Rhetoric vs. Reality: Obamacare FAILS on Pre-Existing Conditions

Noting yesterday’s one-year anniversary of the House vote to repeal Obamacare, the White House issued a blog post claiming that the law protects sick patients – and that repealing it would allow insurance companies “to once again [sic] deny coverage to children with pre-existing conditions.”  Compare that claim to a news story from Oklahoma, which noted that on Wednesday, a Democrat legislator in that state “filed legislation to ensure access to individual health insurance for Oklahoma children.”

The story raises an obvious question: If Obamacare prevented insurance companies from “deny[ing] coverage to children with pre-existing conditions,” as the White House claimed, why on earth is a Democrat state legislator introducing legislation “to ensure access” to coverage for those same children?  The answer is simple – thanks to Obamacare, carriers in many states have stopped offering child-only policies, because the companies (rightly) fear that otherwise applicants would only apply once diagnosed with a costly medical condition.

It’s difficult to determine whose actions are more ironic:  The Democrat legislator, for his belief that layering on even more state-level requirements could “solve” the problems created by Obamacare’s failed federal mandates, or the White House, for bragging about the ban on pre-existing conditions for children – without pointing out that thanks to their law, families in many states can no longer obtain coverage for their children. (Fat lot of good a ban on pre-existing conditions will do if you can’t buy insurance coverage at all.)  Either way, it’s yet another sign of how Obamacare is falling short in a critical area, by actually reducing access to insurance.

Pelosi Sides with George Soros over Low-Income Seniors

The Hill reported that, at her press conference earlier this week, House Democrat Leader Pelosi rejected many of the pay-fors in the House-passed payroll tax measure: “We’re not going to give to the middle class with one hand and take from them with another by saying, ‘You’re going to get the tax cut, but seniors are going to have to pay more for Medicare, or whatever.’”

Where to begin with this statement?  For one, the House-passed Medicare proposals have NOTHING to do with making the middle class “pay more for Medicare.”  The ONLY increase in beneficiary cost-sharing in the House-passed bill makes wealthy seniors like George Soros and Warren Buffett pay more for their Medicare benefits.  And it’s such a “radical” proposal that it comes straight from the mind of…Barack Obama, who included it in his September deficit submission to Congress.

Meanwhile, the Hill continued that the former Speaker “Pelosi offered several alternatives for offsetting the tax package, including a provision to… allow Medicare to negotiate prescription drug prices on behalf of millions of seniors in the program…”  However, the Congressional Budget Office has consistently indicated that the only way to achieve savings through drug “negotiation” is by restricting access to therapies for seniors.  To use but one example, in April 2007 CBO concluded that drug “negotiation is likely to be effective only if it is accompanied by some source of pressure on drug manufacturers to secure price concessions.  The authority to establish a formulary, set prices administratively, or take other regulatory actions against firms failing to offer price reductions could give the Secretary the ability to obtain significant discounts in negotiations with drug manufacturers.”

To sum up:  Nancy Pelosi would rather cut access to seniors’ prescription drugs through new government-imposed restrictions than to force George Soros to pay more for his taxpayer-subsidized health care.  And Democrats say they stand with the middle-class how…?

Disney World? Meet “Obamacare World…”

The President’s visit to Walt Disney World today comes weeks after a liberal group attempted to make Obamacare more popular by releasing “The Game of Obamacare.”  In a similar vein, and playing off today’s presidential visit, below are some “attractions” that individuals may soon find in “Obamacare World:”

Mr. Obama’s Wild Ride:  Takes riders through the twists and turns created by Obamacare’s 159 new boards, commissions, and programs, as well as the more than 10,000 pages of new federal regulations and notices related to Obamacare.

Obamacare People Mover:  Uses Obamacare’s perverse incentives to “move” people from their existing coverage by encouraging employers to dump their workers’ existing plans.  Costs $1.4 trillion to ride.  (This attraction was nearly called “Great Moments with Mr. Obama,” given the President’s role as the great “emancipator” of individuals from their health coverage.)

Fantasyland:  The enchanted land where spending $2.6 trillion on a new entitlement magically reduces the deficit.  Until it doesn’t.

It’s a Small, Small Wallet:  Boat ride illustrating the effects of Obamacare’s $800 billion in new taxestwelve of which affect families with incomes under $250,000 – on the middle class.  The ride also includes a catchy yet annoying song.

Carousel of (Jobs) Decline:  Revolving attraction tracking how the “4 million jobs – 400,000 jobs almost immediately” promised by Speaker Pelosi failed to materialize.  The final scene demonstrates how Obamacare actually discourages work, and will reduce the labor supply by 800,000.

