PPACA "Obamacare" and the GOP Government Shutdown

For those of you who know me, you already know that I tend to lean Democratic. I don't claim to be bi-partisan, but generally speaking I do hold some very Libertarian and Socialist views also. In fact, I even have some beliefs that are very right-wing. All of that said, the contents of this article will seem very GOP-bashing and/or pro-Democrat. Cest la vie. Get over it. I will present the facts and then my interpretation of those facts.

This article is intended to discuss why our government officials are so deeply divided and what the ramifications are of the Affordable Care Act. So let's get some of the basics out of the way first.

GENERAL INFORMATION ABOUT PPACA

WHAT IS: Patient Protection and Affordable Care Act (PPACA)?
PPACA, affectionately termed "Obamacare," is a piece of legislation that was introduced to our government in late 2009. It was sent through to Congress (which was Democrat controlled at the time) and approved. Subsequently, the Democratic Senate also approved this bill and it was ran to our president at the time, Barack Obama, who signed it in to law.

WHAT DOES: PPACA Do?
Well, PPACA does a lot of things. The bill is 2,409 pages long. If you wish to read it yourself please feel free HERE. In the absence of a desire to literally explain EVERY element of that many pages, let me summarize some of the larger aspects of this bill:

1. Pre-Existing Conditions: PPACA forbids insurance companies from denying a person coverage because of existing illnesses. It goes further to say that a given people of a given area that are the same age and non-tobacco users must be offered the same premium. This means that all 27-year-old people (male and female) in or around Minnesota who do not smoke MUST be offered the same premium as myself as I write this.
2. Minimum Standards: PPACA establishes a bare minimum for what a plan can provide you. Among these standards are the following: You cannot be dropped because you got sick, You cannot have price discrimination against you based on gender or pre-existing conditions, all children can stay on their parents insurance until the age of 26, Insurance cannot establish an annual or lifetime cap on essential services (ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.), Essential services ( mammograms and colonoscopies, wellness visits,gestational diabetes screening, HPV testing, STI counseling, HIV screening and counseling, FDA-approved contraceptive methods, breastfeeding support and supplies, and domestic violence screening and counseling.) MUST be covered without copay/co-insurance/deductible
3. A fee is imposed to Businesses that employ 50+ people but do not offer insurance and on those that are not covered by insurance. It gets a little hairy here, but let me get you the basics. Your fee if you have no healthcare? $95/year. A business' fee for not offering it when they have over 50 full-time employees? $2,000/employee/year ($3,000 if they get insurance from PPACA) but both of these fees are scheduled to increase over time. There are subsidies that are available to any family that makes less than 400% of the current poverty line ($11,490 + $4,020 for each additional person in your family - so for my family $94,200) and for small businesses. If you don't make enough income, you are exempt from the law. If your employer only covers you and not your family, you are exempt. If you already get insurance from your provider at work you can opt in and get a subsidy as long as your offered insurance is more than 8.5% of your individual income or 9% of your family income, whichever is higher. WHOA THAT'S A LOT OF NUMBERS!!! Okay, here is the skinny. If you are poor, you are exempt. If you are rich, you already pay more. If you are in the middle and only the employee is offered insurance, you are exempt. Most other cases you will need either the employee plan, a PPACA plan, or you'll pay the fee which is considerably less but still will not cover your medical bills. It's a fee to compensate the rest of America because you are costing them money every time you go to the hospital without insurance.
4. PPACA plans must be offered through each individual state and they are encouraged to expand the Medicare, Medicaid, Children's Health Insurance Program (CHIP), and Tricare programs. Each state will have a Marketplace, where competitive bids from insurance companies will be posted in four tier levels (Bronze, Silver, Gold, Platinum) of ascending costs and benefits. Medicaid is specifically expanded for individuals and families with incomes up to 133% of the federal poverty level, including adults without disabilities and without dependent children but also allows you to disregard 5% of your income, so it's really more like 138% of the poverty level. The problem is that several states have opted out even though it helps them get better at a lower cost. The Medicare program is improved so as to close up donut holes from Medicare Part D and make payments based on individual care not individual providers (I.E. If I break my arm it covers the fixing of that arm in one payment to the hospital, not 40 payments for the 40 elements that comprised that fix - WAY BETTER).

