Predictable Woes

I said 7 years ago when I started this blog that this was going to happen. It was predictable.

Two Words: Adverse Selection. 🙂

Republicans and many health policy experts said this would happen – that’s one of the reasons the GOP wouldn’t sign off on it.

So now that the obvious has come true, Barack Obama is floating an idea to save the entire system: Go full-steam into true socialized medicine, complete with the dreaded “public option.”

In an article for The Washington Post,  Dr. Ezekiel Emanuel, a former Obamacare top official, said he had a fix for the problems. He offered a five-prong solution, but one in particular stands out: A public option.

He says that “we should consider a public option,” because “consumers should never be subject to the whims of insurer withdrawals or withdrawal threats,” The Daily Caller is reporting.

I said the objective of ObamaCare as crammed down our throats by the Democrats was only to crash the whole thing so that the Government could ride in and “save” everyone from it by doing EVEN MORE of it, namely Government Controlled Health Care. Its what the Democrats wanted all along and it’s not like they take “no” for an answer when it comes to their Agenda.

Never Let a Crisis Go to Waste.

Barack Obama “authored” a piece in the Journal of the American Medical Association. In it, he argued that progress on Obamacare is through “continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees,” and by “introducing a public plan option in areas lacking individual market competition.”

2009: Obama told the Washington Post that he thought a public option would provide the most Americans the greatest access to healthcare.

That same year, in an interview with Univision, Obama said a public option in the exchanges is “something that we can still include as part of a comprehensive reform effort.”

And he only has a few month left in office. There is no guarantee, despite what the Liberals and The Liberal Media have been doing to rig the election, that a Democrat will be around to finish us off.

And it’s not like someone is going to tell you about it.

Townhall: The number of uninsured is expected to spike by 2 million people between 2017-2026, the number of those enrolled came in 24 million under the original CBO projections, a large percentage of those who enrolled in Obamacare were already insured before their previous plans were gutted under the law, and the whole notion that the law is on the verge of total collapse. It’s a total disaster, yet NBC News, CBS News, and ABC News’ evening programs seem to ignore that President Obama’s signature domestic achievement is on life support.

The honorable mention is CBS Evening News, which has devoted 2 minutes and 18 seconds of airtime to Obamacare woes…for the entire year thus far. Mike Ciandella of the Media Research Center crunched the numbers. It’s not pretty, folks—believe me:

The broadcast networks have refused to cover the repeated failures of ObamaCare in 2016. During the entire year, ABC World News Tonight and NBC Nightly News have yet to give the floundering program any coverage at all, while CBS Evening News only found time to cover two of the ObamaCare updates – and that only added up to 2 minutes and 18 seconds of coverage for the entire year.To put that in perspective, these same three evening news shows managed to find 46 minutes and 49 seconds to dedicated to Olympic swimmer Ryan Lochte running afoul of Brazilian police.

[…]

Here are some of the major ObamaCare developments that the networks ignored:

February: Investigators from the Government Accountability Office successfully defraud the ObamaCare system 11 out of 12 times.

No network evening news coverage

[…]

April: Premiums rise, deductibles spike as high as 76 percent in some states

No network evening news coverage

May 12: Federal judge says the President is illegally using federal money to pay for premium subsidies

No network evening news coverage

August: Aetna announced that it plans to back out of ObamaCare, after losing $300 million this year from individual coverage sold on the ObamaCare exchanges. Aetna and Humana join UnitedHealth in pulling out of ObamaCare.

Only CBS Evening News covered this, for 1 minute, 55 seconds on August 16

Well, of course, you know this is media malpractice. A significant law is on the verge of disaster millions of Americans’ health care coverage could be detrimentally impacted, and the media is doing their best to shield the White House from fanning the flames of their horrible law. That’s sounds like par of the course…sadly.

reluctant

 

 

Roll Tide

One might be forgiven for thinking health insurers are cracking under the strain of Obamacare’s broken insurance exchanges. But don’t be fooled: it is the 10 million Obamacare enrollees who are in trouble, not the insurers.

To be sure, new nonprofit cooperative insurers, set up with special subsidies to compete in the exchanges, have had a terrible run. They deliberately underpriced their premiums to gain market share, expecting the federal government to bail out their losses. Once the Republicans took over the House of Representatives, then the Senate, this became unlikely. As a result, the administration announced in November that 12 of 23 nonprofit cooperative insurers were shutting down.

However, these nonprofit cooperative insurers, which did not exist before Obamacare, are not important overall. That is why UnitedHealth Group’s November 19 announcement that it is losing $500 million on the Obamacare exchanges and might withdraw from Obamacare in 2017 is a big deal. Just a few weeks earlier, UnitedHealth Group had announced it would expand into 11 new states’ Obamacare markets.

