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Posts Tagged ‘health’
April 18th, 2014 at 4:10 pm
Issa to Investigate Pro-ObamaCare ‘Census-Gate’

Darrell Issa (R-CA), Chairman of the House Government Oversight & Reform Committee, wants the Census Bureau to explain why it failed to tell Congress that it would change the way it measures whether people have health insurance in the same year ObamaCare goes into effect.

The new survey produces a lower uninsured rate than previous versions asked by the Census Bureau. The concern is that the new lower numbers will make ObamaCare enrollment figures now and the in the future appear to be higher than they would have had the same questions been asked.

“A two-percent adjustment in the nationwide uninsured rate would represent a change in status for six million Americans and could be used in misleading arguments about the coverage impact of the Affordable Care Act,” Issa wrote in a letter to the Census Bureau.

Politically-motivated shenanigans are nothing new for ObamaCare, but this latest revelation indicates that even a highly respected agency like the Census Bureau – which researchers in several fields look to for objective data – is being used to push the narrative that the controversial health law is a historic success; data to the contrary notwithstanding.

H/T: Washington Examiner

April 17th, 2014 at 1:58 pm
Sebelius Back to Kansas as a U.S. Senate Candidate?

Say it ain’t so!

Soon-to-be-former HHS Secretary Kathleen Sebelius “is considering entreaties from Democrats who want her to run against her old friend, Senator Pat Roberts, Republican of Kansas,” reports the New York Times.

It’s hard to see how this news is anything other than an attempt to put a softer spin on Sebelius’s disastrous tenure as the face of ObamaCare.

Considering how much the Left loathes her mismanagement of Healthcare.gov – driving down public confidence in government to record lows – it’s no surprise that friends of Sebelius are trying to rehabilitate her image by saying the former two-term Kansas governor could be just the candidate to topple Roberts.

Making the GOP spend money and time on a race they would otherwise win easily could burnish Sebelius’s ‘good soldier’ credentials. Actually winning the seat would give Democrats their first U.S. Senator from Kansas since 1939.

Still, whatever goodwill Sebelius had as governor has been forgotten long ago. In the current reality, it’s difficult to see how she could step down from such a bad job at HHS into an underdog Senate campaign and emerge as anything other than a twice rejected public servant.

April 15th, 2014 at 6:31 pm
Suspicious Timing of Census Bureau’s New Health Insurance Questions Helps ObamaCare

After compiling three decades-worth of responses to health insurance questions, the U.S. Census Bureau is about to implement a new version that will make it impossible to compare insurance coverage data before and after ObamaCare.

Coincidence?

It gets better.

“An internal Census Bureau document said that the new questionnaire included a ‘total revision to health insurance questions,’ and, in a test last year, produced lower estimates of the uninsured,” reports the New York Times.

In practical terms this means “it will be difficult to say how much of any change is attributable to the Affordable Care Act and how much to the use of a new survey instrument.”

According to the Times, the new survey has been in the works for awhile. But there is no explanation given for why it is going into effect in the same year when millions of Americans are transitioning to the ObamaCare regime. The controversial health law was sold as a way to extend coverage to tens of millions of uninsured Americans. Why would the non-partisan Census Bureau make it impossible for observers to see whether ObamaCare actually achieved its goal?

Whatever the official line, it’s difficult to understand the timing of this development as anything other than a naked attempt to avoid accountability.

April 14th, 2014 at 4:57 pm
Will Sebelius’ Replacement Follow Her Lawless Lead?

Here’s a suggested question for GOP Senators to ask Sylvia Burwell – President Barack Obama’s nominee to succeed Kathleen Sebelius as Secretary of Health and Human Services – at her confirmation hearing next month.

Studies by the RAND Corporation and Goldman Sachs estimate as much as 20 percent of the claimed 7.5 million ObamaCare enrollments have not paid their first month’s premiums.

When enrollees start seeing how much their deductibles are – commonly $3,000 to $5,000 – many more may choose to stop paying ObamaCare’s higher out-of-pocket expenses.

If that happens, it’s really bad news for doctors and hospitals.

“Section 1412 of the health law gives consumers a 90-day ‘grace period’ before their subsidized plan is canceled for nonpayment. But insurers only have to keep paying doctors and hospitals for 30 days. The next 60 days of care on the care provider,” explains Betsy McCaughey.

