Wisconsin Health Insurance Is Good But Needs Some Reform

It's always a puzzling to understand when a good example for benefit funding is so clearly displayed as it is in Wisconsin, there are still many states struggling with ideas on how to fix their broken systems?

This is not rocket science. If something works, why not copy it? Right?

Wisconsin Health Insurance for Public Retirees Needs Reform
Source: Jagadeesh Gokhale, "The Momentum of Pension Reform in Wisconsin Must Be Extended to Health Insurance for Public Employees and Retirees," National Center for Policy Analysis and the MacIver Institute, November 19, 2014.

November 19, 2014

Wisconsin's pension system is in better shape than in most states, and, in fact, its disability and life insurance programs for retirees are more than fully funded. In a new report from the National Center for Policy Analysis and the MacIver Institute, Cato Institute Senior Fellow Jagadeesh Gokhale explains why Wisconsin's pension system is stronger than most and how the state could make further improvements.

Wisconsin's pension system includes the following features:

• It does not guarantee annual retirement benefit increases or cost of living adjustments.
• Employees have a choice of investment funds to which to contribute.
• It provides for a benefit floor, meaning that retiree benefits are protected to a certain degree, even if the market tanks.
• It makes annual adjustments to benefits above that floor according to investment performance. Benefits increase if a fund's assets exceed the assumed benefit discount rate.

Since the year 2000, Wisconsin's retirement system -- which covers all public employees -- has had a funding ratio of almost 100 percent.

However, Wisconsin's post-employment health benefit program -- which provides health coverage for pre-Medicare retirees -- is unfunded and in need of reform. He offers two main principles that should guide Wisconsin policymakers:

• Beneficiaries should pay more for the benefits that they are receiving, and higher premiums and copayments could bring out-of-pocket spending more in line with health care utilization.
• Lawmakers should close the current health program for employees below the age of 45 and any future employees, who could be offered a new plan that is prefunded. This would limit the growth of unfunded obligations. This could be done by introducing health savings accounts for future employees.

Without reform, the burden on taxpayers to fund these health benefits will only grow, says Gokhale.
 

Illegal Immigration to Cost Trillions : Just Politics As Usual

Does it matter that this breech of Constitution law by Mr Obama brings chaos to our country? Once Mr Obama declares the 5.4 million illegals amnesty, and all those that are family members that will also come here to join them, as well as the thousands being flown in from Latin America, and let's not leave out the thousands coming across the board every day, the question that remains is, who will stand in opposition to this lawlessness?

Knows this, what Mr Obama and the progressive democrats are doing now and for the past year bringing the children here, is criminal. Mr Obama is breaking the law. He is acting against the will of the people. There is no other way to describe what is happening other then a criminal act.

Does it matter that the Republicans were elected with the a mandate to stop Mr Obama? In reality, no, it doesn't matter. Members of the opposition party are afraid to take a stand on principle alone. If true, then why elect them at all?

Understand this in dollars and cents, the illegals will pay in $3.1 trillion over a life time, but the taxpayer will be on the hook for $9.4 trillion.

This is called a Constitutional crisis like we have never experienced in our 235 year history. Our way of life is being challenged like never before, and it seems too many of us believe the best solution is to do nothing. Fear, ignorance and greed rules the day.

The bottom line comes down to politics as usual? The opposition believes being close to power is good enough? The true definition of power is 'one's proximity to real power' and many in our government seem satisfied that's good enough. 

Maybe actually doing what they were elected to do is too difficult? Time will tell.

The Financial Costs of Illegal Immigration
Source: David Inserra, "Ten-Step Checklist for Revitalizing America's Immigration System: How the Administration Can Fulfill Its Responsibilities," Heritage Foundation, November 3, 2014.

November 11, 2014

Many people believe that illegal immigrants receive little government welfare, but that is not the case, contends David Inserra, research associate with the Heritage Foundation. In a new report, Inserra provides some numbers on the fiscal cost of illegal immigration.

The typical American household received $31,584 in government benefits and services (such as Social Security, unemployment insurance, means-tested welfare programs, public education and local services like police protection) in 2010. Of course, not every household saw a net gain in government benefits -- higher income households tend to be tax contributors (meaning that they pay more in taxes than they receive in benefits), while other households are net tax consumers (receiving more in government services than they pay in taxes). According to Inserra:

• The typical household headed by a college-educated person paid $54,089 in taxes while receiving just $24,839 in government benefits.
• The average American household headed by a person without a high school diploma paid just $11,469 in taxes while receiving $46,582 in government benefits.

