Obamacare Burying America in Paperwork

The Administration’s latest “reg dump” of proposed rules, released last Friday, includes some interesting new requirements on health insurers.  According to pages 259-260 of the proposed rule, the Department of Health and Human Services will impose a mandate of more than half a billion dollars on insurers, to track “9 billion claims and enrollment files:”

Issuers will be directed to make risk adjustment and reinsurance data accessible to HHS in a way that conforms to HHS-established guidelines and applicable standards for electronic data collection and submission, storage, privacy and security, and processing.  In addition, in §153.720(a), we propose requiring these issuers to establish a unique masked enrollee identification number for each enrollee, in accordance with HHS-defined requirements and maintain the same masked enrollee identification number for enrollees that enroll in different plans within the issuer, within the State, during a benefit year….

We estimate that this data submission requirement will affect 1,800 issuers, and will cost each issuer approximately $327,600 in total labor and capital costs (including the average cost of $15,000 for a data processing server) during the start-up year.  This cost will be lower in future years when fixed costs decrease.  This cost reflects an estimate of 3 full-time equivalent employees (5,460 hours per year) at an average hourly rate of $59.39 per hour.  We anticipate that approximately 400 data processing servers will be established across the market in 2014, and these servers will process approximately 9 billion claims and enrollment files.  Therefore, we estimate an aggregate burden, including labor and capital costs, of $589,680,000 for all issuers as a result of these requirements.

Over and above the obvious privacy implications these new Washington-inspired requirements present, there’s one obvious question: How does imposing more than half a billion dollars in costly new mandates help lower health costs?  Candidate Obama promised repeatedly that his health plan would CUT premiums by an average of $2,500 per family – but creating new paperwork requirements seems like a great way to RAISE costs, not lower them.

Up Next: Obamacare’s Thanksgiving Turkey

According to online sources, on Wednesday President Obama plans to pardon the White House turkey in an annual Thanksgiving ceremony.  But before that happens, later today Secretary Sebelius plans to serve the American people a turkey – more regulations implementing Obamacare.  Among the possible items on “Aunt Kathy’s” Thanksgiving menu:

Reading through all these mandates and requirements is enough to give anyone a serious case of indigestion, which explains why the Administration is releasing them so close to Thanksgiving.  They don’t want the American people to read the regulations implementing the bill, just like they didn’t want the American people to read the bill itself.  Thus the spectacle of a Cabinet secretary who sat idly by as an “author” of Obamacare admitted he hadn’t read it (because Democrats had to “make judgments very fast”) engaging in a real-life version of “Take Out the Trash Day” by dumping out massive – and costly – regulations two weeks after the election, and two days before a major holiday.  It does raise one obvious question: If Obamacare is so popular, why did these major regulations implementing Obamacare sit on a shelf until after the election?  What has HHS been hiding?

Then-Speaker Pelosi spoke the truth when she famously said we had to pass the bill to find out what’s in it.  That statement is just as true with the regulations implementing the bill as it is with the 2700-page measure itself.  But a general clue about what’s to come will arrive in the form of the entrée on many Americans’ tables this Thursday.

“The Law of the Land” Is One Big Mess

Last week, many press stories focused on Obamacare’s status as “the law of the land,” attempting to emphasize that the 2700-page measure is “here to stay.”  But based on a sampling of recent quotes, what President Obama wants “to stay” in his second term is a jumbled-up mess of bureaucratic and regulatory chaos and confusion:

  • State exchanges are “not going to be ready;”
  • “If I could wave a magic wand and change [the start] from 2014 to 2015, I would….[Meeting the law’s deadlines] is going to be really hard;”
  • “The timeline is definitely getting crunched.”

And those quotes are comments from three different supporters of the law – individuals and groups working on Obamacare’s implementation.  These sample quotes come from but one article among many outlining the federal government’s many difficulties in implementing the law – illustrating perfectly its unworkable, Rube Goldberg-esque nature.

Late yesterday, HHS announced yet another implementation delay, allowing states an extra month to decide whether or not to establish a state-based Exchange.  But with even supporters of the law publicly admitting that the complex, bureaucratic measure is not ready for prime time, why would states want to accept political responsibility for Washington’s chaos by creating their own Exchanges – thereby going down with a sinking ship?

The Siren Song of the Left’s “Competition”

As previously noted, yesterday the Center for American Progress released its platform for altering entitlements.  In fairness, the paper does include some conservative ideas, most notably additional means-testing for Medicare beneficiaries.  But mainly the report demonstrates the fundamental difference between conservatives and liberals: Not only do liberals not believe in markets, they don’t understand (and/or don’t want to understand) how markets actually work.