“[I]t could pose a significant financial risk for medical practices,” the American Medical Association warns.

The HHS Secretary has no express power to bail out such care providers.

However, under the previous Secretary, the Department of Health and Human Services didn’t shy away from spending $8 billion without congressional authorization to hide Medicare Advantage cuts before the 2012 presidential election.

This and many other extra-legal actions by Secretary Sebelius have come to define HHS as the most powerful domestic federal agency.

Ms. Burwell, Do you think the absence of express authority to bail out care providers in the above situation limits you in any way from spending money for this purpose?

April 11th, 2014 at 2:44 pm
IRS’s ‘Big Brother’ ObamaCare Enforcement Coming into View

As Tax Day approaches, consider the bright side – at least there’s no ObamaCare form you have to fill out.

That changes next year.

“According to the agency, the IRS plans to include a specific line on the 1040 forms for taxpayers to ‘self-attest’ whether they purchased insurance,” reports Fox News. “It will most likely include a worksheet for taxpayers to calculate how much they owe – essentially either a flat penalty or a percentage of their income.”

Next year the penalty is either $95 or 1 percent of your income, whichever is greater.

The IRS plans to confirm whether taxpayers are telling the truth about purchasing insurance by getting enrollment records from insurance companies.

So along with increased paperwork, we can all look forward to a greater amount of government surveillance into our insurance (and eventually our health) records.

All in the name of helping us. Thank you, Big Brother.

April 5th, 2014 at 9:15 pm
Bipartisan Support for Repealing the Employer Mandate?

It sounds like there may be a growing bipartisan consensus to repeal ObamaCare’s onerous employer mandate.

“Republicans don’t like the mandate because they oppose the idea of government telling private sector entities what to do, but they also don’t support the lack of tax incentives for individuals who don’t pay for health care through an employer,” says The Street. For their part, “[s]ome Democrats don’t mind dumping the employer mandate because they would prefer to move away from businesses making health insurance decisions for individuals.”

The employer mandate is poised to hit small and growing businesses especially hard, since employing 50 full-time workers – defined as working 30 hours or more a week – triggers requirements to offer costly ObamaCare-compliant insurance plans.

This creates an obvious incentive to cut hours for people already at the margins, in effect robbing them of extra work and extra pay. Because of this liberal pundits like Ezra Klein have called for the full repeal of the employer mandate (and deplored the politically-motivated delays that have made ObamaCare’s implementation so arbitrary).

Of course, repealing the employer mandate isn’t a painless option. While it would no doubt free countless human resources directors from nimbly trying to anticipate the next extra-legal maneuverings of the Obama administration, it would also be a huge hit on ObamaCare’s financial scorecard.

“If you take [the employer mandate] out the congressional budget score looks a lot worse,” one academic supporter of ObamaCare tells The Street. That’s because the buck for subsidizing health insurance would move from private employers to the public treasury via a massive migration to ObamaCare exchanges. The individual mandate, remember, would be still be in effect. If that happens, expect ObamaCare’s price tag to soar.

So while it may be tempting for Republicans to ally with Democrats and vote to repeal the employer mandate, doing so could be used to charge the GOP with willfully spiking federal spending. Better, it seems, to just get rid of the whole law and start afresh.

April 4th, 2014 at 1:15 pm
Report: ObamaCare to Increase Large Employer Costs Up to $186 Billion

A new study by the American Health Policy Institute demonstrates that when it comes to ObamaCare’s disruption of the health insurance industry, the worst is yet to come.

The study looks at 100 large employers – defined as employing 10,000 workers or more – to estimate the direct and indirect costs of complying with ObamaCare’s costly mandates. (Due to extra-legal delays by the Obama administration, the employer mandate will go into effect starting in January 2015.)

When factoring in all of the direct mandates and fees – for example, covering children up to age 26 and accepting all enrollees regardless of preexisting conditions – as well as indirect costs – such as medical device companies and insurers passing on compliance costs to businesses in the form of higher prices – the total cost of complying with ObamaCare will be between $4,800 – $5,900 per employee. The net cost of ObamaCare for all large employers is projected to range from $151 billion to $186 billion.

