Natalie De Vincenzi

Obamacare Insurers Fleeing Exchanges and Hiking Premiums

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Posted by Natalie De Vincenzi on Thursday, August 18th, 2016, 2:44 PM PERMALINK

Insurers operating on Obamacare exchanges have requested an average premium hike of 24 percent across the country, according to independent analyst Charles Gaba.  Even as they request higher premiums, many insurers have announced plans to flee exchanges or reduce their involvement, leaving enrollees with fewer options and more expensive insurance.

Insurers’ requests for larger increases should not be surprising. Even with billions in subsidies, Obamacare’s failure to attract enough enrollees has caused an insurer exodus. In a 2016 fact sheet, the Centers for Medicare and Medicaid Services (CMS) reported that as of March 31, only 11.1 million consumers had planned on staying in Obamacare marketplaces. HHS on the other hand projected that the marketplace would have a lower enrollment at the end of the year—only 10 million.  Yet, these numbers are only half of what the CBO had originally projected, which was 24 million.

As enrollment numbers have failed to materialize, Obamacare insurers have not received the revenue that they had expected. This has led to two outcomes – higher premiums and fewer insurers operating on exchanges.

Large insurers have recently been revising their initial rate requests. In Tennessee, Cigna and Humana revised their rates up more than 20 percent. Cigna requested a 46 percent average increase, up from 23 percent, and Humana asked for a 44 percent increase, up from 29 percent.

So far, only 5 states have approved rate increases—Mississippi, New York, Oregon, Rhode Island, and Vermont. These 5 states have an average approved rate increase of 17 percent. While they only make up about 6.1% of the population, Gaba notes that the rate will undoubtedly fluctuate as larger states’ rates are accounted for.

One reason insurers are struggling to operate on exchanges is that they are failing to enroll enough young enrollees. Insurers need 40% of enrollees to be in the 18-34 age range in order to offset the costs of those who are older and typically rack up the insurance bill. However only 28% of exchange participants are in the golden 18-34 range, leaving insurers with a risk pool that is unsustainable.

Due to insurmountable losses, the nation’s largest insurer, UnitedHealth, will be pulling out of 26 of the 34 exchanges it participated in last year. Following United’s footsteps, Aetna announced yesterday that it would pull out of all but 4 states and remain in only 242 counties.

The exodus of insurers from Obamacare exchanges is not self-contained – it is leading to higher costs and more unaffordable insurance. The significant increases in rate requests is just another indicator that Obamacare is failing, but the larger than expected requests are showing that it is failing faster than expected. 

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Team USA Olympic Athletes Could Owe More Than $250,000

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Posted by Natalie De Vincenzi on Friday, August 12th, 2016, 10:23 AM PERMALINK

Only 7 days into the Rio Olympics, Team USA medalists could already owe the IRS more than $250,000.

As the 2016 Rio Olympics continue, Team USA’s tax bill will keep rising with each gold, silver, or bronze medal our athletes win. The breakdown of how much Team USA could owe based on Team USA's medals earned thus far is shown below:

As a reward for winning a medal, U.S. Olympic athletes receive a monetary award that is considered regular income, subject to taxation. The U.S. Olympic Committee rewards its medalists with $25,000 for gold, $15,000 for silver, and $10,000 for bronze.  

Our nation’s best athletes could face a bill as high as $9,900 per gold medal, $5,940 per silver medal, and $3,960 per bronze medal. These are the maximum possible tax amounts, and vary widely based on an individual’s tax brackets, circumstances, and available deductions. Still, the athletes must reckon their medal winnings with the IRS code, a headache they can do without.

                                             Maximum Prize Tax             

Gold                                      $9,900                  

Silver                                    $5,940                  

Bronze                                  $3,960     

Americans for Tax Reform brought the issue to the public’s attention during the 2012 Olympics. Sen. Marco Rubio (R-Fla.) took the lead and immediately introduced The Olympic Tax Elimination Act. The bill called for IRS code to be changed so that the gross income of U.S. medal winners “shall not include the value of any prize or award won by the taxpayer in athletic competition in the Olympic Games.” 2012 GOP presidential nominee Mitt Romney also called for an end to the tax.

In March 2016, Sen. John Thune (R-S.D.) introduced a bill (S. 2650) to stop the IRS from taxing Team USA medalists. The bill passed the Senate by unanimous consent on July 12.

