Monthly Archives: December 2011

Eight Ways Obamacare Has Harmed Americans This Year

Yesterday the Administration released a blog post claiming eight ways in which Obamacare is helping Americans.  But in reality, there are far more ways in which the law is wreaking havoc on Americans’ health care and economic security.  Herewith are just eight (plus one!) of the ways in which Obamacare has harmed millions of Americans during 2011:

Higher Premiums:  One of the “success stories” cited in the White House blog post involved a premium increase in Oregon lowered to “only” about 10 percent.  But Candidate Obama repeatedly promised his health care plan would LOWER premiums by $2,500 per family, and do so within his first term.  So a 10 percent premium increase represents yet another broken promise by this Administration.  Sadly, skyrocketing premium increases remain the norm: The price of the average employer-sponsored plan ROSE by more than $2,200 per family since Obama was first elected in 2008, according to studies from the Kaiser Family Foundation.

Jobs Disappearing:  All over the country, firms are having to lay off workers as a result of Obamacare’s tax increases and regulations.  Last month, device manufacturer Stryker announced that it would be shedding “five percent of its workforce over concerns about the impending 2.3 percent medical device tax prescribed by” Obamacare.  And in October, one insurance carrier announced plans to eliminate 110 jobs in Nebraska and Iowa as a “fairly predictable consequence” of Obamacare’s regulations.  That’s a long way from the 4 million jobs Speaker Pelosi claimed Obamacare would create.

Jobs Not Being Created:  Just this week, the owner of the Carl’s Jr. franchise wrote an op-ed in which he discussed the uncertainty surrounding Obamacare, and the fact that his business will reduce capital spending and hiring in anticipation of higher health care costs.  Other experts agree: Investment firm UBS has said Obamacare is “arguably the biggest impediment to hiring,” and the President of the Atlanta Fed said “we’ve frequently heard strong comments to the effect of ‘my company won’t hire a single additional worker until we know what health insurance costs are going to be.’”

Lost Coverage:  The Galen Institute recently released a paper chronicling all the plans that have dropped coverage since Obamacare was enacted into law – literally dozens of plans affecting millions of consumers nationwide.  Sadly, these results are far from atypical; the Administration’s own estimates found that half of all employers – and up to 80% of all small businesses – would lose their current health plan by 2013.

Paperwork Galore:  Already, the Administration has released more than 10,000 pages of regulations and notices regarding Obamacare – and the effects are echoing throughout the health care system.  USA Today recently reported that some medical facilities are actually laying off clinical staff to hire more administrative employees to deal with Obamacare-related paperwork.  And one hospital in Alabama decided to start imposing a new $25 annual fee on its patients to cover the “huge increase in paperwork” and “mountains of new forms” resulting from Obamacare.

Waivers and Favors:  One obvious symbol of Obamacare’s onerous impacts on Americans’ health insurance is the myriad exemptions being granted from the law.  As of July, the Administration approved a whopping 1,578 waivers exempting 3.4 million Americans, many of whom are in union plans, from just some of the law’s mandates.  Even Senate Democrats were forced to send a letter to the Administration asking for a separate waiver from one of Obamacare’s provisions, noting that the law “may cause disruption for farmers and others in the agricultural sector.”

You Can’t Spell Insurance Without I-R-S:  The Wall Street Journal reported on the consequences of just one of Obamacare’s tax increases – restrictions on consumer-directed health accounts like Flexible Spending Arrangements (FSAs) and Health Savings Accounts (HSAs).  New paperwork requirements led physicians to revolt: “‘I am now doing the IRS’s work, and that’s what I resent most,’” said one pediatrician.  And that’s not the only IRS-related provision bogged down in paperwork: An Inspector General report recently revealed that takeup of the small business tax credit has been far short of predictions, possibly because claiming the credit involves filling out seven different worksheets.

Raising Mandates, Raising Costs:  The 15-page guidance released by HHS earlier this month gives states the “flexibility” to impose more benefit mandates, not fewer.  It does so by allowing states to mandate an extremely rich benefit package, and do so without paying for the financial consequences of their decision – because the costs instead will be foisted on federal taxpayers funding insurance subsidies in that state.  At this rate, the Congressional Budget Office estimate of a $2,100 per family increase in individual insurance premiums due to Obamacare could very well be an under-estimate.