These numbers are significant, he explains, because the average illegal immigrant would fall on the "tax consumer" side of the equation; half of illegal immigrant households are headed by people with less than a high school diploma, while one-quarter have only a high school diploma. If illegal immigrants are granted amnesty, they will enter the welfare system and drain the treasury of funds:

• The average illegal immigrant is 34 years old. If he receives amnesty, he will receive government benefits for 50 years. Some amnesty proposals suggest restricting benefit access for the first 13 years after amnesty, but that limit would have little impact on long-term costs.
• Over the course of a lifetime, 11.5 million illegal immigrants granted amnesty would receive $9.4 trillion in government benefits after paying just $3.1 trillion in taxes.

Notably, illegal immigrants are already receiving significant amounts of government benefits, writes Inserra. In 2010, the typical illegal immigrant household received $24,721 in government benefits but paid just over $10,000 in taxes -- an annual benefit of more than $14,000 per household. Illegal immigrants not only receive the benefits of government services (like fire and police protection), but their children receive public education. Additionally, children of illegal immigrants that are born in the United States are eligible for the full spread of government welfare benefits, including Social Security and Medicare.
                            
 

Crop Insuracne Scams Taxpayers, Consumers : New Congress Applies Reforms?

I think any subside should come under close scrutiny by congress and then take action trim them or eliminate them. To cut the military is needed as the waste is huge, but this insurance for farmers is a scam and a catch all for politicians to reward a group of people with taxpayers money for their votes.

Will the new congress that appears to have won a mandate to act in the people best interest actually deliver in January, remains to be seen.

Taxpayers Pay $9 Billion in Crop Insurance Subsidies
Source: Isaac Orr, "GAO: Crop Insurance Subsidies Cost Taxpayers Billions," Heartland Institute, November 16, 2014.

November 18, 2014

How much are taxpayers spending on crop insurance subsidies for farmers? A whopping $9 billion per year, reports Isaac Orr, research fellow at the Heartland Institute.

What is crop insurance? It was a scheme developed by the federal government in the first half of the twentieth century to protect farmers against losses. It was expanded in 1980 when, Orr writes, the federal government started paying one-third of the cost of premiums for farmers. Starting in 2000, the program became even more popular, as the federal government began paying an average of 68 percent of farmers' premiums.

According to Orr, the program has morphed from a safety net program into an income-support system, even paying farmers sky-high prices for food that they do not grow. As a result, Orr says, the program encourages farmers to plant crops on land that is not likely to be productive, as farmers can receive federal dollars even without production. Reportedly, farmers are turning grazing land into cropland -- not because the land is good for crops, but because they are able to profit due to the government subsidies.

Orr urges Congress to reform the program, noting that even a 5 percent reduction in premium subsidies could have saved American taxpayers $400 million in 2012. Reducing those subsidies by a fifth would have saved taxpayers $2 billion.
 

Affordable Housing On Wheels? : Tiny Houses A Blight?

I think the D.C code is good - if anyone has seen these structure it will become clear why this is a bad idea. What we have here is just another way to destroy the community by establishing new ways to bring irresponsible people that have no connection to a restricted community. And worse, many of these tiny structures are on wheels so once they have totally ruined a community they can be rolled into another place to start destruction all over again.
 
And it's not just D.C., many communities have seen this same idea pushed forward and rejected.

D.C. Code Restricts Affordable Housing Availability
Source: Todd Krainin, "Washington's Beautiful, Illegal Tiny Houses," Reason Magazine, December 2014.

November 18, 2014

In Washington, D.C., a group of architects have developed a community of miniature homes, but housing regulations threaten to keep the houses off the market.

While small -- one house is just 140 square feet -- the tiny homes constructed in the nation's capital have bathrooms, showers, kitchens, offices and bedroom lofts, writes Todd Krainin for Reason Magazine, and they require little in the way of heating or cooling costs. Their cost? It ranges, from $10,000 to $50,000 -- cheaper than the typical cost in D.C., says Krainin, which offers a median housing cost of $450 per square foot.

