The impact of ObamaCare on doctors and patients, companies inside and outside the health sector, and American workers and taxpayers

The Journal of the American Medical Assn. recently published a very unusual article: a scientific study authored by a sitting president of the United States. That’s never happened before.

In a sense, it’s cool that President Obama cares enough about science to want to publish a paper in one of the world’s leading medical journals. But JAMA has set a bad precedent. The article, on healthcare reform in the United States, is problematic not only in its content but in the threat it poses to the integrity of scientific publishing.

It would be difficult, if not impossible, to find another paper in any scientific journal in which a politician was allowed to subjectively analyze his own policy and declare it a success. This is a textbook definition of conflict of interest.

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Politicians tend to be most enraged by the problems they cause, and the liberal fury against insurance mergers is a classic of the genre. ObamaCare was designed to create government-directed oligopolies, but now its authors claim to be alarmed by less competition.

Last week federal and 11 state antitrust regulators filed a double lawsuit to block the pending $54 billion insurance tie-up between Anthem and Cigna and the $37 billion acquisition of Humana by Aetna.

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Hillary Clinton led a health care reform effort in the 1990s, promoted medical research as a senator, and has been bashing price-hiking drug companies on the campaign trail and in TV ads.

So there’s every reason to expect her to make health care a major theme when she accepts the Democratic presidential nomination in Philadelphia on Thursday night. What she says about the future of medical research, public health, and the uninsured will give a valuable preview of what her priorities would be — and how far she’s willing to go to co-opt the ideas of her defeated rival, Bernie Sanders.

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The Department of Health and Human Services’ (HHS) annual report on Medicaid’s finances contains a stunning update: the average cost of the Affordable Care Act’s Medicaid expansion enrollees was nearly 50% higher in fiscal year (FY) 2015 than HHS had projected just one year prior. Specifically, HHS found that the ACA’s Medicaid expansion enrollees cost an average of $6,366 in FY 2015—49% higher than the $4,281 amount that the agency projected in last year’s report.

The government’s chief financial experts appear not to have anticipated how states would respond to the federal government’s 100% financing of the cost of people made eligible for Medicaid by the ACA. It appears that the enhanced federal funding for the ACA expansion population has led states to set outrageously high capitation rates—the amount government pays insurers—for the ACA Medicaid expansion population. The rates are much higher than the amounts for previously eligible Medicaid adult enrollees and suggest that states are inappropriately funneling federal taxpayer money to insurers, hospitals, and other health care interests through the ACA Medicaid expansion.

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More than six years of efforts by Republican and other right-of-center opponents to repeal, replace, or substantially reshape Obamacare have fallen short.

The strategic options ahead for Obamacare critics on the right are:

  • Rinse and repeat: more of the same
  • Gamble on a more ambitious long-shot strategy
  • Adapt tactically in the near term, to minimize future damage

House Republicans released their latest plan – “A Better Way” – to repeal and replace the Affordable Care Act last month. It blends all three of the strategies above, but its lite brew for reform remarkably manages to be both too cautious and too unrealistic all at once.
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The platform approved Monday at the Republican National Convention suggests that a future Republican administration could dismantle Obamacare using regulatory authority. A Republican president could not waive portions of the law, but he could act to stop controversial payments that are being made to insurers.

In its section on health care, the platform pledged of Obamacare: “a Republican president, on the first day in office, will use legitimate waiver authority under the law to halt its advance and then, with the unanimous support of Congressional Republicans, will sign its repeal.” The waiver concept echoes language used by 2012 Republican nominee Mitt Romney, who pledged that “If I were president, on Day One I would issue an executive order paving the way for Obamacare waivers to all 50 states.”

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Only about one-third of health insurers came out ahead in their first year in the ObamaCare marketplace, according to a study by the Commonwealth Fund released Wednesday.

While insurers made nearly twice as much money from healthcare premiums in 2014, overall profits “diminished noticeably” because of higher payouts, according to the expansive new analysis on companies participating in the exchanges.

Overall, health insurers underestimated their total medical costs by about 5.7 percent in their first year.

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The Republican platform seems to have taken its cue from Speaker Paul Ryan’s A Better Way, at least when it comes to health policy. Not surprisingly, health care did not get top billing in the 66 page document. The economy, jobs, and taxes led off, with the Affordable Care Act, Medicare, and Medicaid relegated to later chapters.  Although there is not much text, those words are important.\

Significantly, the platform takes up Medicare and Medicaid in the chapter on government reform. The document points out that Medicare’s long-term debt is in the trillions, and does not shrink from recommending actions that could set the program on a fiscally sound path.  That requires change that will not be welcomed by everyone, so the platform pushes off that change for a decade in the hope of not alienating the senior vote.  Nonetheless, the Republican Party has now officially endorsed Ryan’s premium support plan that can promote competition and more efficient health care.

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A provision of the Affordable Care Act that allows insurers to charge smokers higher premiums may have discouraged smokers from signing up for insurance, undercutting a major goal of the law, according to a study published this month.

The surcharges, of up to 50 percent over nonsmokers’ premiums, also showed no sign of encouraging people to quit.

The Affordable Care Act eliminated insurers’ ability to charge higher premiums based on whether a person was sick. But it does allow them to vary premiums with age, geography, family size and smoking status.

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The Republican party’s 2016 platform, unveiled Monday, echoes many of the proposals included in the health care plan House Republicans laid out last month.

The platform calls for the full repeal of the Affordable Care Act and for state control of insurance markets. It backs selling insurance across state lines and states that insurance should be more portable so that consumers can move from job to job with the same policy.

“We must recover the traditional patient-physician relationship based on mutual trust, informed consent, and confidentiality,” the platform reads.

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