The insurer is also dialing back advertising and brokers’ commissions for 2016, even though it is too late to withdraw from the market literally. (We are in the middle of Obamacare’s third open season.) However, it is the threat of absolute withdrawal in 2017 that has shocked many. By 2017, the fourth year of Obamacare, the market is supposed to have shaken out. Both insurers and Obamacare’s political sponsors understood that insurers would not know how expensive claims would be from those who signed up during the first three years. That is why insurers were given temporary taxpayer subsidies, called reinsurance and risk corridors, for 2014 through 2016. Reinsurance is a direct handout of $25 billion from taxpayers to insurers. Risk corridors were more complicated and supposed to be budget-neutral. Insurers that made more money than expected would pay money to those that lost more money than expected.

 

When it became clear that the losers far outnumbered the winners, the administration tried to raid the kitty to make risk-corridor payments from the general fund. By this time a new Congress (in which the majority opposed Obamacare) actually read the bill that its predecessor had passed in 2010 and pointed out that the administration could not pay out that money. As a result, Obamacare insurers will only receive $362 million of $2.9 billion of risk-corridor payments requested.

However, even if Congress did cave in and pay the risk corridors in full, payments would finish in 2016. That is what makes UnitedHealth Group’s announcement about dropping out in 2017 so important: it is effectively an admission that three years are not enough to learn how to manage risks in Obamacare’s exchanges. Indeed, it suggests that risks are unmanageable, that the vicious circle of increasing premiums’ driving healthy subscribers away and leaving only sick ones on the books cannot be stopped under Obamacare.

The exchanges have fewer victims than initially expected. The economy has been strong enough that employer-based coverage has stood up to Obamacare. As a result, only 10 million people are caught in them, instead of the 21 million forecast when the law was passed. However, this is a mixed blessing. These 10 million are a politically weak constituency of working-class and lower middle-class citizens in middle age — the people whose needs politicians always talk about but seldom address because they are not politically active.

The only group politically powerful enough to renegotiate the exchanges are the insurers, and they show no more creativity than to lobby for their subsidies to be restored, which this Congress has promised not to do. On the other hand, simply quitting the exchanges is not very painful for large health insurers. UnitedHealth Group’s stock took a small hit when it admitted its struggles, but Obamacare exchanges are a tiny share of its business. As more insurers make the same decision to quit, 10 million Obamacare subscribers will be left high and dry in short order. (DC)

Political Cartoons by Michael Ramirez
Political Cartoons by Bob Gorrell
Political Cartoons by Jerry Holbert
Political Cartoons by Bob Gorrell

If you Like your Job…

ObamaCare

Please enjoy the latest installment of the “it’s working” chronicles. Sorry, American workers (via The Hill):

ObamaCare will force a reduction in American work hours the equivalent of 2 million jobs over the next decade, Congress’s nonpartisan scorekeeper said Monday. The total workforce will shrink by just under 1 percent as a result of changes in worker participation because of the new coverage expansions, mandates and changes in tax rates, according to a 22-page report released by the Congressional Budget Office (CBO). “Some people would choose to work fewer hours; others would leave the labor force entirely or remain unemployed for longer than they otherwise would,” the agency said in its latest analysis of the now five-year-old law.

This assessment largely confirms the bombshell February 2014 analysis from the nonpartisan entity, which also projected that Democrats’ $2 trillion healthcare scheme would slow economic growth and slow job creation.  Take it away, 2011 Nancy Pelosi:

“Four million jobs will be created by the legislation when it is fully in effect.”

In 2010, she said Obamacare would create 400,000 new jobs “almost immediately.”  Last year, the law’s defenders were reduced to arguing that the reduction in worker hours was a positive development, offering Americans more time to spend with their families, and freeing them from “job lock.”  CBO’s findings determined that Obamacare disincentivizes work, shifting the burden of subsidizing health coverage for people who choose to work less or leave the workforce altogether onto the backs of middle class taxpayers.  Democrats’ frantic “liberation from job lock” spin worked out…about as well as one might have expected.  Obamacare’s cheerleaders have been wrong about virtually everything: Their law was not a job creator.  Their law has not bent the national health spending “cost curve” down.  Their law has not even approached lowering rates across the board.  Their law has not made healthcare more affordable.  Their law has not secured access to care.  Their law has not reduced emergency room visits, or decreased uncompensated care. Their law did not guarantee that satisfied consumers could keep their preferred doctors and plans. And their law has not attracted nearly as many enrollees as they expected, largely due to lack of affordability.  Their law has not signed up as many young and healthy consumer as they’d anticipated, raising new fears of an adverse selection spiral.