So that covers the bigger portions of what this does. This isn't by any means a definitive source as to what the exact rules are or even how they all apply, because there is much too much content for that here. Again, you are welcome to read the entire bill at your leisure through the link I provided above.

OUR CONGRESS AND THE HANDLING OF PPACA

So our Congress and our Senate have a problem. When this bill was passed into law, it was pushed hastily through by Democrats seeking to take advantage of a GOP-deficient government. We had the House, the Senate, and the Presidency. We were basically unstoppable. It's like when your brother gets to stay home from school after your mom baked cookies and when you get home the cookies are gone. The Democrats ate all of the cookies and the Republicans got mad. Understandably so. 

MYTHS

1. PPACA will cost us a lot of money: No - PPACA cuts 2 trillion from our deficit over the next 20 years (http://politicalticker.blogs.cnn.com/2013/09/25/fact-check-repealing-obamacare-adds-to-deficit/)
2. PPACA causes our debt to increase: No. Debt is configured as "Gross Domestic Product" GDP vs. Existing Amounts owed. Capital Gains tax and the Bush-Era cuts lower GDP for us. Since capital gains are taxed lower, rich investors typically make their money by purchasing companies, downsizing, shipping jobs overseas (which they get a tax break for thanks to Bush), and then sell the company. That sale is a "capital gain" and is taxed lower than my paycheck but capital gains do not offer more GDP or jobs in America. They lower GDP and job growth, which increases the "indebtedness" to those amounts. Simple version: rich people are getting richer while decreasing jobs and increasing the national debt
3. PPACA Will drain our economy of resources: No. It will only drain the GOP and insurance companies of their resources. 
4. Congress has no reason to be upset: Yes they do. The law means they HAVE to take a plan from PPACA, meaning they no longer get those swanky plans from their providers but they have to pay more like the rest of us. 

SO HOW ARE THEY SHUTTING THE GOVERNMENT DOWN?

Republicans have tried more than five times in the last year alone to pass legislation that either de-funds PPACA or creates exclusions for themselves and other select groups (creating a privileged group). Every time these bills pass the house, the senate has rejected them. Republicans have sought a straight bill that allows people to decline PPACA (rendering it useless), they have tried other bills that say that money cannot go to PPACA, they have tried having bills that say that Congress and those in office do not need to take the PPACA insurance, and several other attempts. Since their other efforts have not worked, they are now working an angle to sneak the legislation about our healthcare into a budget that was already working. When the lawmakers in the senate noticed that they were trying to pass add-ons to the law that delay, de-fund, and leave members exempt they rejected it. Both the President and our Senate have said they will not partially fund our government (because that actually has a huge impact on foreign economy also) and they will not allow a budget law to be abused for personal party agenda such as repealing the effects of a law that passed the House and Senate and was found Constitutional.
As a result, the GOP lead Congress is refusing to assemble a bill that will not begin a systematic disassemble of "Obamacare" and because we passed the fiscal year for 2013, the funds that would be used to fund the basic elements that are shut down are locked up because we don't have an existing law to tell those funds where to go. It's like if you asked for $15 to go to a movie, but you only ask your mom for the $15 without saying what for. Your mom then asks, "What for?" Our government hasn't told mom what it is for, so mommy says no and 800,000 people are out of work, several people are going without WIC support, many headstart programs are shut down and lists taken apart, and other devastating affects while Congress enjoys their $132/day budget for "lunch" and their cozy, uninterrupted six-figure salaries.

WHAT IS THE BIG DEAL ABOUT A DEFAULT?

Well there are a ton of things to consider, but let's get to the most basic version of the problem. If we don't budget our money by a given time (November 1st at the latest) our government runs out of allocated funds to pay for certain things like Social Security, SNAP, Medicare, Medicaid, and interest on existing debt. This part is substantial, but can still be mitigated through existing funds to avoid a "default" but at the same time you are then allocating funds that would be used to preserve the value of our other major value - treasury bonds.

