Tag: ObamaCare

ObamaCare Beyond the Handouts

ObamaCare Beyond the Handouts

We’ve always said that ObamaCare, for all its flaws, could become the instrument by which responsible reformers renew their push for health care that delivers value for money. In the meantime, however, no worthwhile thoughts about ObamaCare, pro or con, are to be heard from people who count a program as a success just because Americans enjoy receiving benefits at the expense of other Americans.

Source: ObamaCare Beyond the Handouts – WSJ

The Obamacare Escalator

The Obamacare Escalator

I originally wrote this on my Facebook page. I am embedding that post below, but also putting the text here (including fixing some grammatical mistakes from the original post).

In 2009 White House economists tried to sell ObamaCare as a health cost-control bill, and some liberals still claim the recent spending deceleration is a result of the law even though it is really due to a bad economy.

On Wednesday, the actuaries at Health and Human Services released their new annual projected measurement of national health expenditures for last year and through 2023. Spending in 2013 grew at a relatively low rate of 3.6% which still outpaced real economic growth. They expect the rate to climb to 5.6% in 2014 and continue rising by 6% a year, on average, through the decade.

Health spending as a share of the economy rose to 17.2% in 2013 from 16.2% in 2007 and will hit 19.3% in 2023, assuming that GDP grows as much as the auditors project. In other words, healthcare will soak up nearly one of every five U.S. dollars instead of one of six. Taxpayers will finance 48% of that spending a decade out, up from 41% in 2007.

I have argued for years that the reason for healthcare expense growth is not the need for a single payer. Rather it is a combination of

  • The obstructionist policies of our trading partners (the US finances most medical research but foreign nations restrict the pricing of those same medicines).
  • The severe obesity of our people compared to the rest of the world.
  • The cost of medical malpractice coverage (unheard of in most of the world).
  • The high cost of treating trauma injuries due to gun shot wounds.

So we know that Obamacare didn’t end the lack of insurance coverage in the US. We also know that it is not going to bend the cost curve. What good does it do?

Here is the WSJ article that gave me the information for this post.

Gruber discusses penalize States at Noblis – January 18, 2012

Gruber discusses penalize States at Noblis – January 18, 2012

Obamacare was originally written to penalize states that did not establish a health exchange.

In case you didn’t believe that the Obama administration has no problem changing the law without approval from Congress, I point you to this interview. In it Gruber plainly explains that for States that do NOT set up an exchange they will NOT get a subsidy – the law was intended to penalize states that were not on board with the program. This is exactly opposite of what the Obama administration put into place AND opposite of what the government argued to the 2 federal courts.

A change to the law such as paying subsidies to federal exchange enrollees has to be created as a bill within Congress and then signed by the President. That is what the Constitution says. We need to stop allowing the Administration take liberties with the Constitution to appease their political goals. For those that cry out, “Impeach Obama!”, I want to assure you that this is not an impeachable offense.

Questioner: You mentioned the health-information Exchanges for the states, and it is my understanding that if states don’t provide them, then the federal government will provide them for the states.

Gruber: Yeah, so these health-insurance Exchanges, you can go on ma.healthconnector.org and see ours in Massachusetts, will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law, it says if the states don’t provide them, the federal backstop will. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. I think what’s important to remember politically about this, is if you’re a state and you don’t set up an Exchange, that means your citizens don’t get their tax credits. But your citizens still pay the taxes that support this bill. So you’re essentially saying to your citizens, you’re going to pay all the taxes to help all the other states in the country. I hope that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these Exchanges, and that they’ll do it. But you know, once again, the politics can get ugly around this.

Long video – skip ahead to 31 minutes. http://youtu.be/GtnEmPXEpr0?t=31m25s

Poor reporting on Obamacare insurance

Poor reporting on Obamacare insurance

I have been reading a lot of articles lately (and a lot of TV news shows) about Obamacare insurance problems.

I think it is quite sad that so many people are getting cancellation letters from their insurance companies. Even if they may get a slightly better insurance deal in the future, the frustration of having to change insurance providers is something that elected politicians don’t seem to empathize with enough.

insurance coverage umbrellaI do condemn the “made up” controversies though. It is shocking the number of people that are getting interviewed on TV about their own horror that are not fairly reported. Too many times, I read an article where a print reporter followed up on a TV interview only to find the person didn’t adequately confirm their exact coverage or costs. The TV interview shows really need to get their act together and if you watch TV for your news, you probably are being misinformed in one way or another.

I am frustrated with reports of great deals that people get (once they live through the pain of the website). Every great deal that I have seen has been made into a great deal by subsidies. These subsidies come from the Federal Government. The government is paying for the subsidies from a bank account that is empty. That emptiness is currently being filled with loans from others. Those loans are going to be paid off by my children and grandchildren (if I am blessed to have grandchildren in the future).

