President Barack Obama is calling on taxpayers to shell out more money for his health reform law’s disastrous Medicaid expansion.
The president recently asked Congress to approve $106 billion in new Medicaid spending over the next 10 years. Nevermind that the Congressional Budget Office just concluded that, as is, Medicaid spending will add $1.3 trillion to the federal deficit by 2025. That’s $136 billion more than the agency projected last year.
And it’s not as if those dollars are being spent wisely. Obamacare’s Medicaid expansion is sticking taxpayers with a huge bill while doing little to help low-income Americans actually gain access to high-quality healthcare.
Beginning next year, the annual out-of-pocket limits for all health plans sold in the (Obamacare) health insurance exchanges will be $7,150 for an individual and $14,300 for a family. To put those numbers in perspective, a $10-an-hour employee only earns about $20,000 a year.
One way to help families meet the burden of these medical expenses is with a Health Savings Account. But because the requirements for HSAs are so rigid, roughly four out of five plans sold in the exchanges are incompatible with them. One of the most nettlesome rules is the requirement that HSA plans cover only “preventive care” below the deductible. To compete for customers, especially young healthy enrollees, the insurers believe they need to make more services available with a minimum of out-of-pocket costs.
Things are about to get much worse. New rules and regulations, which become mandatory in 2018, will impose minimum and maximum deductibles and out-of-pocket limits that are inconsistent with the HSA rules.
One provision of the Patient Protection and Affordable Care Act that has been delayed until 2017 is a federal mandate for standard menu items in restaurants and some other venues to contain nutrition labeling.
Drawing on nearly 300,000 respondents from the Behavioral Risk Factor Surveillance System from 30 large cities between 2003 and 2012, we explore the effects of menu mandates. We find that the impact of such labeling requirements on BMI, obesity, and other health-related outcomes is trivial, and, to the extent it exists, it fades out rapidly.
A new note from JPMorgan economist Jesse Edgerton looks at what is happening with Americans who are working part-time for “economic reasons” — or Americans involuntarily working part time. As you can see in the above chart — the red line — the numbers remains elevated despite big declines in the U-3 and U-6 jobless rates. Edgerton:
There has been little recent relationship between the number of “extra” part-time workers and the level of U3 unemployment, questioning the idea that driving U3 down further will reduce involuntary part-time employment. . . In a note last year, we pointed out that the shift strikingly coincided with the passage of the ACA, which included an employer mandate to provide health insurance to employees working 30 or more hours per week. . . passage of the ACA preceded a large and unprecedented shift from workers working more than 30 hours per week to just under 30 hours. We continue to believe that the ACA can explain a significant number of the “extra” involuntary part-time workers.
One of the reasons that ACA Exchange plans are losing money is their inability to attract enough healthy enrollees. Healthy people are, disproportionately, young people. And large numbers of young adults don’t have to enroll in ACA Exchange plans – because the ACA mandates that their parents’ employer provide them with coverage, and that coverage is almost invariably priced lower.
Anyone up to age 26 with a parent who has employer-based health coverage that includes dependents can enroll in the parent’s plan. This is called the “dependent care mandate,” and is a requirement of the ACA. There are no other requirements for this coverage option: the “child” does not have to live with the parent or be financially dependent or a dependent for tax purposes on the parent. The “child” could be employed and eligible for employer-based coverage on his/her own, but elect to take the parent’s coverage if it’s preferable.
Exchanges are being undermined, in part, by the ACA’s dependent care mandate.
. . .
On Tuesday UnitedHealth Group reported a terrific first quarter, with strong performance across nearly all business lines. There was one exception: The conglomerate’s insurance exchange unit raised its projected Affordable Care Act losses for 2016 to $650 million from $525 million, after booking $475 million in red ink last year.
CEO Stephen Hemsley said ObamaCare’s instability, small market size and costly patient population “continue to suggest we cannot broadly serve it on an effective and sustained basis.” He said UnitedHealth will withdraw to “only a handful of states” in 2017.
Normally sedate insurance markets have been roiled by everything from the federally chartered co-op failures to enrollment well below projections. ObamaCare’s architecture also makes it economically rational for consumers to wait until they are about to incur major medical expenses to get covered, and administratively created “special enrollment periods” encourage such gaming.
. . .
The Republican Study Committee submitted their recommendations for health reform to the House Republican Health Care Reform Task Force on Friday, pointing to several provisions of an already-introduced bill to guide its proposals.
“The Republican Study Committee has led the way on a comprehensive repeal and replace strategy for ObamaCare,” the group says of its recommendations. “Currently, the American Health Care Reform Act, H.R. 2653, is the most cosponsored ObamaCare alternative in the House. This bill relies on conservative principles and increased state flexibility to transform our top-down health care system into one that creates competition, growth and increased access for all Americans.”
United Healthcare’s announcement that it is pulling out of most of the exchanges established by the Affordable Care Act is one of many indications of the law’s continuing instability.
There are many other insurance plans in the same boat. Blue Cross Blue Shield plans have dominated the individual and small-group markets in most states for decades. If they were to abandon this market, they would have less ability than United does to grow their business elsewhere. But many of these plans are nonetheless contemplating such a move.
ObamaCare isn’t likely to enter an insurance death spiral; there’s too much federal money propping the whole thing up. But it isn’t on track to become a stable, self-sustaining insurance pool either, because very few middle-class families want to get their insurance through the exchanges. Which means the law is not only unstable financially, it is politically unstable as well.
. . .
The Obama administration has published rules that “will make it impossible to offer HSA-qualified plans in the future” in the ACA exchanges, according to HSA expert Roy Ramthun. That’s because plans offered in the exchanges must comply with HSA and new ACA rules that conflict. This is one more way in which the ACA is limiting options to people getting coverage through the Obamacare exchanges, giving enrollees fewer of the options available to those with private and employer coverage outside the exchanges. Nationwide, nearly 20 million people were enrolled in HSA-qualified plans last year.
Presidential candidate Donald Trump has said he wants to repeal the Affordable Care Act and yet still “take care of everybody.” He has said repeatedly that he is different from other Republicans in this regard, implying that other GOP politicians don’t want Americans to get needed health services. Of course, Trump has never bothered to back up this slander with any evidence (and the media haven’t bothered to ask him for it).
Trump is apparently unaware of the plans to replace Obamacare sponsored by Rep. Tom Price and by Sen. Richard Burr, Sen. Orrin Hatch, and Rep. Fred Upton. These plans would insure as many Americans as are enrolled today under the ACA at a fraction of the cost.