Large employers employ about 52 million American workers, or about one-third of the nation’s workforce. You don’t have to be a Harvard-trained CFO to realize that companies “have a significant incentive to make fundamental changes to their health offerings” because of ObamaCare. The most obvious choice is to pay the $2,000 per employee penalty for not offering health insurance, and let employees try their luck on an ObamaCare exchange.

ObamaCare advocates insist that the law isn’t designed to separate workers from their health insurance, but the incentive structures buried within it tell a different story. Skeptics can be forgiven if the implementation phase looks like a coordinated effort first to get people into government-run exchanges, and eventually, under government-run health care.

H/T: Daily Caller

April 1st, 2014 at 6:48 pm
ObamaCare Promotion Driving Up Medicaid Applications

“According to a recent study by Avalere, the average application rate [for Medicaid] has increased 27 percent among non-expansion states and 41 percent for those expanding,” writes Angela Boothe of the American Action Forum.

For example, Tennessee – a state that chose not to expand its Medicaid program under ObamaCare – is still experiencing severe pressure on its budget due to high numbers of people trying to enroll. Though only the beginning of April, the Volunteer State has already enrolled the maximum number of people it projected to cover for the year. Adding to the pressure on state budget writers is the reality that by refusing to expand Medicaid under ObamaCare – which covers 100 percent of the increased costs until 2017 – part of the expense for covering the new enrollees falls on the state. If you work in a non-Medicaid state agency in Tennessee, beware bean counters wielding knives.

The Avalere report highlights the fact that ObamaCare creates a unique burden for non-expansion states like Tennessee. Because of the controversial health law’s media saturation, millions of people are aware that they are probably eligible for some sort of government assistance to purchase health coverage. Of these, many are discovering that they already qualify for Medicaid, even before ObamaCare was enacted. The awkward situation for states like Tennessee is that ObamaCare is still expanding Medicaid, just without any extra financial help.

If non-expansion states like Tennessee continue to see record Medicaid enrollment increases this year, don’t be surprised if anti-ObamaCare governors and legislatures start to rethink their opposition to expansion. Of course, as I’ve explained elsewhere, it would be a serious mistake to swap a three-year federal bailout for decades of increased costs by expanding Medicaid on ObamaCare’s terms. But for desperate lawmakers looking for a quick fix, ObamaCare’s “free money” may be too tempting to pass up.

March 31st, 2014 at 6:20 pm
IRS Compliance Nightmare Looms as ObamaCare Site Crashes Ahead of Deadline

This morning Healthcare.gov – the federal ObamaCare website serving citizens in 34 states – went down for four hours, stymieing customers from accessing or completing their applications for insurance.

NBC News reports that people unable to log onto the website were put in a “queue,” meaning they would be notified by email when they could resume the enrollment process.

But with the deadline to begin an application (supposedly) ending at midnight, what will happen to people unable to return to their computer screens after the lengthy delay? Last week’s extension to mid-April only covers people who start the process for enrolling by the end of March. If other commitments – say family or work responsibilities – don’t allow an applicant to return, what then? How will federal regulators distinguish between people who never tried to use Healthcare.gov and those that did, but for various reasons beyond their control couldn’t finish?

If history is any guide, don’t expect the feds to make a distinction. More likely, the response sometime soon will be a blanket extension for enrollment that allows anyone – without precondition – to complete the process.

Then it will be the IRS whose head will spin. When it comes to enrolling on an ObamaCare exchange, the carrots are the subsidies and the sticks are the fines. Any adult that goes without health insurance for three consecutive months is subject to a fine of $95 or 1 percent of her annual income, whichever is higher. And since that fee gets levied at next year’s tax filing, it will be the IRS’ job to sort out who is subject to the penalty.

That is, as soon as the political operatives in the Obama administration decide when enrollment really, really – no really we’re serious this time! – ends.

March 29th, 2014 at 7:52 pm
Latest ObamaCare Delay an Attempt to Hold Down Rate Spikes?

Megan McArdle posits three reasons why the Obama administration extended the enrollment deadline for purchasing insurance through Healthcare.gov, the federal ObamaCare exchange.

