Tag Archives: Obamacare

What Would Happen if Obamacare is Not repealed, Part 2

The New York Analysis of Policy and Government concludes its two-part review of what would occur if Obamacare is not repealed.

It is, perhaps, a pointless intellectual exercise to speculate on Obamacare’s impact if it’s not repealed, largely because, regardless of what Congress does, it is collapsing on its own.

Tyler Durden, writing for Zero Hedge, explains that “If Obamacare enrollments continue their current trend and insurers continue to hike premiums at alarming rates then Republicans may not have to worry about ‘repealing and replacing Obamacare’ as it might just work itself out “naturally”.

The House Ways and Means Committee  found that “Since the Obamacare exchanges opened for business on October 1, 2013, they have struggled to deliver quality, affordable health insurance options to Americans… Here’s a closer look at how Obamacare is failing across America:

  • PREMIUM SPIKES: Premium rates for the 2017 individual health insurance market may increase by an average of 24 percent, forcing many Americans to pay hundreds more a month to keep their coverage.

Wall Street Journal“The danger for insurers and supporters of the law now is that high prices and limited choices further deter low-risk people from signing up, and that the increases continue and become irreversible.” — Rate Increases for Health Plans Pose Serious Test for Obama’s Signature Law, October 18, 2016

Philadelphia Inquirer“In a bid to keep at least one insurer on the exchange in every county, ‘the department allowed insurers to adjust their rate filings …’ regulators said in a filing approving an average rate increase of 28.4 percent for individual plans.” — Without Aetna and United Healthcare, Philly Area Faces Hefty Increases for Affordable Care Act Rates, October 17, 2016

Omaha World-Herald“About 82,000 Nebraskans will pay more than expected for individual health insurance next year because Blue Cross won’t offer policies on the Affordable Care Act’s exchange.” — With Blue Cross’ Exit, Nebraskans Can Expect Even Higher Health Premiums through Obamacare, October 14, 2016

Associated Press“Minnesota’s Democratic governor said Wednesday that the Affordable Care Act is ‘no longer affordable’ … while addressing questions about Minnesota’s fragile health insurance market, where individual plans are facing double-digit increases after all insurers threatened to exit the market entirely in 2017.” — Democrat Dayton: Health Law ‘No Longer Affordable’ for Many, October 12, 2016

Bloomberg“Minnesota will let the health insurers in its Obamacare market raise rates by at least 50 percent next year, after the individual market there came to the brink of collapse.” — Near ‘Collapse,’ Minnesota to Raise Obamacare Rates by Half, September 30, 2016  

The Denver Post“Residents who buy their health insurance themselves will pay 20 percent more on average next year … In some parts of rural Colorado, premium increases will top 40 percent.” — Colorado Health-Insurance Rates to Jump 20 Percent on Average for Individual Buyers in 2017, September 20, 2016

The Boston Globe“Thousands of people who buy subsidized health insurance will face substantial premium increases — an average of 21 percent — if they want to keep the only plan that gives them access to certain prestigious Boston hospitals.” — Premiums Soar 21 Percent for Popular Health Plan, September 9, 2016

  • CO-OP CLOSURES: 74 percent (17 out of 23) of Obamacare co-ops have collapsed, wasting billions of taxpayer dollars and kicking hundreds of thousands of Americans off of their insurance.

The Washington Post“17 co-ops have either collapsed or been ordered to close by state regulators because of their financial fragility, leaving hundreds of thousands of people to scramble for new coverage.” — Maryland’s ACA Health Co-Op Will Switch to For-Profit to Save Itself, October 3, 2016

The Record“Health Republic Insurance of New Jersey will shut down for next year, forcing 35,000 people to find new insurance by Jan. 1 … The shutdown leaves just two companies doing business on HealthCare.gov, the Affordable Care Act marketplace for New Jersey.” — Health Republic Insurance of New Jersey’s Demise Exposes Flaws of Obamacare, October 2, 2016

Bloomberg“Most of the original 23 co-ops have failed, dumping more than 800,000 members back onto the ACA markets over the last two years … With more of the nonprofits on the brink of folding, the situation for the remaining providers looks dire.” — Shaky Obamacare Market Adds to ‘Death Spiral’ Fears, September 23, 2016

FoxNews.com“Health Republic Insurance of New Jersey is folding after the state’s insurance commissioner put the Obamacare co-op in ‘rehabilitation’ due to its hazardous financial condition.” — Another ObamaCare Co-Op Folds, Leaving Only 6 Remaining, September 13, 2016

  • FEWER, IF ANY, CHOICES: More Americans are finding themselves with fewer health care options as insurers exit the Obamacare exchanges.

Bloomberg“A growing number of people in Obamacare are finding out their health insurance plans will disappear from the program next year, forcing them to find new coverage even as options shrink and prices rise.” — More Than 1 Million to Lose Obamacare Plans as Insurers Quit, October 14, 2016

Washington Post“More than 250,000 people in North Carolina are losing the health plans they bought under the Affordable Care Act because two of the three insurers are dropping out — a stark example of the disruption roiling marketplaces in many parts of the country.” — In North Carolina, ACA Insurer Defections Leave Little Choice for Many Consumers, October 14, 2016

Washington Examiner“Blue Cross’s exit [from Tennessee] is part of a nationwide trend of insurers pulling back from the Affordable Care Act marketplaces after experiencing heavy financial losses. Independent analysts have said one-third of the country may have just one Obamacare insurer next year.” — Obamacare Customers Lose Access to Top Tennessee Hospital, October 13, 2016