Gee, How many times have I said that very thing? 🙂

And their law has not become popular post-implementation.  Meanwhile, the string of high-profile failures among Obamacare co-ops is inflicting more chaos onto an already-strained system:

Health care providers could get stuck with unpaid bills in a half dozen states where co-op plans have collapsed. That’s because there’s no financial backstop in those states if the failed nonprofit startups backed by Obamacare loans run out of money before paying off all of their medical claims. That messy scenario is already playing out in New York, where the state’s co-op shut down at the end of November after its financial situation proved direr than originally known. The Greater New York Hospital Association estimates the co-op, Health Republic Insurance of New York, owes its members at least $165 million. And the Medical Society of the State of New York found that of more than 900 doctors surveyed, 64 percent reported being owed money by the co-op plan. For most insurers, a state’s guaranty fund – bankrolled by the industry – will cover unpaid medical claims if they become insolvent. But in some states, like New York, that fund doesn’t support plans that are licensed as health maintenance organizations, which is typically how the co-ops were set up. The other five states where providers could end up with unpaid bills if the failed co-ops run out of money: Kentucky, Louisiana, Nevada, Oregon and Utah…Just over half of the 23 co-ops seeded with $2.4 billion in loans have collapsed, with most set to cease operations at the end of this year. That’s left roughly 600,000 individuals scrambling to find new coverage.

On Capitol Hill this week, Republican lawmakers are demanding answers about how the government spent hundreds of millions of dollars on state-level Obamacare exchanges that ultimately collapsed, and have since been abandoned.  Here’s Rep. Marsha Blackburn (R-TN) grilling acting CMS administrator Andy Slavitt about whether or not he agrees with the nonpartisan Government Accountability Office’s (GAO) recently-announced verdict that zero of the remaining state-level exchanges are “fully operational,” after five years and $1.45 billion in IT spending, courtesy of taxpayers:

Senate Republicans used a budget maneuver called reconciliation to vote to repeal vast swaths of Obamacare last week, approving a bill that would gut the law.  Once it passes the House, President Obama is expected to veto the legislation in order to protect his unpopular, harmful law. Hillary Clinton, who invented Obamacare, asserted last week that the law is working.

And The Ministry of Truth assures us that it’s all just a plot by dissidents and Thought Criminals and that they just want poor people to die. 🙂

THE AGENDA IS THE AGENDA. They fight for it to very last drop of YOUR blood. 🙂

 

The November Surprise?

Another round of “if you like your plan” well… too f*cking bad suckers!

But don’t worry, the Liberal media won’t tell you about it because that’s not on The Agenda (and it’s still “the Affordable Care Act” to them because their Orwellian training says so when it’s bad news) or they’ll sugar coat it in Orwellian BS and class warfare as they do anything that’s bad new for them.

One of the causes they’ll never see, because it was central to their Agenda:

From MSNBC (earlier this year): Until recently, insurance companies screened individual buyers for potential health needs and penalized or excluded anyone who might actually need care. The Affordable Care Act bars that discrimination, and it uses tax credits to subsidize coverage for people with modest incomes.

And we know how this was destined to fail and has failed. What they are flapping their collectivist lips about is Adverse Selection (which I have harped on before).

Suppose an insurance firm offered health insurance to the general public. It is likely to have the highest take up rate amongst unhealthy people. People who don’t exercise, people who smoke. They are the group most likely to need health care, therefore, it makes sense for them to take out insurance. Healthy people don’t see the point, if the price of health insurance is determined by the average unhealthy person.

If insurance premiums are based on the needs of smokers, then the premiums will be high. Therefore, there is no incentive for healthy people to take out the insurance.

Solutions to Adverse Selection

To avoid adverse selection, firms need to try and identify different groups of people. This is why health insurance premiums are higher for smokers and obese people, etc.

And some people deemed of high or extreme risk are excluded altogether.

And this works in any insurance really, the higher risk people get higher premiums or excluded altogether in order to try and keep premiums as low as possible.

BUT

In Health Insurance if  you MANDATE that you can’t adversely select the higher risks (what the Left calls “discrimination”) then EVERYONE‘s premiums are going up to cover the influx of the unhealthy and the one’s who couldn’t afford it in the first place but are mandated to have it anyhow (or just like a freebie) are now on the taxpayers-you-and-me’s dime and we get to pay to pay for them as well!

