Latest news with #Obamacare
Yahoo
2 days ago
- Business
- Yahoo
The Biggest Boondoggles in Trump's Big Beautiful Bill
The House reconciliation bill — officially known as the One Big Beautiful Bill Act — is extraordinary in how much it robs from the poor to boost the rich. Its tax cuts for the wealthy are financed by cuts to health care coverage (both in Medicaid and Obamacare) that will help Republicans swell the ranks of the uninsured by 16 million, according to the Congressional Budget Office. But the Big Beautiful Bill is not just an ugly tax bill where society's less fortunate are made to sacrifice for the benefit of the wealthiest. It's also a spending bill that steers hundreds of billions of dollars into new pet projects. This is financed with debt. All in, the BBB will spike deficits by $2.4 trillion over 10 years, according to CBO, likely increasing the national debt by $3 billion when interest payments are included. The bill's spending has angered budget hawks in the Senate like Rand Paul (R.-Ky.). It has been part of the public split between Donald Trump and Elon Musk, who calls the bill a 'disgusting abomination' that will squander any supposed savings imposed by DOGE, the so-called Department of Government Efficiency. Conservative budget analysts are sounding the alarm: 'This inability to set priorities is going to bring a debt crisis,' Jessica Riedl, a senior fellow at the Manhattan Institute tells Rolling Stone. In fact, the bill would create so much new debt that it risks triggering a mechanism called 'sequestration,' which would impose deep, mandatory cuts to Medicare. These cuts to the health care of America's seniors would start next year, and rise to half-a-trillion dollars over ten years. The BBB's spending provisions have received far less scrutiny than the tax cuts and safety-net slashes. But the bill lards new funds on a range of already-fat-cats — from the military-industrial complex and Big Tech to private prisons and construction concerns. Below we survey the biggest boondoggles of the Big Beautiful Bill: The BBB proposes spending nearly $50 billion for construction of Trump's border wall with Mexico. Sen. Paul, in an appearance on Face the Nation last week, accused the administration of waste. He cited an existing Customs and Border Patrol estimate that wall construction should cost only about $6.5 billion over 1,000 miles: 'They have inflated the cost of the wall eightfold,' said Paul. (After his TV hit, CPB appears to have scrubbed the construction cost estimate Paul quoted from its website.) Paul even questioned the need for more wall, at all, given his view that Trump has 'essentially stopped the border flow without new money and without new legislation.' Offering just a small taste of the anticipated building bonanza, the Trump administration awarded a $70 million, 7-mile wall-construction contract to California-based Granite Construction in March. The bill includes $45 billion for 'Adult Alien Detention Capacity' and 'Family Residential Centers.' This funding would enable the administration to ramp up its mass deportation program for undocumented immigrants. As the nation has seen from recent high-profile Immigration and Customs Enforcement raids at restaurants, this involves ripping productive members out of society and making them wards of the state, at great public cost, until they can be deported. The money would be a boon to private prison contractors and construction firms. For a taste of where this is headed, consider that the administration has already inked a 15-year, $1 billion deal with GEO Group to house ICE detainees at Delaney Hall, a 1,000 bed facility in Newark, New Jersey. The mayor of the city was arrested by ICE amid a recent protest at the facility. The private prison company is well connected to the Trump administration. As Rolling Stone has reported, Attorney General Pam Bondi is a former lobbyist for GEO Group, which also made a $500,000 donation to the Trump inaugural committee. A GEO subsidiary donated $1.3 million to a Super PAC that backed Trump's 2024 election. The BBB puts up nearly $25 billion for the Golden Dome. The satellite-based missile defense project builds off the branding of Israel's 'Iron Dome,' a ground-based defensive system that can intercept rockets and missiles launched from local militants or state actors like Iran. 'To the extent we match Iron Dome technology, we will be well protected from a missile attack from Canada or Mexico,' says Riedl of the Manhattan Institute, sarcastically. 'But not necessarily from Russia, North Korea or China.' In reality the Golden Dome appears to be Trump's revival of the Ronald Reagan era Strategic Defense Initiative, or SDI — a hugely expensive, largely ineffective space-based missile-defense system derided in the 1980s as 'Star Wars.' 'Ultimately this is $25 billion more for SDI' says Rieidl. 