Tag: health care reform

The New York Times and The Boston Globe Unload on ObamaCare

Aside from one necessary clarification (see far below), it would be difficult to improve on what the New York Times, the Boston Globe, and the enrollees they interview have to say about ObamaCare.

First, from yesterday’s New York Times article, “Many Say High Deductibles Make Their Health Law Insurance All but Useless”: 

But for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.

“The deductible, $3,000 a year, makes it impossible to actually go to the doctor,” said David R. Reines, 60, of Jefferson Township, N.J., a former hardware salesman with chronic knee pain. “We have insurance, but can’t afford to use it.”…

“We could not afford the deductible,” said Kevin Fanning, 59, who lives in North Texas, near Wichita Falls. “Basically I was paying for insurance I could not afford to use.”

He dropped his policy…

“Our deductible is so high, we practically pay for all of our medical expenses out of pocket,” said Wendy Kaplan, 50, of Evanston, Ill. “So our policy is really there for emergencies only, and basic wellness appointments.”

Her family of four pays premiums of $1,200 a month for coverage with an annual deductible of $12,700…

Alexis C. Phillips, 29, of Houston, is the kind of consumer federal officials would like to enroll this fall. But after reviewing the available plans, she said, she concluded: “The deductibles are ridiculously high. I will never be able to go over the deductible unless something catastrophic happened to me. I’m better off not purchasing that insurance and saving the money in case something bad happens.”

“While my premiums are affordable, the out-of-pocket expenses required to meet the deductible are not,” said [Karin] Rosner, who makes about $30,000 a year…

“When they said affordable, I thought they really meant affordable,” [Anne Cornwell of Chattanooga, Tenn.,] said.

And from today’s Boston Globe article, “High-Deductible Health Plans Make Affordable Care Act ‘Unaffordable,’ Critics Say”:

“We can’t afford the Affordable Care Act, quite honestly,” said Cassaundra Anderson, whose family canvassed for Obama in their neighborhood, a Republican stronghold outside Cincinnati. “The intention is great, but there is so much wrong. . . . I’m mad.”…

The Andersons’ experience echoes that of hundreds of thousands of newly insured Americans facing sticker shock over out-of-pocket costs…

“This will be an issue at least one more time in the 2016 election. It could absolutely still hurt Democrats,” said Robert Blendon, a professor of health policy and political analysis at the Harvard School of Public Health. “Polls about the Affordable Care Act have a considerable amount of middle-income people who say either the program has done nothing for them or actually hurt them.”…

“Unfortunately, what we are headed toward now is universal crappy health insurance,” said Dr. Budd Shenkin, a California pediatrician…“It’s just not a good deal for people,” he said.

“We’re in the process of looking at going without insurance,” [Cassaundra Anderson] said, calculating that the family will be better off financially just paying the $2,000 tax penalty for not abiding by the law’s mandate. “What am I even paying these insurance people for? Why should we reenroll?”…

“I cannot get anything with this insurance. Nothing,” said [Laura] Torres, who avoids seeking treatment for her thyroid condition and high blood pressure because of cost. “I just pay my monthly payments, try to take care of myself, go to work, and hope something serious doesn’t happen to me.”…

Amete Kahsay, 53, works as a temporary warehouse packer in Columbus. The Affordable Care marketplace is her only option for health insurance. She and her husband, an airport shuttle driver, pay $275 a month for a “bronze” plan with a $13,200 deductible.

Shortly after they signed up for insurance last year, her husband rushed her to the emergency room when she experienced dizziness. The visit, which included a CT scan of her brain, cost $1,700. She paid the charge from her savings, then returned to her native Ethiopia, where care is cheaper, to consult a neurologist and seek follow-up care.

“I support Obamacare. Without it, I wouldn’t have any type of insurance. But I’m not sure it’s worth the money,” said Kahsay, a US citizen who is registered as an independent voter. “Now, unless I get very, very sick, like only if it’s life-threatening, I won’t go to the doctor. I just lay down and take a rest.”

The necessary clarification is that these people are not complaining about high-deductibles in a market system. In a market system, consumers who choose high deductibles save money on their premiums and therefore have more resources to help them pay their out-of-pocket expenses. ObamaCare, on the other hand, manages to pair high deductibles with higher premiums, stripping many people of this benefit of high-deductible plans and leaving them unable to pay their medical bills. 

Yes, the Senate Can Repeal ObamaCare’s Regulations with 51 Votes

The Hill reports the Senate GOP is trying to decide how much of ObamaCare to repeal via the budget-reconciliation process:

[Senate Majority Leader Mitch] McConnell only needs 51 votes instead of the customary 60 because he is moving the repeal measure under a special budgetary process known as reconciliation. The downside of the strategy is that that package can only include provisions designed to impact the budget deficit.