That’s fair!, right. 🙂

And then you stick in the provision, in ObamaCare, that says if your plan doesn’t match up perfectly with what ObamaCare considers the perfect plan then your plan has to bit the big one and you get….

More than a dozen states plan to cancel health care policies not in compliance with ObamaCare in the coming weeks, affecting thousands of people just before the midterm elections.

“It looks like several hundred thousand people across the country will receive notices in the coming days and weeks,” said Jim Capretta of the Ethics and Public Policy Center.

The policies are being canceled because states that initially granted a reprieve at the request of President Obama are no longer willing to do so.

In coming weeks, 13 states and the District of Columbia plan to cancel such policies, which generally fall out of compliance with the Affordable Care Act because they don’t offer the level of coverage the law requires.

Virginia will be hardest hit, with 250,000 policies expected to be canceled.

And because federal law requires a 60-day notice of any plan changes, voters will be notified no later than November 1, right before the Nov. 4 midterms.

Many of those forced out of their current plans and into ObamaCare may not be able to keep their doctors. They also could face higher deductibles and out-of-pocket expenses, making ObamaCare an election issue on the eve of voting.

Obama had originally unequivocally promised that under his health care plan, everyone could keep their doctors and plans.

In 2009, he told the American Medical Association, “If you like your doctor, you will be able to keep your doctor. Period.If you like your health care plan, you will be able to keep your health care plan. Period.No one will take it away. No matter what.”

The president later was forced to admit that any plan without the additional benefits required under ObamaCare faced cancellation.

But that unleashed a nasty political backlash, forcing him to back down and call for states and insurers to extend those policies for three more years.

Some said he didn’t have much choice. “There were some five or six million people who were at stake here and the federal exchange was in no condition to even process a few hundred thousand people much less millions,” said Joe Antos of the American Enterprise Institute.

Many states flatly refused to extend and now comes the new round of states that plan to cancel policies. (Jim Angle)

But don’t worry, IF the liberal media even mentions it, it will be the Insurance Companies fault, not the fault of ObamaCare and it’s ridiculous “requirements” because ObamaCare is the Light, and we “haters” are the Darkness, after all.

You don’t want the days of “discrimination” (racial overtone background music) to come back now do you? 🙂

After all, The Left is the Light, and everyone else is The Dark.

MSNBC: “Honest people can differ on the merits of those policies.

And there’s no one more honest and transparent than The Left, after all, they are The Angels of Mercy and Compassion… 🙂

So LIGHTen your wallet, here comes ObamaCare! The November Surprise?

Political Cartoons by Bob Gorrell

Hardship Discharge

“It’s now been redefined,” Charles Krauthammer continued, “so that all you have to do is to claim that going into the exchange would create a hardship. I mean, it’s ironic. It makes Obamacare itself the hardship — which is slightly ironic, but I think she <Sebelius> is beyond the reach of irony so she didn’t quite see it.”

Hardship exemptions

If you have any of the circumstances below that affect your ability to purchase health insurance coverage, you may qualify for a “hardship” exemption:

  1. You were homeless.
  2. You were evicted in the past 6 months or were facing eviction or foreclosure.
  3. You received a shut-off notice from a utility company.
  4. You recently experienced domestic violence.
  5. You recently experienced the death of a close family member.
  6. You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.
  7. You filed for bankruptcy in the last 6 months.
  8. You had medical expenses you couldn’t pay in the last 24 months.
  9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
  10. You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child.
  11. As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace.
  12. You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act.
  13. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.
  14. You experienced another hardship in obtaining health insurance. (healthcare.gov)

Which is all well and good, but remember, the “shared responsibility payment” was one of the major FUNDING vehicles for this onerous mess so if have a run away program with no funding mechanism then you have a gigantic mess.

And then one has to ask why did you do it in the first place?

THE AGENDA IS THE AGENDA.

Suckers! 🙂

“The door’s wide open,” economist Doug Holtz-Eakin, who leads the conservative-leaning American Action Forum, told Fox News. “[The] mandate which they said was absolutely crucial to ObamaCare is falling apart day by day.” 

The most recent exemption was included in an ObamaCare application document. There already had been 13 distinct exemptions, but this document added one more — apparently it was added in late December. 

The document said that individuals can now qualify for a “hardship exemption” — meaning they would not have to pay a penalty for not buying insurance — if they “experienced another hardship in obtaining health insurance.” 

The document does not define what “another hardship” means, and suggests the administration might not be a stickler when it comes to proof either. It says anyone seeking this exemption should “submit documentation if possible.” 