So your great deal in health insurance is going to be paid by my offspring. Please understand if I don’t think that is a good idea. I love my children more than I love you, so I am not real excited about them paying for your great insurance deal.

I did want to point out this particular review of a television interview. This is terrible. Since when does “basic health insurance coverage” include mental care insurance? While I fully empathize with anyone that needs mental health assistance, I honestly do not think it is on the same level as making sure that their broken arm gets set or babies getting proper immunization. Shouldn’t we work on getting that insurance coverage first for those that have NO coverage before we start offering expanded coverage at a discount with subsidies?

Also, I don’t know what world the reporter, Nancy Metcalf, lives in where $100 a month is an immaterial expense.

CR’s Metcalf examined Barrette’s Blue Cross Blue Shield policy and made two discoveries: how junky it really is, and how badly her insurer may have misled her about her options. Barrette’s $54 monthly premium bought her almost nothing. The policy pays $50 per office visit (which can run two or three times that) and $15 per prescription (which can run to thousands of dollars a month); above that she’s on her own. Nothing for a colonoscopy. Nothing for mental health treatment. Up to $50 for hospital and ER services — and then only if her treatment is for “complications of pregnancy.” Nothing for outpatient services.

“She’s paying $650 a year to be uninsured,” said an insurance expert Metcalf consulted. If she ever had a serious medical problem, “she would have lost the house she’s sitting in.”

As for the replacement plan her insurer offered, at a shocking $591 a month? Barrette has much better options via the government insurance exchange. (Or she will once the federal system gets running.) Metcalf estimated that she’ll be eligible for “real insurance that covers all essential health benefits” for as little as $165 a month — a higher premium than she’s paying now, sure, but one that won’t cost her her home.

The insurance coverage described in the article seems fairly decent. A pretty decent reimbursement for preventative care. While I would suggest the individual get some catastrophic coverage to help with a major illness, this basic coverage hardly seems to be predatory. When the “nanny state” starts to tell us what product is best for us and not good for us, I start to get a bit squeamish. I will make my own decisions on what is best for me, thank you very much.

The interviews regarding Obamacare insurance failings need to be fair, but then so do the rebuttals of those interviews.

Image courtesy of digitalart at FreeDigitalPhotos.net

Companies say health care costs hard to swallow

Companies say health care costs hard to swallow

I really love this line:

Consumers Energy, a Michigan gas and electric company with 2.9 million customers, said it will not take a big first-quarter charge because, like most utility companies, it can try to recover the added costs from its customers through rate hikes.

I am sure the state with the highest unemployment in the country will LOVE having their energy rates increased to pay for medical costs!

I get it, health costs will go down because it will get subsidized by the taxes on energy! We can just rob Peter to pay Paul because Peter is too stupid to realize he got robbed.

The really good news in all that is we may get some more new jobs – the bill gives the IRS $1B a year to hire new employees to collect all of these new taxes – that is about 12,000 new jobs for the IRS! Obama has finally come up with a solution to unemployment – hire the entire US population so that no one is unemployed!

Wall Street Journal has an opinion on all of these charges. They quote:

Towers Watson estimates that the total hit this year will reach nearly $14 billion

This is after AT&T, Deere, Caterpillar, AK Steel, 3M, and Valero announced a total of about 1.4B in combined charges. Verizon has already said they will need to announce charges just not sure how much.

That is okay though – I am sure that these companies are really rich and they will just absorb the charges and they won’t pass them on to the consumers. In fact, I am sure that these companies will now accelerate their plans to hire more people.

Obviously, a lot of what I said above is sarcasm. Here is what really going to happen. The door is open by a bad bill. Now there will be a lot of little fix bills to cover these problems. These little bills won’t get a lot of media attention in fact many will just be amendments on other bills. It won’t matter who controls the legislative or executive branch, the amendments will happen. These and other taxes are going to get taken out because they are stupid and punitive but the promise of free health care will continue (and probably expand) until 20 years from now it is as bad of a monstrosity as Social Security – under-funded and over-extended.

Speaking of Social Security, did you see that Social Security is now paying out more than it brings in as of this year (NY Times – the bastion of socialistic thoughts). Of course this is 6 years earlier than CBO said it would happen. CBO must have made a mistake. Isn’t that the same CBO that said ObamaCare will slightly help the federal deficit? I sure hope that it wasn’t the same group of counters that analyzed both programs since the Social Security analysis sure wasn’t on target!

There is very little that a government can do better than private enterprise. Now we have just placed 1/8 or more of our economy into the hands of the incompetents that can’t get a job in private companies so they run for political jobs.

What in the world are we doing? Will our children curse this day 40 years from now?