In the House, Congressman Blake Farenthold (R-Texas) introduced a similar bill called the TEAM Act (H.R. 2628).

Americans who wish to express their support for the House bill can do so through the petition here or sign below:


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Report: IRS Failing to Screen Contractors for Unpaid Taxes

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Posted by Natalie De Vincenzi on Thursday, August 11th, 2016, 11:46 AM PERMALINK

The IRS is failing to ensure contractors have paid all taxes owed as required by federal law, according to a new report by the Treasury Inspector General for the Tax Administration (TIGTA).

29 percent of businesses receiving IRS contracts were granted these contracts without tax checks, according to the report.  Under both internal IRS policy and federal law, the IRS is required to check if contractors have paid their taxes and fully comply with federal law before the business is granted a federal contract. As the report explains:,

“Federal appropriations law prohibits the IRS from awarding contracts to tax delinquent corporations. Current IRS policy requires a tax check for all bidders in the competitive range (under consideration for award) on solicitations greater than $250,000.”

Not only did the IRS fail to check whether contractors had paid their taxes, the agency also failed to ensure competing bidders had paid taxes. As the report notes:

“21 (29 percent) of the 73 contract awards reviewed did not have evidence that the contracting officer performed the required tax check on the winning bidders. In all 73 contracts (100 percent), there was no evidence that the other qualified bidders underwent a tax check, as required.”

This is not the first time TIGTA has raised concern about the IRS’ process of awarding contractors. A 2015 TIGTA report found that the IRS illegally gave 57 contracts valued at $18.8 million to 17 corporations, who had outstanding tax debt or a felony conviction.  

This report identified ZERO contracts that contained the required contract clause and certification guidelines to ensure tax debts of contractors had been paid. As a result, TIGTA estimated that at least 94 percent of contracts had been awarded without adhering to this law.

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Beer Tax Hangs Over IPA Day

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Posted by Natalie De Vincenzi on Thursday, August 4th, 2016, 3:10 PM PERMALINK

It’s IPA Day and as beer-lovers rush to the store to celebrate, some may find one ingredient too pricey to swallow. It’s not the hops or the yeast, but taxes! Think about that again. The most expensive ingredient in beer is taxes!  On average, more than 40 percent of the cost of beer comes from federal, state and local taxes. This tax burden borne by beer drinkers is almost 70 percent higher than for the average purchase in the U.S.

Federal excise taxes are levied at a $7 tax on each of the first 60,000 barrels. And for businesses who produce more than 2 million barrels a year (110 million six-packs), they must pay an $18 tax on every barrel produced.

On top of the $7 or $18 per barrel federal excise tax, states also levy taxes on beer. Each state uses a different formula to determine how much of a tax they want to levy on beer-drinkers, ranging from case or bottle fees to additional sales taxes. Regardless of the formula, beer-lovers across the nation face taxes yet again when just trying to enjoy a nice cold brew. Coming in at # 1, Tennessee has the highest beer tax at a steep $1.29 per gallon, whereas Wyoming’s $0.02 per gallon rate is the lowest among states.

See the map below for each state's tax:

According to the Beer Institute, when taxes levied on production, distribution, and retailing of beer are added up, they account for more than 40% of the retail price. Low-balling the all-in-all beer tax bite at 40 percent, a beer-lover who pays $26.25 at the register for a 12-pack of Goose Island IPA might be surprised to know that over $10 dollars of that cost was taxes. Try swallowing that fact.

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Hiked Obamacare Premiums to Dry Out Californian’s Bank Accounts

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Posted by Natalie De Vincenzi on Thursday, July 28th, 2016, 9:46 AM PERMALINK

Obamacare premium increases are now depleting the pockets of California’s health exchange participants faster than California is losing water. As of next year, Californians can expect their health premiums to increase an average of 13.2%. This hike is more than three times that of the last two years increase and is sure to have a devastating effect on more than one million Californians.

Increasing medical costs and expiring federal programs that help insurers offset costs are causing some of the nation’s largest insurers to either significantly raise their rates or pull out of exchanges. The nation’s largest insurer, UnitedHealth, has already announced that it is pulling out of Covered California after only one year in the exchange due to insurmountable losses.

Just as concerning, two of California’s largest insurers—Blue Shield of California and Anthem Inc.—will have the biggest premium increases. Blue Shield and Anthem are two of the top four insurers that control more than 90 percent of Covered California enrollment. Blue Shield’s premiums are set to rise by more than 19 percent, and Anthem’s by more than 16 percent. Their high enrollment rates and soon to be higher premium rates will surely affect a significant portion of California families and pose significant concern to them.