'This is a noble idea — but a lot of spending up until now hasn't brought a lot of success.' Trump envisions the BBB as a downpayment on a total investment of $175 million. The Golden Dome promises to be a golden goose for defense contractors. SpaceX, the rocket company founded by Trump's billionaire benefactor Elon Musk, who's currently feuding with Trump, is reportedly vying for a contract. So are the Peter Thiel-linked tech firm Palantir and longtime military-industrial heavyweights like Raytheon and Lockheed Martin. Including the Golden Dome, the Big Beautiful Bill increases America's Pentagon spending by a colossal $150 billion. 'This is a bill from the military-industrial complex advocates who are padding the military budget,' according to Paul, who has long criticized the Defense Department for failing to pass every audit to which it's been subjected. Budgets are moral documents. And metaphorically people often speak of the tradeoff between 'guns and butter' — or programs that defend the public and those that keep the public out of misery. The guns side of the Big Beautiful Bill is financed entirely by cuts to butter. The bill strips $128 billion in funding to the states for the SNAP food assistance program that keeps American families from going hungry. It also aims to avoid another $92 billion in spending by knocking people out of the program with red tape and work requirements, including for parents of argues that the Pentagon should be forced to achieve cost efficiencies before it receives any new federal dollars. 'One of DOGE's great failures was essentially ignoring the enormous waste and cost overruns inside the Pentagon. There is a reason the Defense Department cannot pass an audit. There is so much waste. It has significant cost overruns — particularly in government contracts and procurement — that absolutely must be addressed before we further increase defense spending,' says the Manhattan institute fellow. The House bill steers new money to more than a dozen weapons systems, including many dogged by cost overruns, construction delays, performance issues, and questions of combat capability. On the airplane side, this list includes: $4.5 billion for the B-21 Raider, the Air Force's newest long-range stealth bomber, which cost nearly $700 million per aircraft to produce. The two-person Northrup Gruman-built plane may be poorly suited to modern warfighting, where swarms of unmanned drones are becoming the dominant air threat. $3.2 billion for the Boeing-built F-15EX. The planes cost $90 million a pop, making them more expensive than the notoriously costly F-35A. Unlike that fighter, the F-15EX is not a stealth aircraft. And production has been snarled by manufacturing problems. A recent federal assessment put it bluntly: 'Boeing has experienced increased quality deficiencies.' Ships include: $4.6 billion for Virginia Class submarines. The nuclear submarine program has a reported cost overrun of $17 billion and has delivered boats massively behind schedule. The contractors are General Dynamics Electric Boat and Huntington Ingalls Industries. The Pentagon already has 23 of these submarines. $2.1 billion for San Antonio Class 'amphibious transport docks.' This ship was put on production pause in 2023 because of massive cost overruns. The boats are supposed to land Marines into onshore combat, but have been found by DOD testers to only be suitable 'in a benign environment' because the ship is 'not effective, suitable and not survivable in a combat situation.' Huntington Ingalls Industries is the contractor. The Pentagon already has 13 of these boats. More from Rolling Stone Donald Trump Is Destroying the Economy and Waging War on the Poor Trump Moves to Deploy National Guard to L.A. Over ICE Protests 'Dejected' Trump Says Relationship With Musk Is Over; Calls Him a 'Big-Time Drug Addict': Report Best of Rolling Stone The Useful Idiots New Guide to the Most Stoned Moments of the 2020 Presidential Campaign Anatomy of a Fake News Scandal The Radical Crusade of Mike Pence
Forbes
4 days ago
- Health
- Forbes
Republicans Like Health Savings Accounts
Should the government allow HSAs to cover gym memberships? Health Savings Accounts (HSAs) are a popular and important way many people pay for medical expenses. They are also a great way to save—better, for example, than an IRA or a 401(k) plan. Because of various quirks in the law, HSAs are not available to a large number of people—including people on Medicaid or Medicare and most people who buy their own insurance in the (Obamacare) exchanges. Under the reconciliation bill just passed in the House of Representatives, more people will have access to these accounts and there will be new opportunities to use them. Currently, individuals and their employers can make tax-free deposits to HSAs, provided the individual is also covered by third-party health insurance with a high deductible. Money can accumulate and grow