States Saddled by Mandates:  The annual State Expenditure Report released by the National Association of State Budget Officers revealed that Medicaid is consuming an ever-larger portion of state budgets, much faster than spending on education, corrections, or transportation.  And the reason why Medicaid is crowding out other portions of state budgets is Obamacare; at a time when states face budget deficits totaling a collective $175 billion, Obamacare is imposing new unfunded mandates of at least $118 billion.  Earlier this month the non-partisan Lewin Group released an analysis of the Rhode Island Medicaid program’s global compact waiver, revealing that the state saved tens of millions of dollars through flexibility – progress made despite the Obama Administration’s efforts, not because of them.  While other states could achieve similar savings, the Administration has refused governors’ multiple requests for flexibility from the new Medicaid mandates included in Obamacare.

More HHS Misinformation on Preventive Services

Yesterday the Administration released a blog post claiming eight ways in which Obamacare is helping Americans.  One of the eight “benefits” highlighted was “free preventive services” – not “free of cost-sharing,” mind you, but characterized in the blog post as being absolutely “free.”  This claim is clearly false, as the Administration’s own rule regarding preventive services noted; here’s just a small excerpt from that rule:

“The Departments calculated an estimate of the average impact using the information from the analyses described above, using estimates of the number of individuals in non-grandfathered health plans in the group and individual markets in 2011.  The Departments estimate that premiums will increase by approximately 1.5 percent on average for enrollees in non-grandfathered plans.”

The blog post raises an obvious question: How can “free preventive services” raise premiums by 1.5 percent – or conversely, if they raise premiums by ANY amount, how can the Administration claim they are “free?”

Of course, last year Secretary Sebelius herself sent a very public letter to insurers attacking their supposed “misinformation.”  Given HHS’ own allegations about others’ supposed misinformation, it will be interesting indeed to see whether the Administration makes any attempt to correct what is a clear factual error on its part.

Administration Report Reveals an Inconvenient Truth: Employers WILL Drop Coverage

On Wednesday, the Administration released a brief report claiming to take success for expanding access to coverage through SCHIP.  The Administration’s talking point regarding the report was that 1.2 million previously uninsured children gained coverage through the government-run program.  However, a Washington Post story on the report included this interesting fact, which the official HHS report conveniently omitted:

“In addition to the 1.2 million newly insured children, 3 million children who formerly had private insurance were picked up by [S]CHIP or Medicaid over the same period.”

In other words, for every child who obtained new coverage through the SCHIP program, an additional 2.5 children DROPPED their private coverage to obtain subsidized insurance courtesy of federal taxpayers.  This sky-high “crowd-out” effect – in which individuals drop private coverage to enroll in a government-funded plan – shows just how attractive Obamacare’s lucrative insurance subsidies likely will be to both employees and employers beginning in 2014.

But the same Administration that just released a report showing that only two in seven of the newly enrolled in SCHIP were previously uninsured continues to assert that employers will not drop coverage en masse.  They maintain this position despite the numerous studies, papers, briefs, reports, employer questionnaires, consultant presentations, surveys, op-eds, interviews, quotes, and comments from other prominent Democrats suggesting that employers will drop coverage in numbers far greater than the White House lets on.  However, this week’s report – or, more specifically, the crowd-out numbers that HHS decided to omit from the report – reveal the inconvenient truth this Administration has yet to admit: Employers WILL drop coverage, and the cost of Obamacare will explode as a result.

More Evidence of Obamacare’s Epic Premium Fail

Late last week, the Des Moines Register ran a story describing how one Iowa insurer’s proposed 9.4 percent rate increase was ruled justified by skyrocketing health costs.  The proposed 9.4 percent hike comes after an 8.5 percent premium increase last year, and a whopping 18 percent increase the year before that.

Sadly, these stories are the norm, as premiums continue to spike despite, and in many cases because of, the enactment of Obamacare.  Recall that candidate Obama repeatedly promised his health care plan would LOWER premiums by $2,500 per family, and do so within his first term.  But the price of the average employer-sponsored plan ROSE by more than $2,200 per family since Obama was first elected in 2008, according to studies from the Kaiser Family Foundation.  Therefore, according to candidate Obama’s own metric, President Obama owes American families nearly $5,000 per year – the difference between a $2,200 premium increase and a $2,500 promised premium reduction.

Given last week’s debate, soon to be resumed, on extending the payroll tax holiday, it’s more than a bit rich for President Obama to engage in political messaging regarding a payroll tax holiday amounting to $1,000 for the average family – when his own failure to deliver on his health care promises has forced the average struggling middle-class family to pay nearly $5,000 more per year in premiums than candidate Obama promised.