Take for instance the CAP proposals that will supposedly “enhance competition based on price and quality,” such as the idea to “require health insurance exchanges to offer tiered insurance plans.”  On the face of it, the idea sounds reasonable enough – encourage plans to lower premiums by offering a variety of choices.  But the catch here – as in the rest of the CAP proposals – is that “competition” is government-defined, government-mandated, and government-prescribed.  For instance, if insurers want to offer, and patients want to purchase, less expensive insurance coverage that doesn’t cover all of Obamacare’s mandated benefits – and/or insurance purchased across state lines – both CAP and Obamacare would tax those who gain coverage through such means, because this “competition” is prohibited in liberals’ new health care utopia.

Then there’s the fact that the CAP report also includes numerous other proposals that involve expanding prescription drug price controls in various forms.  One may find it ironic – and ever-so-slightly contradictory – that a report supposedly focused on “enhanc[ing] competition” simultaneously expands government-dictated price controls.

Finally, CAP’s proposals for “competitive bidding” seem little short of comical for their ideologically-based hypocrisy.  The paper states that Congress should “use competitive bidding for Medicare Advantage” – but then just as quickly states that government-run Medicare itself should not compete.   And why doesn’t CAP want government-run Medicare to compete against private plans?  Because a paper co-authored by one of CAP’s own scholars released in September found that in many parts of the country, traditional Medicare can’t compete – it’s far too costly.  The study, outlined in an article in the Journal of the American Medical Association, found that private plans would be 9% cheaper than traditional Medicare under a competitive bidding proposal.

Mind you, the Left has no problems forcing seniors to pay more for private Medicare Advantage coverage, or forcing them out of their plans entirely – Obamacare’s cuts to the program will ensure both outcomes.  But when it comes to competitive bidding for government-run Medicare itself, CAP and others on the Left want nothing to do with such an idea, clinging instead to the shibboleth of government-run Medicare as a first step towards socialized medicine for all.  And that hypocrisy – competition for thee, but not for me – explains in a nutshell why liberal ideas such as those in the CAP paper are both unrealistic and ideologically dangerous.

News on Containing Costs Goes from Bad to Worse

The employer benefits firm Mercer released its annual survey of health plans today, and for those wishing to “bend the curve” on health costs, the results were not promising.  Mercer’s survey concluded that employers’ health costs will rise 4.1% this year, and even more (5.0%) next year; if firms do not take steps (e.g., raising co-payments, etc.) to control spending, costs would rise by a whopping 7.4% in 2013.  Recall that four years ago, candidate Obama promised repeatedly that his health plan would CUT premiums by an average of $2,500 per family.  Not only has that premium reduction not happened – premiums have risen by $3,065 since Barack Obama was elected President – but cost increases continue to grow unabated.

In fact, today’s Mercer study suggests one way Obamacare will accelerate the growth of health costs – by limiting usage of consumer-driven health plans.  The survey notes that an “enrollment shift” to consumer-driven plans – which have more than tripled in popularity since 2007 – has “helped to hold down overall cost increase[s].”  Consumer-driven plans help to slow cost growth because average costs are nearly $2,200 lower per year than traditional health insurance costs.  Unfortunately, several provisions in Obamacare will move health coverage in the exact opposite direction, by restricting access to HSAs and consumer-driven plans – therefore raising, not lowering, health costs.  Three separate provisions in the statute, and regulations implementing the law, will reduce access to HSA plans:

  1. Obamacare’s essential health benefits package contains new restrictions on deductibles and cost-sharing, which will prevent at least some current HSA plans from being offered.
  2. Obamacare’s medical loss ratio regulations also impose new restrictions that studies show will hit HSA plans particularly hard, and could force individuals to change their current form of coverage.
  3. The Obamacare statute does not specify that cash contributions made to an HSA will be counted towards the new federal actuarial value standards.  And a February bulletin released by HHS in advance of upcoming rulemaking indicates that under the Administration’s approach, not all contributions into an HSA will count towards the new minimum federal standards – meaning some HSA policies will not be considered “government-approved.”

Both individually and collectively, these provisions in Obamacare will have the effect of limiting access to new and innovative consumer-directed health plans like Health Savings Accounts.  Not only will these onerous regulations prevent many Americans from keeping the plans they have and like – by limiting access to consumer-directed health plans, Obamacare will also raise, not lower, health costs for many Americans.

