|Healthcare Business News, By Jessica Zigmond –
April 26, 2012: Hypertension, mental health disorders and diabetes are the most commonly found medical conditions among adults that could lead to a health insurer denying coverage, the Government Accountability Office concluded in a new report about pre-existing conditions (PDF).
GAO analysts found that between 36 million and 122 million adults—representing a range between 20% and 66% of the U.S. adult population—reported having medical conditions that could result in health insurance coverage restrictions. The midpoint of that spectrum is estimated to be about 32%.
Hypertension was the leading condition that could result in an insurer denying coverage, and GAO analysts found that about 33.2 million adults between the ages of 19 and 64, or about 18%, reported having hypertension in 2009. Those individuals reported average annual expenditures to treat the condition of about $650, although maximum reported expenditures were calculated to be about $61,540. Cancer had the highest annual treatment expenditures at about $9,000.
Starting in 2014, the Patient Protection and Affordable Care Act won’t allow insurers in the individual market to deny coverage, increase premiums or restrict benefits because of a pre-existing condition.
“The estimated number of adults with pre-existing conditions varies by state, but most individuals, 88% to 89% depending on the list of pre-existing conditions included, live in states that do not report having insurance protections similar to those in PPACA,” the report noted. “Compared to others, adults with pre-existing conditions spend thousands of dollars more annually on healthcare, but pre-existing conditions are common across all family income levels.”
In a letter to the GAO (PDF), Jim Esquea, HHS’ assistant secretary for legislation, said HHS does not have any “substantive or technical comments,” about the report’s findings.
Author Archive | John Barrett
Investors Business Daily Editorial
Health Reform: The New York Times just discovered that the nation’s health care system was on the mend before ObamaCare took effect. Too bad it didn’t tell its readers how Obama’s “reforms” will destroy this progress.
The Sunday Times article — “In Hopeful Sign, Health Spending Is Flattening Out” — didn’t break any new ground. The numbers the reporter used have been around since January. But it was a tacit admission by the paper that the health care system was not in a state of crisis before ObamaCare.
Quite the opposite, in fact. As the story notes, annual increases in health spending had been trending downward for years, to the point where they climbed less than 4% in 2009 and 2010.
This isn’t the only good news. The Times story doesn’t mention it, but premium increases had also been moderating over the past several years. While some of the slowdown was due to the recession, the Times notes that it “was sharper than health economists expected,” and quotes a former Obama health adviser as saying that “I think there’s much more going on.”
So what is that “much more”? To its credit, the Times also makes clear that the slowdown was due in large part to the recent trend in the private sector toward more high-deductible insurance plans. By 2011, the share of workers enrolled in high-deductible plans had risen to 13% from just 3% five years earlier.
This is a reversal of the trend over the past several decades, which had seen out-of-pocket spending for health care steadily decrease, as government programs and generous health benefits increasingly shielded consumers from the direct cost of care. While almost half of health spending was paid out-of-pocket in 1960, the figure had dropped to just 11% by 2010.
Not surprisingly, as consumers paid less and less out of pocket, demand for health care became virtually unlimited, pushing up spending and inflation. But it wasn’t until recently that businesses — after trying everything else — started bringing consumers back into the cost picture with “consumer directed” health plans.
These higher-deductible plans cut health spending, as consumers suddenly realized that health care costs money. A 2011 Rand Corp. study found health spending for families with a deductible of $500 per person or more dropped an average 14%
But the real story here isn’t these recent gains in getting health spending under control. It’s how ObamaCare will poison the patient just as it was starting to recover.
ObamaCare’s coverage mandates, its limits on co-pays and deductibles, its attack on Medical Savings Account plans, its vast expansion of Medicaid and its massive subsidies all will shield consumers from even more of the direct cost of care.
Medicare’s chief actuary, Richard Foster, told Congress in March that “out-of-pocket spending would be reduced significantly” by ObamaCare — and by that he meant $237 billion in a decade.
And, not surprisingly, that is going to drive up health spending. Foster predicts, in fact, that after staying relatively low for years, national health spending will shoot up by more than 8% in 2014, when ObamaCare fully takes effect. Over the next decade, he said, ObamaCare will add more than $300 billion to the U.S. health tab.
Anyone who thinks ObamaCare will fix the nation’s health system has it backwards. The system was getting healthier before ObamaCare, and will continue to improve only if that misbegotten law is repealed.
It’s something everyone knows, but no one wants to talk about: Medicare’s cash position makes Enron’s business model look downright reputable.
Medicare is bleeding cash — a fact disguised by creative accounting. According to Monday’s release of the 2012 Trustees Report, in 2011 Medicare took in $260.8 billion in payroll taxes and beneficiary premiums, but spent $549.1 billion in medical services. That means last year Medicare ran a $288.3 billion cash shortfall.
And 2011 wasn’t the exception; it was the norm. Since President Lyndon Baines Johnson secured passage of Medicare legislation in 1965, the program has run cash deficits every year except 1966 and 1974.
Advocates of the status quo argue that Medicare receives “general revenue transfers,” but that’s government-speak for raiding the Treasury to spend other tax revenues. It’s the dramatic use of general-revenue transfers that has hidden Medicare’s true insolvency from the public and masked Medicare’s contribution to the national debt.
The annual release of the Medicare Trustees report offers a fleeting moment for adult conversations among policymakers about the program’s long-term trajectory. We must take advantage of this year’s moment and come to a bipartisan understanding that the Medicare program needs structural reform and not just nibbling around the edges.