Haunted Mansion:  Rather than 999 grim, grinning ghosts, this mansion is instead haunted by 15 IPAB bureaucrats – officials who will make binding rulings to reduce Medicare spending.  What’s worse, not even the undead will be able to challenge their rulings.

Country Human Jamboree:  Theater program created by a group of individuals who took Speaker Pelosi’s advice to ‘leave your work’ and ‘be creative and be a musician or whatever,’ knowing they would have taxpayer-subsidized insurance thanks to Obamacare. 

Unfortunately, however, Obamacare is NOT the “Happiest Place on Earth” – far from it, in fact.  For the many families and businesses harmed by the law’s many tax increases, mandates, and regulations, the law is already proving all too real.  And claiming that the law’s $800 billion in tax increases, massive bureaucracies, and incentives for employers to drop coverage will actually help middle class families is just, well, goofy.

Obamacare Hurting Jobs — And Patients

Yesterday the US Chamber of Commerce released its updated survey of small businesses.  The polling data revealed what many Americans already know – that Obamacare is increasing uncertainty and reducing hiring.  A whopping 74% of businesses said that Obamacare makes it harder for their firms to hire new workers, and 30% said they are not hiring thanks to Obamacare.  The survey is consistent with other reports; analysts at UBS have stated that Obamacare is “arguably the biggest impediment to hiring, particularly hiring of less skilled workers,” and the President of the Federal Reserve Bank of Atlanta has “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.’”

Physicians are similarly unenthused about the impact of Obamacare on their practices.  As an op-ed in this morning’s USA Today notes, “many doctors are becoming wary of the law at a time when only one in three Americans support it.”  The piece cites a recent Deloitte survey of physicians, which found that 83% of physicians believe Obamacare will increase wait times, while only 27% believe the law will reduce costs through efficiency savings.

Speaker Pelosi famously said we had to pass the bill to find out what’s in it.  The latest news shows once again how American job creators and American physicians have not liked what they discovered in the massive 2700-page law.

CBO Gives Obamacare an Epic Fail

One of the key unanswered questions about the health law – highlighted in an interview then-Medicare Administrator Donald Berwick gave back in May – was whether and how Medicare could successfully contain costs, given that Medicare spending has skyrocketed virtually unabated since the program’s creation in 1965.  An analysis from CBO released today examined this very issue, studying literally dozens of Medicare demonstration projects implemented over the years.  In the brief, CBO makes crystal clear that Medicare, and specifically its fee-for-service system, isn’t the solution – it’s the problem:

The evaluations show that most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered.  Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average even those programs did not achieve enough savings to offset their fees….

Demonstrations aimed at reducing spending and increasing quality of care face significant challenges in overcoming the incentives inherent in Medicare’s fee-for-service payment system, which rewards providers for delivering more care but does not pay them for coordinating with other providers, and in the nation’s decentralized health care delivery system, which does not facilitate communication or coordination among providers.

The reasons for these programs’ failure to contain spending were myriad: care was not fully integrated; the new care management fees did not offset the meager savings in Medicare spending; the demonstration programs had too few participants to accurately determine cost savings; some providers may have inflated risk scores to generate additional payments.

The Washington Post called the CBO study a “Medicare fail.”  But in reality, the study is an OBAMACARE fail, because it undermines the two prime underpinnings of the entire 2700-page health care law:

  1. That Congress could afford to pass a massive new $2.6 trillion entitlement, because it would ultimately lead to a slowdown in the growth of Medicare spending; and
  2. That Medicare could be a model to drive changes to the broader health care system.

The CBO brief annihilates both theories, virtually obliterating the (already shaky) underpinnings behind this massive entitlement expansion.

Obama’s 2012 Strategy: “I’m Going to Disney World!”

The Orlando Sentinel reported last night that “President Barack Obama, set to unveil a new policy for boosting U.S. tourism, has chosen a fairy-tale setting for the Thursday announcement: Walt Disney World’s Magic Kingdom, with its iconic Cinderella Castle as a backdrop.  And if some Disney magic rubs off on his re-election bid, too, then so be it.”  Given that this year marks the 25th anniversary of the famous Super Bowl advertisement, some may wonder if we will soon hear a version of these words:

Barack Obama, you just signed a 2700 page law that breaks your promise to cut premiums by $2500 per family, instead raising insurance premiums on the individual market by $2,100 per household.  What are you going to do next?  “I’m going to Disney World!”

