A case study of why Democrats are better on policy but lousy on optics

Back in 2003, when the second round of the utterly unnecessary Bush Tax Cuts were doled out (jacking up the federal deficit for decades to come), I received my very own check from the IRS for something like $300 or so. I distinctly remember that it had, typed in the lower left-hand corner, "TAX RELIEF FOR AMERICA'S WORKING MEN & WOMEN".

As it happens, I donated the entire $300 to charity, since I had never asked for it and didn't want it. However, I always remembered the shamelessly partisan promotional nature of how it was done. A physical check with the actual dollar amount and a big, bold slogan referring to "relief" (the implication being, of course, that taxes are by their very nature a negative, awful thing which one needs relief from).

Cut to 6 years later, when the ARRA (American Recovery & Reinvestment Act) was passed by the Obama administration. This was popularly known as "The Stimulus", and while about 2/3 of it involved federal spending on infrastructure projects and the like, the other third actually consisted of tax cuts:

The stimulus bill, formally known as the American Recovery and Reinvestment Act, is meant to create jobs and boost the economy. It cost $787 billion, including $499 billion to fund new roads, hire teachers and generally keep people employed, and about $288 billion in tax breaks to individuals and businesses. Among other things, the mix of tax cuts includes a refundable credit of up to $400 per individual and $800 for married couples; a temporary increase of the earned income tax credit for disadvantaged families; and an extension of a program that allows businesses to recover the costs of capital expenditures faster than usual.

Now, this isn't about whether the Obama stimulus bill was a good or bad thing. Personally, I think it had too little in the way of spending and too much in the way of tax cuts.

However, my larger point is that almost no one in the general public knows about that $400 personal tax cut. Just about everyone I talk to thinks that The Stimulus was just a big ol' pile of increased spending by the federal government.

And why don't most people know about the tax cuts? Because instead of receiving an envelope in the mail with a big check for $400 (or $800) inside and "TAX RELIEF FOR AMERICA'S WORKING MEN & WOMEN" on it, they received...an obscure line item buried in the middle of their 1040 tax form.

Most people never knew that Obama cut their taxes. If they noticed the tax refund/credit at all, they probably just thought they miscalculated their income, or that they owed their accountant a beer for being so clever. It was lost in a sea of paperwork, never to be seen or heard of again.

I bring up all of this because of a story which originally ran back in July, but which for some reason has (thankfully) gained a bit of traction again in the past week or so:

An obscure Obamacare feature may net health insurance customers $332 million this year.

That's the total insurance companies will have to give back to customers this year under an Affordable Care Act provision designed to keep companies from overcharging consumers, the Department of Health and Human Services announced on Thursday. Including this year, consumers will have recovered a total of $1.9 billion from insurance companies since the rule took effect in 2011, according to the department.

Under President Barack Obama's signature health care reform law, insurance companies must spend at least 80 percent of the premiums they collect on actual medical care, rather than on overhead and profit. They are required to give rebates to consumers, or to their employers in the case of job-based insurance, if they fail to meet that standard. Close to 7 million people are due refunds by Aug. 1, with an average of $80, according to a report issued by the department.

So, this is awesome news, and I've mentioned it several times before. It's called the "Medical Loss Ratio" and it's one of the main reasons why I support the law overall in spite of it being insanely complex and cumbersome.

So. 7 million people are getting what amounts to an $80 tax cut this year. Not huge, but not bad either; that'll pay a month's electric bill for a lot of people, or let the family have a nice dinner out.

So what's the problem? Well...

Consumers may not actually get checks or refunds to their credit cards, however. Insurance companies may also apply the money to future premiums, or pass the dollars back to the employer that sponsored the coverage, which may use the funds to lower premiums or add benefits.

Yeah. That's the problem right there.

In many cases, there's not going to be a check in the mail saying "PREMIUM RELIEF FOR AMERICA'S WORKING MEN & WOMEN". There may not even be a check at all. There will just be an obscure line item in their monthly premium invoice, most likely labelled something like "PPAACA Noncompliance Credit Adjustment" or somesuch. Hell, for all I know the insurance companies may even be trying to take credit for the rebate themselves, making it sound like they've decided to knock $80 off the price out of the goodness of their hearts.

And that's assuming they receive the credit themselves at all. For ESI coverage, the insurers can just kick the premium rebate back to the employer, who may or may not bother letting their employees in on the deal.

Anyway, I think the headline of this piece speaks for itself. Just like the Obama administration and most Democrats have done a lousy job of tooting their own horn when it comes to the benefits of the law at large, they seem to be almost embarrassed about calling attention to one of the most important (in my view) tenets of the law: Making sure insurance companies actually provide, you know healthcare coverage with the payments they receive.