Of all the exemptions created so far, this category appears to be the broadest. Prior exemptions were created for people who are homeless, who filed for bankruptcy, who experienced a fire and who dealt with other financial emergencies. Already, the 13 exemptions previously on the books could apply to millions. Another created in December would give a pass this year to many of those whose policies were canceled due to ObamaCare and who struggled to find an affordable option — last week, the administration quietly extended that waiver through 2016. 

All along, the administration has rejected congressional attempts to officially delay the individual mandate in its entirety. The White House even threatened to veto one such bill. 

But the 14 exemptions now on the books raise the question of whether the mandate has been pushed off in all but name. 

“There’s a real question as to whether the White House just abandoned the individual mandate,” Boehner said Thursday. “It just seems they are hoping no one will notice.”

They still want there agenda, because they need more time to figure out how to screw you without you squealing so much and spurting so much blood on the table as they cut you into pieces.

As a consequence, he said, there could be “chaos” in the insurance market. Insurance companies, in exchange for taking on older and sicker patients as part of the Affordable Care Act, were counting on millions of young and healthy Americans signing on. The individual mandate — and the penalty that comes with it — was supposed to compel people who might not otherwise buy insurance to enter the system. 

Now that the mandate is being softened, it’s unclear whether insurance companies will have enough of those new customers to keep premiums down for everyone else. (FOX)

They didn’t already, so this will just make it even worse.

Adverse selection is now officially off the table. 🙂

So does “If you wanna keep your exemption…” start?? 🙂

Congrats, Mr. President!!

Not that he will take the blame for it or that anyone in the liberal media will assign it to him, mind you. They just hope you still vote for them, because the other guy is a much bigger asshole than they are and they will be glad to tell you all about that. 🙂

They are Homo Superior Liberalis, and you’re not!

Freedom Delayed is Freedom to Vote for Democrats and to still pay for the insurance even if you can’t afford it…

And we’ll get new hidden taxes in their to make up for our crap shoot. And when those fail, we’ll go for the more overt taxes and bailouts because we are never wrong!

So Vote for us, the other guy is still a bigger asshole! 🙂

http://dailycaller.com/2014/03/12/krauthammer-obamacare-hardship-exemption-essentially-cancels-individual-mandate-video/

 

 

Hope & Change 2014

“I guess what I would say, if you looked at that person’s budget, and you looked at their cable bill, their cell phone bill, other things that they’re spending on, it may turn out that it’s just they haven’t prioritized health care because right now everybody is healthy.” President Obama. The man who has ADDED 7 1/2 Trillion to the Debt in 5 years! I guess that was his priority!

Political Cartoons by Chip Bok

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius admitted Wednesday that Obamacare premiums will probably go up in 2015, that she does not know how many Obamacare customers have paid their premiums, and that she does not know how many Obamacare enrollees had insurance previously.

“I think premiums are likely to go up, but go up at a slower pace” than they did previously, Sebelius admitted at Wednesday’s House Ways and Means Committee hearing.

“I can’t tell you that, sir, because I don’t know that,” Sebelius said when asked by Georgia Rep. Tom Price how many Obamacare customers have paid their first premiums. Sebelius said she also does not know how many Obamacare customers previously had insurance plans that were canceled.

However, an industry source says the White House “definitely knows” who has made these payments from two separate data points, as the exchanges were set up to be the “source of truth for information.” The source claims the White House is withholding the information for “political reasons because it would force them to lower their enrollment figures if 10% of 20% of enrollees had not paid.”

The Obama administration has delayed many provisions of the Obamacare law until after the 2014 midterms, including the economically consequential employer mandate.

The administration’s inability to meet its goal for enrolling young, healthy “invincibles” on the Obamacare exchanges has mired the entire Obamacare program in the so-called “death spiral,” which drives up health insurance rates because older, sicker people are primarily signing up. (DC)

Subverted Adverse Selection they did! 🙂

Most recently, the administration extended the “hardship exemption” from the individual mandate for those who had their previous policies canceled because of Obamacare until October 2016.

To qualify, your plan must have been canceled because it wasn’t compliant with Obamacare, and you just have to tell the government you “believe” that other insurance policies are unaffordable.

So the individual mandate is a “hardship” and the employer mandate is on hold until he’s not running anymore. BUT IT’S NOT POLITICAL!!!! And it’s doing good for everyone, anyone who says otherwise is a “liar” (Harry Reid).

So the 80-90% of the funding structure of this Magnum Opus just pissed down the drain…Gee, that’s very responsible budgeting Mr. president. Maybe we should cut your Cable bill!

