Pipes: On Obamacare's 5th Birthday

Health care expert Sally Pipes marks the 5th birthday of Obamacare with a painful reality check of the changes the health care law has made.

Promise: lower premiums by up to $2,500 per year for typical family.

2014 insurance premiums are 24.4% higher than they would have been without Obamacare, according to the National Bureau of Economic Research.

Promise:  protect vulnerable patient populations from increases in drug prices.

Drug costs are being shifted to patients. In 2015, more than 40% of all 'silver' exchange plans -- the most commonly purchased -- are charging patients 30% or more of the total cost of their specialty drugs. Only 27% of silver plans did so last year.Drug costs for these patients have skyrocketed as costs of drugs were shifted to patients.

Promise:  more choice, more competition, lower costs for millions of Americans.

The Government Accountability Office reports that insurers have left the market in droves. In 2013, 1,232 carriers offered insurance coverage in the individual market. By 2015, that number had shrunk to 310.

Promise:  Government spending on Obamacare will be only $900 billion over 10 years.

This month, the Congressional Budget Office estimated the law's 10-year cost will reach $1.2 trillion.

Promise:  Obamacare will cover 34 million uninsured Americans by 2021.

The Congressional Budget Office revised that estimate to 25 million obtaining coverage by 2025. Moreover 89% of Americans who have signed up for Obamacare in 2013 were already insured and simply switched insurance plans.

Promise:  Obamacare will let you keep your doctor and your hospital.

McKinsey & Co. noted that roughly two-thirds of the hospital networks available on the exchanges were either "narrow" or ultra-narrow," meaning Obamacare plans refused to partner with at least 30% of the area's hospitals. Other plans exclude more than 70%. More than 60% of doctors plan to retire earlier than anticipated -- by 2016 or sooner, according to Deloitte. Coverage is worthless if patients can't find a doctor or hospital who will see them.

 "Time and again," writes Pipes, "Obama has been proven wrong about what his health law would accomplish. Quality hasn't improved, and costs continue to grow out of control.  So far at least, that's Obamacare's legacy."

ObamaCare before Supreme Court Wednesday

"On Wednesday, the fate of ObamaCare is in front of the Supreme Court again," writes former NY Lt. Gov. Betsy McCaughey. "At stake are the subsidies intended to make ObamaCare plans 'affordable'."

The letter of the law allows consumers to get subsidies only in the 14 states that set up their own exchanges, not in the rest that didn't. But the Obama administration is ignoring that and doling them out in all 50.

The administration claims that if the court rules against it in King v. Burwell, it will cause a national disaster. Don't believe it. The biggest losers will be insurance companies.

The losers, should the Court rule against the Obama Administration:

• about 5.5 million middle-class Americans who get questionable subsidies and who will see their insurance premiums quadruple if taxpayers are no longer required to pay three-quarters of their plans' actual costs; and
• big insurance companies who have seen their stock prices soar since the Healthcare.gov rollout — Humana up 66%, Cigna up 53% and Aetna up 52%.

The biggest winners, should the Obama Administration lose:

• people and businesses in the 36 non-exchange states:
• uninsured people would no longer be forced to pay the Obamacare penalty;
• 250,000 business with 50 or more full-time workers would no longer face Obamacare penalties; and
• job-seekers and part-timers hoping for full-time work from businesses that would no longer have an powerful incentive to keep their workforce below 50 full-time employees;
• the Rule of Law, if the Obama Administration is forced to "faithfully execute" his health care law; and
• the entire nation, "if Obama is forced to negotiate changes to his unworkable, expensive, overbearing law."

The court's decision, expected in June, will have no impact on the poor — about 90% of all Obamacare sign-ups — since the poor will continue to be subsidized through the federal Medicaid welfare program regardless of the court's decision.

Barnett: How to Finally Kill Obamacare

Law professor Randy Barnett, who directs Georgetown University Law School's Center for the Constitution, writes in USA Today that "there is now a clear path to repealing and replacing the Affordable Care Act next year."