The sad reality however is that many individuals can’t afford a vacation to Disney World – or anywhere else, for that matter – because Obamacare has failed to live up to candidate Obama’s promises for lower insurance premiums.  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.  That nearly $5,000 difference could fund a luxurious vacation for most American families – and the fact that consumers are instead spending that money on higher insurance premiums shows once again how Obamacare has failed to deliver.

Obamacare ALREADY a Failure

The liberal Center for American Progress today released a one-pager attempting to claim that Obamacare is already a success.  In reality, however, the law’s many flaws have become more manifest with each passing day:

Premiums Higher and Higher:  Candidate Obama said repeatedly his bill would CUT premiums by an average of $2,500 per family – meaning premiums would go DOWN, not merely just “go up by less than projected.”  The campaign also promised that that those reductions would occur within Obama’s first term.  However, the annual Kaiser Foundation survey of employer-provided insurance found that average family premiums totaled $12,860 in 2008, $13,375 in 2009, and $13,770 in 2010 and $15,073 this year.  In other words, while candidate Obama promised premiums would fall by $2,500 on average, premiums have already risen by $2,213 during the Obama Administration.

Millions Losing Coverage:  The Galen Institute last month released a paper discussing the havoc Obamacare is wreaking on insurance markets, and specifically the insurance many Americans had – and liked – before the massive 2700 page law was passed.  Dozens of carriers have left insurance markets, or gone out of business altogether – leaving millions in the lurch.  And millions more will lose their coverage; under the Administration’s own estimates, more than half of all employers – and up to 80% of small businesses – will lose their pre-Obamacare coverage by next year.

Millions More Exempted:  According to the latest data, the Administration has now granted waivers to over 1,700 health plans with more than 4 million people – more than half of them participants in union plans.  The fact that the Administration feels the need to exempt millions from the law’s mandates shows how onerous they are.  Even Democrat Senators have admitted the law is flawed – five Senators wrote to the Administration asking for another Obamacare waiver, because the law “may cause disruption for farmers and others in the agricultural sector” by causing members of farmer co-operatives to lose their current coverage.

Higher Taxes:  Several middle-class tax increases related to Obamacare have already taken effect: new restrictions on FSAs and Health Savings Accounts, and Obamacare’s first tax increase, on tanning products, which took effect in July 2010.  And in just a few months, more new taxes will take effect – including taxes on medical products and industries, which the Congressional Budget Office and other outside experts agree will be passed on to consumers, raising insurance premiums by as much as $5000 per family over a decade.  These taxes are collectively having an effect; in November, 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.

Economic Uncertainty:  Multiple quotes from business executives have proven how Obamacare’s uncertainty is hampering economic recovery.  Analysts at UBS have stated that Obamacare is “arguably the biggest impediment to hiring, particularly hiring of less skilled workers.”  And the President of the Federal Reserve Bank of Atlanta admitted he has “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.’”

One Bailout Program Bankrupt:  Last month the Administration admitted that Obamacare’s early retiree reinsurance program would shut down at the end of 2011.  The program was scheduled to run through 2014, but ran out of money years ahead of schedule.  The program went broke because unions and state governments rushed to the federal government to receive subsidies; HHS data indicate that more than half of the money went to only 24 organizations – with the biggest recipient being the United Auto Workers union.

Another Unsound Program Ended Before It Began:  In October, HHS finally admitted that the CLASS Act long-term care program was actuarially and fiscally unsound, and decided not to go forward with the program.  This development should shock no one – the Medicare actuary said on Day One the plan would not work, and one Democrat Senator called CLASS a “Ponzi scheme of the first order.”  But the Administration was forced to admit that its sanctimonious claims that CLASS was not a “business-as-usual Washington gimmick” were utterly FALSE.

Burdens Crushing States:  Last month’s annual State Expenditure Report released by the National Association of State Budget Officers illustrated how Medicaid is a large – and rapidly growing – portion of state budgets.  Yet at a time when states face budget deficits totaling a collective $175 billion, Obamacare is imposing new unfunded mandates of at least $118 billion.  These burdens have forced states to spend money on Medicaid that could otherwise be used to improve education, transportation, corrections, or other priority areas.

Nearly two years ago, Speaker Pelosi famously said we had to pass the bill to find out what’s in it.   All the signs above show how the American people are not liking what they’ve found in the 2700-page health care law.

Senate Democrats Defend Benefits for Billionaires

Amidst the ongoing discussion about the need to reform entitlements, this morning’s New York Times article on the payroll tax conference included these two interesting paragraphs:

The largest sticking point may be Medicare.  The House-passed yearlong extension would increase premiums for high-income beneficiaries and increase the number of people who would have to pay extra.  About 5 percent of beneficiaries now pay higher premiums based on income.  The proportion would eventually rise to 25 percent under the House bill and under a separate deficit-reduction plan proposed in September by Mr. Obama.

