Another Subsidy Fails Miserably

[Ann H]

The GAO is reporting that the new health insurance tax credit for small businesses has failed miserably, saying:

"Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million. The cost of credits claimed was $468 million. Most claims were limited to partial rather than full percentage credits (35 percent for small businesses) because of the average wage or full-time equivalent (FTE) requirements. 28,100 employers claimed the full credit percentage. In addition, 30 percent of claims had the base premium limited by the state premium average."
​

U.S. GAO - Small Employer Health Tax Credit: Factors Contributing to Low Use and Complexity

Wording from the IRS site says this about the credit:

Small employer? Get the credit you deserve.

If you are a small employer with fewer than 25 full-time equivalent employees, pay an average wage of less than $50,000 a year, and pay at least half of employee health insurance premiums, then there is a tax credit that may put money in your pocket.
For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014.​

Small Business Health Care Tax Credit for Small Employers
​

 

[somarco]

The best thing they have come up with, PCIP, is a wonderful program for the consumer.

They don't have a clue how to effectively promote it, which is why they finally allowed brokers in . . . and then killed them off 6 months later.

Even with lowering rates as much as 30% in some areas and broker fee's they still have less than 20% of the eligible participants in the plan.

I have no idea how many BILLIONS of taxpayer dollars have been used to promote and subsidize the plan, but by any measure it is a failure as well.

 

[Crabcake Johnny]

I don't think the dismal failure of PCIP has anything to do with the lack of promotion. To me, it exposes the fatal flaw in the mentality that "millions" are uninsured due to pre-existing conditions.

No, millions don't have insurance because they don't believe in it unless it's free or they can somehow game the system.

Believe it or not - up to you - but when I explain MD's MHIP program the number one question I get is "but can I cancel it when I want?"

 

[stuy119]

PCIP didn't work, because it wasn't on a grand enough scale. Only once we're able to make it more inclusive to more people will the plans reach their full potential.

Oh, that was sarcasm, just in case you missed it.

 

[dgoldenz]

Believe it or not - up to you - but when I explain MD's MHIP program the number one question I get is "but can I cancel it when I want?"

x2, plus the fact that the app has to be mailed in makes it a time waster...after taxes and postage I make about $65 on the whole deal. Whoopee.

 

[ABC]

I did not have one group qualify for the tax credit.

Most small groups will low wage earners can not afford a employer sponsored health plan.

The other problem I ran into was most accountants did not understand the tax credit or the methodology.

 

[somarco]

most accountants did not understand the tax credit or the methodology

And I doubt the folks who crafted the bill had a clue either.

 

[Ann H]

This also proves the gross overstatement by the government of the estimated beneficiaries of these programs. For PCIP, they estimated that 200,000 would enroll out of 4 million eligible to enroll. By February 2011, 12,437 had enrolled. By February 2012 enrollment was about 48,000. The program ends in 18 months, and they've enrolled a drop in the bucket.

STATISTICS ABOUT WHO DOES NOT ENROLL:
Note, however, that even the government first estimated that 3,800,000 out of 4,000,000 (95%) would NOT enroll in PCIP even though they were eligible due to pre-existing conditons and no coverage for 6 prior months. Even the government understood that subsidized health care won't make most of the uninsured population buy it. But now 3,952,000 out of 4,000,000 (98.8%) haven't bought it. Stunning figures.

STATISTICS ABOUT GROSS OVER-ESTIMATES
200,000 estimated enrollment is 5% of 4 million eligibles
48,000 actual enrollment is 1.2% of 4 million eligibles
The government overstated its estimate by 95.83%
Stunning figures.

 

[ABC]

I forget where I read it but the Gov. estimated that each enrolled person on the PCIP plan would have an avg. claims of $15,000 year. The reality was the avg. claims was over $30,000+.

This also proves the gross overstatement by the government of the estimated beneficiaries of these programs. For PCIP, they estimated that 200,000 would enroll out of 4 million eligible to enroll. By February 2011, 12,437 had enrolled. By February 2012 enrollment was about 48,000. The program ends in 18 months, and they've enrolled a drop in the bucket.

STATISTICS ABOUT WHO DOES NOT ENROLL:
Note, however, that even the government first estimated that 3,800,000 out of 4,000,000 (95%) would NOT enroll in PCIP even though they were eligible due to pre-existing conditons and no coverage for 6 prior months. Even the government understood that subsidized health care won't make most of the uninsured population buy it. But now 3,952,000 out of 4,000,000 (98.8%) haven't bought it. Stunning figures.

STATISTICS ABOUT GROSS OVER-ESTIMATES
200,000 estimated enrollment is 5% of 4 million eligibles
48,000 actual enrollment is 1.2% of 4 million eligibles
The government overstated its estimate by 95.83%
Stunning figures.

 

[somarco]

The reality was the avg. claims was over $30,000+.

Surprised it isn't higher than that. I believe they have been complaining about the number of transplant pts they have.

Here is your 2x expected data
Per person cost of federal high-risk medical plan doubles - The Washington Post

But places like AK are even worse

Alaska To Spend 0K A Year For Each High Risk Pool Member – Capsules - The KHN Blog