On Monday, e21 sponsored a discussion, moderated by National Journal’s Major Garrett, between Charles Blahous and Jared Bernstein. The topic was Blahous’ recent paper entitled “The Fiscal Consequences of the Affordable Care Act” (published by the Mercatus Center of George Mason University). The full event can be viewed here.
Not surprisingly, the back and forth between Blahous and Bernstein was spirited and covered mainly familiar ground. Blahous repeated the main arguments from his paper, which is that ObamaCare will add hundreds of billions of dollars to the federal deficit over the next decade, contrary to official estimates. Bernstein then picked up many of the criticisms of paper that have appeared in blog posts and opinion columns from defenders of ObamaCare.
Blahous’ argument rests on the fact that ObamaCare’s supposed cuts in Medicare spending aren’t, in reality, cuts at all. They merely substitute for spending restraint (or tax increases) that would be required under law and happen anyway whenever Congress is faced with impending trust fund insolvency.
Bernstein countered that the baseline against which ObamaCare was measured is the same baseline both sides have used for many years. Changing the rules of the game at this point would have been both odd in a procedural sense and also a thinly veiled attempt by political opponents to scuttle the legislation with arcane rules instead of substantive arguments.
What this debate really comes down to actually relatively straightforward. Does extending the life of the Medicare Hospital Insurance (HI) trust fund, with spending cuts and tax hikes, result in new Medicare spending, or not? Because if it does, that would mean ObamaCare spent the Medicare cuts twice — once on future Medicare benefits, and a second time on ObamaCare’s coverage expansion entitlements.
It should be obvious that extending the life of the HI trust fund does authorize more Medicare spending. Otherwise, why does Congress worry about trust funds becoming depleted at all? Because, if Medicare benefits were going to be paid in full regardless of the status of the trust fund, all of this worrying by Congress about trust fund exhaustion would be completely misplaced. The truth is that Congress worries for good reason: trust fund depletion would mean Medicare benefits could not be paid in full. The fact that official baselines do not reflect this reality of trust fund law (for reasons that are themselves also rational) does not mean it isn’t so.
“As we approach the second anniversary of ObamaCare, it’s worth re-examining some of the claims its proponents made about the impact of the law on health-care costs. Three of the law’s most-touted cost-control measures have already been shown to be unlikely to succeed.”
“For much of the last year, the White House had adopted a ‘strategy of silence’ on ObamaCare. That’s clearly over… But ObamaCare is back to center stage this month, and the more people learn about the law, the more unpopular it becomes. Here are just some of the recent revelations:”
“On February 10, on the same day that the administration announced it wanted to craft the so-called accommodation, it finalized the rule that had been previously issued with no change. That rule includes the infamous four-part test by which HHS bureaucrats will determine which houses of worship are pure enough to warrant a full exemption from the mandatory coverage of abortion-inducing drugs, sterilization procedures, and contraception. It is also the same rule that provides no exemption from the mandate for religious employers that provide services to the general public. So, as matters stand today, the Obama administration has implemented rules that even it concedes infringe on the traditional rights of religious employers.”
Nancy-Ann DeParle, White House Deputy Chief of Staff, Touts ObamaCare’s New Rate-Review System Coming Online:
Today, consumers got some good news when a big insurance company – Blue Shield of California – announced it will be returning $295 million to consumers and the community by the end of the year. This announcement will provide some much needed relief to families who have seen their premiums increase in recent years. And it’s the fourth positive announcement we’ve heard this week alone about health insurance premiums. Before the Affordable Care Act became law, many insurance companies could raise your premiums without any transparency or accountability. If you wanted to know why your rates were going up, they were under no obligation to tell you. Thanks to the Affordable Care Act, that’s all changing. Starting September 1, 2011, in every State and for the first time ever, insurance companies are required to publicly justify their actions if they want to raise rates by 10 percent or more. The Affordable Care Act also included $250 million to help States strengthen their rate review procedures so they can successfully fight high premium hikes and help keep costs under control.
In Reality, Price Controls Lead To Higher Costs And Fewer Choices.
