand and crediting with the other), but quite a few are. Coryrc linked this, I'm "borrowing" it: http://www.newsweek.com/id/224020 http://www.newsweek.com/id/224020 Incidentally, I give this provision a very high chance of being struck down on Constitutional grounds, but that of course leaves the entire rest of the bill in place. The CBO estimate can't assume that will happen, but if it does the already-screwy revenue numbers just get screwier. Please carefully read the statements I am making here and note their factual content. I will not deny I think this bill is an enormous, enormous mistake, but it is not my opinion that taxes are collected for four years before benefits are paid out, it is not my opinion that the bill contains unfunded mandates on States, it is not my opinion that younger people will have to buy insurance or pay penalties (the reason why is arguably my opinion but extremely-well founded). It is my opinion the CBO might as well disband. It isn't my opinion that the insurance mandate is facing a constitutional challenge, though of course who will win that is currently a matter of opinion. To the best of my knowledge, these aren't "talking points", these are simply part of the bill as it stands.
mediaman 17y ago
To add to the others' responses, the following New York Times article goes into some detail to the CBO estimates and why the author believes their figures are unrealistic, mostly not due to any bias at the CBO but due to strictness of their mandate. http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html?src=me&ref=homepage http://www.nytimes.com/2010/03/21/opinion/21holtz-eakin.html...