Tag: aca

President’s Budget Shows Feds Can’t Create ObamaCare ‘Exchanges’

According to Politico Pro [$]:

More than $860 million of President Barack Obama’s proposed $1 billion increase in the CMS budget will go to building the federal exchange, acting [Centers for Medicare and Medicaid Services] Administrator Marilyn Tavenner said during a budget briefing at HHS on Monday.

This funding is necessary in part because the amount originally appropriated for the federal costs of implementing the Affordable Care Act — $1 billion — is expected to be gone by the end of this year, HHS officials said.

Assistant Secretary for Financial Resources Ellen Murray said at the briefing that half of these funds have already been obligated, and the remaining amount will be used by the end of the year.

She also said states will still be able to get help building exchanges, because other ACA funds are still available for exchange work.

“Funding for [state grants] was provided in the Affordable Care Act, so the money we’re asking for in this budget is just for the federal exchange,” Murray said.

In other words, the federal government doesn’t have the money to create ObamaCare Exchanges, and the administration has no hope of getting that funding through the Republican-controlled House. So if states don’t create Exchanges, they might not exist. (And even if the federal government does create them, they won’t work.)

Never mind the lawsuits. The Exchanges may be ObamaCare’s most serious vulnerability.

Credit Where It’s Due: Sarah Kliff Edition

On Friday, President Obama announced an “accommodation” to those who object to his contraceptives mandate. Since then, I have been astonished at how many reporters have portrayed the president’s announcement as some sort of compromise, even though it would not reduce – not by one penny – the amount of money he would force Catholics and others with a religious objection to spend on contraception.

In fact, the only reporter who seemed to grasp this may also have been the first out of the box. The Washington Post’s Sarah Kliff:

“If a charity, hospital or another organization has an objection to the policy going forward, insurance companies will be required to reach out to directly offer contraceptive care free of charge,” one administration official explained…

Numerous studies have shown that covering contraceptives is revenue-neutral, as such preventive measures can lower the rate of pregnancies down the line…

“Contraceptives save a lot of money,” a senior administration official argued.

The catch here is that there’s a difference between “revenue neutral” and “free.” By one report’s measure, it costs about $21.40 to add birth control, IUDs and other contraceptives to an insurance plan. Those costs may be offset by a reduction in pregnancies. But unless drug manufacturers decide to start handing out free contraceptives, the money to buy them will have to come from somewhere.

Where will it come from, since neither employers nor employees will be paying for these contraceptives? That leaves the insurers, whose revenues come from the premiums that subscribers pay them. It’s difficult to see how insurance companies would avoid using premiums to cover the costs of contraceptives.

The Post’s subsequent coverage would have benefited from such scrutiny of the president’s spiel. If I missed such scrutiny in the Post or elsewhere, I hope someone will let me know.

Cochrane on ObamaCare’s Contraceptive-Coverage Mandate

My Cato colleague John Cochrane – who is way smarter than I am – has a generally excellent op-ed in today’s Wall Street Journal on ObamaCare’s contraception mandate:

Salting mandated health insurance with birth control is exactly the same as a tax—on employers, on Catholics, on gay men and women, on couples trying to have children and on the elderly—to subsidize one form of birth control…

The tax rate and spending debates that occupy the media are a small part of the effective taxes and spending that the government achieves by these regulatory mandates…

The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don’t have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society…

Sure, churches should be exempt. We should all be exempt.

My only quibble is with his claim, “Insurance is a bad idea for small, regular and predictable expenses.”

That’s generally true. But medicine is an area where, potentially at least, small up-front expenditures (e.g., on hypertension control) could prevent large losses down the road. So it may be economically efficient for health plans to cover some small, regular, and predictable expenses. Both the carrier and the consumer would benefit. In fact, that would be the market’s way of telling otherwise uninformed consumers, “Hey! Controlling your hypertension is a really good for you!” And really, if someone is so risk-averse that they want health insurance with first-dollar coverage of everything – and they’re willing to pay the outrageous premiums that would accompany such coverage – why should we take issue with that?

ObamaCare’s contraceptive-coverage mandate demonstrates that government does  a horrible job of picking only those types of “preventive” services for which first-dollar coverage will leave consumers better off. But I also think advocates of free-market health care generally need to let go of the idea that health insurance exists only for catastrophic expenses.