tax-free. After age 65, the money can be withdrawn for non-health expenses without penalty, but it is subject to normal income taxes. As of 2023, there were 37.4 million accounts with $46.4 billion in assets. Industry experts think the House bill will lead to an additional 20 million people with an HSA. Here is a summary of the hits and misses in the Republican bill, as it faces a vote by the Senate. The Good. By far the best feature of the bill is a provision making all bronze and catastrophic insurance plans offered through the (Obamacare) exchanges automatically eligible for an HSA account. This is likely the main reason why the number of HSA accounts is likely to soar. Another provision would allow the use of HSAs to pay monthly fees for direct primary care (DPC). This used to be called 'concierge care' and in the past it was available only to the rich. But the price has come way down. Atlas MD in Wichita, for example, charges $50 a month for a mother and $10 for a child. In return, the family has 24/7 access to a physician's practice that provides all primary care. Often, the family has the doctor's personal phone number. DPC has become increasingly popular, and employers often pay the monthly fee for their employees. Under current law, however, the employer cannot put funds in an HSA account, let the employee choose a DPC doctor and pay that doctor from the account. The House bill will create that opportunity. According to the Congressional Budget Office (CBO), the ten-year cost of all of the HSA changes combined is almost $44 billion. Yet the cost of the two best provisions is less than $6 billion. More on that below. The Questionable. The bill allows annual withdrawals of $500 (individuals) or $1,000 (couples) for gym memberships and other physical activities. (No sailing or golfing expenses, however.) The problem is that these are not medical expenses. If we are going to allow gym memberships, why not hundreds of other nonmedical expenses – including sailing and golfing? The CBO says the cost of this provision is $10 billion. The bill also doubles the annual HSA contribution that is allowable for individuals with incomes up to $75,000 and couples who earn up to $150,000. The problem here is that only about one in ten account holders are contributing the maximum allowable right now. At a cost of more than $8 billion this is an expensive change that will only affect a small part of the market. Instead of these questionable measures, the Senate should consider making all Obamacare silver plans (the most popular choice) automatically eligible for an HSA. Missed opportunities. While the House should be congratulated for making many desirable improvements in the HSA law, it unfortunately failed to correct a fundamental flaw: an inflexible across-the-board deductible. Common sense would suggest that different medical expenses need different deductibles. The biggest problem with chronic illness, for example, is noncompliance with a drug regimen. That is why some Medicare Advantage plans make maintenance drugs for chronic patients (such as insulin for diabetics) available for free or at very low cost. In the first Trump administration, an IRS ruling waived the deductible requirement for 14 specific services and medications that serve as treatments for such conditions as diabetes, asthma, heart disease, and depression. This was an executive branch decision to modify existing legislation, however. To make it permanent, Congress needs to codify it. Ideally, Congress should remove the deductible requirement altogether and let the role of deductibles be determined in the marketplace. One way to think about the combination of allowing gym memberships and failing to address the deductible issue is to see that the House risks being accused of creating benefits for the healthy while ignoring the sick. Another missed opportunity was the failure of House Republicans to give 80 million Medicaid enrollees access to what I will call a Roth HSA. Private companies managing Medicaid (or the state itself) should be able to make deposits to an account that would cover, say, all primary care. Enrollees could use the money for health care during an insurance year. Afterward, they could withdraw any unspent funds for any purpose. If there were no taxes or penalties on non-medical withdrawals, health care and non-health care would trade against each other on a level playing field under the tax law. People wouldn't spend a dollar on health care unless they got a dollar's worth of value. An early study by the RAND Corporation suggests that these accounts would reduce Medicaid spending by 30 percent. Aside from payments for the disabled and nursing home care, if Medicaid spending could be reduced by 30 percent, the savings would amount to almost $1 trillion over ten years. This saving would be shared by the beneficiaries and the taxpayers who fund Medicaid.
