Health care costs could increase for thousands of Louisianans

Tax credits that made health coverage through the federal Marketplace affordable are set to expire at the end of this year and are a key sticking point in negotiations to reopen the federal government. The Times-Picayune | Baton Rouge Advocate’s Emily Woodruff explains what Louisiana stands to lose if the enhanced premium tax credits are allowed to lapse: 

If the subsidies expire at the end of the year, Louisiana would be hit harder than any other state, according to a new analysis from the Urban Institute. The state is projected to see the steepest decline in subsidized marketplace enrollment nationwide — a 61% drop, representing roughly 85,000 people losing coverage. 

Premiums will increase 114%, on average, if Congress allows the tax credits to lapse. Woodruff breaks down potential cost increases in Louisiana: 

Two 60-year-olds in Louisiana with a household income of $85,000, for example, would see insurance costs rise from around $600 to $2,000 per month, according to a cost calculator from the non-partisan Kaiser Family Foundation. A family of four with two adults in their 50s earning $90,000 would see costs increase from about $390 to $700 a month.

Approximately 85,000 Louisianans would become uninsured, but will ultimately still get sick and need health care: 

If premiums rise, [Invest in Louisiana Executive Director Jan] Moller said, some may feel they can’t afford insurance. “Their first obligation is to pay the rent, pay the light bill, put food on the table, put gas in the car, and health care is very important, but it comes after that, especially if you’re a healthy person,” Moller said. People who have chronic health conditions will have little choice but to absorb the higher costs. 

The QSBS is some BS

The federal Qualified Small Business Stock (QSBS) exemption is a massive tax break for very wealthy venture capitalists that will cause 38 states plus the District of Columbia to lose a collective $1.2 billion in annual tax revenue. Sarah Austin and Nick Johnson of the The Institute on Taxation and Economic Policy explain why states should opt out of QSBS as part of enacting a more progressive tax structure: 

Broader taxes on investment income and other measures aimed at asking more of wealthy households, including sensible policies to prevent tax avoidance by the wealthy and corporations, are likely to raise much more revenue than repealing the QSBS exemption. In this context, QSBS decoupling should be seen as one part of a broader strategy to improve state tax treatment of income from wealth and bolster state services.

‘Digital Cancer Alley’ 

Data centers can pose the same harm to Black and working class communities that petrochemical facilities do, according to a new report from the grassroots coalition MediaJustice. As The Lens’ Gus Bennett notes, the rapid buildout of these centers are being concentrated in the South and bring economic, environmental and health risks to the communities where they’re located:

“This is not just about building warehouses full of computers,” said Davante Lewis, a member of the Louisiana Public Service Commission who cast the sole vote against Entergy’s plans to power the Richland Parish data center. “The real health risks come from the utilities rushing to build more gas plants and delaying renewable energy commitments,” he said. “That locks our communities into decades of pollution and higher bills.” … The expansion deepens environmental injustice, critics say, especially in majority-Black and working-class communities already burdened by petrochemical plants. 

What is a digital ad tax? 

Digital advertisements are ubiquitous across the internet, social media and streaming services. Brookings’ Chi Nguyen and Robert Seamans explain ways that policymakers can tax these advertisements, including Maryland’s first-in-the nation digital ads tax: 

The Maryland DAT applies only to firms that generate at least $1 million a year from digital ads within Maryland and whose global gross revenues exceed $100 million. Larger firms face higher tax rates, with the tax ranging from 2.5% to 10%, following a progressive structure based on global earnings. Lawmakers later approved S.B. 787 in May 2021, which pushed the DAT’s effective date to January 2022. The measure also created exemptions for broadcast and news outlets and prohibited companies from shifting the cost onto customers through added fees or surcharges.

The authors lay out potential benefits of digital ad taxes:

The tax revenue collected from the annual gross revenues of digital advertising companies can help finance government services. Since the implementation of the tax in 2021, Maryland state reported collecting approximately $93 million in 2022 and $82.5 million in 2023. The revenue is earmarked for the “Blueprint for Maryland’s Future Fund,” which aims to provide “adequate funding for early childhood education and primary and secondary education.” Therefore, the DAT offers a stable source of public funds for essential public services, including education, health care, and social security.

And potential drawbacks: 

DAT can significantly influence the pricing behavior of the media platforms by altering their cost structure. With lower post-tax revenues, media and tech companies may increase ad prices to maintain profit margins. Higher ad prices may especially affect small and medium-sized businesses that rely on targeted, cost-efficient digital ads. For example, the DAT could indirectly hit a local restaurant that advertises on a search engine or social media platform and force it to pay a higher advertising cost than it did previously. In such a case, the tax would fall on small businesses and would fail to incentivize large digital platforms to move away from their traditional business model.

Number of the Day

21% – Percentage of American workers who say at least some of their work is done with AI, up 16% from last year. (Source: Pew Research Center)