Tag: Obamacare

How ObamaCare Threw Gays, Immigrants under the Bus

In the wake of Senate Democrats’ inability to break a GOP filibuster of the defense appropriations bill, to which Democrats hoped to attach the pro-immigration Dream Act and a repeal of the military’s “don’t ask, don’t tell” policy, the Reason Foundation’s Shikha Dalmia writes in Forbes:

But if Harry Reid was the proximate cause of this bill’s demise, ObamaCare was the fundamental cause. The ugly, hardball tactics that Democrats deployed to shove this unpopular legislation down everyone’s throat have so poisoned the well on Capitol Hill that Democrats have no good will left to make strategic alliances on even reasonable legislation anymore. When a party has such huge majorities, even small gestures of reconciliation are enough to splinter the ranks of opponents and obtain cooperation. But Democrats played the game of our way or the highway with ObamaCare, ignoring warnings that this would render them completely impotent for the rest of President Obama’s term. Indeed, Republican Senator Lindsey Graham of South Carolina,who had been working with Senator Chuck Schumer of New York to craft comprehensive immigration reform, gave up in disgust in the wake of ObamaCare.

How ironic that a president who got elected on the promise of bipartisan comity has produced nothing but partisan rancor. And his signature legislation that was supposed to save America’s most vulnerable has begun by throwing them under the bus.

Dalmia assigns Republicans their (ample) share of the blame, too.  Read the whole thing.

ObamaCare’s First Adverse-Selection Death Spiral

This is what happens when government price controls limit insurance companies’ ability to set premiums according to risk:

Note that this adverse-selection death spiral happened before ObamaCare’s price controls on child-only coverage even took effect.  (Of course, President Obama never calls them price controls.  He calls them “consumer protections.”  Some protection.)

ObamaCare supporters are in full-blown denial:

“We’re just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds,” Ethan Rome, executive director of Health Care for America Now, an advocacy group, said in a statement. “[It] is immoral, and to blame their appalling behavior on the new law is patently dishonest.”

I’d say that brave new world is already here.

ObamaCare supporters can take comfort in this: since it might take healthy people a while to figure out that they’re better off financially if they drop their coverage and pay the individual-mandate penalty, ObamaCare’s health insurance exchanges might not collapse before their January 1, 2014, launch date.  They could last until January 2.

ObamaCare’s Premium Refunds: Bad News for the Sick

USA Today and Politico Pulse report that ObamaCare has prompted BlueCross BlueShield of North Carolina to rebate $156 million to its customers in the individual market.  This may seem like good news.  It’s actually bad news, particularly for BCBS’s sickest customers.

Pre-ObamaCare, BCBS’s customers – whether healthy or sick – had coverage with an insurer that had already pre-funded their future medical needs. Competition protected them from BCBS skimping on care: if BCBS got a reputation for skimping, it would have a hard time enrolling new customers.

Post-ObamaCare, BCBS no longer needs that pile of cash, so they’re returning it to their customers. That hurts sick enrollees because BCBS is doling it out to all enrollees – not just the sick enrollees whom that money is supposed to serve. This cash-out is actually a transfer from the sick to the healthy.

Also, every BCBS customer who is sick or becomes sick in the future will have less protection against their insurer skimping on care. Competition used to discourage insurers from providing lousy access to care, but under ObamaCare competition will reward skimping. Under ObamaCare’s price controls, insurers that gain a reputation for providing quality coverage to the sick will attract sick people and go out of business.  Insurers that gain a reputation for providing lousy access to care will drive away sick people and thrive.

President Obama’s Speech Czar

President Obama’s Secretary of Health and Human Services Kathleen Sebelius is still threatening to bankrupt insurance companies who tell their customers that ObamaCare’s mandates will increase premiums by more than 2 percent, even though her department’s projections show that, starting this week, just one of the law’s new mandates will increase some premiums by nearly 7 percent.

In a CBS News story last week, Sebelius tried to defend those indefensible threats:

But don’t the insurance companies have a right to make their own analyses and claims to their customers?

“Absolutely, they have a right to communicate with their customers,” replied HHS Secretary Kathleen Sebelius. “We just want to make sure that communication is as accurate as possible.”

The government can and should police fraud – but that’s not what Sebelius is doing.  She is suppressing legitimate differences of opinion in the pursuit of political gain.