The most interesting, and to my mind most plausible, is that pushing the deadline into mid-April will make it more difficult for insurers to calculate next year’s premiums.

“Extending open enrollment, which is essentially what they’re doing, would then be a desperate play to get more young, healthy customers into the exchanges, and perhaps to make it a bit harder for insurers to raise rates,” writes McArdle. “In some states, insurers have to file preliminary rate increases in May. And thanks to this latest extension, they won’t have final data to back up any requests for a premium hike.”

Originally, the Obama administration estimated it needed 40 percent of enrollments to be from young and healthy people to avoid rate spikes the following year. With the current mix stuck at only 25 percent, insurers are signaling that prices will go up next year to cover the likely costs of insuring an older and sicker population than anticipated.

But with this extension the Obama administration is putting insurers in a bind. Do they assume the 25 percent number will hold and justify rate increases to state regulators using that assumption? Or do they wait and see if a last-ditch push to inflate the number of young and healthy enrollees reaches the magic 40 percent threshold?

The dilemma for the insurance companies is just the most recent example of how bending the law for one group punishes another. True, many people won’t mind that insurance carriers are the ones holding the bag this time, but that just underscores the growing lack of resistance to arbitrary regulation. Today, it’s unpopular insurance companies. Tomorrow, it’s you.

March 27th, 2014 at 11:30 am
The Dangerous Unfairness of ObamaCare Delays

Viewed in the most favorable light, the Obama administration’s decision this week to extend ObamaCare’s enrollment deadline into the middle of April is a measure of justice to people forced to buy health insurance but unable to complete the transaction because of lousy government websites. Simply put, it’s just wrong to penalize people for failing at a task the government makes it impossible to do.

However, for every person receiving his due there are others getting the shaft. For example, consider all the people who diligently signed up for coverage last fall, spending hours surfing through glitch-prone websites and incoherent call centers, all because the Obama administration swore up-and-down that insurance had to be purchased by mid-December if coverage was wanted on January 1st. And then the deadline was extended.

Recall that millions of people lost their individual and family plans because they didn’t comply with ObamaCare’s heightened benefits mandates. Responsible customers swallowed hard and leapt into an ObamaCare exchange because the government said so. And then the Obama administration decided not to enforce its own law.

And let’s not forget the insurance companies, business owners and tax experts who spent thousands of hours trying to comply with ObamaCare’s deadlines and mandates only to watch those who did little or nothing to prepare get rewarded with delay after delay, or as we used to say during the last Bush administration, bailout after bailout.

So while it is true that it’s unjust that people should be penalized for government’s failures, it is equally unjust to punish those who are trying valiantly to play by the rules but then get hosed by last minute changes. The takeaway here is that the implementation of ObamaCare is destroying the incentive to take the government at its word. If this becomes its legacy, the law will be far more destructive than anyone thought possible.

March 21st, 2014 at 8:38 am
Maryland to Extend ObamaCare Enrollment Deadline

First the feds, now the states.

“To be clear, the state says it’s not an extension of the open enrollment period scheduled to close March 31. Only Marylanders who made an attempt to enroll by March 31 will get more time if they call a state hotline by that day. All four insurers selling on Maryland’s exchange agreed to the special extension,” explains the Washington Post.

Oregon and Nevada are also weighing whether to grant extensions for enrollment. Like Maryland, their residents have found it extremely difficult to complete the sign-up process for subsidized ObamaCare plans due to glitch-prone public websites.

Of course, anyone who’s watched the news since last October knows that the federal exchange – Healthcare.gov – has been notoriously difficult to use. So perhaps it’s no wonder that the Obama administration is considering granting its own extension to allow enrollment to continue after the original drop-dead date.

Granted, it’s not an individual’s fault that a government’s website is impossible to use. And it’s unfair in the extreme to turn around and penalize the same person when a government-imposed deadline passes without the mandated sign-up. But perhaps news of an extension would be easier to swallow if it wasn’t grouped with more than 30 other intentional delays that further complicate the law.

The news of enrollment extensions isn’t surprising. In its most basic elements, ObamaCare doesn’t work. But for its supporters propping it up with all kinds of extra-legal maneuvers, the law would collapse under the weight of its failed promises.

