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Do you remember, “If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.” All we have heard about as Obamacare has gone into effect is millions of Americans losing their health insurance.
Consider: Florida Blue announces termination of 300,000 policies, about 80 percent of its individual policies in the state. California’s Kaiser Permanente reports cancellation of 160,000 policies, about half of its individual policies in the state. Independence Blue Cross in Philadelphia drops 45% of its individual policies. CareFirst Blue Cross Blue Shield axes 76,000 policies in Virginia, Maryland and Washington, DC, over 40 percent of its individual policies in those states. Insurer Highmark in Pittsburgh cancels 20% of its individual policies.
The Weekly Standard published an expert estimate last month that altogether 16 million individual policies will be terminated nationwide, more than 80% of the total 19 million individual policies in the entire country. Who took these policies away from the people who chose them?
Section 1251 of the Obamacare legislation was supposed to embody Obama’s pledge to the American people with a “grandfather” provision supposedly allowing people to keep their current health plan if they like it. But within a few months of the passage of Obamacare, Obama’s Department of Health and Human Services (HHS) issued a regulation interpreting the legislation so narrowly that all of the millions of individual health plans discussed above were made illegal under the Act.
Obamacare has mowed down as well employer health plans that many millions more liked and wanted to keep. Obama’s HHS published a notice in the Federal Register on June 17, 2010 estimating that 66 percent of small employer plans and 45 percent of large employer plans, accounting for 51 percent of all employer provided health insurance, would have to be terminated under Obamacare’s requirements by the end of 2013. Counting the required individual cancellations, that adds up to terminated health insurance under Obamacare for93 million Americans, as Avik Roy recently calculated.
Obama and his media apologists now deride the health insurance terminated under Obamacare for close to 100 million Americans as “substandard” because they do not meet the Obamacare regulatory requirements. What they are saying is that they have now revised Obama’s pledge to the American people as, if Obama likes your health plan you can keep it. But what the 2010 HHS Federal Registernotice reveals is Obama knew that his original pledge, which he has continued to repeat since 2010, was false from the beginning. That was confirmed in a front page Wall Street Journal story this past weekend reporting internal White House deliberations over Obama’s pledge which essentially concluded that the pledge successfully served its purpose of calculated deception of the American people to win Congressional passage of Obamacare.
Universal Health Coverage
The essential promise of Obamacare, which produced its appeal to the so-called “Progressive” Left, was that it would provide universal health coverage for all. But even the Washington establishment Congressional Budget Office scored Obamacare as leaving 30 million uninsured 10 years after implementation! That is still more than half the uninsured before Obamacare. We couldn’t do better than that with a trillion dollar program?
But the harsh reality of Obamacare has been far worse than that. Because the results cited above show that the effect of Obamacare so far has been to increase the number of uninsured, rather than reduce it. Indeed, close to 100 million Americans losing their health insurance already makes Obamacare the greatest failure of all government programs in American history!
Former House Speaker Nancy Pelosi famously said we would have to pass Obamacare to find out what is in it. A recent retort from the medical community was that the exact same can be said about a stool sample. During the just four years that Nancy Pelosi served as Speaker, government spending soared from $2.7 trillion to $3.6 trillion, an increase of 33%. The federal deficit increased from $160 billion to $1.3 trillion, an increase of more than 700%, or more than 8 times. All in just four years.
During her stewardship, Congress passed Obamacare to provide for universal health coverage, spending a trillion dollars that served only to increase rather than reduce the uninsured. America suffered the worst economic crisis since the Great Depression. Congress passed a nearly $1 trillion supposed stimulus bill, yet the economy still has not recovered five years later, even though the American historical record is the worse the recession, the stronger the recovery. Maybe that is because Pelosi professed that she thought the best means for promoting economic recovery is through increased federal spending on unemployment benefits and welfare. Her “stimulus” bill failed to stimulate anything except federal spending, deficits and debt.
Proposition: Nancy Pelosi was the worst Speaker of the House in American history. I am certain Sarah Palin would have done far better.
The Unaffordable Care Act
President Obama promised repeatedly for many years in campaigning for Obamacare that it would reduce the cost of health insurance for families on average by $2,500 per year. But as with all of the other Obama Obamacare promises, reality has turned out the opposite of the promise.