When Obama was touting his Obamacare law, he promised he would “cut the cost of a typical family's premium.” Clearly, this is not the case.

High premium rates aren’t the only problem with the Covered California exchange. Earlier this year, nearly 2000 pregnant women were dropped from Covered California due to “computer glitches”. This isn’t the first report of people inexplicably being dropped from the exchange—it has been an ongoing issue since its launch. Enrollment and tax-related errors have plagued the exchange, leaving some with an unforeseen bill or without coverage for months.

With the $1.1 billion California was granted by the federal government for its exchange, there is no excuse as to why the exchange should be “accidentally” dropping pregnant women or others without coverage. To top it off, the exchange currently faces an $80 million deficit.

The Covered California exchange is far from successful and is only indicative of the further failed Obamacare law. 

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Government Says Pokemon Go is a No-Go

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Posted by Natalie De Vincenzi on Tuesday, July 19th, 2016, 10:00 AM PERMALINK

Nanny-staters are at it again. Heat Street reports that the government’s latest overregulation grab takes aim at Pokemon Go. Elected officials want to regulate the nation’s latest fad, the augmented-reality game Pokemon Go, rather than address real pressing issues our nation faces, like our rising national debt or our unsustainable criminal justice system. Felix Ortiz, Democratic New York Assemblyman, has claimed that the game brings about numerous public safety concerns and should be addressed with regulations.

Ortiz, an established “nanny-stater”, has a history of proposing too many unnecessary and unimportant regulations surrounding personal matters and choices. His past proposed regulations include banning salt in restaurants, taxing alcohol and sugary drinks, and banning admission to strip clubs. Why one’s guilty pleasure, be it a Dirty Martini or Pokemon Go, matters to the government is ludicrous.

Other critics trying to impose regulations on Pokemon Go include Senator Al Fraken, who questioned Niantic about how much information is being collected from users.

Pokemon Go has had many positive effects, all of which has been neglected. Users have reported significant spikes in their physical activity, and many have been given a reason to explore the area where they live. In fact, the employees at Cardiogram, an app for Apple Watch, found that 45 percent of users playing Pokemon Go were exercising 30 or more minutes on the day of the launch and that people were walking 62.5 percent more on the weekend after the launch than past weekends. 

Technology, its advances, and effects on personal lives hold no place in the government. Rather than focus on miniscule and irrationally drawn out “concerns” on the nation’s latest fad game, the government should focus on real issues and finding real solutions. No wonder why 3 out of 4 millennials have such a big distrust of government.


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Congress Must Stop Obamacare Reinsurance Bailout

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Posted by Natalie De Vincenzi, Alexander Hendrie on Friday, July 15th, 2016, 10:19 AM PERMALINK

Obamacare drastically increased both federal spending as well as the costs of health insurance. In order to disguise the costs to American families, the law has relied on a web of confusing spending programs, subsidies, and taxes.

Among these programs are the reinsurance, risk corridors and risk adjustment programs which redistribute funds from different groups directly to Obamacare insurers. In the case of reinsurance, this took the form of a fee on each individual with private health insurance to raise $25 billion, including $5 billion that would go back to taxpayers via the Treasury general fund.

In practice the reinsurance program has failed to work as promised, like so many other parts of the law. As a result, the Obama Department of Health and Human Services has funneled money from treasury’s general fund in direct violation of federal law. As announced earlier this year, Obamacare insurance companies would receive $7.7 billion through the reinsurance program – $6 billion obtained from a fee on private health insurance and $1.7 billion taken from the Treasury general fund. Because HHS did the same last year, this means a total of $3.5 billion has been stolen from taxpayers using the reinsurance program.

This decision clearly violates federal law. Section 1341 of Obamacare, which establishes reinsurance, explicitly allocates taxpayer dollars that “shall be deposited into the general fund of the Treasury of the United States and may not be used for the [reinsurance] program established under this section.”

A memo released by analysts at the nonpartisan Congressional Research Service found that federal law “unambiguously” states funds must be deposited into the Treasury general fund. Similarly, former White House Counsel C. Boyden Gray called the diverting of funds “unlawful” and questioned how it could possibly withstand legal scrutiny.

