Fix Health Care Policy

Labor union leaders, who are big supporters of President Obama and were big proponents of his health care reform law, want taxpayer dollars to help pay for the increase in their health care costs due to Obamacare.

There are many provisions in Obamacare that will raise the cost of insurance in both the individual and employer markets. To name just a few of these provisions: no pre-existing condition exclusions, no cost-sharing on certain preventative benefits, children can stay on their parents’ plan until they’re 26, and no cap on medical benefits.

It should surprise no one that adding benefits and restricting cost-sharing adds considerable costs to health plans.

However, it appears the unions were too busy supporting Obamacare to do the math. Unions are now asking for a reprieve from the higher costs in the form of taxpayer subsidies for their lower income workers with employer-sponsored insurance. However, the subsidies are only intended to go to those purchasing coverage in the new exchanges, not to anyone with employer-sponsored insurance.

To be clear, they want taxpayer subsidies to offset the cost of their insurance while non-union workers in the same predicament would not receive help.

This request should insult every American taxpayer. These unions are using their political clout to ask for special treatment under the law at the expense of taxpayers.

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Tags: benefits, Cadillac tax, cost-sharing, health plans, labor unions, ObamaCare, subsidies

Employers’ health benefit cost growth had the smallest increase in 15 years—only 4.1 percent in 2012 compared to 6.1 percent in 2011—according to Mercer’s National Survey of Employer-Sponsored Health Plans.

The lower-than-usual increase in costs is attributed, in part, to increased usage of consumer-directed health plans (CDHP).

Despite this, many provisions in Obamacare threaten the viability of CDHPs, which have great cost-saving potential and have been growing in popularity.

One such regulation is the medical-loss ratio (MLR) requirement, which requires insurance companies to spend 80 percent of premium revenue on medical claims or other health care quality improvements. The remaining 20 percent is for fixed costs such as administrative and other non-medical expenses. If the minimum of 80 percent is not met, the insurer must issue a rebate to the consumer.

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Tags: cost containment, employer health benefit, health plans, increase, ObamaCare

The Kaiser Family Foundation just released a study that grossly misrepresents the premium-support model of Medicare reform and apparently misunderstands normal market dynamics and the differences between efficiency, choice, and higher premiums.

The Kaiser study assumes that an entire class of Americans—senior citizens—is insensitive to price. In reality, seniors are price sensitive when they are presented with options. Already, 90 percent of retirees can and do choose the private health plans they like, ranging from supplemental insurance to Medicare Advantage and Medicare drug plans. Premium support encourages intense competition that will change premiums and hold down costs. The larger impact is that seniors would have a choice of the health options they want, while creating needed savings for themselves and the federal government.

Take a simple analogy: Assume that the price of a gallon of gasoline rose from $3 to $300. How much would this affect your driving habits? It is doubtful that you would still buy the same amount of gas every week. Yet that is the economic intuition embodied in the Kaiser study.

The authors of the Kaiser study assume that zero beneficiaries would switch from traditional Medicare to a cheaper plan, despite cost increases. Part of the gain from competition is that health plans must compete for beneficiaries in order to retain or gain market share. They have to secure high satisfaction, as they do today, for example, in Medicare Part D and Medicare Advantage. To create a scenario that simply ignores the gains of market competition grossly misrepresents the economic impact of any consumer-driven market, including a health care market with premium support. The study’s headline is that 53 percent of enrollees in traditional Medicare would pay more, but within the study, when benificiaries respond to higher premiums, the number falls to as low as 33 percent.

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Tags: choice, efficiency, health plans, Kaiser Family Foundation, Medicare, premium support

Legislation to repeal Obamacare under consideration in the House today makes clear in two significant findings the massive health care law’s threat to religious liberty, conscience rights, and the protection of human life:

(7) While President Obama promised that nothing in the law would fund elective abortion, the law expands the role of the Federal Government in funding and facilitating abortion and plans that cover abortion. The law appropriates billions of dollars in new funding without explicitly prohibiting the use of these funds for abortion, and it provides Federal subsidies for health plans covering elective abortions. Moreover, the law effectively forces millions of individuals to personally pay a separate abortion premium in violation of their sincerely held religious, ethical, or moral beliefs.

(8) Until enactment of the law, the Federal Government has not sought to impose specific coverage or care requirements that infringe on the rights of conscience of insurers, purchasers of insurance, plan sponsors, beneficiaries, and other stakeholders, such as individual or institutional health care providers. The law creates a new nationwide requirement for health plans to cover “essential health benefits” and “preventive services”, but does not allow stakeholders to opt out of covering items or services to which they have a religious or moral objection, in violation of the Religious Freedom Restoration Act (Public Law 103–141). By creating new barriers to health insurance and causing the loss of existing insurance arrangements, these inflexible mandates jeopardize the ability of institutions and individuals to exercise their rights of conscience and their ability to freely participate in the health insurance and health care marketplace.

The need to repeal Obamacare to address these and many other concerns for the future of Americans’ liberty remains in the wake of the Supreme Court’s sharply divided decision upholding Obamacare.

As a result, Obamacare’s multiple threats to religious liberty, rights of conscience, and the protection of human life remain.

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Tags: conscience rights, health plans, protection of human life, religious liberty, repeal Obamacare