Kaiser 2011

Medicare’s Growing Problems

The Washington Post has a lengthy story out today on the causes of Medicare spending, and the reasons for comprehensive reform.  Several thoughts regarding the piece:

  1. Former CBO Director Robert Reischauer opined in the article that “I think many of us would accept the fact that…payroll tax payments probably have to go up.”  His quote brings up a little-discussed point: Not only do Democrats have political reasons for delaying reforms to Medicare – as numerous quotes over the past year have demonstrated – dithering aligns with their policy goals as well.  After all, if you want to enact massive tax increases, the best way to achieve this goal is to ignore Medicare’s looming problems, keep on spending, wait for the crisis to hit, and then say tax increases are the “solution.”
  2. Medicare program head Jonathan Blum is quoted in the story as stating that a recent slowdown in Medicare spending is thanks to Obamacare.  Blum’s statement ignores the Medicare actuaries’ conclusions about the prime reason for the slowdown in spending: “Estimated spending growth in 2010 was slow due to continuing declines in employment and private health insurance coverage associated with the recent recession.”  In other words, spending growth was slower than projected NOT because Obamacare worked, but because the Obama “stimulus” didn’t.  Surprisingly, Blum did not appear to want to take credit for the failed “stimulus” in the Post article.
  3. Even though the article talks about a predicted dramatic slowdown in per capita Medicare spending growth over the coming decade, those projections are based on assumptions that most experts have concluded are unrealistic.  For instance, the Medicare actuary found that provisions in Obamacare “are unlikely to be sustainable on a permanent annual basis.”  Likewise, CBO concluded that the Medicare reductions will be “difficult to sustain for a long period.”
  4. The Post article emphasizes the problem that demographics will create for the Medicare program in the medium term.  According to CBO, between now and 2035, 64% of the growth in entitlement spending, and 48% of the growth in health care entitlement spending, will be driven by demographic factors associated with the retirement of the Baby Boomers and general aging of the American population.  Even if health care costs were brought under control, entitlement programs face significant structural difficulties, as nearly half of the growth in entitlement spending over the next generation comes from demographics, NOT rising costs.

Medicare faces a looming financial crisis.  Yet Congressional Democrats’ prime contribution to the debate this year has not been a reform proposal, but a political campaign of demagoguery dubbed the “Lie of the Year.”  Republicans have offered numerous solutions to advance the cause of entitlement reform; it’s long past time for Democrats to step up to the plate.

What True Flexibility Looks Like

Earlier this month the non-partisan Lewin Group released an analysis of the Rhode Island Medicaid program’s global compact waiver.  The waiver, approved by the Bush Administration in January 2009, attempts to reduce expenses by giving the state the flexibility to improve the quality of care.  The Rhode Island waiver focuses on promoting home-and-community-based services as a more affordable (and more desirable) alternative to nursing homes, on improving access to primary care through managed care enrollment, and on other similar methods to provide quality care at better cost.  And the Lewin report proves that the waiver resulted in numerous successes:

  • Shifting nursing home services into the community saved $35.7 million during the three-year study period;
  • More accurate rate setting in nursing homes saved an additional $15 million in Fiscal Year 2010 alone;
  • Better care management for adults with disabilities and special needs children saved between $4.5 and $11.9 million; and
  • Enrollment in managed care significantly increased the access of adults with disabilities to physician services.

Lewin’s final conclusion:

The GW [Global Waiver] initiatives and budget actions taken by Rhode Island had a positive impact on controlling Medicaid expenditures.  The actions taken to re-balance the LTC system appear to have generated significant savings according to our estimates.   The mandatory enrollment of disabled members in care management program reduced expenditures for this population while at the same time generally resulting in improved access to physician services.  Continuing the GW initiatives already undertaken by the state and implementing the additional initiatives included in the GW will result in significant savings for the Rhode Island Medicaid program in future years.

All this progress comes despite the Obama Administration’s efforts, not because of them.  Pages 14-15 of the Lewin report note that maintenance of effort mandates imposed in Obamacare and the “stimulus” prevented Rhode Island from imposing modest premiums on some beneficiaries, even though the approved waiver was supposed to give the state that flexibility.

And therein lies the problem.  While flexibility would allow innovative solutions like Rhode Island’s to take fruit, Washington is imposing new requirements on states instead.  At a time when states face budget deficits totaling a collective $175 billion, Obamacare is imposing new unfunded mandates of at least $118 billion.