Forbes“The exit of other major insurers means that 85% of North Carolinians needing Obamacare coverage will have only 1 insurance company to choose from in 2017.” — Mixed News For Obamacare In North Carolina As Blues Plan Opts To Remain In Obamacare Exchange, September 25, 2016

Alaska Public Media: “Alaskans shopping for individual health insurance on the federal exchange will only be able to choose from one insurer when open enrollment starts on November 1st.” — Alaskans Endure Rising Insurance Costs, September 21, 2016

Star-Telegram“After three years of growth, which culminated in six health insurers offering 63 plans last year, the Affordable Care Act marketplace likely will fall to just one insurer for Tarrant County residents in 2017 … Having just one insurance company to choose on the exchange will limit medical options.” — Local Consumers Left with Few Options on Obamacare Exchange, September 16, 2016”

Allowing Obamacare to die a natural death, without any repealer by Congress, might be a viable political strategy.  But the damages left to the American health care system by this failed concept would leave substantial hardships in its wake.

What Happens if Obamacare Isn’t Replaced

The New York Analysis of Policy and Government presents a two-part examination of what would happen if Obamacare isn’t replaced. 

There has been a great deal of discussion about the impact of replacing Obamacare. Perhaps more attention should be paid to what would happen if Obamacare is NOT replaced.

A Washington Free Beacon report  quotes Aetna CEO Mark Bertoline, noting that “Obamacare Will Continue to Deteriorate If Nothing Happens…” Aetna has announced that it will leave Obamacare exchanges in Iowa and Virgina. Bertoline also stressed thata reinsurance pool would be a better solution for really sick individuals…When you talk to a lot of constituents who have $6,000 deductibles, live in the five eastern counties of Colorado where there isn’t a doctor, a $6,000 deductible is not helpful.”

Writing for the Journal of American Physicians and Surgeons, Dr. Lawrence R. Huntoon, M.D.states:

“ObamaCare is designed to cheat both patients and physicians. It destroys patient choice and often disrupts continuing long-term patient-physician relationships. By implementing extremely high deductibles, co-pays, and out-of-pocket maximums, ObamaCare creates the illusion of coverage at the cost of unacceptably high premiums…In order to survive, physicians who depend on third-party payment will need to take appropriate legal measures to limit financial losses caused by ObamaCare. Many will likely reassess their plan participation as financial losses and bureaucratic impediments to care increase. Third-party-free practice models will become more attractive to many physicians. And, unfortunately, physicians who opt for hospital-subsidized employment in an attempt to escape the adversities of ObamaCare will only exacerbate the loss of choice for patients and the rationing of care by the so-called Accountable Care Organizations. Patients will also come to recognize that they are paying a very high price for the illusion of coverage under ObamaCare. As patients increasingly realize that, for the most part, they will be spending their own money for medical care during any given year, they will begin to look for better value in their medical care. Third-party-free physicians, who are able to provide timely access to care, and more face-to-face time with patients at an affordable cost, will become more attractive to many patients. Likewise, as high deductibles, high co-pays, and unlimited out-of-pocket costs are a reality under ObamaCare, health savings accounts will become more attractive to more patients. If one is going to spend one’s own money, one might as well spend tax-free money as opposed to after-tax money. “

A major concern about Obamacare has been its detrimental impact on full-time employment, a problem that would continue if the law remains in effect. Writing for Forbes last September,  Michael C. Cannon noted: “Four percent of large employers are reducing hiring because of the cost of providing health benefits to them… ObamaCare will depress wages for high-skilled workers by 1.3 percent and for low-income workers by 3 percent.”

The harsh economic impact of Obamacare doesn’t receive adequate attention.  Casey B. Mulligan writes in Side Effects and Complications: The Economic Consequences of Health-Care Reform that the economy, and particularly employment, are detrimentally affected.

Edward Morrissey, writing for the Fiscal Times,  concurs. He cites a Goldman Sachs study that demonstrates that employers have reduced full-time positions in favor of part-time ones that don’t require them to provide health insurance. That trend will continue if Obamacare is not repealed.

The continued existence of Obamacare-related taxes also would serve as an ongoing drag on the economy. Americans for Tax Reform’s John Kartch  lists the $1 trillion in taxes that would be repealed if the legislation were overturned:

Obamacare Individual Mandate Tax

Obamacare Employer Mandate Tax

Obamacare’s Medicine Cabinet Tax

Obamacare’s Flexible Spending Account tax

Obamacare’s Chronic Care Tax

Obamacare’s HSA withdrawal tax.

Obamacare’s 10% excise tax on small businesses with indoor tanning services.

Obamacare health insurance tax.

Obamacare 3.8% surtax on investment income.

Obamacare medical device tax.

Obamacare tax on prescription medicine.

Obamacare tax on retiree prescription drug coverage.

The Report concludes tomorrow. 

Media Misleads on Obamacare Repeal

Media coverage of the ongoing debate over how to repeal and replace Obamacare has been exceptionally inept.  It has ignored the deceptive manner in which the former President’s failed legislation was enacted, the depth of nationwide opposition to it, and the failures that require its elimination.

One of the key architects of the “affordable Care Act,” Jonathon Gruber, has boasted about the misstatements and coverups that were employed to gain passage. Notably, he has stated that “lack of transparency is a huge political advantage, and basically, call it the stupidity of the American voter.”

Obamacare was enacted in a Democrat-only, party line vote, in which even the elected officials voting on the measure has only a limited knowledge of what was in the bill. The American people knew even less, as demonstrated by then-speaker Pelosi’s infamous comment: “But we have to pass the…bill so that you can find out what’s in it….”