RTD: ‘Insurance Exchange: Just Say No’

Regarding legislation to create an ObamaCare “Exchange” in Virginia, the Richmond Times-Dispatch explains:

Republicans at the General Assembly are falling prey to the fallacy of the false alternative…

[H]ere are the real options facing Virginia: (a) federal bureaucrats determine the form of our exchange, or (b) federal bureaucrats determine the form of our exchange. There is no (c)…

Running a health-insurance exchange would cost a lot of money — money Virginia does not have. Since Washington will dictate how it will be run, Washington should pick up the tab.

But, But…Price Controls Poll Well!

Politico’s Jason Millman writes:

How much does Rick Santorum hate President Barack Obama’s health care law? So much that he even opposes the parts a lot of Republicans like.

The Republican presidential candidate, talking health care across the street from Minnesota’s Mayo Clinic Monday morning, blasted parts of the Affordable Care Act that poll well even among Republican voters — like guaranteeing coverage for people with pre-existing conditions and making health insurers cover preventive care.

Santorum, who has touted free market health principles like health savings accounts as an alternative to the Affordable Care Act, defended insurance industry practices the law eliminates, like setting premiums based on people’s health status.

Sigh. I refer my right honorable friend to the smack-down I gave such silliness some time ago:

Asking people whether they support the law’s pre-existing conditions provisions is like asking whether they want sick people to pay less for medical care.  Of course they will say yes.  If anything, it’s amazing that as many as 36 percent of the public are so economically literate as to know that these government price controls will actually harm people with pre-existing conditions.  Also amazing is that among people with pre-existing conditions, equal numbers believe these provisions will be useless or harmful as think they will help.

But as the collapse of the CLASS Act and private markets for child-only health insurance have shown, and as the Obama administration has argued in federal court, the pre-existing conditions provisions cannot exist without the wildly unpopular individual mandate because on their own, the pre-existing conditions provisions would cause the entire health insurance market to implode.

If the pre-existing conditions provisions are a (supposed) benefit of the law, then the individual mandate is the cost of those provisions. If voters don’t like the individual mandate–if they aren’t willing to pay the cost of the law’s purported benefits–then the “popular” provisions aren’t popular, either.

Or, as Firedoglake’s Jon Walker puts it, ObamaCare is about as popular as pepperoni and broken glass pizza.

Even among Republican voters? Good grief.

The Ethos of Universal Coverage

Associated Press photojournalist Noah Berger captured this thousand-word image near the Occupy Oakland demonstrations last month.

(AP Photo/Noah Berger)

Many Cato @ Liberty readers will get it immediately. They can stop reading now.

For everyone else, this image perfectly illustrates the ethos of what I call the Church of Universal Coverage.

Like everyone who supports a government guarantee of access to medical care, the genius who left this graffiti on Kaiser Permanente’s offices probably thought he was signaling how important other human beings are to him. He wants them to get health care after all. He was willing to expend resources to transmit that signal: a few dollars for a can of spray paint (assuming he didn’t steal it) plus his time. He probably even felt good about himself afterward.

Unfortunately, the money and time this genius spent vandalizing other people’s property are resources that could have gone toward, say, buying him health insurance. Or providing a flu shot to a senior citizen. This genius has also forced Kaiser Permanente to divert resources away from healing the sick. Kaiser now has to spend money on a pressure washer and whatever else one uses to remove graffiti from those surfaces (e.g., water, labor).

The broader Church of Universal Coverage spends resources campaigning for a government guarantee of access to medical care. Those resources likewise could have been used to purchase medical care for, say, the poor. The Church’s efforts impel opponents of such a guarantee to spend resources fighting it. For the most part, though, they encourage interest groups to expend resources to bend that guarantee toward their own selfish ends. The taxes required to effectuate that (warped) guarantee reduce economic productivity both among those whose taxes enable, and those who receive, the resulting government transfers.

In the end, that very government guarantee ends up leaving people with less purchasing power and undermining the market’s ability to discover cost-saving innovations that bring better health care within the reach of the needy. That’s to say nothing of the rights that the Church of Universal Coverage tramples along the way: yours, mine, Kaiser Permanente’s, the Catholic Church’s

I see no moral distinction between the Church of Universal Coverage and this genius. Both spend time and money to undermine other people’s rights as well as their own stated goal of “health care for everybody.”

Of course, it is always possible that, as with their foot soldier in Oakland, the Church’s efforts are as much about making a statement and feeling better about themselves as anything else.