After enacting an ObamaCare-style health reform law in 2006, the Bay State faced rising health spending and insurance premiums. Spending per individual was 15% higher than the national average last year, and premiums went up between 5% and 10% in the years following the passage of the reform plan. Last year, Massachusetts officials tried to crack down on health insurance rates, rejecting 253 of 274 proposed rate hikes across the state. Chaos ensued. The small-group health insurance market, which served 800,000 of the state’s residents, briefly shut down. Later in the year, all four of the state’s biggest health insurers reported that they’d lost money as the price caps were implemented. Three explicitly attributed their losses to the state’s rate rejections. Insurers can’t endure state-mandated losses forever. Eventually, they’ll have to shed jobs or exit the market entirely. Consumers would be left with fewer choices. (“Reviewing ObamaCare’s Rate Review” by Sally Pipes in Forbes)
President Obama Likes The Term “ObamaCare” Because It Shows He Cares, And His Opponents Don’t
President Obama is embracing the term ‘ObamaCare’ on the campaign stump, attempting to turn the tables on critics who use it in a derogatory way. ‘They call it ObamaCare?’ the president told supporters at a St. Louis fundraiser Tuesday evening. ‘I do care! You should care, too.’ Earlier in the day, Obama told an audience in Dallas, ‘Folks go around saying ObamaCare. That’s right — I care. … That’s their main agenda? That’s your plank? Is making sure 30 million people don’t have health insurance?’ The president’s remarks are clearly part of a White House strategy to reclaim some lost ground on healthcare, taking the fight to Republicans… ‘If the other side wants to be the folks that don’t care, that’s fine with me. I do care.’
Yet House Democrats Dislike The Term So Much, They Banned It From Official House Mailings
In the latest battle in the Congressional franking wars, Democrats have been vetoing use of the word ‘Obamacare’ in taxpayer-financed mass mailings, saying it violates rules against using the franking privilege for “personal, partisan or political reasons.’… ‘It’s telling that Democrats are fearful of taking ownership of the president’s signature piece of legislation,’ a GOP House aide said. ‘The White House and Congressional Democrats exhausted all of their political capital and a Congressional majority to move the bill across the finish line and into law. You would think given how much it cost them, that they would embrace the end result and proudly attach the president’s name to it at every opportunity.’ ‘You know, if it was popular they’d be all about calling it Obamacare,’ another Republican source added.
At issue is the ability to send provocative communications using Congressional funds. The franking commission reviews official mail, email and social media for overtly political or inflammatory content.
“Since the federal government is mandating that people purchase health insurance and will spend trillions of dollars in taxpayer subsidies, it therefore must define what qualifies as an acceptable policy. Deciding what will be in this ‘essential benefits package’ is going to be a long, painful process that the political system is ill-equipped to handle.”
On Thursday night, President Obama gave a speech to a joint session of Congress outlining his new program to stimulate the economy. There was only one small reference to ObamaCare, but it was packed with misinformation.
“But what we can’t do — what I will not do — is let this economic crisis be used as an excuse to wipe out the basic protections that Americans have counted on for decades. (Applause.) I reject the idea that we need to ask people to choose between their jobs and their safety. I reject the argument that says for the economy to grow, we have to roll back protections that ban hidden fees by credit card companies, or rules that keep our kids from being exposed to mercury, or laws that prevent the health insurance industry from shortchanging patients.” [EA]
The laws to which the President is referring to are presumably the “medical-loss ratio” regulations which are part of ObamaCare. The laws are supposed to restrict the administrative overhead—and thus the profit—of insurance companies. Instead, this rule will drive many insurers out of business or cause them to leave certain smaller markets, driving down the quality of coverage and increasing the price. Many states are applying for waivers to delay implementation of these rules, because their insurance commissioners have said their citizens will lose access to their current insurance plans.
“President Barack Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed… Up to 3 million people could qualify for Medicaid in 2014 as a result of the anomaly. That’s because, in a major change from today, most of their Social Security benefits would no longer be counted as income for determining eligibility.”
“The traditional gift for a first anniversary is paper, but ObamaCare isn’t worth the paper it’s printed on. It’s bad medicine — for patients, doctors, hospitals and businesses. We hope the two parties will work together this year to actually improve health care, not break it even further.
But make no mistake: There’s no avoiding the necessity of repealing ObamaCare to prevent it from doing further damage, even as Congress takes up better, more workable solutions.”