In many states, Medicaid is a fundamentally broken – and fiscally unsustainable – program.  Unfortunately, Obamacare not only did not fix Medicaid’s woes, it is actively impeding states’ ability to fix their own programs using new and  innovative solutions.  It’s one more reason why Obamacare is the furthest thing from “reform.”

Bill Summary: House Payroll Tax Bill

As you may have heard, the House introduced a new two-month payroll tax/UI extension this afternoon.  Text is available here, and a CBO score is online here.

The health provisions of the House-introduced bill are UNCHANGED from the measure the Senate cleared last Saturday.  Namely, the legislation provides a zero percent update in physician reimbursement levels for January and February 2012, and stipulates that the payment increase shall be disregarded for purposes of calculating SGR rates for future periods.  Those provisions cost $3.6 billion.  The bill also includes several two month extensions of expiring Medicare provisions (listed in full below my signature), costing a total of $510 million.  The entire bill is paid for through non-health savings, namely an increase in guarantee fees for Fannie Mae and Freddie Mac mortgages.

Numerous reports indicate the House will consideration the measure during its session tomorrow.  Timeline for Senate consideration remains unclear; however, under the order of December 17, the Senate is scheduled to convene tomorrow at 9:30 AM and on Tuesday December 27 at noon.

 

Medicare Physician Payment:  Provides for a 0 percent update in reimbursement levels for January and February 2012.  Provides that the payment update shall not be considered when calculating the Sustainable Growth Rate (SGR) reimbursement levels in future periods.

Medicare “Extenders:”  Extends for two months a series of Medicare and health-related provisions, all of which would expire at the end of the calendar year unless otherwise noted:

  • Section 508 hospital reclassifications;
  • Geographic floor for work;
  • Therapy caps exception process;
  • Technical component of certain physician pathology services;
  • Reimbursement raises for ambulance services;
  • Mental health reimbursements (5% increase);
  • Outpatient hold harmless provision;
  • Minimum payment for bone mass measurement;
  • Qualifying Individual (QI) program, assistance to low-income seniors in paying Medicare premiums; and
  • Transitional Medical Assistance, which provides Medicaid benefits for low-income families transitioning from welfare to work.

Liberals’ Silly Contortions over Premium Support

Earlier this week the Center for American Progress released a paper, and former Obama Administration official Zeke Emanuel wrote a blog post, attacking the Ryan-Wyden premium support model.  The gist of both documents is their assertion that government-run Medicare would attract sicker beneficiaries than private plans, and in so doing fatally undermine the government-run program.  From the CAP report:

“No version of premium support fully prevents private health insurance plans from attracting healthier beneficiaries, driving up premiums for those who remain in traditional Medicare.  In addition, no version of premium support creates a level playing field between private plans and traditional Medicare.  As a result of these two factors, more and more beneficiaries would gradually shift to private plans over time.”

Compare the above position to the (in)famous quote from a Congressional Democrat two years ago, in which she said that a government-run plan for those under age 65 would eradicate private insurance:

“Next to me was a guy from the insurance company, who then argued against the public health insurance option, saying it wouldn’t let private insurance compete – that a public option will put the private insurance industry out of business and lead to single payer [loud cheering]. My single payer friends: He was right. The man was right.”

So the liberal groups who once claimed that a government-run plan “will put the private insurance industry out of business and lead to single payer” NOW believe that government-run Medicare CANNOT compete on a “level playing field” against the private sector.  Why didn’t they tell us this two years ago…?

There are three possible explanations for this abrupt U-turn by the left:

  • Liberals believe that risk adjustment to adjust for beneficiaries’ health status will not work effectively, and that allowing plans to offer benefits actuarially equivalent to, but not exact replicas of, government-run Medicare will attract healthier beneficiaries.  In this case, the left is admitting Obamacare will fail – because Obamacare includes provisions allowing for actuarially equivalent plans (Section 1302(d)) and a risk adjustment program (Section 1343).
  • Liberals believe that unlike the above-65 population in Medicare, everyone below age 65 has identical health status, rendering concerns about certain plans attracting sicker-than-average beneficiaries moot.
  • Liberals will say one thing when it comes to expanding government control, and another when it comes to giving individuals more private choices.