Avik Roy of Forbes was the first to examine the market data carefully and estimate that the new Obamacare policies being offered on the Exchanges involved increased insurance premiums of 99 percent for men, and 62 percent for women. But that was more recently succeeded by a new study by economists for the American Action Forum concluding that the Obamacare premium increases for individual policies on average amount to 193 percent for women and 260 percent for men.
Obama apologists argue that Obamacare includes health insurance subsidies for purchasers that would offset these premium increases to some degree. But that assertion is fallacious, because these subsidies are not free either, but involve real costs to taxpayers, who collectively are the same people as the health insurance purchasers. Moreover, many people, singles making over $46,000 and families making only somewhat more, close to half the country at least, will not be eligible for these health insurance subsidies at all. Even those just above poverty will not see all of the increases offset by federal subsidies.
Thinking people knew from the beginning that the effect of Obamacare would be to sharply increase rather than sharply reduce health insurance costs. All of the supposedly “free” mandated health benefits of Obamacare could mean nothing else other than increased costs for health insurance.
The same is true of the Obamacare regulatory requirements of “guaranteed issue” and “community rating.” Those requirements mean that no matter how sick and costly a new applicant for health insurance is when he or she first show up, the health insurance company must issue a new policy to them covering everything at standard rates. That would be like in fire insurance requiring the insurers to issue new homeowner policies to those who first call up when their houses are already on fire. The insurer must cover them and could charge no more than the standard rates that apply to everyone else. Of course, those standard rates must soar to ensure that the insurance company will have enough money to pay for an insurance pool covering all burnt down houses, because as the standard rates explode, no one is going to buy fire insurance until their house catches fire.
The official title of the Obamacare legislation was The Affordable Care Act. That means the Obamacare lies and deception started in the very title of the Act.
If You Like Your Doctor
Still another Obama promise regarding Obamacare was that “If you like your doctor, you will be able to keep your doctor. Period.” But even at the above skyrocketing premiums for Obamacare health insurance, the networks of doctors and hospitals covered by that insurance are sharply limited.
The problem is perfectly well illustrated in a Wall Street Journal commentary on Monday by California resident Edie Littlefield Sundby. She personally suffers from stage 4 gall bladder cancer. That was discovered 7 years ago, and she has fought and battled to survive to this day, despite a five-year survival rate of less than 2% after diagnosis for her cancer.
She has been kept alive “by doctors and health teams in California and Texas: at the medical center of the University of California, San Diego, and its Moores Cancer Center; Stanford University’s Cancer Institute; and the M.D. Anderson Cancer Center in Houston.” That health care has been paid for by “a United Healthcare PPO (preferred provider organization) health-insurance policy.”
“Since March 2007 United Healthcare has paid $1.2 million to help keep me alive, and it has never once questioned any treatment or procedure recommended by my medical team. The company pays a fair price to the doctors and hospitals, on time, and is responsive to the emergency treatment requirements of late-stage cancer. Its caring people in the claims office have been readily available to talk to me and my providers.”
But the problem, Edie explains, is that under Obamacare, “My affordable, lifesaving medical insurance policy has been canceled effective Dec. 31,” because United Health Care is terminating its entire individual health insurance business in the now heavily, oppresively, overregulated California market.
United Health Care recommended that Edie search for new coverage on the California Obamacare Exchange, Covered California. Edie explains the results,
“You would think it would be simple to find a health-exchange plan that allows me, living in San Diego, to continue to see my primary oncologist at Stanford University and my primary care doctors at the University of California, San Diego. Not so. UCSD has agreed to accept only one Covered California plan—a very restrictive Anthem EPO Plan. EPO stands for exclusive provider organization, which means the plan has a small network of doctors and facilities and no out-of-network coverage (as in a preferred-provider organization plan) except for emergencies. Stanford accepts an Anthem PPO plan but it is not available for purchase in San Diego (only Anthem HMO and EPO plans are available in San Diego). So if I go with a health-exchange plan, I must choose between Stanford and UCSD. Stanford has kept me alive—but UCSD has provided emergency and local treatment support during wretched periods of this disease, and it is where my primary-care doctors are.”
“What happened to the president’s promise, “You can keep your health plan”? Or to the promise that “You can keep your doctor”? Thanks to the law, I have been forced to give up a world-class health plan. The exchange would force me to give up a world-class physician. For a cancer patient, medical coverage is a matter of life and death. Take away people’s ability to control their medical-coverage choices and they may die. I guess that’s a highly effective way to control medical costs. Perhaps that’s the point.”