Krainin says the tiny homes could offer affordable housing for young, single adults, but there's a problem: city regulations. Washington, D.C.'s land use restrictions mandate that homes be of a certain size, among other restrictions. To avoid those restrictions, Kraining writes that the tiny house inhabitants have added wheels to their dwellings, in order that they be treated as trailers rather than houses. However, the wheels offer their own set of difficulties: if they're classified as trailers, D.C. law doesn't allow the owners to use them as primary residences.

Can owners be granted exemptions from the city's regulatory code? They can -- but at a cost, which Krainin reports can reach up to $50,000. As a result, the costly and restrictive land use code limits affordable housing options in D.C.
 

ObamaCare's Cadillac Tax Coming : Everyone Will Suffer

This is something that most of us that have paid attention knew before this nightmare of ObamaCare was forced down our throats by the democrats, and only the democrats. It's only now that, along with all the other catastrophic failures across the country and around the world, people have awaken to just who is responsible for the country's decline.

Of course now that Mr Gruber has given us some 'inside baseball' of just how the progressive socialists were able to get this bill passed, they lied to us. Interesting as well, given how the election went, a lot of people knew who the bad people were before Gruber and the threw them out of office.

Maybe there is hope for out country. Maybe the people aren't as stupid as Gruber has stated. But don't hold your breath, 2016 is coming.

Cadillac Tax Will Hurt Employees
Source: Tevi Troy, "Another ObamaCare Deception," Wall Street Journal, November 16, 2014.

November 18, 2014

Obamacare's "Cadillac tax" will soon hit American consumers -- even those who do not have high-value health coverage, says Tevi Troy, president of the American Health Policy Institute.

The Cadillac tax is a tax on high-value insurance plans. Starting in 2018, employer plans worth more than $10,200 (or $27,500 for families) will be hit with the 40 percent Cadillac tax. That tax, while it's technically on employer insurance plans, is ultimately a tax on people, says Troy. In a study with economist Mark Wilson, Troy showed how employers will pass on the costs of the tax:

• Large employers hit by the Cadillac tax will pay more than $2,700 per employee annually starting in 2018.
• Seventeen percent of all businesses and 38 percent of large employers will be hit with the tax in 2018.
• To escape the tax, many employers will reduce the health care benefits that they provide to their employees, in order to lower its value and avoid being hit by the tax.
• If those employers reduce health benefits without increasing monetary compensation, their employees will effectively lose up to $6,150.
• If those employers reduce health benefits while raising monetary compensation to make up for the benefit loss, employees will face higher taxes (at an average of $1,050), despite receiving the same level of compensation.

The notion that the Cadillac tax will only affect the highest-value plans is incorrect, says Troy. By 2031, he estimates that average family insurance plans will be hit with the excise tax.

 

Mandate Payments More then People Pay In Taxes : Who Pays the Most? Why?

It seems there an information gap in the minds of those that are on the receiving end of  federal funding of mandates. Many among us pay little or nothing in taxes but believe there is 'right' to access the federal treasury, other peoples money. Little wonder the class warfare ideology of the democrats is on the front burner. 

One has to wonder why it so easy and acceptable to bite the hand that feeds them? And if someone suggests that reform is needed, all hell breaks lose from those that are in control of the funding. Who knew?

The truth be known, it's just more of the politics of control. The more people that are receiving subsistence, the more people that will have to vote to continue the funding to survive.

Majority of Households Receive More in Government Payments than they Pay in Taxes
Source: Mark J. Perry, "New CBO study shows that 'the rich' don't just pay their 'fair share,' they pay almost everybody's share," American Enterprise Institute, November 15, 2014.

November 18, 2014

How much are the rich paying in taxes? A new report from the Congressional Budget Office (CBO) outlines exactly who is paying -- and receiving -- tax dollars. The report looks at households' income before and after taxes and transfer payments (government benefits such as unemployment insurance or Medicare).

The results? American Enterprise Institute scholar Mark Perry explains:

• Sixty percent of American households -- the bottom three income quintiles -- receive more in government transfer payments than they pay in taxes. The bottom quintile receives $8,600 more than it pays in taxes, while the second quintile receives $12,500 more and the third quintile receives $9,100 more. These households are "net receivers."
• The second-highest quintile consists of households that are "net payers," but barely. Those households receive $14,100 in government transfer payments while paying $14,800 in taxes.
• The top fifth, however, pay $46,500 more in taxes than they receive in government transfer payments.