Feel free to decide amongst yourselves which option you find most accurate…

The Myth of “Market Power”

The Center for Budget and Policy Priorities released a preliminary analysis of the Ryan-Wyden Medicare proposal late last week, and (unsurprisingly) outlined reasons to oppose it.  But included in their brief was an interesting line: “Ryan-Wyden would deny Medicare much of its ability to serve as a leader in controlling costs by depriving it of the considerable market power it secures from its large enrollment.”  The “market power” argument is one liberals toss around frequently, claiming Medicare can use its power to get “better bargains.”

But there’s one easy question that exposes the fallacy of this liberal argument.  If anyone tries to talk about preserving or expanding Medicare’s “market power,” ask them this: Would you have any objections if drug companies, or major hospitals, decided to drop out of the Medicare program, or all government-run programs?  Recent experience suggests that Democrats will NOT allow providers to drop out of government-run programs – in Massachusetts, Gov. Deval Patrick proposed “solving” the problem of physician access by forcing doctors to participate in government-organized insurance plans as a condition of licensure.  That’s NOT a market – that’s government coercion.  And “leveraging market power” is just a euphemism by the left for the government dictating prices to medical providers.

Liberals’ incoherence on “market power” is actually quite stunning:

  • Zeke Emanuel wrote a New York Times opinion piece yesterday on premium support (about which more soon) stating that when it comes to Medicare, “We Must Cut Costs, Not Shift Them.”  The only problem with his logic is that one 2008 study found that Medicare and other government-run programs ALREADY shift costs from the public sector to the private sector – to the tune of nearly $1,800 per family per year.
  • Ezra Klein last week alleged that Medicare Advantage compete against government-run Medicare, apparently unaware that the structure of the Medicare Advantage program means plans actually compete against themselves, and have ZERO incentive to compete against government-run Medicare on price.
  • Then there’s Paul Krugman, who says that “Patients Are Not Consumers.”  Well, if patients are not consumers, then how can there be a “market” for Medicare to exercise its “power” over?  The only other potential “buyers” under Krugman’s logic are government bureaucrats – and does anyone think some government officials sitting in Washington offices constitute a “market” in any realistic sense of the word?

The fact of the matter is, many conservatives believe that there is certainly NOT a market in health care – or not enough of one anyway – and that comprehensive entitlement reform should look to change that fact.  And their rhetoric notwithstanding, the policy positions of most liberals prove that their talk about increasing “market power” is really just an excuse for government to increase its dominance over everything in its path.

The “Lie of the Year:” Democrats’ Mediscare Campaign

Politifact this morning is out with its claim for the 2011 “Lie of the Year,” and it’s the claim from Democrats that “Republicans voted to end Medicare.”  The column tracks the history of the numerous Democrat mis-statements regarding Republican proposals for entitlement reform.  Democrats’ record of “Mediscare” tactics is indeed impressive:

Democrats have furiously attacked Republican proposals for entitlement reform – and, as noted above, made highly misleading claims in the process.  Yet what proposals have Democrats in Congress put forward to solve Medicare’s looming fiscal disaster?  Nothing.  And why do they want to do nothing?  In a word, politics:

  • One House Member objected to any agreement between the President and Republicans on fundamental entitlement reform, because reforming entitlements now would “cancel out any bludgeoning that Democrats might give the Republicans over Medicare and Medicaid.”
  • The Washington Post’s liberal Plum Line reported in July that Senate Democrats don’t want to pass Medicare reform because it would be “giving away the biggest [political] advantage” Democrats have had “in some time.”
  • In a story last month, Rep. Steve Israel, Chair of the Democratic Congressional Campaign Committee, “declined to say whether a [deficit] agreement to cut entitlements might have hindered his political strategy.”  In other words, Democrats WANTED the supercommittee to fail – so that they could resume their “Mediscare” political attack ads against Republicans.

Just look at the reaction when one Democrat, Sen. Ron Wyden, collaborated with a Republican Member of Congress to put forward a comprehensive Medicare proposal.  Democrats objected because Wyden did not want to play politics with the issue: One source said the Ryan-Wyden plan “has the potential to take away a key argument for Democrats that are trying to retake the House,” while another told the New York Times that “This plan gives bipartisan political cover to Ryan and other Republicans against whom we have been waging a very successful political offensive.”

This morning’s column summarizes the fruits of a year filled with “Mediscare” rhetoric.  Congressional Democrats’ lack of an entitlement plan is fiscally dangerous.  The demagoguery for attempted electoral gain is crass politicking of the worst sort, the kind that makes the public hate Washington.  And the claims behind them are the Lie of the Year.  An ignominious Triple Crown for Democrats to celebrate this holiday season.