The Washington Post reports that “…there are now seven Gruber [Jonathon Gruber has been termed Obamacare’s “architect”] videos, in which he mocks the “stupidity” of American voters and boasts of the Obama administration’s ability to take advantage of it…”

The Americans for Prosperity (AFP)  organization has listed the most notable deceptions.

  • “If you like your healthcare plan, you will be able to keep your healthcare plan.”
  • “If you like your doctor, you will be able to keep your doctor.”
  • “We’re going to lower your premiums by up to $2500 per family per year.”
  • “No family making less than $250,000 a year will see their taxes increase.”
  • “I will not sign a plan that adds one dime to our deficits, now or in the future.”
  • “I will sign a universal healthcare bill into law…that covers every American.”

Marketwatch notes thatObamacare barely passed Congress in 2010. If people had known how it would develop, the health-care act would likely never have become law.”

Among the many failings of the measure noted by Marketwatch:

  1. Low enrollment. The Department of Health and Human Services estimates that between 9.4 million and 11.4 million signed up in 2016…In contrast, in March 2010, the Congressional Budget Office estimated that 21 million people would be enrolled on the exchanges.
  2. High numbers of uninsured. There are still 31 million uninsured, and the number is never projected to go below 29 million, according to CBO.
  3. Lost doctors. Varioussources note that a common (and popular) way to reduce premium costs has been to reduce the number of doctors in the insurer’s network.
  4. Lost plans.Sen. Ben Sasse released a reportabout Obamacare’s effects on competition among insurers, concluding that outcomes have worsened for most Americans, in terms of choice of insurers and plans. Over the past year, the number of insurers offering plans in exchanges has dropped by nearly 6%.Many states have lost more than 80% of their insurers: Alabama went from 23 to 3, Arkansas went from 24 to 4, and Wyoming from 21 to 1, just to name a few. Only New York did not lose over half of its insurers, going from 28 to 15 insurers, a 46% decline.
  5. Higher premiums.reportby the Kaiser Family Foundation and the Health Research & Educational Trust found that, since 2008, average employer family premiums have climbed a total of $4,865. From 2015 to 2016 the most popular exchange family plan, Family Silver, saw a 10% average increase in its premiums. In some states, premiums rose by nearly 40%.In 2015 the average annual family premium was $17,545 per year, and the average premium for a single policy was $6,251. Young men were particularly hard-hit. Average premiums rose by 49% from 2013 to 2014, the year Obamacare was supposed to go into effect.
  6. Higher deductibles. The New York Times, long a cheerleader for Obamacare, reported that many people can’t afford to use the health insurancethat they have purchased because of the deductibles.New York Times reporter Robert Pear wrote that the median deductible in Miami was $5,000 in 2015. It was $5,500 in Jackson, Miss., and $4,000 in Phoenix. One Chicago family of four paid $1,200 monthly for coverage yet had an annual deductible of $12,700.
  7. High costs.The Office of the Actuary of the Center for Medicare and Medicaid Services has projected that Obamacarewill result in an additional $274 billion in administrative costs alone over the period of 2014 through 2022.

AFP  noted thatThe promise to repeal Obamacare is what drove Americans to overwhelmingly cast their ballots for Obamacare’s opponents in three out of the last four elections.” The anger over the measure, in addition to its deceptions and failures, ran roughshod over individual rights. WND  worries that “The…Affordable Health Care Act…has forced nuns to pay for abortions, demanded that Christians violate their doctrines of faith…and much more.”

Much has been written about the fact that, just two months into his term, President Trump and Congress have not yet replaced the failed legislation.  However, a more open and vigorous debate about the replacement attempt is a good thing.  Rather than a secretive, deceptive, and ill-conceived measure such as Obama’s bill, a more fact-based and strenuous process centered on a vigorous exchange of ideas has a far better chance to produce an end product that actually improves, rather than harms, health care.  

Why Obamacare has to be Replaced

The New York Analysis of Policy and Government continues its review of the reasons Obamacare had to be replaced.

Government mandates for the inclusion of coverage for treatment modes unwanted and unneeded by many serves to unnecessarily increase costs.

Cato Institute study notes:

“Like the federal government, all states increase the cost of health insurance by requiring consumers to purchase certain types of coverage, whether or not they want it. Many states require consumers to purchase coverage for services that many consider quackery, such as acupuncture (12 states), chiropractors (44 states), and naturopathy (4 states). Thirty-three states require consumers to purchase at least 40 types of mandated coverage. States have also required consumers to purchase coverage for medical treatments that later proved harmful to health, such as hormone replacement therapy (4 states) and high-dose chemotherapy with autologous bone marrow transplant for breast cancer (at least 1 state, Minnesota). States impose many additional regulations on insurance pools, from premium taxes to rules limiting insurers’ ability to manage utilization. The Congressional Budget Office estimates that, on average, state regulations increase the cost of health insurance by 13 percent. States prevent individuals (and employers) from avoiding unwanted regulatory costs by prohibiting them from purchasing health insurance from states with more consumer-friendly regulations.