• There is now a serious financial risk to the ACA now that the Supreme Court has agreed to hear King v. Burwell, which challenges the legality of the IRS ruling that — contrary to the law's specific language — permits federal subsidies in states that have not built their own state exchanges.
• Opponents of ACA should begin to develop — and have ready — a viable alternative law, one that has gone through the regular order legislative process.
• As a rule, Supreme Court justices are reluctant to invalidate a law on which many relied. It will be far easier for the justices to enforce the law's existing language if they know there is a viable alternative that can be enacted by both house of Congress and signed by the president within a week of their ruling.
• The alternative law should:
• completely repeal, in its first line, each and every word of the ACA;
• restore the private insurance market using actuarially-based insurance priced according to risk;
• restore consumer choice to buy true private insurance limited to the terms they want to pay for, including policies insuring only catastrophic costs, and medical savings accounts;
• increase competition among insurers by allowing state regulated policies to be sold across state lines so people don't have to change insurance when they move; and
• increase equity by extending tax benefits now available only to employer0based insurance.

By having a legislatively-vetted replacement in the pipeline and in the public discussion before oral arguments are held in March, Barnett argues, Obamacare's opponents can make a favorable ruling against the law much more likely.

Obamacare's Hidden Taxes on Jobs, Wages

Many have already felt the pain of Obamacare's impact on their health insurance coverage and medical care, but that's only half the story. The other half is the negative, long-term impact Obamacare has on jobs and the opportunity for personal career advancement, as University of Chicago economics professor Casey Mulligan explains in the November Imprimis.

The key is Obamacare's "tax distortions," i.e., those changes in behavior on the part of businesses and households for the purposes of reducing their costs (tax burdens) or increasing their subsidies (tax benefits). These tax distortions "create all kinds of productivity problems and will have visible and permanent effects on the economy."

Obamacare effectively creates three new hidden taxes on full-time employment and business expansion via the employer mandate and the federal premium subsidies:

• Since the employer mandate applies to full-time employment, Obamacare effectively penalizes (or taxes) employers who offer full-time employment to workers and rewards employers who offer part-time employment to workers.
• Since the employer mandate applies only to employer with 50 or more employees, Obamacare effectively discourages (or taxes) businesses that grow and expand, hurting employees who would have advanced financially as a small business grew into a larger, more profitable business.
• Since state exchange premium subsidies (tax breaks) are progressive and based on worker earnings — the more a worker earns, the less he/she receives in government tax breaks — Obamacare effectively creates a new hidden tax on wages.

"In conclusion," writes the author, "I can make you this promise: If you like your weak economy, you can keep your weak economy."

Source: Effects of the Affordable Care Act on Economic Productivity, Casey Mulligan, Imprimis.

Harsanyi: Obama Era Myths Debunked

David Harsanyi debunks dubious assumptions about the Obama Era, among them:

• No, Voters Don't Hate 'Obstructionism' — "If anything, what we learned is that politicians are far more likely to be penalized by the electorate for passing unworkable and overreaching legislation that they are stopping it."
• There is No Revolt Against Washington (Yet) — American voters didn't oust all incumbents; they selectively punished only one party.
• Obamacare is Not a Political Winner — Approximately 36,000 anti-Obamacare ads were aired in Senate races in the three-week period from October 6 to 26. "It could be that the historic Republican gains had nothing to do with the most-discussed legislation in America. A far more plausible answer is that Obamacare has fathered two colossal wave elections by the GOP in four years. Which probably makes it the least popular federal policy in our lifetimes."

Less-costly Alternative to Obamacare Insurance

"A fast-growing, short-term alternative to ObamaCare that allows customers to get cheap, one-year policies could put the government-subsidized plan into a death spiral," reports Fox News.

The plans, the only ones allowed for sale outside of ObamaCare exchanges, generally cost less than half of what similar ObamaCare policies cost, and are increasing in popularity as uninsured Americans grapple with the requirements of the Affordable Care Act. The catch -- that the policies only last for a year -- is not much of a deterrent, given that customers can sign up for ObamaCare during open-enrollment periods if their short-term coverage is not renewed.

These short term plans, which have a typical premium of $100 per month, are less costly than Obamacare plans with an average cost of $271 per month, and they allow the patient to choose any doctor or hospital.

Health Insurance Innovations estimates that the short-term insurance industry as a whole has grown at 20-30 percent over the last year since ObamaCare was implemented. McLean, of eHealthInsurance.com, said the plans appeal to young people.