Conclusion: Obama lied, people died.
If only Barack Obama and Harry Reid had listened to Ted Cruz, and delayed Obamacare, so obviously not ready for prime time, for a year, Edie would have been spared this ordeal, at least for now. But having achieved Obamacare by Calculated Deception, they fear that they could lose political control, and the whole, wretched program, if they agree to any delay.
We Can Do Better
John Goodman, President of the National Center for Policy Analysis, has proposed free market health care reforms to replace Obamacare, that would actually deliver on all of Obama’s broken promises regarding Obamacare.
Goodman proposes a universal refundable health insurance tax credit for everyone of $2,500 per person, $8,000 per family, for purchase of private health insurance of their choice. That would extend the current tax preference for employer provided health insurance to everyone, in place of the current tax exclusion for employer provided health insurance. (The current tax preference for employer health insurance does not pay for all of the insurance for everyone, and this tax credit is not intended to do so either).
For those who do not use the credit to buy health insurance, the credit funds are sent to local indigent care facilities in their area. But everyone is free to use the credit to buy into Medicaid if they desire.
Goodman’s proposal would also greatly improve Medicaid by proposing to block grant Medicaid back to states following the model of the enormously successful, 1996 welfare reform block grants. States would then each be free to reform Medicaid for the poor in their respective states. The states could then use the block grant funds to finance health insurance vouchers that the poor in their state can use to purchase private health insurance of their choice, in addition to the refundable, universal, health insurance tax credit. States could also use part of these Medicaid block grant funds to finance state High Risk Pools, covering the uninsured who had contracted highly costly illnesses while uninsured, for which they can no longer get health insurance in the market.
Goodman’s plan would consequently repeal and replace Obamacare, delivering on the original Obamacare promise of universal health care for all. Yet, it would do so with no individual mandate, and no employer mandate, while cutting taxes by $1 trillion, and spending by $2 trillion, over the first 10 years alone, and provide for a massive reduction in unnecessary, counterproductive regulation (mandates, guaranteed issue, community rating).
Under this proposal, everyone chooses the health plan they each prefer, so, of course, if you like your health plan, you can keep it. No new requirements and burdens are placed on health insurers, so there would be no terminations or cancellations of existing plans. Current law would continue to prohibit cancelling anyone covered after they get sick, as it has under the common law for hundreds of years, and as it currently does under federal law. Since your current plan finances your current doctor, of course you can keep your doctor as well. Edie Sundby would be free to continue to survive, and even recover, from her cancer.
Workers who do not like their current employer plan can use the universal health insurance tax credit to buy the plan they prefer, including a Health Savings Account (HSA). The poor on Medicaid could use the vouchers and universal tax credit to choose HSAs as well.
HSAs were enacted into law in December, 2003. A slowdown in rising health costs first showed up meaningfully in the data in mid-2005, when Barack Obama was still in the Illinois state legislature. Participation in HSAs has been growing at double digits every year since then.
National health spending growth slowed to 3.9% each year from 2009 to 2011, the slowest rate of increase since the 1960s (which was the last time the government role in health care exploded). But all that Obamacare, passed in 2010 (and not going fully into effect until next year), did during that time was contribute to increased health costs.
HSAs are designed to greatly reduce the cost of health insurance by offering coverage with a high deductible, in the range of $2,000 to $6,000 a year or more. The savings achieved from the lower premium expense due to that deductible then funds the HSA, which pays for health care costs below the deductible. Catastrophic insurance pays for health costs above the deductible each year. The patient keeps any leftover HSA funds each year for future health care expenses, or to spend on anything in retirement. This framework creates full market incentives to control costs for all noncatastrophic health care expenses, because the patient is effectively using his or her own money to pay for them. Since the patient is now concerned about costs, doctors and hospitals will compete to control costs.
This is why a Rand Corporation study last year found that those covered by HSAs spend 21% less on average on health care in the first year after switching from more traditional coverage. Rand estimated that national health costs would fall by $57 billion if half of all workers were covered by HSAs.
HSAs are consequently a proven means of markedly reducing health costs. Combining interstate sale of health insurance with tort reform would further reduce costs, delivering on this Obamacare promise as well, again unlike Obamacare.
Republicans can rightly be faulted for failing to even try to repeal and replace Obamacare with this free market health care reform.
[Originally posted on Forbes.com]
Photo: President Obama signing the Affordable Care Act (source: Wikipedia)