Despite this, the administration shows no signs of returning taxpayer funds. To force these funds to be returned, Congressman Mark Walker (R-N.C) recently introduced the “Taxpayers Before Insurers Act,” legislation that stops the Obama administration from illegally bailing out insurance companies through redirecting taxpayers funds to the Obamacare reinsurance slush fund. Companion legislation has also been introduced in the Senate by Senator Ben Sasse (R-NE).

This pro-taxpayer legislation forces the Obama Department of Health and Human Services to obey the law and return billions in funds to their rightful owner – the American people. If they fail to do so, the legislation strips HHS of billions in taxpayer funds.

This is just one of many cases where the federal government has utilized wasteful or illegal subsidies and payments to keep Obamacare afloat.  In the past few years, the government has stolen a total of $8.5 billion in taxpayer dollars to illegally fund Obamacare through programs like reinsurance, and the law has provided more than $170 billion in corporate welfare payments to special interests.

The fact is, the $3.5 billion in Obamacare reinsurance corporate welfare payments are merely the latest effort by the administration to ignore the law to the benefit of monied special interests. Members of Congress should stop this latest cash grab and support Congressman Walker’s Taxpayers Before Insurers Act.

ATR Supports H.R. 5818, the Mandated Expenses Tax Relief Act of 2016

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Posted by Natalie De Vincenzi on Friday, July 15th, 2016, 9:58 AM PERMALINK

Earlier this week, Congressman Rod Blum (R-Iowa) introduced the Mandated Expenses Tax Relief Act of 2016. This important legislation allows assets that are used to comply with federal laws and regulations to be immediately expensed. Under current law, businesses must comply with the arbitrary and confusing system of depreciation. H.R. 5818 will allow any assets that are used to comply with federal regulations to be immediately expensed. In doing so, it will provide much needed relief to small businesses and make it easier for them to invest in new equipment and assets.

The letter can be found here and below: 

Dear Congressman Blum:

I write in support of the Mandated Expenses Tax Relief Act of 2016, legislation to allow small businesses to immediately expense the purchase of property used to comply with federal laws and regulations.

Under current law, small businesses are allowed to expense up to $500,000 in business purchases under section 179 of the tax code. However, some of these purchases may be forced through federal regulations, rather than investments in the business.

This legislation offers relief to business owners by modifying section 179 to allow assets used to comply with federal laws and regulations to be expensed in addition to the $500,000 allowance.

In the perfect world, businesses of all kind would be permitted to immediately expense all assets against their taxable income. It makes no sense that a business can write off a box of paper clips immediately but has to wait five years to recover the full cost of purchasing a computer, or seven years to recover the full cost of purchasing a desk.

Unfortunately, that is the system we have. This outdated, complex, and bizarre system places far too much of a burden on small businesses and should be replaced with the much simpler immediate, full business expensing.

While full expensing is the desired goal, this bill moves us in the right direction. By allowing small businesses to expense purchases associated with onerous government regulations, the Mandated Expenses Tax Relief Act grants important tax relief to millions of businesses across the country. ATR encourages all Members of Congress to support and co-sponsor this important legislation.


Grover G. Norquist
President, Americans for Tax Reform

IRS Manager Caught Playing Hooky To Attend Obama Rally

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Posted by Natalie De Vincenzi on Wednesday, July 13th, 2016, 3:32 PM PERMALINK

An IRS manager shirked her official duties to attend an Obama re-election rally in 2012, according to a statement issued Wednesday from the U.S. Office of Special Counsel. According to the statement, the IRS employee canceled a site visit and disappeared for four hours: 

OSC’s investigation confirmed allegations that the employee, while on official travel to perform site visits with her subordinates, canceled a site visit and asked a subordinate to drop her off at the location of a presidential candidate’s campaign rally.

The employee did not return to her place of duty for over four hours and did not request leave. OSC concluded that the employee attended the campaign rally and thus violated the Hatch Act’s prohibition against engaging in political activity while on duty.

Amazingly, the IRS employee gets to keep her job. As noted by Politico, OSC has announced the slap on the wrist given to the guilty IRS employee, a mere 14-day suspension:

“A supervisor at the Internal Revenue Service has received a 14-day suspension for ditching work in 2012 to attend a re-election rally for President Barack Obama. The IRS official's actions violated the Hatch Act, a federal law limiting politicking by government employees.”