Yahoo
4 days ago
- Business
- Yahoo
3 reasons your Obamacare premiums are going up next year
If you happen to be one of the roughly 24 million people in America who buy their health insurance through the Affordable Care Act's marketplaces, you're probably in for some sticker shock next year. Many families could be on the hook for hundreds, and in some cases thousands, of dollars more in premium payments thanks to the expiration of Biden-era coverage subsidies. A little-talked-about change in the GOP's tax bill could also bump up costs by ending a practice among insurers known as 'silver loading,' which juiced the amount of financial help households could qualify for when buying a health plan. Meanwhile, higher premiums and new red tape contained in the GOP's bill are expected to push younger, healthier customers out of the market. As a result, carriers are already signaling their intention to raise their rates by more than usual next year to deal with the cost of a smaller and sicker customer base. Here's what you need to know about the potential triple whammy. The Biden administration temporarily upgraded the Affordable Care Act (ACA) by offering insurance shoppers much larger tax credits to help them buy coverage. Those changes dropped some premiums to zero and decreased out-of-pocket costs for lower-income families, and for the first time, capped monthly payments for households earning more than 400% of the poverty line, limiting costs to 8.5% of their income. The enhanced insurance subsidies are set to expire next year, which means premiums will spike. As the Urban Institute calculated last year, that could leave some lower-income households paying 80% more. People with incomes above 400% of the poverty line — $62,000 for an individual, or $128,000 for a family of four — will no longer receive any help. This year, that would have meant paying an extra $2,900, according to Urban's calculations. These changes are going to be particularly important for freelancers and small-business owners who tend to rely on the individual insurance market, as well as service industry workers who don't receive health coverage through their jobs. For most of this past decade, many marketplace customers have been able to get a free bronze plan or very cheap gold-level coverage courtesy of a quirk that developed after Trump tried to cut funding to Obamacare during his first term. Those days will likely soon be over, thanks to the new tax bill. The backstory is a bit technical: Under the ACA, lower-income households who buy coverage from the marketplace get big discounts that shrink their out-of-pocket expenses like copays and deductibles. The federal government was supposed to pay insurers directly to cover these so-called 'cost-sharing reductions.' But Trump cut off that flow of payments in 2017, seizing on what was essentially a legal hole in the Affordable Care Act after Republicans failed to repeal the statute. The president's move was expected to seriously weaken the markets. Instead, states and insurers found a workaround known as silver loading that made coverage cheaper for many Americans while adding to the federal government's expense. Rather than try to make up for the lost payments by upping the prices of all of their health plans, carriers only increased the cost of the silver plans that are used to calculate the value of the tax credits enrollees could receive. This allowed insurers to recoup their costs and increased the subsidies that households were eligible for, with the side effect that people could suddenly get free bronze or cheaper gold insurance. As part of their tax and spending bill, Republicans are planning to save some money by restoring the old cost-sharing reduction payments. In essence, they'll be restoring this aspect of the Affordable Care Act to how it was originally supposed to work, but it will also make the law's tax credits a bit less generous and kill the option of buying those super-cheap bronze or gold plans. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy The coming cuts to Obamacare's subsidies are expected to lead many young and healthier enrollees to drop their coverage. The same goes for parts of the GOP bill that will likely make buying and maintaining ACA coverage more difficult, such as ending the ability to automatically re-enroll in your health plan from year to year. As a result, experts anticipate that insurers will have to increase the unsubsidized price of coverage by more than usual this coming year, since older, sicker patients cost more to insure. Already, there are signs of that happening. According to a review by the think tank KFF, insurers in Vermont, Oregon, Washington, and Washington, D.C., are requesting an additional 4% increase in their rates for next year, specifically because they expect the market to shrink when Biden's enhanced subsidies expire. Those price hikes won't affect households that get subsidized coverage, which caps their premium payments at a share of their income. But they will be felt by households that earn above 400% of the poverty mark, since they'll no longer receive tax credits. If you're middle-income and self-employed, be prepared for a big pop in your insurance bill. Jordan Weissmann is a senior reporter at Yahoo Finance. Sign up for the Mind Your Money newsletter Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
