President Obama’s famous promise that “you can keep your plan and your doctor, no matter what” was not the only misleading argument he made for his health care plan. There is yet another controversy, with even bigger consequences, brewing for Americans who already have health care.
Analysts predict that as ObamaCare takes hold, it will mean the end of employer-provided insurance, with former Obama adviser Zeke Emanuel predicting that80 percent of such plans will disappear within ten years.
It’s nothing I didn’t predict.
“For a worker making only $15 an hour, typical employer coverage for a family costs $15,000 or $16,000, that’s more than half of that worker’s annual wage,” explained health care economist John Goodman.
“So lots of employers,” he argued, will “find it attractive to send their low income employees to the exchange.”
In his first presidential campaign, well before the law passed, Obama argued employer coverage was too important to change, saying anything that would weaken it would be wrong.
In his second debate with Republican nominee John McCain in 2008, Obama said, “This would lead to the unraveling of the employer-based health care system. That, I don’t think, is the kind of change that we need.”
He was referring to a proposal from McCain in 2008 offering every American a $5,000 tax credit instead of tax-free insurance only for those who get coverage at work.
In the same debate, Obama said, “Now, Senator McCain has a different kind of approach. He says that he’s going to give you a $5,000 tax credit. What he doesn’t tell you is that he is going to tax your employer-based health care benefits for the first time ever.”
But now, analysts predict ObamaCare will go even further and actually eliminate those plans altogether.
Goodman noted that Obama “accused John McCain of trying to undermine employer-provided health insurance. And now we find that ObamaCare is having the very impact that Obama warned against. It may completely erode health insurance provided by employers.”(FOX)
IF YOU LIKE YOUR PLAN YOU CAN KEEP IT…. 🙂
Federal, state and local governments will spend a total of $1.4 trillion on health care this year, which will account for a record-high 46% of the nation’s total health care tab, according to spending data released by the Centers for Medicare and Medicaid Services.
That’s up from the government’s 39% share just a decade ago, and the share is expected to hit 48% by 2023, as government programs continue to grow faster than the overall health care economy, the report found.
If this trend continues, government will pay for more than half of the nation’s health costs by 2028.
ObamaCare is fueling some of this spending surge. This year, federal spending on health care is expected to climb an eye-opening 14.7%. And its growth rate will exceed that of private spending for at least the next 10 years, the data show.
CMS also expects Medicaid spending to shoot up 18.4% this year, thanks largely to 28 states’ expansion of the Medicaid program under ObamaCare.
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To Douglas Holtz-Eakin, former head of the Congressional Budget Office and now president of the American Action Forum, this trend is troubling.
“You are basically saying, we want to put a lot of the health sector’s future innovation in the hands of government programs,” he said, adding that the government doesn’t have a good track record when it comes to innovation.
ObamaCare is also likely behind the $1 billion drop in out-of-pocket spending this year — something that happened only three times before since 1960.
Out-of-pocket costs as a share of health spending have been dropping steadily for decades. In 1960, consumers paid 48% of the nation’s health care costs out of pocket; this year, it will be 11%.
But ObamaCare will accelerate this trend by driving more spending through insurance companies and government programs. By 2023, as a result, direct spending will account for less than 10% of the nation’s health tab.
While that drop in out-of-pocket costs might seem like good news, some health care economists say it will fuel health care inflation.
These economists point out that the less consumers are aware of the cost of health care, the more they’ll likely demand, which has contributed to cost spikes in the past.
Outside of ObamaCare, employer-provided health care has been shifting toward health savings accounts.
HSAs combine high deductibles with a tax-free savings account to cover out-of-pocket costs. They’ve been widely credited with contributing to the slowdown in health spending over the past five years.
This year, 17.4 million are enrolled in an HSA plan, says America’s Health Insurance Plans, up from 1 million in 2006.
CMS data also show that prescription drugs accounted for 9.5% of health spending this year.
The insurance industry has mounted a series of attacks on the drug industry for what it claims are outrageous prices on new specialty drugs, particularly Sovaldi, which offers a cure for hepatitis C but costs $80,000.
“We cannot have affordable health care in America without affordable pricing,” AHIP CEO Karen Ignagni said in a statement. “As health spending increases, all segments of the industry must work together to reduce costs.”
Despite these complaints, drug spending will account for a lower share of health spending this year than it did a decade ago, when it was 10.1%. Drug spending today is even lower than it was in 1960, when its share of health spending was 9.8%.
And CMS expects drug spending’s share to continue falling, hitting 9.4% by 2023.
In contrast, the “net cost of private health insurance” — which is industry revenue after paying claims — is on its way up.
CMS expects these insurance costs to account for 6.6% of the nation’s health spending by 2023, up from 6.4% this year and only about 2.4% in 1960. (IBD)
WE ARE FROM THE GOVERNMENT, AND WE OWN YOU…. 🙂