What if the government had said, “Absolutely, CBS News has a right to communicate with its customers – we just want to make sure that communication is as accurate as possible”?  Should the government be able to put CBS News out of business if it decides those communications are not as accurate as possible? How about the National Rifle Association?  Should the next Republican administration be able to put the Center for American Progress, the SEIU, or The New York Times out of business if it decides their communications are not as accurate as possible?

You don’t have to oppose ObamaCare to see the danger here.

ObamaCare & Health Insurance Premiums: Out of the Frying Pan, into the Fire

During the (initial) congressional debate over ObamaCare, President Obama vilified Anthem Blue Cross of California for a 39 percent rate increase.  On Wednesday, the Hartford Courant reported that ObamaCare itself may increase premiums by similar amounts:

Health insurers are asking for immediate rate hikes of more than 20 percent in Connecticut for some plans, citing rising medical costs and federal health reform laws as reasons…

In what might appear to be an oddity, companies are citing a huge range of effects that the health care reform mandates will have on plan prices — from near zero to well over 20 percent. The reason is that among all the plans, some already deliver the provisions required by health reform, while others do not…

Anthem Blue Cross and Blue Shield in Connecticut, by far the largest insurer of Connecticut residents, said in a letter that it expects the federal health reform law to increase rates by as much as 22.9 percent for just a single provision — removing annual spending caps. The mandate to provide benefits to children regardless of pre-existing conditions will raise premiums by 4.8 percent, Anthem said in the letter. Mandated preventive care with no deductibles would raise rates by as much as 8.5 percent, Anthem said.

It was unclear how those separate factors would add up for Anthem’s plans, but those potential increases were all on top of rising medical costs.

If those increases are cumulative, ObamaCare could increase premiums for some Connecticut residents by more than 36 percent.

Compare that to what President Obama said in his weekly radio address on February 20:

The other week, men and women across California opened up their mailboxes to find a letter from Anthem Blue Cross. The news inside was jaw-dropping. Anthem was alerting almost a million of its customers that it would be raising premiums by an average of 25 percent, with about a quarter of folks likely to see their rates go up by anywhere from 35 to 39 percent

And as bad as things are today, they’ll only get worse if we fail to act… We’ll see exploding premiums and out-of-pocket costs burn through more and more family budgets.

It sure seems like President Obama promised that ObamaCare would make things better.  Instead, it pushed us out of the frying pan and into the fire.

HHS Secretary Katheleen Sebelius said that Anthem Blue Cross of California’s 39 percent rate increase “just doesn’t make a lot of sense to people across America.”  She said those “extraordinary” increases threaten “to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.”  Will she say the same about ObamaCare’s premium increases?  Or will she threaten to put Anthem Blue Cross and Blue Shield of Connecticut out of business for its insolence?

Avoiding the ‘U’ Word

I grow increasingly amused at how some people carefully avoid saying that ObamaCare is unpopular.

When Pollster.com aggregates all the various polls on ObamaCare’s popularity, it reveals that a plurality or majority of the public has consistently opposed the law since before the angry town-hall meetings of August 2009:

It’s no surprise when HHS Secretary Kathleen Sebelius avoids the U-word by saying stuff like, “We have a lot of reeducation to do.”  (To be clear, she’s talking about reeducating you, not herself.)

But it’s odd when a Washington Post news item describes the public as “profoundly ambivalent” toward the law. (According to Merriam-Webster, ambivalence means holding “simultaneous and contradictory attitudes or feelings,” “continual fluctuation,” or “uncertainty as to which approach to follow.”)  Or when Kaiser Family Foundation president and CEO Drew Altman tells NPR: “The public is split, has been split, and continues to be split.”

I guess those descriptions are true (though “continual fluctuation” and “uncertainty” seem like a stretch).  But they’re not very informative.  “Ambivalent” doesn’t tell you if one side dominates.  “Split” could accurately describe anything shy of unanimity.  “Opposed” or “unpopular” or “consensus” would convey so much more information. Why convey less?

Shifting the Blame for America’s Health Care Woes

I must be losing my touch. I’ve let nearly two months pass without responding to Ezra Klein’s defense of RomneyCare, ObamaCare, and other centrally planned health care systems.  (For those who want to get up to speed: his original post, my reply, and his response.)  So here goes.