“President Obama has refused to enforce those parts of our nation’s immigration laws that are not to his political liking, has waived portions of our welfare laws, has stretched our environmental laws to accommodate his policy objectives, and has waived testing accountability provisions required under the ‘No Child Left Behind’ education law,” according to Rep. Bob Goodlatte, the chairman of the House judiciary committee.

For example, in June 2012, Obama created a temporary mini-amnesty for at least 500,000 younger illegal immigrants. The act boosted his election-day support among Hispanics, but made it more difficult for young Americans to find jobs.

“Political appointees at the Justice Department have announced that rather than work with Congress to amend the federal criminal code, they will simply stop prosecuting low-level drug offenders under mandatory minimum sentencing laws,” said Goodlatte in a Fox News op-ed.

“And now that his signature health care law has not been working and revealed his empty promises, President Obama has changed that law unilaterally over 20 times,” Goodlatte added.

The House bill is titled “the Faithful Execution of the Law Act.”

The House is expected to pass the bill Wednesday, along with a companion bill, titled “ENFORCE the Law Act.”

The bills are expected to be blocked by the Democrat-controlled Senate. (DC)

Now that’s By-Partisan!
So do you “believe” in Hope & Change now…

Political Cartoons by Jerry Holbert

Political Cartoons by Glenn McCoy

Political Cartoons by Henry Payne

 

Happy New Health Care Everyone…

More than three years after passage of the Affordable Care Act (aka, Obamacare), most Americans still lack a good understanding of what the law does and how it will affect them. In large measure, that is due to the sheer complexity of the law and the fact that its major pieces are only now beginning to take effect. That complexity is also the root cause of many of the technical problems the federal government is facing in implementing the law, with those technical problems creating, in turn, even greater public confusion and anxiety.

The politically “popular provisions” (such as, so-called “free” preventive care, covering 26-year-old “children” on their parents’ plans, and expanding Medicare prescription drug benefits) took effect first—prior to the 2012 election. But these provisions are nearly inconsequential compared to the damaging Obamacare components slated to take full effect in January 2014.

That’s when a new and completely unsustainable subsidy program takes hold via the government exchanges. It’s also when Obamacare expands the broken Medicaid program to take in millions of new patients, and when Americans start paying for most of the nearly $1.8 trillion in new entitlement spending with massive tax hikes and unprecedented cuts to the Medicare program.

The results of these intertwining provisions will profoundly change the U.S. health care system and will undoubtedly produce lasting negative effects for a majority of Americans, regardless of the source of their health care coverage. Many Americans will see higher costs, fewer choices for coverage and less access to doctors and hospitals.

CHANGING INSURANCE COVERAGE AS WE KNOW IT

The Exchanges
The key vehicle used by Obamacare to radically transform and standardize health insurance in the U.S. is the creation of government health insurance exchanges. These exchanges were created to sell and subsidize standardized government-approved health care plans. Most of those who acquire coverage through the exchanges will have their costs subsidized by federal taxpayers. In 34 states, the federal government will be in charge of running the exchange.

Sixteen states, plus the District of Columbia, have elected to run their own state exchange. Open enrollment in the exchanges began on October 1. Coverage for enrollees kicks in beginning January 1, 2014.

Standardizing Health Insurance
Plans are offered in metal tiers: bronze, silver, gold, and platinum. Bronze plans will have the lowest premium, but highest cost sharing, and the reverse will be true of platinum plans. Those under age 30 can also purchase so-called catastrophic plans.

While there is some variance from state to state, every plan sold on the exchanges must offer a new “essential health benefits package”—an extensive level of benefits drawn from 10 different benefit categories.

With these built-in benefit mandates, insurers are unlikely to offer additional benefits. Doing so would further increase the price of their products compared to their competitors. In essence, the benefit floor created by Obamacare is likely to also become a benefit ceiling. The result is that meaningful differences among health plans can be hard to come by at the benefits level.

Over-Regulation of Insurance
These benefit mandates are combined with new insurance rules inside and outside the exchanges that take full effect in 2014. These include:

  • Unrestricted guaranteed issue, meaning no one can be denied coverage due to a pre-existing condition, even if they didn’t have previous coverage. (Of course, to avoid people waiting until they are sick to buy coverage, Obamacare added the infamous individual mandate to coerce healthy people to join Obamacare now.)
  • No medical underwriting, meaning an insurer cannot vary premiums based on health condition.
  • Community rating, which essentially forces insurers to charge younger adults artificially higher premiums by limiting the variation in premiums between the young and old. (The natural variation in medical costs runs at about 1:5. Obamacare sets the ratio at 1:3)
  • Prohibition of annual and lifetime limits on benefits. This provision has been gradually phasing in. The limits will be fully phased out on January 1, 2014. (At that time, any waivers for plans with such limits will expire, and 4 million people in plans that got waivers will lose their existing coverage.)