March 20th, 2014 at 3:48 pm
ObamaCare Rate Hikes Might be THE Issue in 2014

The Hill is reporting that ObamaCare’s politically-motivated delays may come back to bite Democrats this fall.

“[One] insurance official, who hails from a populous state, said his company expects to triple its rates next year on the ObamaCare exchange.” And, “In Iowa, which hosts the first presidential caucus in the nation and has a competitive Senate race this year, rates are expected to rise 100 percent on the exchange and by double digits on the larger, employer-based market,” says the website. (Emphasis added)

The spikes are coming primarily for two reasons. First, the percentage of young and healthy people enrolling for coverage is too low to off-set the cost of care for older and sicker enrollees. Second, insurance companies don’t trust the Obama administration to follow the law.

Delaying parts of ObamaCare that force people to do things they don’t like – such as pay more for less generous plans – feels good politically, but it skewers carefully laid business plans that rely on the government to faithfully apply its own regulations.

After watching the Obama administration change the rules at the eleventh hour this year, insurance companies are hedging their bets by passing the costs of arbitrary regulation onto consumers, starting with next year’s premiums.

The Democrats’ midterm dilemma is really a refusal to engage in delayed gratification. Had the Obama administration stood firm and applied the law as-is, an entire year would have elapsed before the party that passed ObamaCare would be held accountable. By then, people might have grown used to the frustrating parts of the health law, much like they have with the never-ending delays. But now, fiscal reality is staring Democrats in the face. And thanks to their backstabbing of the insurance industry, they have no one to blame but themselves.

March 19th, 2014 at 12:18 pm
California’s ObamaCare Exchange Expands Coverage, But at What Cost?

There is a lot of misreporting with ObamaCare numbers as the open enrollment period draws to a close March 31.

Consider these two examples from California.

First, Covered California – the state’s ObamaCare exchange – announced recently that more than 1 million people had applied for coverage and chosen an insurance plan. Liberal bloggers at the Daily Kos are cheering this news as a triumph. Before the enrollment period began last October, the state set as a goal 696,000 enrollments by the end of March. At 1,018,315 as of the end of last Saturday, ObamaCare supporters think they are 300,000 over their goal.

Except Covered California isn’t anywhere close. Look again at the goal and the announcement. California wants at least 696,000 people to be enrolled by the end of March. To date, they have over 1 million people who have applied to be enrolled. That’s not the same thing. In fact, in speaking recently to a source at Medi-Cal – the state’s Medicaid program – I was told that thousands of applications are in limbo across the state because computer systems at the state and county levels don’t talk to one another. This impacts Covered California’s numbers because many of the uninsured applying for insurance through the exchange qualify for the state’s expanded Medicaid program. To compensate for the technology failure, caseworkers are processing emergency requests by hand. So to recap, don’t be fooled by news about applications posing as enrollments.

The other example of misreporting is on the type of coverage most enrollees are choosing. The most popular plans also cost the least. That’s not surprising since ObamaCare requires people to purchase health insurance or pay a fine. On one hand, the increased number of policyholders does allow ObamaCare supporters to say the law is covering more people. But at what price? “[E]xperts worry plans with lower premiums could come with a different cost: Fewer doctors and hospitals could mean fewer choices and longer waits for care,” reports the San Jose Mercury-News.

Lower premiums also mean higher out-of-pocket costs. I’ve written previously about how reporting on lower-than-expected premiums ignores across-the-board spikes in deductibles. The IRS says that annual deductibles larger than $1,250 should be considered high. On California’s exchange, it’s common for the lowest priced plans to have deductibles in excess of $2,000 annually (and some as high as $4,500 or more).

When all the dust settles after March 31, it’s very likely that California won’t have hit its enrollment goal, and that of the enrollees it does have many will come to loathe the longer wait times and higher costs. Maybe then we’ll get more help from journalists in how ObamaCare insurance actually works. But probably not.

March 14th, 2014 at 11:49 am
ObamaCare Will be a Major Campaign Issue in 2016

The latest ObamaCare delay guarantees that the law’s arbitrary implementation will be a huge issue in the 2016 presidential campaign.

“The change was included in last week’s announcement that the government would let people keep otherwise out-of-compliance health plans for another two years,” reports Fox News. “Buried in the official memo was a line giving people whose policies were canceled a ‘hardship exemption’ through October 2016.”