Klein notes that he and I had each used flawed measures of RomneyCare’s impact on health insurance premiums in Massachusetts.  Fair enough.  But Klein ignores the study I cited by John Cogan, Glenn Hubbard, and Dan Kessler, which estimates that RomneyCare increased premiums in Massachusetts by 6 percent.  The CHK study has limitations, but it is the best estimate available.  I hope Klein addresses it.

Klein’s fallback position is that even if RomneyCare increases premiums, that’s not an indictment of the law because cost-control was not one of its goals.  Never mind that Mitt Romney boasted, “the costs of health care will be reduced.”  Klein knows political rhetoric when he sees it.  Yet he oddly sees no parallels between the phony-baloney promises of cost-control used to sell RomneyCare and the phony-baloney promises of cost-control used to sell ObamaCare – despite ample assistance from people like Medicare’s chief actuary and Alain Enthoven (“the American people are being deceived”).

Then Klein throws down his trump card:

[E]ven a cursory read of the evidence would show that whatever the drawbacks of central planning, it covers people at an extremely low cost. Romney Care’s cost problem is a result of pasting a coverage-oriented quick fix atop our insane health-care system. Compare its costs to the British system, the French system, the German system, or any other system, and whatever your conclusions, you won’t walk away unimpressed by the ability of centralized systems to cover whole populations for much less money than we spend.

Oy, where to begin?  First, Klein violates Cannon’s First Rule of Economic Literacy: he writes that centrally planned systems cost less, when what he means is that they spend less.

Second, the phrase “whatever the drawbacks of central planning” is some serious hand-waving.  Those “drawbacks” include (among other things): the Medicare program’s suppression of comparative-effectiveness research, error-reduction efforts, care coordination, and other delivery innovations; Canada’s human-rights violating Medicare system; and the suppression of untold innovations in health insurance and medical treatment by government price controls.  Other than a few drawbacks, Mrs. Lincoln…

Third, our “insane health-care system,” as I blogged previously, “is the product of the old raft of government price & exchange controls, mandates, and subsidies.”  Prior to ObamaCare, government already controlled half of all U.S. health care spending directly, granted control over another quarter to employers, and regulated health care more heavily than perhaps any other sector of the economy.  Klein and his fellow central planners can’t deny paternity.  Our “insane health-care system” is the product of central planning.

Finally, only a cursory read of the evidence could lead to the conclusion that central planning contains health care spending.  Klein posts the following charts and concludes that since all those (other) centrally planned systems spend less on health care than the United States, central planning must result in lower health care spending.

Photo credit: By Robert Giroux/Getty Images

But if that were true, then one would expect per-capita spending on elderly Americans – who have universal coverage through the centrally planned Medicare program – would not be far out of line when compared to how much other nations spend per elderly resident.  Yet the United States is just as far out of here as overall.  According to the OECD, the United States spends about twice as much per elderly person as Canada, and more than twice as much as Australia spends.  (Alas, I’m not cherry-picking; these are the only four nations for which the OECD provides recent data.)

Source: OECD, author’s calculations

(One could argue that the reason for this is that Medicare exists alongside the world’s largest (ostensibly) private health care sector, whose evils spill over into Medicare.  If that were the case, then moving all Americans into Medicare should reduce U.S. health care spending, bringing it back into line with other nations.  But consider that Klein and The New Republic’s Jonathan Chait both acknowledge that Congress had to throw $2 at the health care industry for every $1 that ObamaCare cut from future Medicare spending. How exactly could Congress move 250 million Americans into Medicare (which presumably would reduce overall spending), or reduce Medicare spending later, given those constraints?  How, exactly, would an independent rationing board survive the political dynamics that produce such outcomes? Prediction: it won’t.  The narrative that central planning contains health care spending just doesn’t hold water.)

Klein, The New Republic’s Jonathan Cohn, and others have taken a big step by acknowledging that RomneyCare is struggling.  When they shift the blame to “the American health care system,” however, they obscure what’s really happening.  As I closed my previous post: “RomneyCare and its progeny ObamaCare are attempts by the Left’s central planners to clean up their own mess.  If Klein and Cohn want to defend those laws, pointing to the damage already caused by their economic policies won’t do the trick.  They need to explain why government price & exchange controls, mandates, and subsidies will produce something other than what they have always produced.”