It is the top income quintile that is funding government transfer payments to the majority of American households after paying an average of $57,500 in federal taxes as of 2011. After accounting for transfer payments, Perry explains that the bottom three quintiles effectively face negative tax rates of -35 percent, -27.6 percent and -13.7 percent. The fourth quintile faces an after-transfer tax rate of just 0.7 percent. But the top quintile? It has an after-transfer tax rate of 18.9 percent.
 

State Unfunded Pensions - $4.7 Trillion : What Happened?

Given the state of the funding of pensions in many states around the country, it staggers the mind to understand these same states look to the feds for help to fund health care. What a good idea - relying on the feds to save the state by accepting funds from another debt ridden institution to fund their health care system is crazy.

How long will it take for the feds to go into default leaving the states hung out to dry. Why did these states forgo their responsibilities of funding pensions in the short run only to have this huge burden on taxpayers in the long run? Easy, it's about the immediate access to the money and the power to control.

It's a mind set of the progressive socialist liberal democrats, always rely on others to do the heavy lifting, stuffing their collective pockets with as much taxpayer money as possible, and all the while demonize those that demand personal responsibility. Who are these people?

State Unfunded Pension Liabilities at $4.7 Trillion
Source: Joe Luppino-Esposito, "Promises Made, Promises Broken 2014: Unfunded Liabilities Hit $4.7 Trillion," State Budget Solutions, November 12, 2014.

November 18, 2014

A new report from State Budget Solutions finds that state-level public pension plans are underfunded by a staggering $4.7 trillion as of 2014. Were one to apportion that unfunded liability out among the country, it would equal more than $15,000 per person.

Which states are in the worst shape? According to State Budget Solutions' Joe Luppino-Esposito, California has a $754 billion unfunded liability -- the highest among the 50 states. In second place is Illinois ($331.6 billion), followed by New York ($307.9 billion) and Texas ($296 billion).

However, as large states have larger numbers of public sector employees, simply looking at the total figure can be a misleading way to measure financial distress. Instead, Luppino-Esposito looks at "funding ratio," which compares assets to liabilities. The lower the funding ratio, the worse off a state is -- Illinois, for example, has a funding ratio of just 22 percent, meaning that it has only met one-fifth of its liabilities. Connecticut (23 percent) and Kentucky (24 percent) are not far behind.

Another way to look at pension liabilities is by looking at state pension liability per capita. In that regard, Alaska -- with a $40,639 unfunded liability for every resident - is in the worst shape. Behind Alaska is Illinois ($25,740) and Ohio ($25,028). Connecticut, New Jersey, New Mexico, Hawaii, Nevada, Wyoming and California round out the top 10.

Which state has the best pension funding? Wisconsin. Still, writes Luppino-Esposito, it's far from perfect, as the state's funding ratio is just 67 percent.
 

ObamaCare Subsides On Trial : Law Suit Against IRS ( King VS Burwell)

Interesting that this is still an on going law suit given that once our leader in the White House has blessed the program, it's still continuous. Who knew? Well, millions knew this was wrong and unconstitutional but at the same time, millions didn't care when it was all about the "One".

Now as the general public is living the nightmare of progressive socialism brought to us by democrats and only democrats, the public has decided this is not what they voted for when they believed things would change for the better. Paying more and getting less is not what they voted for.

"Fundamental" change didn't mean changing the Constitution to suit a political party's ideology.

Debunking Myths Surrounding King v. Burwell
Source: Michael F. Cannon, "Seven Myths about King v. Burwell," Cato Institute, November 10, 2014.

November 17, 2014

The Supreme Court recently announced that it will hear the case of King v. Burwell, in which plaintiffs have challenged the IRS's decision to grant subsidies to enrollees in federally-run exchanges.

The Affordable Care Act grants subsidies to individuals enrolling in state exchanges, but not in federally-run exchanges. Even so, the IRS decided to grant subsidies to all enrollees, whether on state-run exchanges or not.