3 reasons your Obamacare premiums are going up next year
If you happen to be one of the roughly 24 million people in America who buy their health insurance through the Affordable Care Act's marketplaces, you're probably in for some sticker shock next year. Many families could be on the hook for hundreds, and in some cases thousands, of dollars more in premium payments thanks to the expiration of Biden-era coverage subsidies. A little-talked-about change in the GOP's tax bill could also bump up costs by ending a practice among insurers known as 'silver loading,' which juiced the amount of financial help households could qualify for when buying a health plan. Meanwhile, higher premiums and new red tape contained in the GOP's bill are expected to push younger, healthier customers out of the market. As a result, carriers are already signaling their intention to raise their rates by more than usual next year to deal with the cost of a smaller and sicker customer base. Here's what you need to know about the potential triple whammy. The Biden administration temporarily upgraded the Affordable Care Act (ACA) by offering insurance shoppers much larger tax credits to help them buy coverage. Those changes dropped some premiums to zero and decreased out-of-pocket costs for lower-income families, and for the first time, capped monthly payments for households earning more than 400% of the poverty line, limiting costs to 8.5% of their income. The enhanced insurance subsidies are set to expire next year, which means premiums will spike. As the Urban Institute calculated last year, that could leave some lower-income households paying 80% more. People with incomes above 400% of the poverty line — $62,000 for an individual, or $128,000 for a family of four — will no longer receive any help. This year, that would have meant paying an extra $2,900, according to Urban's calculations. These changes are going to be particularly important for freelancers and small-business owners who tend to rely on the individual insurance market, as well as service industry workers who don't receive health coverage through their jobs. For most of this past decade, many marketplace customers have been able to get a free bronze plan or very cheap gold-level coverage courtesy of a quirk that developed after Trump tried to cut funding to Obamacare during his first term. Those days will likely soon be over, thanks to the new tax bill. The backstory is a bit technical: Under the ACA, lower-income households who buy coverage from the marketplace get big discounts that shrink their out-of-pocket expenses like copays and deductibles. The federal government was supposed to pay insurers directly to cover these so-called 'cost-sharing reductions.' But Trump cut off that flow of payments in 2017, seizing on what was essentially a legal hole in the Affordable Care Act after Republicans failed to repeal the statute. The president's move was expected to seriously weaken the markets. Instead, states and insurers found a workaround known as silver loading that made coverage cheaper for many Americans while adding to the federal government's expense. Rather than try to make up for the lost payments by upping the prices of all of their health plans, carriers only increased the cost of the silver plans that are used to calculate the value of the tax credits enrollees could receive. This allowed insurers to recoup their costs and increased the subsidies that households were eligible for, with the side effect that people could suddenly get free bronze or cheaper gold insurance. As part of their tax and spending bill, Republicans are planning to save some money by restoring the old cost-sharing reduction payments. In essence, they'll be restoring this aspect of the Affordable Care Act to how it was originally supposed to work, but it will also make the law's tax credits a bit less generous and kill the option of buying those super-cheap bronze or gold plans. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy The coming cuts to Obamacare's subsidies are expected to lead many young and healthier enrollees to drop their coverage. The same goes for parts of the GOP bill that will likely make buying and maintaining ACA coverage more difficult, such as ending the ability to automatically re-enroll in your health plan from year to year. As a result, experts anticipate that insurers will have to increase the unsubsidized price of coverage by more than usual this coming year, since older, sicker patients cost more to insure. Already, there are signs of that happening. According to a review by the think tank KFF, insurers in Vermont, Oregon, Washington, and Washington, D.C., are requesting an additional 4% increase in their rates for next year, specifically because they expect the market to shrink when Biden's enhanced subsidies expire. Those price hikes won't affect households that get subsidized coverage, which caps their premium payments at a share of their income. But they will be felt by households that earn above 400% of the poverty mark, since they'll no longer receive tax credits. If you're middle-income and self-employed, be prepared for a big pop in your insurance bill. Jordan Weissmann is a senior reporter at Yahoo Finance. Sign up for the Mind Your Money newsletter Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
