ObamaCare’s impact on health costs.
“The health-care overhaul has taken some of the flex out of flexible spending accounts, which let workers pay medical expenses with pretax dollars. Starting in January, you’ll no longer be able to use your FSA for over-the-counter drugs and medicines unless you have a doctor’s prescription. Experts agree that the new rules will likely discourage people from tapping their FSAs for routine purchases of aspirin, vitamins, cough medicine and other drugstore essentials.”
“Congress must repeal the new law. Congress cannot build sound market-based health care reform on the PPACA foundation, which is utterly incompatible with a health care system based on consumer choice and free markets.”
Since the subsidies for the uninsured don’t begin until 2014, ObamaCare creates high-risk pools to help the uninsured get coverage. This program is so poorly designed and ill-conceived that instead of insuring hundreds of thousands of people, as expected, only about 8,000 people have coverage in the program.
“AARP’s endorsement helped secure passage of President Barack Obama’s health care overhaul. Now the seniors’ lobby is telling its employees their insurance costs will rise partly as a result of the law. In an e-mail to employees, AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.”
“Until the next presidential election, the short-term tactical agenda for the new de facto majority in Congress remains mostly defund, delay, and debunk. Initiatives to reduce or cut off funding for implementation of the next round of ObamaCare need to be targeted narrowly to succeed… Trying to wind back the ObamaCare implementation clock so that it doesn’t get so dark so early is a more promising approach. Congressional appropriations riders could attach new conditions that must be met before proceeding further.”
“If anyone ever doubted the extent to which Congressional committees could turn good intentions into a bureaucratic nightmare, they need only to look at PPACA’s premium subsidy provisions and their potential impact on insurance exchanges.”
“The overhaul left virtually untouched one big element of our health-care dilemma: the price problem. Simply put, Americans pay much more for each bit of care — tests, procedures, hospital stays, drugs, devices — than people in other rich nations.”
Insurance companies will be forced to comply with new mandates on their administrative spending. This new spending could drive many of them out of business if they have to pay large penalties. “The market is underestimating the impact of minimum MLRs on managed care earnings in 2011 — Unless plans are successful in obtaining the federal income tax adjustment and receive numerous waivers from HHS, our analysis of United’s Golden Rule subsidiary indicates that plans will be forced to pay bigger rebates next year than the market currently anticipates, which means the consensus earnings outlook for next year seems too high.”
Many embattled House Democrats who voted to pass ObamaCare just seven months ago no doubt wish they had listened to the American people rather than to their leadership and said “No!” to the massive health overhaul law.
If a Democrat boasts about voting Yes, it is such a rarity that it makes news. In all but a very few races, support for the law is a huge liability on the campaign trail.
Nervous Democrats are defensively asking voters to give them another chance so they can fix it and get it right this time. It would be something of an understatement to say that most voters are disinclined to do that.
There will be huge political consequences for slamming such a massive change into law – one that will directly affect virtually every American and every corner of the health sector.
Here are the top 10 reasons the health law is unraveling:
- State pushback: State opposition is building and will become more intense next year. About 10 states, led by Mississippi Gov. Haley Barbour, are talking about forming a unified front to oppose the law’s mandates. And up to 25 new governors will be elected on Nov. 2, most facing huge budget pressures and most with no intention of falling into line to implement a law many actively campaigned against.
- Voter rejection: Three states — Oklahoma, Arizona, and Colorado — have ballot initiatives before the voters in November, all repudiating the health law. Passage will give even more impetus to proponents of repeal, following the 71% vote against the law in Missouri in August.
- Lawsuits: There are at least 15 lawsuits against the law, and the two largest moved forward in the last week. Two federal judges have said that there is enough substance to the constitutional questions to allow the challenges to proceed. Arguments were heard in Virginia on Monday and are scheduled for December in Florida. The suits are marching toward the U.S. Supreme Court, likely in 2012-2013.
Backers of the health law are concerned that if the individual mandate is declared unconstitutional, the court will strip out everything that wouldn’t have passed without the mandate. That would surely include insurance “reforms” but possibly hundreds of billions of dollars in insurance subsidies.
- Rising costs: Health insurance costs already are rising as a result of the law, and the pressures will intensify. Boeing is the latest company to tell its 90,000 employees that it plans to increase the price of employee health insurance for its non-union workforce over the next few years in response to rapidly rising insurance costs, at least partly because of the health law.
- Towering deficits: Gov. Philip Bredesen, Democrat of Tennessee, warned in a Wall Street Journal commentary Thursday that the health overhaul law creates strong incentives for employers to drop health coverage. This would dramatically increase the cost for taxpayers, as former Congressional Budget Office Director Doug Holtz-Eakin of American Action Forum has explained. Congress may find it is essential to ask the CBO to recalculate the actual cost of the health overhaul law to protect taxpayers from an even larger wave of red ink.
- Seniors hit hard: Medicare Actuary Rick Foster confirmed that the health overhaul law will result in “less generous benefits packages” for seniors on the popular Medicare Advantage program and that the coverage will cost them more. Foster estimates seniors’ costs will go up by $346 in 2011 and as much as $923 by 2017.
- Millions losing coverage: The Principal Group announced it plans to drop health coverage for 840,000 policyholders; millions of seniors will lose Medicare Advantage plans; child-only policies already are vanishing from the market because of HHS rules; retirees are losing supplemental coverage; and major employers such as AT&T, Caterpillar, John Deere, Verizon, and countless others are considering dropping health benefits over the mid- to long-term.
- Job-killing mandates: The U.S. Chamber of Commerce said that nearly eight in 10 small business leaders expect their costs to increase as a result of the new law. Many are fearful of the impact of new health insurance mandates, and the majority say they will be less likely to hire new employees and more likely to reduce current benefits.
- Searching for the exits: The McDonald’s waiver shows that companies have to be protected against the law to avoid its damage; dozens more waivers have been granted so a million people didn’t lose their mini-med coverage just before the election. The Wall Street Journal asked, “Wouldn’t it be better to write less destructive rules in the first place? Or why not give everyone a waiver from everything?”
- Reduced quality, higher costs: A Wall Street Journal poll last week found that a majority of voters believe the new law will cause them to get lower quality care, pay more in insurance premiums or taxes, or both. A plurality favors repeal, and those who know most about the law favor repeal by more than two to one.
If Republicans capture the House on November 2, expect dozens of hearings to point out the many problems we already are seeing with the law — from driving up costs, to causing millions of people to “lose the coverage they have today,” to massive new deficit spending on new entitlement programs, to budget-busting Medicaid mandates.
As Rep. Paul Ryan (R-WI) said at a briefing about the overhaul law, “This cannot stand!”
ObamaCare’s deficit reductions are unlikely to pan out, and the tax hikes will be worse than anticipated when you account for their economic effects. “Indeed, the Patient Protection and Affordable Care Act is chock full of tax hikes. And those taxes will cost more than you might think.”