Archive for September, 2012
Obamacare Spends More Than a Trillion in Taxpayer Dollars and Still Leaves 30 Million People Uninsured
On November 7, 2007, at a speech in Bettendorf, Iowa, then-candidate Obama said:
Every four years politicians come before you to talk about health care. You hear the same promises. And then you see the same results. Well it’s time to end the outrage of 47 million uninsured Americans. It’s time to finally do something about it.
Well, not much has changed since then. Four years later, the country has 48.6 million people without health insurance and a $1.68 trillion health care law that, if it even works as claimed, would still leave 30 million people without health care.
A USA Today editorial recently praised Obamacare for increasing the number of insured by 3.6 million. But those gains include 50.8 million people enrolled in Medicaid (2.3 million more than in 2010) and 46.9 million people enrolled in Medicare (2 million more than 2010). And under Obamacare, the number of people covered by government health care will continue to rise.
During a Sunday evening interview on CBS’s “60 Minutes,” President Obama made numerous factually inaccurate or misleading claims.
Specifically, Obama claimed that he has not raised Americans’ taxes, that he has not raised costs for Medicare beneficiaries, and that he has imposed fewer regulations than his predecessor. The first two claims are false, and the third is highly misleading.
Obama: “You can’t ask me to…ask seniors to pay more for their Medicare.”
Fact: Obamacare’s cuts to Medicare will raise Medicare costs for many seniors.
In recent weeks, liberal politicians, editorialists, and policy analysts have vigorously attacked reform of Medicare based on a defined contribution financing. In fact, this approach to reforming Medicare has a long bipartisan tradition, going back to the 1980s and Representatives Richard Gephardt (D–MO) and David Stockman (R–MI). In fact, much of this criticism is distorted, misleading, or just plain wrong.
The problem of individuals being denied health insurance because of a pre-existing medical condition is frequently cited by defenders of Obamacare as justification for the law, particularly its new insurance regulations and individual mandate.
In truth, however, the problem is actually much smaller than portrayed, and a sensible solution does not require anything like the massive new spending, taxing, and insurance market takeover included in Obamacare.
In the group market, where over 90 percent of Americans with private health insurance are enrolled, there are reasonable rules limiting the application and duration of pre-existing condition exclusions. For employment-based coverage, a pre-existing condition exclusion can only be imposed if an individual has less than 12 months of prior coverage. Furthermore any coverage exclusion can be for no more than 12 months—or 18 months if the individual didn’t enroll in the employer plan when first eligible.
As Heritage’s Ed Haislmaier explains, “Those existing rules represent a fair approach: Individuals who do the right thing (getting and keeping coverage) are rewarded; individuals who do the wrong thing (waiting until they are sick to buy coverage) are penalized.”
The one problem remaining is in the individual market—which represents less than 10 percent of the total private insurance market—is that the same rules that protect consumers from unreasonable pre-existing condition exclusions in the group market do not currently apply to the individual market. An individual can keep continuous insurance coverage in the individual market for years and still face unjust exclusions when switching plans.
Secretary of Health and Human Services (HHS) Kathleen Sebelius has misled the American public again.
HHS just announced that enrollment in Medicare Advantage (MA) is projected to increase by 11 percent next year. That’s good news. But the Secretary goes terribly wrong when she credits the increase to Obamacare, stating, “Thanks to the Affordable Care Act, the Medicare Advantage and Prescription Drug programs have been strengthened and continue to improve for beneficiaries.”
As Heritage has pointed out before, Obamacare severely damages MA. The law is projected to cut $156 billion from the program between 2013 and 2022. Because of these cuts, the Medicare actuary predicts that enrollment in MA will decrease 50 percent by 2017. For those who remain in MA, Heritage estimates, “By 2017, Medicare beneficiaries who would have enrolled in Medicare Advantage under prior law will lose an average of $1,841 due to the MA changes alone and $3,714 when the effects of the entire bill…are considered.”
Yesterday, the Congressional Budget Office (CBO) released a new report that determined that even more Americans than previously estimated will be hit with Obamacare’s ever-controversial individual mandate tax, totaling 6 million by 2016.
Of the 30 million Americans whom Obamacare leaves uninsured and without affordable insurance options, 6 million will have to pay the penalty, an increased estimate from 2010. According to CBO, “About two million more uninsured people are now projected to pay the penalty each year, and collections are now expected to be about $3 billion more per year.” The total cost to uninsured Americans will be around $7 billion in 2016 and is projected to be about $8 billion every year from 2017 to 2022.
The tax penalty is calculated in different ways depending on income levels. If they do not obtain Obamacare-mandated health insurance, households with lower incomes will pay a flat dollar amount each year, and those with higher incomes will pay a penalty equal to a percentage of their incomes.
Officials in California plan to use popular network television shows to market the state’s new health care exchange, established as part of Obamacare, according to a marketing plan drafted in June.
“Individuals from California’s robust entertainment industry will be approached at the most senior levels to engage in California’s effort, to enroll residents in coverage, many for the first time,” the report states.
It continues, “A number of popular television programs and personalities such as Grey’s Anatomy, Modern Family, the Biggest Loser, Dr. Oz and others will be approached and pitched to incorporate story lines or mentions of health care reform that would reinforce campaign messages.”
In recent weeks, liberal politicians, editorialists, and policy analysts have vigorously attacked reforming Medicare based on defined-contribution financing. In fact, this approach to reforming Medicare has a long bipartisan tradition, going back to the 1980s and Representatives Richard Gephardt (D–MO) and David Stockman (R–MI). In fact, much of this criticism is distorted, misleading, or just plain wrong.
Here are some articles that set the record straight.
Medicare Reform Debate: What Really Works in Health Care Competition (Kevin Dayaratna)
The Heritage Foundation, 9/13/12
“[T]here is indeed a growing body of academic evidence that competition can help reduce health care costs.”
“Two key Obama health-care advisers—David Cutler of Harvard and Jonathan Gruber of MIT—proposed that Obama privatize the Medicare program as part of the negotiations surrounding the Bowles-Simpson deficit commission in 2010.”
Recently, economist Paul Krugman derided the premium support plan to reform Medicare:
Still, wouldn’t private insurers reduce costs through the magic of the marketplace? No. All, and I mean all, the evidence says that public systems like Medicare and Medicaid, which have less bureaucracy than private insurers (if you can’t believe this, you’ve never had to deal with an insurance company) and greater bargaining power, are better than the private sector at controlling costs.
Of course, Medicare has been shown to be “efficient” enough to lose more money to fraud than private insurance. Peter Suderman of Reason magazine recently pointed out a number of studies suggesting that the private sector can effectively control costs in health care. One notable study recognizes that private plans do have the potential to control costs better than the government, as illustrated by Medicare Advantage’s success in constraining costs compared to traditional Medicare.
Health Care News
As states weigh their options regarding the Obamacare expansion of Medicaid, many have sought out cost estimates to assist them. However, in a new paper, Heritage experts Ed Haislmaier and Drew Gonshorowski caution state lawmakers that state cost estimates rest on key assumptions, some of which may be questionable.
There are six reasons state cost estimates could be unreliable:
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