That means no who qualifies for this exemption has to pay a fine under the individual mandate until President Barack Obama is leaving office.

Talk about forcing someone else to do make all the hard decisions. Because of the current president’s refusal to shoulder the burdens of implementing his own law it seems like a certainty that the campaign to succeed him will be dominated by questions he can’t bear to answer now.

In short, get used to ObamaCare being a flashpoint in our politics for a long time to come.

March 4th, 2014 at 6:05 pm
Newest ObamaCare Delay Further Politicizes Medicine

The Hill is reporting that the Obama administration will extend for an additional year the ability of insurance companies to offer consumers plans that do not comply with Obamacare requirements. The current one-year extension is set to expire in October of this year, about a month before the 2014 midterm elections.

It is universally acknowledged that the reason for the extended extension is so that Democrats up for reelection can avoid having to explain to voters why the cheaper insurance plans they like are being canceled and replaced with more expensive options.

As one insurance industry source told The Hill, “I don’t see how they could have a bunch of these [cancellation] announcements going out in September, [n]ot when they’re trying to defend the Senate and keep their losses at a minimum in the House. This is not something to have out there right before the election.”

When the legality of a person’s health insurance depends on the timing of a political campaign, it’s obvious that health care has become politicized.

But while subjecting millions of Americans’ insurance plans to the expediency of a political party is certainly bad, the fact that no year seems to be a good year to fully implement Obamacare offers something like a silver lining. The whole point of terminating non-compliant insurance plans between October 2013 and January 2014 was to inflict maximum damage a year before voters went to the polls. The thinking was that other issues would eventually overshadow the anger and price spikes, allowing Democrats to avoid the consequences of entrenching their favorite policy.

Going forward, it’s hard to see how the Obama administration won’t become addicted to its own avoidance behavior. Though barred from seeking a third term in office, Obama will be under enormous pressure from Hillary Clinton and other Democratic presidential candidates, as well as members of Congress, to continue delaying enforcement until after the 2016 elections. After all, letting Obamacare go into effect will provide Republicans with a perfect campaign issue. Why not keep it off the table?

However, if that’s the tack they take it paves the way for another GOP line of attack – If Obamacare is too horrid to live with before an election, it certainly can’t be tolerated after.

After years of politicizing medicine by not enforcing its own law, the Obama administration may succeed in convincing Americans that Obamacare isn’t worth the pain it will inflict.

March 3rd, 2014 at 1:42 pm
ObamaCare’s War on Work

Up to 38% of people who qualify for Obamacare exchange subsidies may have to pay some or all of the money back to the IRS. That’s because the amount of subsidy dispensed is based on a sliding scale. As income rises, the amount of subsidy decreases. In practice, many people who currently qualify for a subsidy could wind up paying back the amount if they earn just a little bit more in income.

“At biggest risk are people who annual household income put them near the thresholds where the Obamacare subsidies make steep declines,” explains AEI expert Scott Gottlieb. “These cliffs are steepest for those people who earn 150% of the federal poverty level (family of four earning $35,000 in annual household income); 250% (a family of four earning about $55,000 annually); and 400% (a family of four earning about $95,000 annually).”

The upshot of this is that people may become much more sensitive to family budgeting since their financial stability depends on which side of the subsidy wall they fall. The downside of course is that we’re likely to start seeing people decline job promotions and salary hikes to avoid becoming a net loser at tax time.

As I’ve noted before, Obamacare’s War on Work is just beginning.

February 26th, 2014 at 5:29 pm
ObamaCare Menu Regulations Could Decrease Food Options

“Tucked deep in the Affordable Care Act is language requiring all restaurants with at least 20 locations to list nutritional information alongside each and every item on the menu,” writes Peter Doocy at Fox News.

The purpose is to inform customers about the nutritional value of a menu item before ordering.

This regulation hits made-to-order eateries particularly hard, since in practice the restaurant would have to provide customers with things like calorie counts on-the-fly – a nearly impossible task for places like Domino’s where up to “34 million different pizza combinations [are] available at the chain, when all crusts and cheeses and toppings are factored in.”

To make matters worse, the cost of compliance will fall on franchisees; i.e., the small business owners most at risk under the new regulation.