We Told You So: Companies Hiring Fewer Full-Time Workers

The Wall Street Journal has a must-read article this morning highlighting one of Obamacare’s effects – companies are replacing full-time workers with part-time employees to avoid the law’s soon-to-be-imposed $2,000 employer mandate penalty.  Because full-time employees working more than 30 hours will incur a penalty while part-time workers will not, many firms are in the process of shifting their workforce, as the article outlines:

Some low-wage employers are moving toward hiring part-time workers instead of full-time ones to mitigate the health-care overhaul’s requirement that large companies provide health insurance for full-time workers or pay a fee.  Several restaurants, hotels and retailers have started or are preparing to limit schedules of hourly workers to below 30 hours a week.  That is the threshold at which large employers in 2014 would have to offer workers a minimum level of insurance or pay a penalty starting at $2,000 for each worker.

Pillar Hotels & Resorts this summer began to focus more on hiring part-time workers among its 5,500 employees, after the Supreme Court upheld the health-care overhaul, said Chief Executive Chris Russell.  The company has 210 franchise hotels, under the Sheraton, Fairfield Inns, Hampton Inns and Holiday Inns brands.  “The tendency is to say, ‘Let me fill this position with a 40-hour-a-week employee.’”  Mr. Russell said. “I think we have to think differently.”…

CKE Restaurants Inc., parent of the Carl’s Jr. and Hardee’s burger chains, began two months ago to hire part-time workers to replace full-time employees who left, said Andy Puzder, CEO of the Carpinteria, Calif., company.  CKE, which is owned by private-equity firm Apollo Management LP, offers limited-benefit plans to all restaurant employees, but the federal government won’t allow those policies to be sold starting in 2014 because of low caps on payouts.  Mr. Puzder said he has advised Mr. Romney’s campaign on economic issues in an unpaid capacity.

Home retailer Anna’s Linens Inc. is considering cutting hours for some full-time employees to avoid the insurance mandate if the health-care law isn’t repealed, said CEO Alan Gladstone.  Mr. Gladstone said the costs of providing coverage to all 1,100 sales associates who work at least 30 hours a week would be prohibitive, although he was weighing alternative options, such as raising prices….

Benefits consultants said most retail and hotel clients have explored shifting toward part-time workers.  Those industries are less likely to offer health coverage now, and if they do, the plans typically are too skimpy to meet the minimum-coverage requirements.  “They’ve all considered it,” Matthew Stevenson, a workforce-strategy principal at Mercer.  In a July survey, 32% of retail and hospitality company respondents told the consulting firm that they were likely to reduce the number of employees working 30 hours a week or more.

Not only is this response predictable – it was predicted, and not just by Republicans but by non-partisan experts.  Here’s what the Congressional Budget Office wrote more than two years ago about the Obamacare mandate taxes:

Those penalties…will, over time, generally be passed on to workers through reductions in wages…However, firms generally cannot reduce workers’ wages below the minimum wage, which will probably cause some employers to respond by hiring fewer low-wage workers.  Alternatively, because firms are penalized only if their full-time employees receive subsidies from exchanges, some firms may instead hire more part-time or seasonal employees.

CBO also said that “the expansion of Medicaid” and the health insurance subsidies “will encourage some people to work fewer hours or to withdraw from the labor market.  In addition, the phaseout of the subsidies as income rises will effectively increase marginal tax rates, which will also discourage work.”

Two years ago, Speaker Pelosi famously said we had to pass the bill to find out what’s in it.  It turns out what’s in Obamacare is exactly what non-partisan experts said – provisions that will cost jobs and harm the American economy.

The REAL Fright Night: Obamacare’s Scary Impact on Americans

In an interview with the Des Moines Register last week, the President claimed that “Obamacare turns out not to be the scary monster that the other side has painted.”  Many may disagree, because on this Halloween day, it’s clear that the legislation includes several “monstrous” provisions likely to wreak havoc on the American people, their jobs, and their health care:

“Count Tax-YOU-lots:”  This creature will suck the life out of the American economy, by imposing $1 trillion in job-killing tax increases on all Americans—taxing people who can’t afford to purchase government-forced insurance, taxing businesses who want to hire new workers, taxing small businesses, even taxing health benefits.

Weird Scientists:  Bureaucrats working for a new comparative effectiveness institute, funded by a tax on health benefits, could publish the protocols needed to deny patients access to life-saving treatments on cost grounds.  In addition, the law’s Independent Payment Advisory Board (IPAB) will make binding rulings on how to reduce Medicare spending below an arbitrary cap.