Companies say health care costs hard to swallow
By JOSH FUNK
AP Business Writer

The health care overhaul will cost U.S. companies billions and make them more likely to drop prescription drug coverage for retirees because of a change in how the government subsidizes those benefits.

In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future.

With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.

Figuring out what it will mean for retirees will take longer, but analysts said as many as 2 million could lose the prescription drug coverage provided by their former employers, leaving them to enroll in Medicare’s program.

White House spokesman Robert Gibbs defended the tax law change Thursday, saying the original provision allowing companies to deduct the federal subsidies from their taxable income was a “loophole” that will be closed by the health care overhaul.

For the government, the tax changes are expected to raise roughly $4.5 billion over the next decade to help pay for the health overhaul. Some of the savings would be negated by retirees enrolling in the Medicare plans.

“You’re increasing the incentive for companies to say ‘We don’t want to be in the health care business any more,'” said James Gelfand, senior manager of health policy for the U.S. Chamber of Commerce, which fought the overhaul.

American industrial companies that are struggling to compete globally against companies with much lower labor costs are particularly likely to eventually drop retiree coverage, said Gene Imhoff, an accounting professor at the University of Michigan.

“Anything that they can use to justify pushing something away from the employees, pushing it back on the employees or the government, they’re going to do it,” Imhoff said. “I’m not sure you can really blame them for trying to do this.”

Caterpillar spokesman Jim Dugan said the company is still studying the health care law and doesn’t yet know what the full impact will be. But he acknowledged that benefit changes are possible.

“Obviously, there’s greater cost pressures on us that could drive changes to plans, but we haven’t made any decisions on that,” Dugan said.

Spokesmen for Deere and Valero said it was to soon to say how the change would affect the benefits they offer retirees.

When Congress approved the Medicare prescription drug program in 2003, it included government incentives for employers to provide drug benefits to retirees so the public system wouldn’t be overwhelmed. Employers that provide prescription drug benefits for retirees can receive subsidies covering 28 percent of eligible costs; those subsidies totaled $3.7 billion in 2008.

Under the 2003 law, companies could deduct the entire amount they spent on the drug benefits from their taxable income — including the government subsidy, an average of $665 per retiree.

The health care law signed by President Barack Obama on Tuesday prohibits companies from writing off the subsidies starting in 2011, meaning they will no longer be able to deduct them from their taxable income.

For example, if a company spent $100 on benefits, including a $28 government subsidy, it could write off the full $100 on its taxes under the old rules. The new rules would allow the same company to write off only $72.

The follow-up health care bill to reshape parts of the overhaul would delay the changes until 2013.

As many as 1.5 million to 2 million retirees could lose the drug benefits provided by their former employer because of the tax changes, according to a study by the Moran Company, a health care consulting firm.

James Klein, president of the American Benefits Council, said between 6 million and 7 million retirees currently get the benefits. But the number of companies offering them has been dwindling for years.

Generally, retirees would prefer to stay with prescription drug coverage provided by their companies as opposed to enrolling in a Medicare Part D plan, said Marilyn Moon, a health care economist with the nonpartisan American Institutes for Research.

She said most of the company-sponsored plans are more generous and almost none have the coverage gap that comes with Part D plans.

“That’s particularly painful and problematic for people who have substantial expenses at any one point in time,” she said.

Industry groups say they lobbied hard against the change in the tax rules before it was added to the health care law over the winter.

“It was in all of our letters and communications that went up to the Hill, and the companies were heavily involved in that,” said Dena Battle, a tax specialist with the National Association of Manufacturers.

Nationwide, companies would take a $14 billion hit on their financial statements if all of the roughly 3,500 companies receiving the subsidies continued to do so, according to a study by Towers Watson, a human resources consulting firm.

That financial hit will be a one-time cost as companies report a new cost estimate for the benefits over the life spans of all retirees.

Deere and Caterpillar were among a group of 10 companies that sent a letter to congressional leaders in December warning of the cost increases. The others were Boeing Co., Con-Way Inc., Exelon Corp., Navistar Inc., Verizon, Xerox Corp., Public Service Enterprise Group Inc. and MetLife Inc.

Most of the other companies that signed the letter said Thursday that it was too soon to estimate their costs. A number of other major U.S. companies also said they did not know how much the tax change would cost them. Some companies might wait until they release their earnings reports next quarter to address the costs so they have time to review the entire law.

The companies that signed the December letter warned that changing the way retiree drug benefits are subsidized would have a broad impact on the economy, and there are already indications that the effects will trickle down to individuals.

Consumers Energy, a Michigan gas and electric company with 2.9 million customers, said it will not take a big first-quarter charge because, like most utility companies, it can try to recover the added costs from its customers through rate hikes.