On Tuesday, January 31st, e21 held an event exploring the implications of the Patient Protection and Affordable Care Act (ObamaCare), which was sold to the American people with the promise that “If you like what you have, you can keep it.” New academic research is clearly disproving this claim. The health law provides strong incentives for employers to move their sick and low-wage workers out of job-based plans and into publicly subsidized coverage. The result will be soaring costs for taxpayers, and millions of people losing the coverage they have today.
The event featured a presentation by Professor Daniel Schwarcz of the University of Minnesota Law School, a speech by Sen. John Barrasso (R-WY), and commentary from James C. Capretta.
Read Prof. Schwarcz’s paper, “Will Employers Undermine Health Care Reform by Dumping Sick Employees?” here.
“Because, even if one were to accept the White House’s accounting (which one shouldn’t), that would mean that 22 states — roughly 40 percent of the country — are not ‘on their way’ toward erecting the Obamacare exchanges. Isn’t that a problem? Further, upon closer inspection, it’s clear that many of the 28 states that are supposedly ‘on their way’ really aren’t ‘on their way.’ That’s just comical White House spin, in which the truly inconsequential — the acceptance of minor federal grant money, or the setting up of a committee to “study” the question — is elevated into a sure sign that Obamacare is a fait accompli. It’s ridiculous.”
“In an action with major implications for health reform in Michigan, the state House has voted to turn down — at least for now — nearly $10 million in federal funds to create a statewide health exchange by 2014 to sell more affordable, standardized health insurance to consumers and small businesses.”
“With many states unwilling or unable to get insurance exchanges operational by the health law deadline of Jan. 1, 2014, pressure is growing on the federal government to do the job for them.
But health care experts are starting to ask whether the fallback federal exchange called for in the 2010 health law will be operational by the deadline in states that will not have their own exchanges ready.”
“Congress made a serious drafting error in the health-overhaul law when it said that subsidies could be delivered through state exchanges but not through any federal fallback exchanges… The Obama administration has been trying an end-run around the problem by ordering the IRS to simply say in its proposed regulations that the subsidies can be delivered through either type of exchange. This is a big issue because a growing number of states are refusing to create exchanges. If they don’t, the feds can come in and set one up, but these will be relatively useless if they can’t deliver subsidies.”
“The Patient Protection and Affordable Care Act (ACA) — the new health reform law — contains financial incentives for the states to establish health insurance exchanges where qualifying individuals and small businesses can purchase subsidized, individual health insurance, starting in 2014.
The structure of the exchange subsidies will encourage low-income workers to congregate in companies that do not provide insurance and high-income employees to work for firms that do provide it.”
“Even if ObamaCare survives Supreme Court scrutiny next spring, its trials will be far from over. That’s because the law has a major glitch that threatens its basic functioning. It’s so problematic, in fact, that the Obama administration is now brazenly trying to rewrite the law without involving Congress.”
“The federal insurance subsidies and tax credits are among the few popular features of the law. But they won’t remain that way as Americans learn more about them. ObamaCare provides subsidies to those whose incomes fall between 133 and 400 percent of the federal poverty level, and who do not have access to federally defined “affordable” coverage through their employer. All other Americans — including those in the exact same income bracket — will not be eligible to receive subsidies.”
“Some of the federal healthcare law’s requirements related to insurance exchanges threaten the autonomy of U.S. states, which need more support in establishing the marketplaces, state governors said in a letter released on Thursday. ‘The decision to implement health insurance exchanges requires a number of complex policy decisions amid aggressive timelines,’ wrote the National Governors Association in a letter to U.S. Health Secretary Kathleen Sebelius dated Nov. 2.”
“ObamaCare’s rate review regulations are premised on the notion that rising health insurance premiums are somehow caused by excess profits and wasteful spending. But insurer profits are actually quite small. The Congressional Research Service reports that in 2009, health insurers’ average profit margin was just 2.6%. The cost of insurance is rising because the cost of health care has increased dramatically. True health reform would’ve addressed this underlying problem.”