“They're particularly popular with young adults," she said. "Forty-six percent of our short term policy holders are between the ages of 25 and 34.”

One conservative youth advocacy group, Generation Opportunity, specifically endorses buying short-term plans as a way to get around ObamaCare.

“We think it is an excellent option for young people,” the group’s president, Evan Feinberg, said, though he added that it isn’t perfect.

“We don’t think this is an ideal way to do health insurance in general. People should be free to insure themselves both against short-term catastrophic costs and the long term need for permanent medical care,” he said. “Unfortunately there are people who take away that choice from us based on a misguided idea that they can run a healthcare system from Washington that meets the needs of hundreds of millions of Americans.”

Physicians Opting Out of Obamacare Plans

An estimated 214,524 American physicians will not be participating in ACA (Obamacare) health plans, according to a large 2014 survey of multi-physician medical practices by the Medical Group Management Association (survey summarized here).  Why?

• ACA's payment rates for services rendered are "financially unsustainable" for physicians.  "[W]here private plans pay $1.00 for a service, Medicare pays $0.80, and [Obamacare] plans are now paying about $0.60."
  
• ACA's high deductibles can leave patients owing thousands of dollars to physicians and hospitals for services rendered—money that doctors need to keep their doors open, but may not be able to collect from patients.
  
• ACA's premiums aren't cheap either, and if a patient stops paying the premiums, Obamacare rules give patients a 90-day grace period to get premiums caught up. If the patient doesn't pay up, Obamacare forces the insurance company to pay physicians and hospitals for any services provided day 1 through 30, but not for services provided from day 31 through 90. Doctors and hospitals are simply left holding the bag. 

With the deck stacked against them, doctors are simply avoiding Obamacare plans. As of January 2014, a estimated 70% of California's 104,000 physicians had already said no to participating in Covered California plans.

Judge: IRS Obamacare Rules 'Abuse of Discretion'

"U.S. District Judge Ronald White concluded Tuesday that the IRS rule altering the Obamacare law and providing billions [of dollars] in subsidies is 'arbitrary, capricious and abuse of discretion'," writes Craig Bannister @ CNSnews.com.

"The court holds that the IRS rule is arbitrary, capricious, and abuse of discretion or otherwise not in accordance with law, pursuant to 5 U.S.C.706(2)(A), in excess of summary jurisdiction, authority or limitation, or short of statutory right, pursuant to 5 U.S.C. 706(2)(C), or otherwise is an invalidation of the ACA [Affordable Care Act], and is hereby vacated. The court's order of vacatur is stayed, however, pending resolution of any appeal from this order."

Oklahoma was the first of several states to challenge the IRS rule "that caused billions in subsidies to be paid out, despite Congress having never authorized those payments."

Oklahoma Attorney General Scott Pruitt hailed the state's victory in its lawsuit challenging the implementation of the Affordable Care Act:

"Today's ruling is a consequential victory for the rule of law. The administration and its bureaucrats in the IRS handed out billions in illegal tax credits and subsidies and vastly expanded the reach of the health care law because they didn't like the way Congress wrote the Affordable Care Act. That's not how our system of government works."

A 3-Minute Video: Why ACA Cancelled Health Insurance Plans

The Mercatus Center at George Mason University makes the complex easy in this three-minute video explaining why Obamacare caused so many health insurance plans to be cancelled.  The legislative stupidity of it is astounding!

Professors Silent on Obamacare

In an impromptu focus group we recently did with college students, one student said:  

In the beginning a lot of people on campus were talking about it [the Affordable Care Act]. Then it became a joke, and it just seemed to die away. It’s not a hot topic anymore.

A recent IBD editorial, Professors Suddenly Don't Like Obamacare Either, may explain why the campus has gone silent about Obamacare:

After years of singing the praises of universal health care, college professors are now shocked at how badly it has turned out — for them.

Adjunct professors are steamed at the way their employers are interpreting the Affordable Care Act's employer mandate, which forces them to cover full-time but not part-time workers. Typical of liberals, they blame their employers instead of the job-killing law they supported.