Another approach ignored by those who enacted Obamacare was tort reform. A study by the South Carolina Policy Council analyzed the problem. “…medical malpractice tort reform…seeks to obtain a better balance between holding doctors accountable for mistakes and protecting physicians from frivolous lawsuits. In practice, medical tort reform seeks to cap the amount of monetary damages awarded in medical negligence cases. The impetus for this is escalating costs for doctors and insurance companies, on the heels of multimillion dollar settlements to individuals and multibillion dollar settlements to states…Estimates of the cost total of medical malpractice civil cases range from $252 billion (by the Tillinghast-Towers Perrin actuarial firm) to $865 billion by the Pacific Research Institute (PRI). PRI’s estimate includes $589 billion in wasteful spending that accounts for lost future productivity and lost sales ($367 billion) caused by less innovation. While not all tort costs are wasteful — tort law is imperative in a free market system to maintain the rule of law — there is plenty of room for reform…doctors feel they must practice defensive medicine in order to avoid being sued. This practice entails prescribing tests or treatments for patients whose symptoms would not ordinarily require such procedures…Dr. William Jackson, a radiologist at Beaufort Memorial Hospital, says most people would be amazed at how many defensive medicine lab tests are ordered every day.”

As the Republican majority in Congress moves to address the Obamacare crisis, conservatives are asserting that marketplace concepts such as interstate competition, tort reform, and consumer choice in treatment coverage is not being emphasized in the initial phase. GOP leadership is emphasizing a gradual approach, centered around tax credits for purchasing private policies.

The Wall Street Journal reports that “Sen. Rand Paul (R., Ky.) reintroduced… a bill to repeal most of the 2010 health law without replacing it, a measure that cleared the last Congress when President Barack Obama, a Democrat, was in office. Conservative groups view that bill, which Mr. Obama vetoed, as a gold standard. GOP leaders’ decision to back away from that bill now that Mr. Trump is president is causing friction. Sen. Ted Cruz (R., Texas) amplified the message when he left a Thursday afternoon meeting with Senate Majority Leader Mitch McConnell (R., Ky.) and a handful of other Republicans and said the House bill couldn’t pass the Senate and needed to be changed.”

But Congressional leadership favors a three-part approach, notes the Wall Street Journal. “The leaders plan to first pass the current bill repealing much of the law and offering some Republican-backed elements in their place…The second phase would have Health and Human Services Secretary Tom Price use his administrative power to undo other ACA provisions. The third step would be the hardest—persuading enough Democrats to go along with a set of non-budget health-care bills that would take 60 votes to pass the Senate.Mr. Trump has said letting insurers sell policies in every state would be part of the third phase. But conservatives insist that proposal should be included in the current legislation, since they doubt the likelihood of winning over enough Democrats to pass it.”

Conservatives do approve of portions of the reform bill, reports Townhall, “Compared to Obamacare, GOPCare reduces the role of the federal government in the healthcare system, gives more authority and flexibility to states, spends less, taxes less, regulates less, and coerces less. The individual and employer mandates are gone. Infamous tax hikes like the medical device tax are gone (and in other cases, delayed or reduced). Obamacare’s subsidy system is dismantled by 2020 and supplanted with refundable tax credits for lower-to-upper-middle-income individuals and families, ranging from $2,000 to $14,000 annually…Caps on tax-free contributions to Health Savings Accounts are also raised considerably, almost doubling under this bill.  The conservative Republican Study Committee is out with a pretty balanced memo on the positives and negatives of the draft legislation, noting several shifts towards more coverage and more spending over the weekend.”

Some of the very few popular portions of Obamacare would be maintained. “People with pre-existing conditions are protected…Also, lifetime expenditure caps from carriers remain disallowed, and adult children are permitted to remain on their parents’ plan through age 26.

 On the other hand, conservatives are concerned that the growth in Medicaid may be unchecked. Fiscal conservatives opposed the expansion…Obamacare’s status quo would remain in place until 2020, at which point the new law would ‘transition Medicaid into a system in which each state receives a certain amount of money for each of its residents in the program and has more flexibility over how the program functions. That allocation would revert to per person spending levels from 2016 and then grow each year at the rate of medical inflation. However, states would still receive enhanced Obamacare-levels of spending for individuals who were grandfathered in by having enrolled in expanded Medicaid before 2020…Many conservatives want the Medicaid expansion done away with entirely.”

One conservative source, The Daily Signal, emphasizes: “The key problem with the draft House health care bill is that it fails to correct the features of Obamacare that drove up health insurance costs. Instead, it mainly tweaks Obamacare’s financing and subsidy structure. Basically, the bill focuses on protecting those who gained subsidized coverage through the law’s exchange subsidies and Medicaid expansion, while failing to correct Obamacare’s misguided insurance regulations that drove up premiums for Americans buying coverage without government subsidies.”

 

Obamacare Repeal Delayed

As we went to press, The House of Representatives has announced that it will delay its vote on repealing and replacing Obamacare.

The debate over how to replace the already collapsing Obamacare system has been one of the most contentious in the current Congress. There is little dissent in the need to undo the Affordable Care Act, (ACA) passed in relative secrecy. (Former speaker Nancy Pelosi’ comment “We have to pass the bill before you can see what’s in it” ranks as one of U.S. history’s most memorable examples of legislative incompetence.)

The reality is, no matter which party took control of the federal government in 2016, Obamacare would have required major surgery—or perhaps even a mercy killing. A Heritage analysis outlines the massive problems:

  • 5 million lost prior insurance plans—President Obama’s promises that “you can keep your plan” and “you can keep your doctor” were completely untrue, and private sector enrollment increased by only 2.7 million, and exchange enrollment is only half of what was projected.
  • Average deductibles are $12,000
  • Premiums have increased by 25%
  • 70% of counties have no choice of insurance providers
  • 78% of Obamacare co-ops have failed, at a cost of $1.9 billion
  • Medicaid spending has increased by $1 trillion—paid for by an equal amount of tax increases. Medicaid patients under Obamacare have received a lesser quality of care
  • 5 million full time jobs were lost because the Affordable Care Act actually serves as a disincentive to hire full time employees

Obamacare hurt both young and old.