These new rules and mandates create a one-size-fits-all insurance model. Unfortunately, millions of policies previously sold do not fit this model. As a result, millions of Americans have lost—or are at risk of losing their health plan.

Subsidizing Coverage in the Exchange
Starting in 2014, the government will subsidize premiums for coverage purchased through the Exchange by individuals earning from 100 percent to 400 percent of the federal poverty level (FPL). For individuals, that income range is between $11,490 and $45,960 in 2013. For a family of four, the income range is between $23,550 and $94,200. The subsidies are applied on a sliding scale with the lower income participants receiving higher amounts.

In addition to premium subsidies, cost-sharing subsidies are available to those who purchase a silver plan in the Exchange and earn between 100 and 250 percent of FPL. These cost-sharing subsidies will offset enrollees’ out-of-pocket expenses.

The heavy subsidies are expected to draw more and more people to the exchanges. In May 2013, the Congressional Budget Office (CBO) estimated 7 million people would obtain coverage through the exchanges in 2014. By 2023, the CBO projected 24 million to obtain coverage there, with 19 million receiving subsidies. The CBO estimates that together, the subsidies will cost taxpayers almost $1.1 trillion from 2014-2023.

Higher Premiums and Fewer Choices
The main effect of these Obamacare provisions is a lack of competition, reduced consumer choice, and increased costs in the exchanges. Just the opposite of what the president promised.

The standardization of benefits inherently limits choice but this is combined with a lack of insurer competition, further reducing choices for Obamacare consumers. A county-level analysis of insurers participating in the state exchanges shows that 17 percent of the nation’s counties will have no choice—only one insurer is offering coverage to residents there. More than a third (35 percent) of all counties have only two carriers to choose from. Another 26 percent are being offered coverage from only three carriers. Thus, three out of four counties in America will only have three insurance options through Obamacare. A lack of insurer competition not only reduces choice, it also reduces pressure on insurers to keep costs down.

Obamacare’s many onerous provisions have led to significant premium increases for most consumers in a majority of states. A Heritage Foundation analysis found that 42 of the 47 states for which comparable premium data are available will see significant average premium increases—in many cases, over 100 percent— for individuals purchasing from the exchanges.

A common way for insurers to mitigate premium increases is to reduce the scope of their provider networks. As a result, major hospitals are being excluded in some exchanges, and many exchange customers are finding that their doctor isn’t in their exchange plan’s network.

For instance, the Los Angeles Times reports that “a major insurer in the state run market, Blue Shield of California, said its exchange customers will be restricted to 36% of its regular physician network statewide.”

EXPANDING A BROKEN ENTITLEMENT
Another major piece of Obamacare is an expansion of Medicaid to individuals earning up to 138 percent of the FPL, an annual income of $15,856 in 2013.

The law promises that our already broke federal government will fund the Medicaid expansion population at 100 percent for the next three years, gradually reducing reimbursement to 90 percent in 2020 and thereafter. The CBO expects a partial expansion to cost $710 billion over the next decade. Those states that have opted to expand their programs will see their Medicaid rolls start to swell in January. The administration’s fight to get the rest of the states to expand will rage on.

Originally the law stated that, if a state refused to expand its Medicaid program, the federal government would take back its matching funds for the entire program.

But in June 2012, the Supreme Court deemed that provision to be coercive and ruled that the federal government could not withhold all its funding to states that chose not to expand, it could only withhold the expansion funding.

Prior to Obamacare, Medicaid traditionally covered low-income mothers and children, as well as low-income disabled and elderly. Obamacare’s blanket expansion includes anyone with income up to 138 percent of the FPL. If every state expands its program, as many as 25 million additional people could enroll in Medicaid by 2021—most of them childless adults.

Thus far, only 25 states have agreed to the massive expansion. The rest are weighing their options. The 25 states that have not yet bought into the expansion are under intense pressure from hospital lobbyists to do so. The administration, too, shaken by the dismal enrollment figures in the exchanges, has recently stepped up its efforts to “shame” governors into expansion.

Health Coverage Doesn’t Equal Access to Care
Medicaid beneficiaries already find it difficult to access care. A major reason is due to low physician participation rates. Sandra L. Decker, an economist at the National Center for Health Statistics, found that in 2011, one of three primary care physicians would not accept new Medicaid patients. And it’s no secret why. Medicaid typically reimburses doctors at rates below paid by private insurance plans. In 2008, Medicaid reimbursement was little more than half (about 58 percent) that provided by private plans.