Starting Jan. 1, ObamaCare makes employers offer all full-time workers health insurance or pay a fine. In response, hundreds of colleges have simply cut instructors' course loads to dodge coverage. Others are thinking about laying off untenured faculty by the thousands.  [snip]

The American Association of University Professors says it's "dismayed" by the ObamaCare-tied cutbacks, calling them "reprehensible." A Stark State College adjunct professor facing cuts at his Ohio institution whines that it should cover part-time workers, too. "It goes against the spirit of the law," says the English prof.

Complained another adjunct: "The university canceled one of my courses. The reason was to avoid having to give me any benefits due to the Affordable Care Act."

Welcome to the real world.

Even Bigger ObamaCare Lawsuit in the Pipeline

"The D.C. Circuit is due to rule any day now, quite possibly today, on Halbig v. Sebelius," writes Michael Cannon, adding that "Newsweek calls Halbig 'the case that could topple Obamacare'."

For a little background. The Patient Protection and Affordable Care Act offers refundable “premium-assistance tax credits” to qualified taxpayers who purchase health insurance “through an Exchange established by the State.” The PPACA contains no language authorizing tax credits through the 34 Exchanges established by the federal government in states that declined to establish one themselves, nor does it authorize the Internal Revenue Service to treat those federally established Exchanges as if they had been “established by the State.” Offering benefits only in compliant states was proposed by numerous Republicans and Democrats in 2009, for obvious reasons: Congress cannot force states to implement federal programs, but it can create incentives for states to act, such as by offering health-insurance subsidies to residents of compliant states.

Halbig is one of four cases challenging the IRS’s decision to rewrite the statute and offer tax credits in the 34 states with federal Exchanges. The plaintiffs are individuals and employers who are injured by the IRS’s overreach because, due to the PPACA’s many inter-locking pieces, issuing those illegal tax credits subjects them to illegal penalties.

Cannon adds links to "some materials for those who want to hit the ground running" when the ruling comes down.

Tapscott: Casualty of VA Scandal Could Be Obamacare

"...it was all but impossible in 2014 to talk about Memorial Day without also talking about the VA scandal," writes Mark Tapscott. "There is simply no reconciling the contrast between the nation's love and respect for its veterans the the bureaucratic incompetence and abuse being inflicted on them by their government-run health care system."

Dr. Ben Carson, the world-famous neurosurgeon and potential 2016 GOP presidential candidate, may have best captured the dilemma posed by the VA scandal for President Obama and congressional Democrats.

During an interview on Fox News over the weekend, Carson laid it out on these terms:

"I think what’s happening with the veterans is a gift from God, to show us what happens when you take layers and layers of bureaucracy and place them between the patients and the health care provider.

"And if we can’t get it right, with the relatively small number of veterans, how in the world are you going to do it with the entire population? You don't have to be a rocket scientist to figure this out."

Concludes Tapscott, "...no matter how Congress ultimately fixes VA, one thing seems all but certain — the biggest casualty of the VA scandal will be Obamacare."

Obamacare: "A Colossal Fiscal Disaster"

Describing the Affordable Care Act as possibly the "greatest act of fiscal irresponsibility ever committed by federal legislators," Charles Blahous, a senior research fellow at the Mercatus Center at George Mason University writes:

When new enrollment figures were released last week, the national discussion focused on whether the ACA is fulfilling its coverage expansion goals. The largely unwritten and more important story, however, is that the ACA is rapidly becoming a colossal fiscal disaster as enrollment proceeds heedless of the concurrent collapse of the law’s financing structure.

Blahous lists several of the ACA "funding mechanisms" that have fallen apart, leaving the federal government with no viable plan to finance the Obamacare program. Worse, legislators put the program into place at a time when existing entitlement programs such as Medicare, Medicaid and Social Security were already spinning out of control.

Consider this: just five years after enactment the ACA will absorb more of our total economic output than Social Security did fully sixteen years after it was enacted. [snip]

The ACA was enacted when legislators knew, or should have known, that they inhabited a fiscal environment in which such extravagance was unaffordable. Deficits (and debt) are far higher today than when the other major entitlement programs were created; millions of baby boomer retirements are swelling expenditures arising from previously-enacted Social Security and Medicare law. Someday historians will puzzle over the thinking that induced legislators to embark on a vast new spending program at the very moment it could least be afforded.