As a result, popular parts of the law, such as the prohibition against discriminating against pre-existing conditions and allowing young adults to stay on their parents’ health plans until age 26, cannot be included.

First of all, ObamaCare’s most enduring myth is that its pre-existing conditions provisions are popular. This myth is based entirely on misleading poll questions that ask about only the (presumed) benefits of those regulations. When pollsters ask about not only the benefits but also the costs of those regulations, 2-to-1 public support flips dramatically to 5-to-1 opposition. Second, that last part is a matter of debate, not fact.

As the Heritage Foundation’s Paul Winfree and I explain (in The Hill, as it happens):

A full-repeal bill…would recognize that ObamaCare creates a single, integrated program of taxes and subsidies that work in concert to expand coverage, and would eliminate that entire program as a whole. Its primary effect would be budgetary. According to the Congressional Budget Office (CBO), full repeal would eliminate $1.7 trillion of spending and “would reduce deficits during the first half of the decade.” Retaining ObamaCare’s spending cuts would ensure that repeal reduces deficits in perpetuity.

With respect to the opinion, held mostly by Democrats, that The Hill portrays as fact, we write:

Opponents will try to argue that repealing ObamaCare’s health-insurance regulations (e.g., community rating) would have only an incidental effect on the budget. Yet those regulations are merely part of that larger, integrated program to expand coverage: community rating taxes the healthy to subsidize the sick; the individual mandate enforces those transfers by making part of that implicit tax explicit; additional regulations further enforce that implicit tax; explicit premium subsidies reduce those implicit taxes, and supplement the implicit subsidies, for low-income taxpayers; and the employer mandate imposes an implicit tax on workers that both reduces and offsets direct spending on premium subsidies.

Every relevant authority has held these provisions were designed to create a single, integrated program of taxes and transfers, and has rejected attempts to isolate those regulations from other parts of that program.

Winfree and I then cite former Senate Majority Leader Harry Reid (D-NV), former House Speaker Nancy Peolosi (D-CA), the Obama administration, and the Supreme Court, all of whom fell over themselves to argue that those regulations are part of a single, integrated program. As a result:

To treat ObamaCare’s health-insurance regulations as separate from that larger scheme is to renounce the Supreme Court’s King ruling and everything ObamaCare’s authors have said about how the law works. It would amount, to quote the Obama administration, to “seizing on isolated phrases [and] giving them a meaning divorced from statutory context [to] advance a radically different conception of the Act’s operation.”

Thus, “Congress may repeal those regulations via reconciliation just as it can repeal rules regulating any other government spending Congress zeroes-out through that process.”

Read the whole thing.

King v. Burwell Helps Repeal Obamacare

It’s baaaaaack.

In today’s issue of The Hill, the Heritage Foundation’s “dangerous” director of economic policy Paul Winfree and I explain that King v. Burwell makes repealing ObamaCare about nine Senate votes easier:

As early as this week, the House could consider a reconciliation bill that repeals only parts of ObamaCare, leaving many of its taxes in place. Not only do more Americans oppose that approach than oppose ObamaCare itself, but the Supreme Court’s recent King v. Burwell ruling shows why a full-repeal bill is more likely to reach the president’s desk. Indeed, unlike partial repeal, Senate leaders can all but guarantee that full repeal can pass the Senate with just 51 votes…

A full-repeal bill, by contrast, would recognize that ObamaCare creates a single, integrated program of taxes and subsidies that work in concert to expand coverage, and would eliminate that entire program as a whole. Its primary effect would be budgetary. According to the Congressional Budget Office (CBO), full repeal would eliminate $1.7 trillion of spending and “would reduce deficits during the first half of the decade.” Retaining ObamaCare’s spending cuts would ensure that repeal reduces deficits in perpetuity…

The Senate Budget Committee can further clarify that these provisions create one integrated program. First, it can ask CBO to score ObamaCare as it scored President Clinton’s essentially identical proposal in 1994, with “all payments related to health insurance policies…recorded as cash flows in the federal budget.” Second, it can adopt that score as the baseline against which the Senate considers reconciliation. Using that baseline would show ObamaCare’s regulations are merely components of a larger program, that all financial effects of repeal would be budgetary, and that Congress may repeal those regulations via reconciliation just as it can repeal rules regulating any other government spending Congress zeroes-out through that process.

Read the whole thing.

“Health Care’s Future Is So Bright, I Gotta Wear Shades”

If you’ve ever wondered why a person would earn (and relish) titles like “ObamaCare’s single most relentless antagonist,” “ObamaCare’s fiercest critic,” “the man who could bring down ObamaCare,” et cetera, my latest article can help you understand.

Health Care’s Future Is So Bright, I Gotta Wear Shades” is slated to appear in the Willamette Law Review but is now available at SSRN.

