IBC Practitioner Briefing: The State of the U.S. Economy Robert P. Murphy December 17, 2013

I. Fed and Stock Market

 Artificially Low Interest Rates

II. Long-Term Budget Outlook

 Budget Components

III. ACA Timeline 3/23/2010 Obama signs ACA into law 10/1/2013 Open enrollment begins 1/1/2014 Coverage begins 1/1/2014 Individual mandate enforced 3/31/2014 Open enrollment closes (now need a “major life event” to apply)

IV. Major Planks, all “Mesh” “Universal” coverage Minimum standards in plans Community rating (for premiums) Employer mandate (50 or more full-time, meaning 30+ hours/week) Individual mandate  Jan 1 st 2014,

 More on the Mandate “Individual Shared Responsibility Fee” Based on number of months DON’T have coverage. Exempt if below 133% of federal poverty line. 2014: $95 per person per year or 1% of income 2015: $325 / person or 2% of income 2016: $695 / person / year or 2.5% income 2017: Increase w/inflation, or 2.5% income

V. Undesirable Consequences Premium hikes (next slide) Employment drop Quality suffers, “death panels” (rationing) Possible for people to lose coverage!

VI. Feds vs. Heritage Foundation

VII. CBO Report

A. Notes on CBO Table The gross cost to feds of offering ACA insurance coverage (including tax credits) is $1,677 billion; table has net cost of $1,171 because of mandates penalties and tax on “Cadillac” plans. “Direct Spending” includes ACA’s projected cutbacks on doctor/hospital reimbursements Other revenues includes “Medicare” surtaxes 3.8% investment income and 0.9% payroll

B. Tax on “Cadillac” Plans Starting 2018, 40 percent excise tax on cost of plans in excess of $10,200 for individuals and $27,500 family. Ostensibly limits low-deductible and high cap plans to contain medical costs, but what about sick employees?! EXACT OPPOSITE of minimum standards. ACA hits both ways.