Percent Uninsured Worse Under Obama than Bush

Commenting on Gallup's graphic of the percentage of uninsured people (right), Charlie Martin at PJTatler writes:

At the start of the Obama Administration, the rate was 15.6 percent; the peak was 18 percent — in roughly the third quarter of last year. Remember that, when people were objecting because they'd had their insurance canceled? Harry Reid said all those people were lying, but Gallup says different. In fact, 1 percentage point on this chart is, roughly, 3 million people. The change from Q1 to Q3 was about 2 percent — or roughly 6 million people who became uninsured.

And now for the punchline: Since Obama was inaugurated in 2009, the net change is from 15.4 percent uninsured to 15.6 percent. So the net effect has been that by the Gallup Survey the number of uninsured has improved in the last year, but gotten worse since Obama was inaugurated, and is 1.2 percent worse than under Bush.

Why 7 Million Signups Won't Save OCare

Scoffing at Obamacare supporters for cheering 7.1 million Obamacare sign ups, Ben Domenech argues "the 7 million figure as salvation from supporters of the law is completely bonkers."

The reason the number of people signed up for Obamacare – via the exchanges or Medicaid – matters is that it is, unexpectedly, a much smaller number than originally anticipated. This is in part due to the failure of the approach, and in part due to failure of execution.  What is truly surprising is the degree to which the previously uninsured have not signed up for either program. We’re dealing with a far smaller magic number of beneficiaries than CBO expected:

The health care law’s stumbles out of the gate were unexpected, and it’s understandable that supporters would look for any silver lining as a sign of hope that this approach would be a success. But it is a mess. It will continue to be a mess. The winners are heavily outnumbered by the losers at the current moment, and there is no sign that a bend in the cost curve or a shift in premiums will change that dynamic. Supporters of the administration will try to find poll numbers that indicate avenues to success or achieve more support for the law. But the negatives of the law have eroded support among the very constituencies who were supposed to love it.

President Obama promised that under his law, we could keep our plans, we could keep our doctors, and our premium costs would go down. None of that has happened. And unfortunately for supporters of the law, that’s what people care about. All Obamacare had to do to be a popular success was to work – was to match up with the expectations President Obama and the Democrats set for it. If it did, they would be running on the issue for a generation – if it didn’t, the issue would be a weapon for the other side.

It hasn’t. They can’t. It is. And if you think I’m wrong, there’s a handy test for that this fall: it’s called the ballot box.

IBD: OCare Exposes Lies About Uninsured

From Investor's Business Daily:

The truth is that Democrats had been misleading the country about the uninsured for decades, mischaracterizing who they were, exaggerating their plight, and grossly inflating their numbers.

ObamaCare is now exposing this fraud for all to see.

Of the 46 million who supposedly lacked insurance, for example, more than 40% were either eligible for Medicaid, enrolled in Medicaid, or weren't U.S. citizens. ObamaCare helps none of these groups.

Of the rest, they are predominantly young and in good health. Most of their intervals spent without insurance are relatively short and a significant portion have incomes over $50,000, which means they aren't eligible for ObamaCare subsidies.

Meanwhile, just 5% said they were refused insurance because of poor health or age, according to a Kaiser survey. Most cited cost as the barrier.

But while ObamaCare claims to solve the first problem through its guaranteed issue requirement, it largely fails to fix the cost problem. Even with subsidies, ObamaCare's inflated premiums are still unaffordable for many uninsured.

In fact, the McKinsey survey found that more than half of the uninsured who shopped for an ObamaCare plan cited cost as the reason for not buying one.

There are better, more targeted, and far less expensive ways than ObamaCare to help those who truly need it. ... But getting these done means first being honest with the public about just who the uninsured really are.

Bedard: ObamaCare Will Reduce Wages Says Union Report

"A national union that represents 300,000 low-wage hospitality workers charges in a new report that Obamacare will slam wages, cut hours, limit access to health insurance and worsen the very 'income equality' President Obama says he is campaigning to fix," writes Paul Bedard.

Unite Here warned that due to Obamacare's much higher costs for health insurance than what union workers currently pay, the result will be a pay cut of up to $5 an hour. "If employers follow the incentives in the law, they will push families onto the exchanges to buy coverage. This will force low-wage service industry employees to spend $2.00, $3.00 or even $5.00 an hour of their pay to buy similar coverage," said the union in a new report.