The supervisor blatantly disobeyed the Hatch Act, which states that one must “not engage in political activity while on duty or in the workplace.” Not only did she defy a federal law that was meant to protect citizens from unelected bureaucrats engaging in partisan activities, but she also abused her power as a supervisor to instruct her subordinates in helping her shirk her duties.

The political engagement of an IRS manager at an Obama rally should be of no surprise. The IRS has a history of engaging in a left-partisan manner, even though it is supposed to be a politically neutral entity. During a three-year period of time that Lois Lerner was an IRS boss, only one conservative group was granted non-profit status.

Like Lerner, the IRS supervisor engaged in political activity on the taxpayers’ dime. She should be fired, not given a wrist slap. A 14 day suspension will not cure her negligence or defiance of her federal duties under the law. Breaking federal law does not result in a fourteen day suspension for most people, and the same should apply to the supervisor. 


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Oregon Obamacare Co-op Becomes 15th to Collapse

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Posted by Natalie De Vincenzi on Monday, July 11th, 2016, 5:24 PM PERMALINK

Fifteen Obamacare co-ops have now failed. Oregon announced Friday that its second taxpayer funded Obamacare co-op would close its doors, leaving 40,000 to find new insurance. The co-op, known as “Oregon’s Health CO-OP now joins a list of 14 other Obamacare co-ops that have collapsed including Health Republic Insurance of Oregon which closed last year.  Failed co-ops have now cost taxpayers more than $1.5 billion in funds that may never be recovered.

Co-ops were created as not-for-profit alternatives to traditional insurance companies created under Obamacare. The Centers for Medicare and Medicaid Services (CMS) financed co-ops with startup and solvency loans, totaling more than $2.4 billion in taxpayer dollars. Co-ops were envisioned as innovative providers that could provide member-driven care without needing to worry about recording a profit. In practice, they have failed to become sustainable with many collapsing amid the failure of Obamacare exchanges.

Since September, 12 Obamacare co-ops have collapsed, with only 8 of the original 23 co-ops remaining.  Oregon’s Health co-op faced losses of $18.4 million last year and owed the federal government close to $1 million.  Co-op across the country have struggled to operate in Obamacare exchanges, losing millions despite receiving multiple government subsidies.

The mass failure of co-ops should not be surprising. Larger insurance companies have also struggled to operate in Obamacare exchanges with many announcing they will stop providing coverage.

The web of government subsidies have also failed to provide insurances the funds they were promised. One of these programs, Risk corridors recouped just 12.6 percent of the funds that insurers requested. The program, which was created to encourage insurers to take on higher risk individuals by transferring funds from insurers who made money to those that posted losses, was required to be budget neutral under law leaving Obamacare insurers with a significant shortfall.

Obamacare co-ops have also been plagued by inept management and unrealistic business models.

As a report by the Daily Caller’s Richard Pollock found, 17 of the 21 co-ops paid out gratuitous salaries to executives reaching as high as $587,000, which is more than four times as much as the $135,000 median health insurance executive salary. Worse still, many of these executives had little to no experience in the insurance industry and some of these excessive salaries were disguised in financial documents as “management fees”. Last year, 21 of 23 co-ops posted losses.

Given the trend of failing Obamacare co-ops, the collapse of Oregon’s second co-op will not be the last.

A list of all failed co-ops and their cost to taxpayers compiled by the House Energy and Commerce Committee is found below:

CoOportunity Health - Iowa and Nebraska

Louisiana Health Cooperative, Inc.

Cost: $65,790,660 

Nevada Health Cooperative 

Cost: $65,925,396

Health Republic Insurance of New York

Cost: $265,133,000

Kentucky Health Care Cooperative - Kentucky and West Virginia

Cost: $146,494,772 

Community Health Alliance Mutual Insurance Company - Tennessee

Cost: $73,306,700

Colorado HealthOp

Health Republic Insurance of Oregon

Cost: $60,648,505  

Consumers' Choice Health Insurance Company - South Carolina

Arches Mutual Insurance Company – Utah

Cost: $89,650,303

Meritus Health Partners – Arizona
Cost: $

Consumers Mutual Insurance – Michigan

Cost: $71,534,300 

InHealth Mutual – Ohio

Cost: $129,225,604

HealthyCT – Connecticut

Cost: $127,980,768

Oregon Health’s CO-OP – Oregon

Cost: $56,656,900


Note: This total does not include Vermont’s CO-OP, which was denied an insurance license by the state, and was dissolved before enrolling a single person.  


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