Senate Democrats want no part of that.  They say the White House proposal came as part of a broad deficit-reduction plan that included tax increases on the wealthy.  If Republicans will not make concessions on revenues, the Democrats are not going to give Republican Congressional leaders what they want most: a concession on entitlements to defang Democratic charges in the coming campaign that the Republican Party plans to dismantle the health care program for the elderly.

In other words:

  1. Senate Democrats will NOT reduce subsidized health benefits for billionaires like Warren Buffett and Bill Gates unless Republicans agree to a massive tax increase – at a time when long-term unemployment remains at record highs.
  2. Democrats do not want to deviate from prime electoral strategy – a “Mediscare” campaign designed to distract from the fact that their policies have failed to create the jobs that were promisedeven when it comes to reducing entitlement payments to billionaires.

Medicare faces a significant – and imminent – financial crisis.  The program is now running bigger deficits than Greece, and the President’s own Chief of Staff admitted that the program “will run out of money in five years if we don’t do something.”   This morning’s New York Times article only re-emphasizes a key difference between the parties: Democrats itching for a massive tax increase are unwilling to raise Medicare premiums on millionaires and billionaires to help improve Medicare’s solvency – because they would rather gain politically than fix the problem.

Obamacare Hits the States (Again)

The website Stateline last week published an analysis of the major issues facing states in 2012, and not surprisingly Medicaid was high on that list.  While the recession hit states hard, Obamacare’s onerous new mandates have combined with the continued economic slowdown to inflict a devastating one-two punch on state budgets:

Two years ago, Medicaid eclipsed K-12 education as the most expensive item in state budgets.  Since then, it has only kept growing.  Medicaid now comprises 24 percent of state budgets, when federal funds are counted.  That’s up from 22 percent last year, according to the National Association of State Budget Officers.  The upward spiral seems to be continuing.  Even as states get ready to write their budgets for fiscal year 2013, which starts in July in most states, half of them expect to be wrestling with Medicaid shortfalls in their 2012 budgets, according to a survey by the Kaiser Family Foundation.

Making the job for fiscal 2013 even more difficult for states are new federal restrictions and an increasing number of court rulings that limit states’ options for trimming their programs….Other restrictions on states come from [Obamacare], which prevents states from doing anything that would lower enrollment.  In addition, a new federal rule proposed late last year would require states to produce data showing that cuts to hospital and doctor fees won’t make it harder for Medicaid patients to get the care they need….[Under Obamacare,] states are barred from doing anything that would lower Medicaid enrollment below the income levels called for in the national health law’s 2014 Medicaid expansion.  That includes raising premiums and co-pays to levels the federal government considers unaffordable for low-income patients.  That leaves states with relatively few options when it comes to controlling Medicaid costs.  They can reduce provider fees and eliminate optional benefits.

As the article demonstrates, Medicaid is a large – and growing – share of state budgets, and has increasingly begun to crowd out other potential priorities like education, corrections, transportation, etc.  Yet Obamacare only makes this budgetary mess worse, imposing new unfunded mandates of at least $118 billion.  Thus, even as the states (slowly) start to recover from the budgetary effects of the recession, the budgetary effects of Obamacare will have consequences for years – even decades – to come.

Obamacare Lacking Transparency AGAIN

The five Republicans leading the relevant Committees of jurisdiction in the House and Senate sent a letter to HHS today asking questions about the essential health benefits “bulletin” released just before the holidays.  The letter asks HHS why the Department issued a “bulletin” rather than a proposed rule, and if doing so was designed to avoid issuing a cost-benefit analysis of the impact of the essential health benefits.  The letter also asks why the Department released this critically important “bulletin” on a Friday right before the holidays – the slowest time in the news cycle – and told lobbyists and special interest groups of the substance of the “bulletin” BEFORE notifying Congress.

The letter to HHS comes one week after a Mercatus Center series concluded that the economic analyses included in Obamacare rules published in 2010 was seriously lacking.  And it also comes after Politico in December noted how HHS held a special conference call for “stakeholders,” according to “consumer and patient advocates” (read: pro-Obamacare interest groups), prior to notifying Congress about the proposal.

Recall that this Administration pledged itself to be the “most transparent” in history, promising “an unmatched level of transparency, participation, and accountability.”  Candidate Obama even promised to televise all health care negotiations on C-SPAN.  Today’s letter once again illustrates how far Obamacare has fallen short of Obama’s good government pledges.