Union head Donald "D." Taylor, in a note also being sent to Congress, demands changes and admits to being reluctant to bash a president his union supported.

"Believe me; I enter this entire debate about the consequences of the ACA with a deep reluctance,” he wrote. “Unite Here was the first union to endorse then-Senator Obama. We support the addition of health care to millions of Americans. Yet facts are facts, and Obamacare will cost our members the equivalent of a significant pay cut to keep their hard-won benefits.”

Taylor also suggested that Democrats in Washington are telling unions to stop griping about the impact of Obamacare on their members. He quoted a Senate aide saying, “Labor needs to regress to the mean.” Said Taylor: “In other words, roll back what you have and take one for the team. Ironic, given that Congress and the president carved out an exemption for staffers on the ACA. We cannot sit idly by as the politicians carve up our health plans while they carve out exceptions for themselves and every special interest feeding at the trough in Washington.”

Union's Report: The Irony of ObamaCare: Making Inequality Worse

Expect Bizarre Questions from Your Doctor

"Were you hit by a falling kayak? Injured while baking, vacuuming or spending too much time in a deep freeze? Encountered a lamppost for the second time? Were you bitten by a turkey? Never fear, the ICD-10 is here," writes Grace Marie Turner and Tyler Hartsfield.

Starting this October, your doctor will be required to record precisely whether you were bitten or struck by a parrot, macaw, chicken, turkey, or any "other psittacines," or encountered any one of 140,000 other specific medical conditions, injuries or diseases.

For 30 years, the U.S. has used the ninth revision of the International Classification of Diseases (ICD-9), but the U.S. Department of Health and Human Services (HHS) is requiring virtually all hospitals, laboratories and medical offices to convert to the more complex ICD-10 coding system on Oct. 1. ...

The ICD-9 has about 17,000 codes, while the new ICD-10 will have more than 140,000. These cumbersome new administrative responsibilities will take away from the time doctors can spend with their patients. ...

Legislation is before the House and the Senate to block the implementation of ICD-10 and give small and medium-size practices a much-needed reprieve from yet another bureaucratic nightmare.

No votes have been scheduled, but the clock is ticking for doctors.

Henninger: OCare and the Liberal Brand

"As American voters watch ObamaCare continue its Godzilla-like rampage across the national health-care landscape," writes Daniel Henninger @ WSJ, "it's worth considering the collateral damage this political monster may be doing to the Democratic brand itself."

Not everyone deserves a gold badge from J.D. Power, but by and large it has become very difficult to sustain a shoddy product in the marketplace anymore.

Except the government. And the Democratic Party is nothing if not the party whose identity is bound up with government services and the public unions that deliver those services.

Good enough for government work was once just a joke. ...For decades, voters have passed off this mediocrity as the sometimes maddening bureaucratic price for living in a large, complex country. No longer.

Rubin: OCare Lawlessness Charge Sticks

Noting that liberals are joining the chorus complaining of Obama's lawless changes to Obamacare (Wash Post editorial board and Ron Fournier the latest), Jennifer Rubin argues "it would be wise for Democrats, while they still have the Senate, to clear away the president's lawless fiats."

When the press, political partisans and elected officials ignore the abuse of power because it is for a “good cause,” they encourage more and more abuse. The “good for the gander, good for the goose” realization, if nothing else, should convince Dems to rein in the White House. You’d think that simple fidelity to the Constitution would be enough, but at this point the motive is less important than ending the practice. I fear, however, that Obama’s noxious overreach will simply commence a downward spiral of power grabs in which each Congress and president attempts to rig the system its way, citing the other party’s precedent. Maybe, just maybe, if Democrats policed their own president, we’d nip this in the bud.

Obamacare Lawlessness Charge Sticks, Jennifer Rubin, Washington Post
The Obama Administration Has a Mandate on the Health-Care Law, Too, Editors, Washington Post
Why I'm Getting Sick of Defending Obamacare, Ron Fournier, National Journal
Kirsten Powers: I'm Tired of "Having to Defend This President" and Obamacare [video], Real Clear Politics