Domino’s and other groups are pushing for a solution that would deem restaurant owners compliant if they provide the nutritional information online or through an app.

But if that fails, it’s easy to see eateries cutting back on menu options and clamping down on substitutions. “Have-it-your-way” may soon become “Talk to the FDA.”

If the proposed nutritional rule goes into effect as-is, Americans can add food to the growing number of health-related choices – including doctors, hospitals and insurance plans – that are being reduced thanks to Obamacare.

February 24th, 2014 at 2:23 pm
After ObamaCare: More Insurance, Less Health?

Pay now or pay later.

That’s the choice facing millions of Americans required by Obamacare’s individual mandate to select a health insurance plan through a state or federal exchange.

Insurance companies like Aetna, Humana and Blue Cross and Blue Shield who are participating on various exchanges report that the most popular choices among consumers are middle-of-the-road “silver” plans that typically offer moderate premiums but high deductibles and coinsurance.

Deductibles require policyholders to pay all of the cost for medical care up to  a certain threshold before the insurance company assumes responsibility, while coinsurance commits the policyholder to paying a certain percentage for the cost of medication. (Co-pays, on the other hand, are capped at a flat amount.)

The increased costs are likely to reduce the number of doctor and hospital visits as consumers become choosier. “When deductibles and co-payments are high, patients tend to think twice about their health care purchases, making them more likely to shop around for the best deal,” says health policy expert Bruce Japsen.

Indeed, basic economic theory teaches that knowing the price of something impacts a person’s behavior significantly. But while this may help people who would otherwise overuse health care to scale back, it can – and most likely will – have the effect of convincing people to underuse necessary treatment options for fear of the cost. Thus, we could end up with more people covered by health insurance but a more unhealthful population.

One of the key policy battles on the horizon is how to harness this new transparency in health care prices. Liberals will likely want to subsidize health care until they can socialize the entire industry. Conservatives will be predisposed to favor a market-based solution. But simply repealing Obamacare and its disastrous tax on medical devices, among others, and saying “let the market figure it out” won’t be enough – especially in a campaign context.

Some conservatives may favor working within the system to incent both consumers and health care companies to better align need and cost. Others may prefer to explore deregulating parts of the industry, such as allowing physician assistants and qualified nurses to do more of the work of a doctor while still under supervision (perhaps remotely via technology). These and other ideas need to be deliberated on intensely now so that conservatives aren’t caught off-guard when the electorate is ready for an Obamacare alternative. If not, we’ll all pay dearly for lacking a consensus at the moment we need it most.

February 21st, 2014 at 5:24 pm
Contra Sebelius, ObamaCare Already Killed at Least 33,000 Jobs

“There is absolutely no evidence – and every economist will tell you this – that there is any job loss related to the Affordable Care Act [i.e. Obamacare],” Kathleen Sebelius said earlier this week.

The Health and Human Services Secretary was responding in part to a report by the Congressional Budget Office estimating that President Barack Obama’s signature domestic policy will result in 2.5 million job losses by 2024.

The only explanation that renders Sebelius’ statement (barely) plausible is her phrasing in the present tense: “no evidence… that there is any job loss related to” Obamacare. Sebelius is talking about the present, while the economists at the CBO are projecting into the future.

But even this generous reading won’t survive the fact that Obamacare has already killed 33,000 jobs in the medical device industry, according to the Advanced Medical Technology Association.

Thanks to a 2.3 percent excise tax on each medical device sold since January 2013, industry members report shedding 14,000 jobs, with an additional 19,000 openings left vacant.

The biggest losers were research and development branches, and manufacturing. Regarding the latter, 10 percent of companies surveyed said they moved their plants overseas.

These numbers show just how democratic is Obamacare’s impact on jobs. R&D positions are some of the highest paid in a firm, while manufacturing jobs can range from low- to middle-income.

On the bright side, to date the medical device tax has netted the federal government a cool $3.8 billion, so at least Secretary Sebelius has some extra money to funnel through Medicaid and Obamacare exchange subsidies.

Somehow though, decreasing the number of jobs and increasing the amount of tax revenue doesn’t seem like a long-term formula for success.

Maybe an economist should tell Madame Secretary.