Although Obamacare provides a federal funding boost for Medicaid primary care physicians, reimbursement levels are likely to trend back down. For one thing, the federal boost is only to Medicare reimbursement levels which are still below private insurance rates—about 80 percent. For another, the increase in Medicaid reimbursements is only temporary, ending after 2014.

Instead of reforming a program that is already failing the most-vulnerable in our society, Obamacare expands it, worsening the problem.

PAYING FOR OBAMACARE
New Taxes, Mandates, and Fees Obamacare contains 18 specific tax hikes, mandates or penalties estimated to raise a total of $771 billion in new revenue from 2013-2022. All but four of these are already in effect, and three more will take hold in 2014. Total tax revenue from Obamacare is estimated to be almost $32 billion in 2014.

Included in this list are the individual mandate and the employer mandate. The Supreme Court upheld the individual mandate as a constitutional exercise of Congress’s power to tax, yet it remains wildly unpopular. It is designed to coerce individuals into purchasing government approved health insurance or face a tax penalty. The penalty will start in 2014— based on either $95 or one percent of annual income, whichever is greater. However, nearly all those subject to pay it will pay the latter (one percent of income) amount because individuals with an annual income of only $9,500 or less would likely qualify for Medicaid or a hardship exemption.

The employer mandate forces all employers with 50 or more full-time employees (defined as those working 30 hours per week) to either offer coverage the government deems affordable and adequate or pay a penalty. The penalty varies—either $2,000 per employee after the first 30 workers, or $3,000 per employee receiving subsidized coverage in the exchange, whichever is less.

The Obama administration has delayed the enforcement of the employer mandate until 2015, but it was done administratively rather than through legislative action. Thus many in the business community are still confused— since the law says one thing and the administration says another. Regardless, plenty of businesses have already adapted by reducing hours for their employees to fall under the hourly threshold.

The health insurer tax, one of the bigger taxes included in the law, is an annual fee on health insurance plans. This tax is based on each individual company’s share of the market and is estimated to raise $101.7 billion from 2014-2023, including $8 billion in 2014 alone. While the insurance industry is actively trying to delay the tax, it is sure to have a huge effect on premiums next year and thereafter. An actuarial analysis by the consulting firm Oliver Wyman shows that in 2014, this tax will increase premiums by 1.9 to 2.3 percent. And the impact will be far greater in later years.

Another large fee to help pay for Obamacare is a reinsurance fee, which isn’t even included in the list of 18 taxes. The temporary fee is assessed on group health plans to help spread the cost of the covering those in the exchanges. The fee is going to be $63 per covered life in 2014. Like most taxes and fees, the result will likely be higher premiums.

Using Medicare to Pay for Obamacare
Seniors in Medicare are also hit by the Obamacare spending spree. Obamacare includes a host of across-the-board Medicare spending cuts, totaling $41 billion in 2014 and more than $700 billion by 2022. Contrary to the way these cuts are often portrayed, they are not being used to shore up the Medicare program and are not aimed at specific instances of waste, fraud, and abuse.

Seniors, access to care will be compromised if these draconian cuts take place. The Medicare Trustees project that 15 percent of all hospitals, hospices, nursing homes, and home health agencies would become unprofitable within five years. As the Trustees go on to explain:

“Medicare’s payments for health services would fall increasingly below providers’ costs. Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.”

In fact, Obamacare’s initial Medicare payment changes are already having an effect on seniors’ access to care. UnitedHealth, the nation’s largest provider of Medicare Advantage plans, announced in November that thousands of doctors would be dropped from their network thanks to lower reimbursement payments due to Obamacare. “It’s no secret that we are under substantial funding pressure from the federal government,” UnitedHealth President Austin Pittman told the Wall Street Journal.

As Obamacare’s payment reductions intensify in the coming years, so will the damage they wreak among health care providers and facilities. This can only increase the severity of barriers to care confronting America’s seniors.

An Experiment We Can ’t Afford
Obamacare’s new entitlements are kicking into high gear at a time when the nation rapidly approaches a fiscal crisis. The national debt has surpassed $17 trillion, and government spending is on track to exceed revenues in 2014 by 18 percent. Existing entitlement programs, desperately in need of reform, are largely to blame for this untenable situation.

While the U.S. health care system certainly needed reform before Obamacare, the Affordable Care Act exacerbates pre-existing flaws and creates new problems. Americans can’t afford the cost of Obamacare or its harmful impact on access to quality health care.

But sice Homo Superior Liberalis can never be wrong and they have the best of intentions you’ll just have to suck it…:)

Enjoy.

Political Cartoons by Steve Kelley

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