Although allowing young people to remain covered under their parents’ coverage until age 26, once they aged out, they were forced to buy policies that were overpriced due to mandated coverage of issues not typically affecting them. Indeed, a key part of the financing strategy for Obamacare was the subsidization of young, healthy individuals for the rest of the covered population.

At the other end of the age spectrum, seniors were hurt because, as Heritage outlines, Obamacare cuts $716 billion  from Medicare over the next 10 years, according to the Congressional Budget Office (CBO), and uses these “savings” from Medicare to fund other entitlement expansions mandated by Obamacare. Medicare becomes a cash cow for Obamacare, and the Medicare “savings” from payment cuts are not put back into making Medicare solvent. Such massive payment cuts do impact Medicare benefits, as well as seniors’ access to those benefits.

Dissent against Obamacare by seniors, unless repeal occurs, is expected to grow dramatically. As noted by Modern Healthcare:  in December: “A bipartisan coalition of hundreds of healthcare organizations is urging the new Congress to immediately repeal an advisory board that has not yet been filled but would be charged with finding cuts to Medicare. The Independent Payment Advisory Board was created by the Affordable Care Act. During debate of the ACA, some opponents labeled the board a ‘death panel’ that would make decision about end-of-life treatment. It is actually meant to make cuts to Medicare in the case that spending growth exceeds projections.”

It is reasonable to assert that Obamacare’s failure is attributable to the imposition of government-centric solutions to a health insurance affordability problem significantly caused by government action.

Laws and regulations that prohibit competition by health care insurers across state lines guarantee monopoly practices and prices. The National Conference of State Legislatures  reports that “Insurance firms in each state are protected from interstate competition by the federal McCarran-Ferguson Act (1945), which grants states the right to regulate health plans within their borders. …The result has been a patchwork of 50 different sets of state regulations; the cost for an insurer licensed in one state to enter another state market is often high.”

The Report continues tomorrow

Obamacare’s Demise, and its Replacement Part 2

In addition to the ideological goal of nationalizing one-sixth of the American economy, Obamacare’s Progressive advocates support for the legislation was a reflection of their political alliance with lobbying interests from pharmaceutical corporations, the Trial Lawyers Association, and insurance companies, all of which had vested interests in opposing more viable reforms which would have truly and effectively reduced the cost of healthcare.

President-elect Trump, who made opposition to Obamacare a key part of his campaign, has proposed an alternative approach  to the failed concept:

“the House and Senate must:

  1. “Completely repeal Obamacare. Our elected representatives must eliminate the individual mandate. No person should be required to buy insurance unless he or she wants to.
  2. “Modify existing law that inhibits the sale of health insurance across state lines. As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.
  3. “Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions? As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want healthcare coverage can have it.
  4. “Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.
  5. “Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.
  6. “Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better without federal overhead. States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.
  7. “Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.

“The reforms outlined above will lower healthcare costs for all Americans. They are simply a place to start. There are other reforms that might be considered if they serve to lower costs, remove uncertainty and provide financial security for all Americans. And we must also take actions in other policy areas to lower healthcare costs and burdens. Enforcing immigration laws, eliminating fraud and waste and energizing our economy will relieve the economic pressures felt by every American. It is the moral responsibility of a nation’s government to do what is best for the people and what is in the interest of securing the future of the nation. Providing healthcare to illegal immigrants costs us some $11 billion annually. If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.”

An American Action Forum (AAF)  study proposes tort reform as an additional means to lower health care costs.  “ AAF found multiple state medical liability reforms reduced total healthcare premiums by 2.6 percent,  Employer healthcare costs also declined by 3.5 percent, [and]  If these results were replicated on a national level, the nation’s insured could save more than $15 billion in premiums…Tort reform has taken several forms and gained prominence in the 1990s as a way to curb high jury awards. For example, legislators can cap damages, reform how damages are paid, and amend joint and several liability (allowing the plaintiff to collect money from anyone found liable, regardless of their degree of liability).”

Obamacare’s Demise, and its Replacement

In a 51-48 vote, The Senate yesterday took an important step to replace Obamacare. The measure was a nonbinding budget bill that establishes the path for a repeal of the failing Affordable Care Act within the next few months.

U.S. Senate Majority Leader Mitch McConnell (R-KY)  stated “Too many have been personally hurt by this law. Too many feel they’re worse off than they were before Obamacare…Too many Americans say their Obamacare plans are too expensive to actually use. Too many say their Obamacare premiums have gone up and up though their options have diminished.”

While, as the 51-48 vote indicates, repeal is largely the work of the Republican majority, the reality is that Obamacare was collapsing under its own weight in what some pundits have termed a “death spiral.” Skyrocketing premiums, diminished choices, physicians opting to not take Obamacare-covered patients, a sharp decline in enrollments, and vanishing co-ops have been key indicators that its demise was inevitable.  Public support for the 2010 Affordable Care Act legislation, which was passed without the public being informed of the details (former House speaker Nancy Pelosi (D-California) famously told the public that they would have to pass the bill to see what was in it) had dropped precipitously. Subsequent to its enactment, the laws’ architect, Jonathon Gruber attributed its passage to the “stupidity” of the American people.

Young people have been forced to buy policies which included costs for services they didn’t need. Seniors have been denied necessary treatments because of expense factors. Those with irregular incomes face constant changes in coverage. Physicians are drowning in inadequate reimbursement and bureaucracy. Obamacare in general charges excessive rates and imposes deductibles that make the concept of coverage more illusion than reality.