Frankenstein:  Refers to the dozens of bureaucracies created by the legislation—to say nothing of the difficulties for patients to receive actual treatment—all in the name of health care “reform.”

A Ghoulish Czar:  By one count, Obamacare includes nearly 2,000 commands using the words “The Secretary shall”—allowing the federal government, in the form of the HHS Secretary, to intervene in all manner of personal health care choices taken by millions of Americans.

However, while creating new and frightful government bureaucracies for the American people, Democrats have managed to include sweet treats for themselves and their liberal allies:

  • Senate Democrats received goodies for parochial interests, including a mine in Libby, Montana;
  • ACORN and Planned Parenthood could be eligible for enrollment and outreach grants as “navigators;” and
  • AARP’s popular Medigap policies are not subject to the same pre-existing condition restrictions or price controls placed on all other private insurance plans—thus allowing the organization to continue to receive hundreds of millions of dollars in “kickbacks” by overcharging seniors for coverage.

While Halloween may come and go, many may be concerned that the monsters created in Obamacare will stay—causing permanent fright for all Americans forced to live under Democrats’ government takeover of health care.

Obamacare’s “Pro-Choice” Agenda

During a campaign event yesterday in New Hampshire, the President made some interesting remarks about choice in health care.  Here’s what he said:

I also believe women should make their own health care decisions.  (Applause.)  I know you’ve got — and it’s not just Washington that sometimes deals with this issue.  You’ve got a state legislature up here that sometimes acts like it knows better than women when it comes to women’s own health care decisions.  My opponent has got the same approach….Do you think, like, your boss, or your insurance company, or some politician in Concord or Washington should get control of your health care choices?…The health care law we passed puts those choices in your hands where they belong.

Some may find the President’s comments slightly ironic – because Obamacare actually takes choices away from individuals and gives them to politicians and bureaucrats.  Under Obamacare’s unprecedented mandate, individuals will have to purchase a “bureaucrat-approved” health insurance policy – or be subjected to billions of dollars in new taxes that will hit the middle class hard.  And thanks to Obamacare, unelected bureaucrats in the District of Columbia have proposed outlawing the private market for health insurance entirely – forcing all individuals to go to a government-run Exchange to purchase coverage.

So to bring it all back to where we started, yes, under Obamacare, you can choose any type of health insurance you like – as long as the President and unelected bureaucrats in Washington approve.

Washington’s Government Takeover of Health Care

The Washington Post reported yesterday of a major development in Obamacare implementation here in Washington:

The District’s small businesses may have to buy their employee health insurance through a city-run exchange come 2014, following a controversial vote by a city board.  The D.C. Health Benefit Exchange Authority, charged with implementing the federal health-care overhaul law, voted Wednesday to accept a recommendation that all health-insurance plans sold in the city for 50 members or fewer must be purchased through the exchange.

In other words, you can buy any plan you like – so long as it’s the government plan.

District officials attempted to defend this onerous mandate by saying they needed to ensure a viable marketplace: “For the exchange to be sustainable, it has to have approximately 100,000 people…If the exchange isn’t sustainable in the long haul, if it does not have enough people, then we are wasting our time and our effort.”  This is the same kind of logic that led Democrats to create the unprecedented mandate that nearly all Americans purchase a product for the first time ever – because Obamacare would be unsustainable without a large market.  Now we get word that even with an individual insurance mandate, one key element of Obamacare – the Exchange – could be “unsustainable” and a “waste of time” without even more government intrusion – telling people not just to buy something, nor just what to buy, but even where to buy it.

As one letter of opposition from the D.C. business community noted, Barack Obama repeatedly promised that “you will not have to change plans” under Obamacare.  This week’s development in the District of Columbia is yet another illustration of that broken promise.  Moreover, the fact that Washington wants to shut down the private health insurance market and replace it with a government-run Exchange further proves that Obamacare is indeed a government takeover of health care.

Fact Check: Obama’s Record on Eliminating Government Programs

The President just claimed that he eliminated 77 programs, including 18 education programs.  But by one count, Obamacare created as many as 159 new boards, bureaucracies, and programs.  Another estimate found that the number of Obamacare’s bureaucracies was ultimately unknowable.  And the Internal Revenue Service requested a whopping 1,270 new bureaucrat positions to implement the law – a down payment on what could be up to 16,500 agents hired by the IRS to enforce the individual mandate and other related provisions.  That’s not reducing government bureaucracy and spending – that’s increasing government bureaucracy and spending.