Posts Tagged ‘ObamaCare’
The United States health care system is in need of reform—but not the kind promised by Obamacare, more formally known as “The Patient Protection and Affordable Care Act.” Obamacare was passed by Congress on March 21, 2010, and signed into federal law.
The health law’s expansion of the role of government in every part of Americans’ health care will have negative and unintended consequences for individuals and families. To move in the right direction, Obamacare must be repealed. From there, Congress should pursue reforms that empower patients.
One of Obamacare’s main selling points during the health care reform debate was the need to provide insurance coverage to those with pre-existing conditions—but like other aspects of the law, the plan is failing those it was intended to help.
Beginning in 2014, Obamacare will prohibit insurance companies from excluding anyone with a pre-existing medical condition from coverage (called guaranteed issue). Because this incentivizes people to wait until they’re sick to purchase coverage, Obamacare includes the dreaded individual mandate to force all Americans to purchase health insurance.
But these massive new insurance mandates don’t take effect until 2014, so in the meantime the law set up the pre-existing conditions insurance plan (PCIP), which funded new high-risk pools in each state, providing coverage to those with pre-existing conditions from 2010 to 2014. The PCIP was allocated $5 billion for that time frame.
Remember that repetitive presidential promise to “cut the cost of a typical family’s premium by up to $2,500 a year”? As 2014 and full implementation of Obamacare get closer, it is crystal clear that won’t be the case.
Obamacare’s most onerous insurance regulations will directly cause insurance premiums to skyrocket, particularly in the individual and small group markets.
While there are many provisions that will increase premiums, two will have the most expensive impact:
Expanding Medicaid will be costly for most states. The authors of The Patient Protection and Affordable Care Act of 2010 (Obamacare) threatened to strip all federal funding for states’ Medicaid programs if they refused to expand the entitlement.
But 27 states filed suit over Obamacare and the Supreme Court struck down this threat as coercive, making the Medicaid expansion optional for states. Now, governors and state legislatures are debating whether to expand or not, as the above presentation shows. As Nina Owcharenko notes, Medicaid needs reform, not expansion.
Of course, states are tempted by the offer of new federal dollars. But, as Heritage expert Drew Gonshorowski writes:
The Medicaid expansion represents a massive increase in federal and state spending. Although some claim that states could experience savings, it is clear that this is the exception, not the rule. Expanding Medicaid will ultimately cost states in the long run.
For a breakdown of state-by-state costs, click here.
Obamacare is approaching its three-year anniversary next week. And while it’s having an impact on nearly all Americans in one way or another, businesses are facing some of the biggest challenges related to the law.
Heritage hosted a panel Monday to examine the implications of the Affordable Care Act. Robert Graboyes, a senior fellow for health and economics at the National Federation of Independent Business Research Foundation, explained the three options employers face with Obamacare: stunt business growth, shrink employee hours, or minimize the damage the mandate does on the employer’s wallet.
That’s the case for Mike Ruffer, who works in restaurant business. Ruffer purchased the franchise rights from Five Guys in 2004 with a commitment to build 11 restaurants. Ruffer owns eight Five Guys in North Carolina, but worries about opening new restaurants because of the uncertainty related to impending federal regulations.
As employers and businesses prepare for Obamacare’s sweeping changes and mandates to begin in 2014, many are already laying off some of their employees. An event at Heritage today will discuss the burdens of the law both for small businesses’ ability to hire and grow and individuals’ ability to find jobs. Here are 10 examples of job loss due in whole or part to Obamacare and its consequences:
Medical Device Tax
- 1,000 jobs lost: “Stryker Corporation Confirms Obamacare Layoffs.”
- 275 jobs lost: “Medical Device Tax Blamed for Welch Allyn Layoffs.”
- 100 jobs lost: “Latest Obamacare Casualty: 100 Workers at Smith and Nephew.”
The 2.3 percent excise tax on the sale of medical devices, one of the 18 tax hikes in Obamacare, is estimated to cost the industry over $29 billion between 2013 and 2022. Many employers in the industry are compensating for the tax hike by reducing their labor costs.
Medicare Payment Cuts
- 950 jobs lost: “Wake Forest Baptist Medical Center Reengineers Cost Structure, Eliminate Positions.”
- Up to 400 jobs lost: “Orlando Health to Cut Record Number of Jobs to Save Money.”
- 52 Jobs lost: “Delaware Hospice Lays Off 52 Workers amid Federal Changes.”
- 58 jobs lost: “Hospital Layoffs and the Affordable Hea[l]th Care Act.”