Many of the legislation’s own advocates had seen it as only an interim step towards the implementation of completely nationalized health care under a single payer plan. But that could not be sold to an American public that was well aware that the concept has failed wherever it has been tried.  Indeed, many in the United Kingdom, whose National Health Service was, quietly, the admired model of Obamacare advocates, have sought methods to extricate themselves from their failing system.

Those advocates who have claimed that Obamacare has had some success are fudging facts. As the National Center for Policy Analysis, quoting a Heritage study  noted in 2014: “while health insurance coverage — whether in the private market or in Medicaid — grew by 8.5 million individuals in 2014, the vast majority (71 percent) of that gain was due to increases in Medicaid. According to the authors, “[T]he inescapable conclusion is that, at least when it comes to covering the uninsured, Obamacare so far is mainly a simple expansion of Medicaid.”

The need to address Obamacare has been summarized by the Heritage Foundation,  which outlined how the legislation detrimentally affects Americans:

Seniors: The law cuts an estimated $716 billion from Medicare over ten years. However, these “savings” are not set aside to preserve Medicare’s future, instead they are used to fund new spending created by the law. Nearly one-third of all seniors rely on Medicare Advantage, the private health care option in Medicare. Despite the program’s growing enrollment and beneficiary satisfaction, Obamacare makes deep cuts to the program that jeopardize its viability in coming years. In addition to payment cuts, Obamacare imposes new taxes on drug companies and medical device makers, and new regulations that will make health care more costly for seniors.

Doctors: The United States is facing a severe physician shortage. By 2020, the nation will need an additional 91,500 doctors to meet medical demand. Obamacare exacerbates this problem by further increasing physicians’ workload and worsening their attitudes regarding the health care system. A 2012 survey found that Obamacare is motivating doctors to change their retirement timeline, with 43 percent of respondents stating that they are considering retiring within the next five years as a result of the law.

Business & The Economy: The Congressional Budget Office estimates that the Obamacare subsidies will discourage Americans from working, and cause 2.5 million employees to drop out of the labor force.Obamacare’s employer mandate will raise the minimum cost of hiring a full-time worker to $10.30/hour in 2015. Congress has already raised the minimum wage from an employer’s point of view, but the money goes to the government instead of the employees.

“States: Obamacare’s Medicaid expansion worsens the already heavy burdens facing states. By 2021, approximately 78 million people are projected to be enrolled in Medicaid—requiring billions of dollars from state budgets and taxpayers. In the individual market, Obamacare’s exchanges have on average decreased insurer competition by an estimated 29 percent nationwide. Furthermore, over half of the counties in the U.S. have only one or two insurers to choose from in their Obamacare exchange.

Families: Obamacare adds nearly $2 trillion in new health care spending according to the Congressional Budget Office. Over the next 10 years, Obamacare will levy about$771 billion in new taxes and fees. Obamacare imposes significant financial penalties on the decision to get or remain married – over $10,000 per year for certain couples.

Uninsured: The Congressional Budget Office estimates that “between 6 and 7 million fewer people will have employment-based coverage each year from 2016 through 2024 than would be the case in the absence of [the new health law].”In 2024, after ten years of full implementation, 31 million people are projected to remain uninsured.”

The Report Concludes on Monday

Health Care Challenges Rising

Health care in the U.S. is entering a challenging period. Both Medicare and Obamacare patients will experience serious obstacles

According to a study by The Kaiser Family Foundation (KFF) 21 percent of physicians are not accepting new Medicare patients. This compares to the 14 percent that have decided not to accept new privately insured patients. That is, the proportion not taking new Medicare patients is 1.5 times greater than the proportion not taking new privately insured patients. KFF notes that “Previous studies show that the vast majority of physicians accept Medicare, but the proportion taking new Medicare patients is smaller, particularly among primary care physicians compared with specialists…” This growing limitation of choice will limit choices for those who are aging into the system.

For those using Obamacare, premiums are set to rise. Bloomberg  reports that “Premiums for mid-level Obamacare health plans sold on the federal exchanges will see their biggest jump yet next year, another speed bump in the administration’s push for enrollment in the final months of the U.S. president’s term. Monthly premiums for benchmark silver-level plans are going up by an average of 25 percent in the 38 states using the federal HealthCare.gov website, the U.S. Department of Health and Human Services said in a report today. Last year, premiums for the second-lowest-cost silver plans went up by 7.5 percent on average across 37 states. Individuals signing up for plans this year are facing not only rising premiums, but also fewer options to choose from after several big insurers pulled out from some of the markets created under the Affordable Care Act, known as Obamacare.”

A Guardian review found that “ the ACA relies on competition between insurers to provide affordable coverage, and that is dwindling. Under the ACA, health insurance marketplaces, also called health exchanges, were set up to facilitate the purchase of health insurance in each state. Customers are free to choose from a set of standardized healthcare plans from participating insurers, and those policies are eligible for federal subsidies. But insurers have been fleeing the exchanges, arguing that they are loss makers and the types of people attracted to them make the risks too great for the insurers to provide affordable (and profitable) policies.”

A Breitbart analysis concludes that Obamacare’s (ACA) financial unsustainability is causing both insureds and insurers to abandon the system, “leaving President Obama’s takeover of the nation’s healthcare system on the verge of collapse.” Due to the high and rising costs, young, healthy people, whose payments and relatively light use of medical care were expected to prop up the system, are staying away in sufficient numbers to cause major problems.