From the introduction:

Futurists, investors, and health-law programs all try to catch a glimpse of the future of healthcare. Lucky for you, you’ve got me. I’m from the future. I’ve travelled back in time from the year 2045. And I am here to tell you, the future of healthcare reform is awesome.

When I presented these observations at the Willamette University College of Law symposium “21st Century Healthcare Reform: Can We Harmonize Access, Quality and Cost?”, I was tickled by how many people I saw using iPhones. I mean, iPhones! How quaint. Don’t get me wrong. We have iPhones in the future. Mostly they’re on display in museums; as historical relics, or a medium for sculptors. Hipsters—yes, we still have hipsters—who wouldn’t even know how to use an iPhone, will sometimes use them as fashion accessories. Other than that, iPhones can be found propping up the short legs of coffee tables.

I also noticed you’re still operating general hospitals in 2015. Again, how quaint.

It’s not often I get to cite MLK, Bono, Justin Bieber, the Terminator, Bill and Ted’s Excellent Adventure, two Back to the Future films, and Timbuk3, all in one law-journal article.

King v. Burwell and the Triumph of Selective Contextualism

This Thursday, the Cato Institute will release the 14th edition of the Cato Supreme Court Review, covering the Court’s October 2014 and 2015 terms. The lead article, “King v. Burwell and the Triumph of Selective Contextualism,” is by Jonathan Adler and yours truly. Here’s the abstract:

King v. Burwell presented the question of whether the Patient Protection and Affordable Care Act of 2010 (ACA) authorizes the Internal Revenue Service (IRS) to issue tax credits for the purchase of health insurance through Exchanges established by the federal government. The King plaintiffs alleged an IRS rule purporting to authorize tax credits in federal Exchanges was unlawful because the text of the ACA expressly authorizes tax credits only in Exchanges “established by the State.” The Supreme Court conceded the plain meaning of the operative text, and that Congress defined “State” to exclude the federal government. The Court nevertheless disagreed with the plaintiffs, explaining that “the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” The Court reached its conclusion by disregarding portions of the ACA’s text and considering only selected elements of the ACA’s structure, context, and purpose. The King majority’s selective contextualism embraced an unexpressed congressional “plan” at the expense of the plan Congress actually enacted.

Our article—which is available now at SSRN—quotes Darth Vader more often than any previous Cato Supreme Court Review article. (Probably.)

Adler and I will also discuss the King ruling on a panel at Cato’s 14th Annual Constitution Day Conference this Thursday, September 17, from 10:45am-12pm. Click here to register.

Goldhill: ObamaCare to Hurt Those It Purports to Help

Another excerpt from David Goldhill’s new book Catastrophic Care: How American Health Care Killed My Father – And How We Can Fix It:

If the ACA places more of the burden of health care on the poor and the middle class, diverts resources into waste and unnecessary treatments, coddles an industry culture of dangerous sloppiness, and crowds out all other social priorities, then it will have actively hurt the very people it was intended to help.

Goldhill is the CEO of the Game Show Network, a member of the board of the Leapfrog Group, and will speak at a Cato forum on his book tomorrow, Wednesday, September 18, from 12-1:30 p.m. at the Cato Institute. The Brookings Institution’s Kavita Patel and I will provide comments.

Click here to register.

How Firms Will Adapt to Avoid ObamaCare’s Mandates (and Drive up Its Cost)

An oped in today’s Wall Street Journal explains:

How big can a company get with just 50 employees? We’re about to find out.

Thousands of small businesses across the U.S. are desperately looking for a way to escape their own fiscal cliff. That’s because ObamaCare is forcing them to cover their employees’ health care or pay a fine—either of which will cut into profits and stymie future investment and growth…

“Going protean” offers a better strategy for many businesses. Owners of protean companies create a core of strategic employees who manage the big-picture elements of the enterprise—the culture, business model, product mix, vision, strategy, etc. This core then outsources the business tasks to other corporations…

Non-core tasks could include things like accounting, marketing, product development, manufacturing, IT, PR, legal, finance, etc. There is almost nothing that cannot be outsourced…

These new contracts will be a mix of large corporations, small businesses, micro-corporations and even nano-corporations (an individual doing business as a corporation). But to be a protean solution, it must involve a corporation-to-corporation relationship…

In the context of ObamaCare, a small business could go protean by offering current employees contracts for doing their current work as a corporate entity instead of as an employee…

[A]s government continues to impose itself into the marketplace and reduce the freedom of the commercial sector through statist programs like ObamaCare, businesses will have to look for creative solutions to survive. Going protean is only one way, and others will emerge.

Keeping the core company below 50 full-time employees will allow such companies to avoid the employer mandate. But it will also drive up ObamaCare’s cost, because most of the workers in the new corporate entity will be eligible for government subsidies through ObamaCare’s health insurance “exchanges.” This will drive up the cost of ObamaCare wherever those subsidies exist.