Obamacare has been law for nearly three years, with its anniversary approaching on March 23. And while the major provisions (exchange subsidies and Medicaid expansion) aren’t slated to begin until 2014, Obamacare is already having devastating effects on Americans and their health care.
Recall that fateful Presidential promise, made on several occasions during the health care reform debate, “If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”
Despite the President’s promise, Heritage warned that many provisions in Obamacare would encourage employers to drop health coverage for their workers:
Many businesses and their employees—especially lower-income employees—will find that replacing ESI [employer-sponsored insurance] plans with subsidized coverage on the exchanges is mutually beneficial. Employers would no longer offer health insurance but would offer wage increases as wages and benefits are substitutes in an employee’s net compensation. At the same time, these workers will still have access to coverage through the exchanges with the subsidies or through Medicaid.
Heritage had it right. As employers and businesses prepare for the law’s major insurance regulations and mandates to begin next year, more stories of people losing their current coverage are emerging.
Then: In his September 9, 2009, speech to a joint session of Congress, President Obama declared, “I will not sign a plan that adds one dime to our deficits—either now or in the future.”
Now: Over the next 75 years, the Affordable Care Act—Obamacare—will add an estimated $6.2 trillion to the primary deficit under the most realistic outlook on federal spending, according to a new report by the Government Accountability Office (GAO), the nonpartisan fiscal watchdog of Congress. The primary deficit, as noted by the GAO, is the difference between federal revenues and non-interest spending.
Senator Jeff Sessions (R–AL), who commissioned the study, released its findings this morning at a Senate Budget Committee hearing. The GAO report examines the long-term impact of Obamacare on the nation’s fiscal health.
Projections of spending and deficits and debt, as the GAO analysts observe, are often calculated under the “Baseline Extended Simulation,” which assumes that current law will “continue unchanged.” These projections can also be calculated under an “Alternative Simulation,” which assumes “historical trends and policy preferences continue.” Different assumptions lead to very different results.
Obamacare supporters tend to give credit to the law where credit is not due. In the latest attempt, Senate Budget Committee Chairman Patty Murray (D–WA) tried to link lower projections for Medicare and Medicaid spending to the Affordable Care Act.
As I was reading through the report, one section really got my attention …which was the discussion of the change in health spending in recent years. In fact, I stopped and underlined one statistic because I found it so surprising. The statistic is that CBO has lowered its estimate of federal spending for Medicare and Medicaid to such a degree that spending for 2020—one year is now $200 billion lower than CBO thought back in 2010, an improvement of 15 percent.
And let’s be clear, that improvement has occurred since enactment of the Affordable Care Act.
It is unfortunate that Chairman Murray didn’t keep reading because the very next paragraph of the report states:
Spending projections also have been affected by legislative action—most notably as a result of the Affordable Care Act…. From 2010 to the present, those other types of revisions boosted the estimates of outlays for Medicare and Medicaid in 2020 by $72 billion, or about 5 percent. (The Affordable Care Act also created new subsidies for some people to purchase health insurance through exchanges, adding $115 billion to the estimate for federal outlays for health care programs in 2020, according to CBO’s current projections.)
So spending is estimated to decrease for Medicare and Medicaid in 2020 by $200 billion but Obamacare spends an extra $187 billion more than would have been spent in the absence of the law. Thus, whatever “savings” were projected have been gobbled up by Obamacare and its massive new spending.
Two hospice care centers are struggling to make ends meet, and Obamacare’s cuts to Medicare are to blame.
Hospices—health care facilities for the terminally ill—along with other Medicare providers are facing Medicare pay cuts. Of the $716 billion in payment reductions, hospice care was hit by a $17 billion payment cut from 2013 to 2022.
Now, contrary to all of the misleading claims, this effect is already beginning.
San Diego Hospice recently laid off 260 workers, closed a 24-bed hospital, and has recently filed for Chapter 11 bankruptcy. San Diego Hospice’s financial condition is attributed mainly to reduced Medicare reimbursement, fewer patients, and a federal audit that hurt the center’s reputation.
Another provider, Delaware Hospice, had to lay off 52 workers, citing lower federal reimbursement as the cause. “The decision,” said CEO Susan Lloyd, “is a direct result of a consequential decline in census and the need to position the organization to meet additional changes and challenges that the hospice industry anticipates with health care reform.”
Three House committees have added up the total hours of burden that Obamacare’s regulations will cost Americans: over 127 million hours per year of paperwork.
Federal law requires agencies to estimate the paperwork burden created by rules and regulations, so the estimates for hours of burden come from the Obama Administration itself.
The committees’ new Obamacare Burden Tracker currently includes 157 different rules and regulations that make up the 127 million hours of paperwork.
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