There are some misunderstandings surrounding the lawsuit, but the Cato Institute's Michael Cannon dispels several of them, including:

• Myth -- King v. Burwell is a challenge to the ACA. Actually, the case does not challenge any aspect of the Affordable Care Act. Instead, it challenges the IRS's interpretation of the provision which limited subsidies to state-established exchanges.
• Myth -- the case involves a drafting error. Cannon says the key phrase - exchanges established by the "state" - appears throughout the ACA. It was not an accidental insertion.
• Myth -- the statute is ambiguous. Actually, the plain meaning of the statute indicates that subsidies are not available in federally-run exchanges. It is not ambiguous, and that interpretation is consistent with way the law is structured.
• Myth -- Congress meant to include subsidies for federal exchanges. Cannon explains that several of the bills that Congress drafted leading up to the Affordable Care Act were explicit about granting subsidies only to the states that ran their own exchanges, because some members were more comfortable with that. He cites the example of Rep. Lloyd Doggett (D-Texas), who warned members of his party that states would be able to keep subsidies out simply by choosing not to create exchanges.

Cannon notes that the IRS's original draft regulations made clear that subsidies were only available in states that had established their own exchanges. In 2011, however, it changed its mind and drafted regulations that granted subsidies to all enrollees.
 

New Jersey Residents Fleeing State : High Taxes / No Opportunity

I wonder why people are voting with their feet in New Jersey? How about those fleeing New York and Illinois? Hey, how about California?

What do all these states have in common - governments controlled by democrats. Some have new Republican governors but governments still dominated by democrats.

Facing High Taxes, New Jersey Residents Want to Leave
Source: Steve Malanga, "Poll: The high-tax, gov't union model at work," Public Sector, Inc., November 11, 2014.

November 17, 2014

Deciding where to move? The NCPA's state tax calculator can help you decide the tax consequences of your move over a lifetime. For example, a single, 40-year-old living in New Jersey with annual earnings of $100,000 could gain over $111,000 over the course of a lifetime if he moved to Texas, all based on taxes.

In fact, most New Jersey residents seem to realize that their state is not the best financial environment, writes Steve Malanga, senior fellow at the Manhattan Institute. He cites a recent poll from Monmouth University:

• Half of New Jersey residents want to leave New Jersey; 45 percent want to stay.
• Thirty percent of the residents who want to leave the state blame it on high taxes.
• Twelve percent of those who want to leave say there's not enough economic opportunity.

The poll's director pointed to the state's high cost of living as the main factor that residents want to leave, noting that New Jersey has an especially high property tax, and its income tax is the seventh highest in the United States.

Malanga notes that New Jersey is not the only state with a high level of "outmigration" -- Illinois and New York round out the top three. What's significant about those three states? According to Malanga, they each have high levels of unionization in the public sector. The public sector unionization rate in New York is 69.9 percent, while it's 60.7 percent in New Jersey and 52.3 percent in Illinois. And the national average? Just 35.3 percent.

New Jersey has struggled to fund its pension system, and state lawmakers recently suggested $1.6 billion in new taxes to help pay for the state's public pensions.

 

Medicaid Expansion Troubling : States Duped?

Is the by design? With a debt that is destined to force the country in default without major changes in the very near future, is an expansion of Medicaid a tool to drive millions of people into dependency on government subsistence?

What effect will this have when the government can no longer provide states with the funding to sublimate the states obligation's to the program? How will it be funded? Higher taxes?

Medicaid Funding System Encourages More Spending
Source: John R. Graham, "Medicaid Spending Has Exploded, And It Will Keep Rising Faster Than Expected," Daily Caller, November 12, 2014.

November 17, 2014

Medicaid, the government program providing health care to the poor and disabled, was already financially unsustainable before the Affordable Care Act. In 2013, spending on the program increased 6.7 percent, reaching $449.5 billion. This year, however, experts are predicting a 12.8 percent rise in Medicaid spending, thanks to the ACA. Why? John R. Graham, senior fellow at the National Center for Policy Analysis, explains: Obamacare added millions to state Medicaid rolls, and many states have expanded coverage levels to adults up to 138 percent of the federal poverty line.

In 2013, there were 73 million Americans dependent on Medicaid. By 2024, that number is expected to reach 93 million. But Graham notes that Medicaid spending tends to be higher than official projections expect, because federal funding increases as state spending increases. Graham uses the example of California -- if the state spends 50 cents, the federal government gives it 50 more cents. This model encourages states to increase their outlays, as they're matched with federal dollars.

That problem will only get worse in the states that expanded Medicaid to adults up to 138 percent of poverty. The federal government promises 100 percent funding for the first two years, falling to 90 percent thereafter. Graham expects that state spending will only explode further which such generous federal funding terms. He encourages lawmakers to do away with the federal matching system and replace it with a block grant that allocates dollars to states based on their population size.