3 reasons your Obamacare premiums are going up next year
If you happen to be one of the roughly 24 million people in America who buy their health insurance through the Affordable Care Act's marketplaces, you're probably in for some sticker shock next year. Many families could be on the hook for hundreds, and in some cases thousands, of dollars more in premium payments thanks to the expiration of Biden-era coverage subsidies. A little-talked-about change in the GOP's tax bill could also bump up costs by ending a practice among insurers known as 'silver loading,' which juiced the amount of financial help households could qualify for when buying a health plan. Meanwhile, higher premiums and new red tape contained in the GOP's bill are expected to push younger, healthier customers out of the market. As a result, carriers are already signaling their intention to raise their rates by more than usual next year to deal with the cost of a smaller and sicker customer base. Here's what you need to know about the potential triple whammy. The Biden administration temporarily upgraded the Affordable Care Act (ACA) by offering insurance shoppers much larger tax credits to help them buy coverage. Those changes dropped some premiums to zero and decreased out-of-pocket costs for lower-income families, and for the first time, capped monthly payments for households earning more than 400% of the poverty line, limiting costs to 8.5% of their income. The enhanced insurance subsidies are set to expire next year, which means premiums will spike. As the Urban Institute calculated last year, that could leave some lower-income households paying 80% more. People with incomes above 400% of the poverty line — $62,000 for an individual, or $128,000 for a family of four — will no longer receive any help. This year, that would have meant paying an extra $2,900, according to Urban's calculations. These changes are going to be particularly important for freelancers and small-business owners who tend to rely on the individual insurance market, as well as service industry workers who don't receive health coverage through their jobs. For most of this past decade, many marketplace customers have been able to get a free bronze plan or very cheap gold-level coverage courtesy of a quirk that developed after Trump tried to cut funding to Obamacare during his first term. Those days will likely soon be over, thanks to the new tax bill. The backstory is a bit technical: Under the ACA, lower-income households who buy coverage from the marketplace get big discounts that shrink their out-of-pocket expenses like copays and deductibles. The federal government was supposed to pay insurers directly to cover these so-called 'cost-sharing reductions.' But Trump cut off that flow of payments in 2017, seizing on what was essentially a legal hole in the Affordable Care Act after Republicans failed to repeal the statute. The president's move was expected to seriously weaken the markets. Instead, states and insurers found a workaround known as silver loading that made coverage cheaper for many Americans while adding to the federal government's expense. Rather than try to make up for the lost payments by upping the prices of all of their health plans, carriers only increased the cost of the silver plans that are used to calculate the value of the tax credits enrollees could receive. This allowed insurers to recoup their costs and increased the subsidies that households were eligible for, with the side effect that people could suddenly get free bronze or cheaper gold insurance. As part of their tax and spending bill, Republicans are planning to save some money by restoring the old cost-sharing reduction payments. In essence, they'll be restoring this aspect of the Affordable Care Act to how it was originally supposed to work, but it will also make the law's tax credits a bit less generous and kill the option of buying those super-cheap bronze or gold plans. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy The coming cuts to Obamacare's subsidies are expected to lead many young and healthier enrollees to drop their coverage. The same goes for parts of the GOP bill that will likely make buying and maintaining ACA coverage more difficult, such as ending the ability to automatically re-enroll in your health plan from year to year. As a result, experts anticipate that insurers will have to increase the unsubsidized price of coverage by more than usual this coming year, since older, sicker patients cost more to insure. Already, there are signs of that happening. According to a review by the think tank KFF, insurers in Vermont, Oregon, Washington, and Washington, D.C., are requesting an additional 4% increase in their rates for next year, specifically because they expect the market to shrink when Biden's enhanced subsidies expire. Those price hikes won't affect households that get subsidized coverage, which caps their premium payments at a share of their income. But they will be felt by households that earn above 400% of the poverty mark, since they'll no longer receive tax credits. If you're middle-income and self-employed, be prepared for a big pop in your insurance bill. Jordan Weissmann is a senior reporter at Yahoo Finance. Sign up for the Mind Your Money newsletter Sign in to access your portfolio