Treasury bonds are considered to have the highest fidelity of any investment in the world as our government has NEVER defaulted. As in, ever. Like, we never actually have gone back on our promises to pay these, because we have simply increased our debt limit and allocated funding for these. It's a great system, but when we aren't furthering our agenda and are spending the money reserved for these on other assets, the power of the dollar decreases, which simultaneously decreases the value of the bonds. This is a normal process that happens at around a 2% margin whenever we increase the debt limit, but the rate of return is higher than that for the bond, so the maturation still exists. Without the increase in the limit, the value of the dollar will dip much further and cause a proverbial "spike" downward in the value of the dollar, which stimulates the sale of these bonds and subsequently a downward spiraling economy.

Now I'm going to get a little bit technical, so bear with it:
In traditional economics, the general model shows that austerity (paying debt) is good for the overall economy during recession because it provides confidence to the general public. This is seemingly logical, but if you evaluate using a new and more accurate (by data) model, it's not correct.

The SFB model for aggregate demand in relation to austerity shows that historically (during WWI and WWII) we had a massive spike in our deficit the likes of which we have never seen. The government actually does a tally of an average amount of money spent out of the american personal income (PCE) and the fantastic part about this is that, historically speaking, when our government runs up massive deficits our people generally have extra money and spend it more. 

http://zfacts.com/p/318.html

http://www.advisorperspectives.com/dshort/updates/PCE-Price-Index.php

http://www.usgovernmentdebt.us/spending_chart_1950_2018USb_15s2li111lcn_G0t

So if we evaluate the data from these sources you can see that there are only two instances where the SFB Model for Aggregat Demand in relation to Austerity is proven wrong by the data. One period of time would be 2002-2004 and the other being from 2008-Now. The most common and definitive source to pinpoint with these lack of gains in PCE while experiencing a drastic increase in deficit is our manufacturing.

In the 80's our government (Both Bush Sr. and Clinton) signed into law some provisions that made sending manufacturing jobs overseas easier and cheaper. There isn't a law that specifically gives them "tax breaks" but there is a law that allows them a break for moving companies interstate or out of the nation. This combined with the fact that there are many nations overseas that allow for slave labor at massively lower wages while also doing little to no taxation on those revenues make other nations a safe haven for companies to manufacture and make untaxed revenue that is able to be funneled back to America at a very low rate because of laws that protect over seas revenue of domestic companies from over taxation. Ultimately this meant that more companies were sending jobs and manufacturing overseas.

This also lowers what our nation calls "Gross Domestic Product" or GDP. Coincidentally, GDP versus our existing debt is the primary way that we figure what the National Debt is. So these companies sending these jobs overseas lowers our GDP because we aren't making the product here. The consequence of that is a higher national debt, which concerns people. 

SO WHY ARE PEOPLE FIGHTING OVER THIS IF IT DOES BETTER FOR EVERYONE?

Of the top 20 people who get money from insurance companies, only 5 (FIVE) are Democratic,
one of which hasn't taken office, three of which vote in favor of GOP agenda and insurance
companies every time until it's a hot button issue (Max Baucus, Mark Warner, and Kay Hagan),
and one that outright votes for legislation regulating AHA 5 times, votes to make insurance
payouts for flood victims more difficult, votes against regulating private bribery to congress,and
votes against working Americans.


The fact is, of the top 20 people financed by Insurance companies seeking to dismantle AHA,
all 20 vote to help our government pay insurance companies and against regulating those
costs.

http://www.opensecrets.org/industries/recips.php...

https://votesmart.org/candidate/key-votes/535/mark-warner...

https://votesmart.org/.../key-votes/8749/gary-peters...

https://votesmart.org/candidate/key-votes/21082/kay-hagan...

http://votesmart.org/candidate/key-votes/53315/max-baucus...

Short story? GOP/Republicans are in the pocket of Insurance companies. They get swanky perks from them, boat loads of cash, and some very nice health plans for pennies. Many things can contribute to different parties and that's a good thing. Democrats are largely funded by Lawyers and Lobbyists. The difference here is you don't see Lawyers and Lobbyists poaching on the people of America and you do see Insurance doing that. Additionally you see Congress that is funded by them voting in favor of Insurance companies. Facts are facts. GOP is lining their pockets with Insurance money and they don't want to let go.