Realclearpolitics fleshes out the details. “Economic reality is making it increasingly obvious that we are in the midst of Obamacare’s long anticipated death spiral. Most recently, Aetna  joined United Health care and Humana as the third of the ‘big five’ insurance firms to announce major cuts to its Obamacare exchange business. For insurers, it’s simple math: Premiums collected must exceed claims paid. If too few healthy, low risk individuals enroll to offset the costs of insuring unhealthy, high risk individuals, the math doesn’t work. This imbalance forces insurers to raise premiums on the low risk individuals who do enroll to cover the costs of insuring high risk individuals. The rising premiums cause even more healthy individuals to drop coverage – resulting in what has been called a death spiral…Aetna, for example, suffered a second-quarter pretax 2016 loss of $200 million and total pretax losses of more than $430 million since January 2014 when the exchanges opened for business. Aetna wasn’t alone…UnitedHealth lost $475 million in the exchanges in 2015 and expects to lose $650 million in 2016.”

The US. House of Representatives Committee on Energy and Commerce  recently concluded an investigation which found that lower-than-expected enrollment, higher-than-anticipated costs, and more complicated-than-anticipated technology challenges have caused state based exchanges (SBE) in Oregon, Hawaii, New Mexico and Nevada to fail, ( having wasted hundreds of millions of taxpayer dollars) and Kentucky will be added to that list next year. Only 12 will remain. Washington now appears to be encouraging state exchanges to close and join the federal exchange.

The major findings of the Congressional investigation noted that the state based exchanges will not be sustainable in the long term. As of September 2016, every SBE still relies upon federal establishment grant funds—20 months after SBEs were to be self-sustaining by law. Washington failed to enforce its own rules on Medicaid allocations, and did not recover  misspent dollars.

The looming financial collapse of Obamacare may finally clear the path for more viable options, such as:

  • Tort reform (which would significantly reduce the cost of practicing medicine,)
  •  Allowing nationwide competition between insurance companies (which would lower costs for purchasers of health insurance to be tried)
  • Tax credits to help make private policies affordable
  • Allowing the sale of more flexible policies with different types of coverage, a concept that will be far more attractive for healthier, younger people.

Seniors Adversely Affected as Federal Funds are Diverted

America’s seniors are suffering as federal funds are diverted to questionable uses.

As America’s national debt rapidly soars to the $20 trillion mark (it currently stands at over $19 trillion) key needs are facing a lack of funds, and Americans relying on Social Security and Medicare are the most directly affected.  The problems are not just the future insolvency of those programs. The impact has already been felt.

The Social Security Administration (SSA) projects that “Social Security’s Disability Insurance (DI) Trust Fund now faces an urgent threat of reserve depletion, requiring prompt corrective action by lawmakers if sudden reductions or interruptions in benefit payments are to be avoided. Beyond DI, Social Security as a whole as well as Medicare cannot sustain projected long-run program costs under currently scheduled financing.”

Social Security will face virtual bankruptcy by 2034. Medicare will endure the same fate by 2030.

But those future dates are not the extent of the problem. During the Obama Administration, seniors have been subjected to an unprecedented lack of cost of living increases.

Since the regular program of Cost of Living increases began in 1975, (prior to that increases were provided by legislation) there has never been a period when such adjustments were lower than they have been under President Obama’s term. Not once had there been a year in which there was no increase at all. Since 2009, two consecutive years, 2009 and 2010, provided no adjustments, and there was also no adjustment in 2015.  Before 2009, the average annual increase was 4.4%; during the Obama presidency, it was 1.7%.

Social Security Cost-Of-Living Adjustments

(Chart provided by the Social Security Administration

Year COLA
1975 8.0
1976 6.4
1977 5.9
1978 6.5
1979 9.9
1980 14.3
1981 11.2
1982 7.4
1983 3.5
1984 3.5
1985 3.1
1986 1.3
1987 4.2
1988 4.0
1989 4.7
Year COLA
1990 5.4
1991 3.7
1992 3.0
1993 2.6
1994 2.8
1995 2.6
1996 2.9
1997 2.1
1998 1.3
1999  a 2.5
2000 3.5
2001 2.6
2002 1.4
2003 2.1
2004 2.7
Year COLA
2005 4.1
2006 3.3
2007 2.3
2008 5.8
2009 0.0
2010 0.0
2011 3.6
2012 1.7
2013 1.5
2014 1.7
2015 0.0

It’s not just Social Security problems that are affecting America’s seniors. Medicare has taken a hit, and the problem has been accelerated and worsened due to Obamacare.  Three examples of how Obamacare hurts seniors are provided by The Daily Signal:

 1) Huge payment reductions that reduce access to care. According to the Congressional Budget Office (CBO), Obamacare will reduce Medicare reimbursements by $716 billion over 10 years. These cuts will hit Part A providers such as hospitals, nursing homes, skilled nursing facilities, and hospices, along with Medicare Advantage plans. The trustees predict that if Congress allows these cuts to go into effect, 15 percent of Medicare providers would go in the red by 2019, 25 percent by 2030, and 40 percent by 2050…

2) Medicare “savings” are spent on other parts of Obamacare. As CBO plainly states, “CBO has been asked whether the reductions in projected Part A outlays and increases in projected [hospital insurance] revenues under the legislation can provide additional resources to pay future Medicare benefits while simultaneously providing resources to pay for new programs outside of Medicare. Our answer is basically no.”

3) The ominous and looming power of IPAB.  When Medicare spending surpasses the target, IPAB will have to make recommendations to lower Medicare spending.

While America’s seniors, who have earned their Social Security and Medicare benefits through a lifetime of work, face cuts, questions arise about the diversion of federal funds to pay for benefits for illegal immigrants.