The GOP (Republicans) are also very sheepish to mention that their primary financial contributors happen to be Healthcare and Insurance companies who have fought this bill tooth and nail. In fact, the ONLY reason that insurance is mandatory is because those insurance company lobbyists refused to entertain such legislature unless they forced everyone to have insurance

The GOP rep Ted Cruz recently went on record saying that this bill will cause work weeks to shorten to 29 hours for america's top employers. 9/10 of our top employers are slanted toward the GOP through financial investments to lobbyists who, coincidentally, lobby primarily for budget and healthcare. This is more like a threat versus an observation. The GOP has threatened and enacted an economic halt, have failed in legislature more than 40 times to negate the law, and are in the minority.

Sources:
GE Contributions are mostly Republican (http://www.opensecrets.org/orgs/summary.php?id=D000000125)

YUM! Brands (includes McDonald's) contributions also mostly Republican (http://www.opensecrets.org/orgs/summary.php?id=D000029955)

UPS Contributions also mostly Republican (http://www.opensecrets.org/orgs/summary.php?id=D000000081)

(http://www.forbes.com/.../)

http://shopyourpolitics.com/

http://www.statisticbrain.com/u-s-largest-employers/

http://www.opensecrets.org/industries/indus.php?ind=F


Every fiscal year our government sets a budget and that budget means that our debt has a ceiling. This allows for our money to hold a given value and several other purposes. When our government does not have a budget agreed to they typically have a Continuing Resolution (CR) that is passed which basically says, "we're gonna keep doing what we have been until we decide on a new budget." Republicans have made several attempts with the GOP Congress to pass laws that will render PPACA ineffective, including a suit with the Supreme Court, but more than 5 bills have been rejected prior to July 2013 that were designed to de-fund PPACA or leave certain rules/parties exempt and the Supreme Court found the law constitutional.

CONCLUSION

No one party has the whole answer. When Democrats rule, the poor take advantage of the wealthy. When GOP rules there is no such thing as middle class.

My strongest suggestions for improving our economy are the following:

1. Incentivize local manufacturing by lowering taxes for domestic manufacturing and increase taxes on manufactured product that is shipped into domestically located companies. This concept does two things. It creates a more competitive market for small and medium size businesses that originate here while creating opportunity for labor markets and decreased unemployment. The consequences of this being higher GDP and more job growth. The overseas tax should not exceed however the value of the less expensive labor overseas, as foreign trade markets are also volatile. 
2. Re-evaluate Capital Gains law. Large companies have shifted their sights to increasing their personal income through capital gains, or the purchase and subsequent sale of a given item or company. What this results in is companies being purchased and then liquidated for a higher resale value. This combined with the local incentives for manufacturing will promote traditional gains and higher GDP, which improve the overall wealth of our nation.
3. Allow for an expanding deficit in the wake of the enactments of #1 and #2. It has shown historically that when manufacturing jobs and gross domestic product are prevalent in our nation that a boom in Government deficit spurns a boom in consumer spending (PCE). Essentially the SFB model of Aggregate Demand dictates that the burden will either be on the government or on the people. If the people have the burden, money flow stops and the government suffers (recession - where we are now). If the government has the burden, the people spend and the government recoups funds due to taxation (everyone wins). 

Ultimately, I support a whole government overhaul similar to what Iceland did in 2011. In this specific case, I side with Democrats where I think it's absolutely INSANE to hold up a whole nation over something that you have failed to make happen more than 5 times and only oppose because the people who line your wallet oppose it. Although the Speaker of the House, John Boehner-R, and the Democratic Majority Leader, Harry Reid-D, are both dirty and lie to the American people(http://communities.washingtontimes.com/neighborhood/sip-black-tea/2013/oct/2/boehner-reids-backroom-deal-keep-congresss-obamaca/). I assume most politicians do this and we need to start fresh, regulate incomes, and not allow significant donors from the private sector or influential businesses.