The Federation for Immigration Reform has estimated the cost of illegal immigration to U.S. taxpayers:

  • Illegal immigration costs U.S. taxpayers about $113 billion a year at the federal, state and local level. The bulk of the costs — some $84 billion — are absorbed by state and local governments.
  • The annual outlay that illegal aliens cost U.S. taxpayers is an average amount per native-headed household of $1,117. The fiscal impact per household varies considerably because the greatest share of the burden falls on state and local taxpayers whose burden depends on the size of the illegal alien population in that locality
  • Education for the children of illegal aliens constitutes the single largest cost to taxpayers, at an annual price tag of nearly $52 billion. Nearly all of those costs are absorbed by state and local governments.
  • At the federal level, about one-third of outlays are matched by tax collections from illegal aliens. At the state and local level, an average of less than 5 percent of the public costs associated with illegal immigration is recouped through taxes collected from illegal aliens.
  • Most illegal aliens do not pay income taxes. Among those who do, much of the revenues collected are refunded to the illegal aliens when they file tax returns. Many are also claiming tax credits resulting in payments from the U.S. Treasury.

The lack of priority the Obama Administration has given to the needs of seniors, while turning a blind eye towards the growing financial impact of illegal aliens, is a cause of deep concern.

(Note: We originally published this article on March 18. However, we were informed that many subscribers were not able to view it due to technical issues arising from a website update.) 

Obamacare impact on seniors

At several campaign events, Democrat candidates have disapprovingly noted that the U.S. lags behind European and other nations in not having full government health care.

A closer examination reveals that may be a good thing. It has become a fairly common pattern for foreign leaders seeking the most advanced care to travel—sometimes secretly—to America for treatment. Forbes reports that “An estimated 40% of all medical travelers are looking for the world’s most advanced technologies…Commonly seeking cutting-edge cardiovascular, neurological or oncology treatments, the bulk of medical travelers head to U.S. medical facilities … there’s the United States’ reputation when it comes to health care…”

A study from the Batelle Technology Partnership Practice  notes that the U.S. is the world’s leader in medical innovation, although increasing taxes and regulations may affect that going forward. There are viable and very relevant questions as to whether the adoption of European style medical care would change that.

One group of Americans has a particular vulnerability to the flaws in government-administered health care: senior citizens. The United Kingdom’s National Health Service (NHS), often set up as an example for those advocating government-administered health care in the U.S., has been frequently criticized for its failure to meet the needs of older patients.

The BBC has disclosed that English and Welsh health experts are concerned that older people in need of urgent help are being failed by the NHS, and the NHS’s own studies concur.  “Too many over-65s end up in accident and emergency unnecessarily” according to the NHS Confederation’s Commission on Improving Urgent Care for Older People. The group said this was because of a “lack of help when they fell ill…The commission’s report said older people were “poorly served.”

America’s most significant step towards greater federal involvement in health care has presented significant challenges to quality health care for seniors.

In 2014, John Goodman, writing for Forbes, stressed that “One of the best kept secrets of the Affordable Care Act (ACA) is that it imposes a global budget on Medicare spending – for the first time in the program’s history. Heretofore, Medicare was a pure entitlement program. The government had to pay for whatever care the elderly and the disabled obtained. But going forward, the health reform law imposes a cap on spending.

“For most of its history, per capita Medicare spending in real terms grew at about twice the rate of growth of real per capita GDP – just like the rest of the health care system. But going forward, the law requires Medicare to grow at a rate that is not much more than the growth of GDP – regardless of what happens to other health care spending. If the historical trend continues, that means spending on health care for the elderly and the disabled will grow about half as fast as spending on everyone else’s care.”

A New York Post review of Obamacare’s effect on healthcare for seniors: “It’s skimping on it, socking seniors with unexpected bills for “observation care” and likely shortening their lives…”

Senior Living.com   notes: “The cuts to Medicare—about $700 billion between 2013 and 2022—are actually decreases in the spending rate for this program. According to the Congressional Budget Office, the cuts will be felt in hospital services, Medicare Advantage plans, skilled nursing services, home health services and others. “

Dan Weber, writing for the Washington Times, describes another attack on senior care under Obamacare:

Medicare’s home health care services, formerly serving 3.5 million elderly beneficiaries across the country, were cut under Obamacare. The cut deleted exactly 14 percent, or an estimated $22 billion, from these lowest-income Americans over four years. …This cut does irreparable damage to recipients of Medicare’s home health care services, those who are aged, homebound and sicker than the average Medicare population. Indeed, nearly two-thirds of Medicare home health care users live at or below the federal poverty level, meaning they are the most economically compromised of America’s precious senior citizens.”

The Galen Organization summarizes the impact on Medicare:

“ObamaCare doesn’t modernize the program or improve it for seniors. ObamaCare’s solutions are detrimental to today’s seniors:

  • The law takes $716 billion out of Medicare over 10 years to help fund a huge expansion of taxpayer subsidies for health coverage.
  • It creates an unelected, unaccountable board — the Independent Payment Advisory Board — with powers to limit payment and access to health care for seniors and which will become Medicare’s rationing board. ObamaCare drives your doctors and hospitals out of Medicare
  • The law makes deep cuts in payments to physicians treating Medicare patients.
  • Cuts to Medicare providers mean it will be harder for seniors to find doctors and hospitals to treat them.
  • Doctors are already threatening to drop out of the program in large numbers if the payment cuts go into effect.
  • Medicare actuaries predict that more than 40% of Medicare providers eventually will either go out of business or stop seeing Medicare patients altogether if the law’s cuts take effect.”