To illustrate why structural reform is needed, consider what it would have taken to have had a positive Medicare cash-flow balance in 2011:
For Medicare Part A (hospitals), the cash deficit was $61 billion. To balance this deficit, payroll taxes on employers and workers would have to have been increased by 31 percent.
For Medicare Part B (physicians), the cash shortfall was $168 billion. To balance this deficit, seniors’ physician premiums would need to increase by 392 percent, meaning the annual physician premium cost to seniors would have risen from $1,198 to $4,687 — an increase of $3,499.
For Medicare Part D (drugs), the cash shortfall was over $59 billion. To balance this deficit, seniors’ premiums for prescription drugs would need to increase by 871 percent, meaning the annual drug-premium cost to seniors would rise from $372 to $3,250 — an increase of $2,878.
It is plain that these sharp increases are not viable. Nonetheless, President Obama steadfastly defends Medicare’s existing financing structure. In his address to AP reporters last month, the president called alternative (and bipartisan) approaches such as premium support to be “thinly veiled social Darwinism.” Since only the fittest will survive the future collapse of Medicare, President Obama should think hard before making such accusations.
Since taking office, President Obama has overseen a Medicare cash-flow deficit of more than $869 billion. This includes $570.7 billion in red ink accumulated since the passage of the president’s signature health-care law, which siphoned off $732 billion in Medicare funding over the next ten years. By the end of 2012, the trustees project that the Obama administration will have overseen a $1.2 trillion Medicare cash shortfall.
Left unchanged, Medicare costs will continue to escalate, leading to annual shortfalls and a projected cash-flow deficit of over $450 billion in 2020. These shortfalls lie at the heart of past and future deficits. Between 2001 and 2010, cumulative Medicare cash-flow deficits totaled $1.5 trillion, or almost 28.5 percent of the total federal debt accumulated in the hands of the public during the past decade.
Going forward, the situation is even worse. By 2020, the cumulative cash-flow deficits of $6.3 trillion will constitute 41 percent of the nation’s total debt accumulation. Including interest costs, accumulated Medicare spending will be responsible for over 43 percent of public debt.
A sensible solution would be to offer Medicare beneficiaries the option of a defined-contribution program — as proposed by House Republicans and Mitt Romney. Seniors would be budgeted an annual contribution, which could be adjusted to reflect costs associated with their health status and financial wherewithal. For the federal budget, the result is a capped exposure to Medicare — one that would adjust to reflect the number of seniors and inflation.
That would be great news for the nation’s spending outlook. It would be even better news for the exploding debt and the threat it carries to the nation’s economic health. Most importantly, it would secure Medicare for future generations.
— Douglas Holtz-Eakin is the president of the American Action Forum and previously served as the director of the Congressional Budget Office. Jim Nussle is a former chairman of the House Budget Committee and previously served as the director of the Office of Management and Budget.
Chicago Tribune, By Ricardo Alonso-Zaldivar
April 24, 2012: If the Supreme Court strikes down President Barack Obama’s health care overhaul, don’t look to government for what comes next.
Employers and insurance companies will take charge. They’ll borrow some ideas from Obamacare, ditch others, and push even harder to cut costs.
Here’s what experts say to expect:
— Workers will bear more of their own medical costs as job coverage shifts to plans with higher deductibles, the amount you pay out of pocket each year before insurance kicks in. Traditional insurance will lose ground to high-deductible plans with tax-free accounts for routine expenses, to which employers can contribute.
— Increasingly, smokers will face financial penalties if they don’t at least seriously try to quit. Employees with a weight problem and high cholesterol are next. They’ll get tagged as health risks and nudged into diet programs.
— Some companies will keep the health care law’s most popular benefit so far, coverage for adult children until they turn 26. Others will cut it to save money.
— Workers and family members will be steered to hospitals and doctors that can prove that they deliver quality care. These medical providers would earn part of their fees for keeping patients as healthy as possible, similar to the “accountable care organizations” in the health care law.
— Some workers will pick their health plans from a private insurance exchange, another similarity to Obama’s law. They’ll get fixed payments from their employers to choose from four levels of coverage: platinum, gold, silver and bronze. Those who pick rich benefits would pay more.
“Employers had been the major force driving health care change in this country up until the passage of health reform,” said Tom Billet, a senior benefits consultant with Towers Watson, which advises major companies. “If Obamacare disappears … we go back to square one. We still have a major problem in this country with very expensive health care.”
Business can’t and won’t take care of America’s 50 million uninsured.
Republican proposals for replacing the health care law aren’t likely to solve that problem either, because of the party’s opposition to raising taxes. The GOP alternative during House debate of Obama’s law would have covered 3 million uninsured people, compared with more than 30 million under the president’s plan.
After the collapse of then-President Bill Clinton’s health care plan in the 1990s, policymakers shied away from big health care legislation for years. Many expect a similar reluctance to set in if the Supreme Court invalidates Obama’s Affordable Care Act.
Starting in 2014, the law requires most Americans to obtain health insurance, either through an employer or a government program or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. Government would subsidize premiums for millions now uninsured.
The law’s opponents argue that Congress overstepped its constitutional authority by requiring citizens to obtain coverage. The administration says the mandate is permissible because it serves to regulate interstate commerce. A decision is expected in late June.
The federal insurance mandate is modeled on one that Massachusetts enacted in 2006 under then-Gov. Mitt Romney. That appears to have worked well, but it’s unlikely states would forge ahead if the federal law is invalidated because health care has become so politically polarized. Romney, the likely Republican presidential nominee, says he’d repeal Obamacare if elected.
That would leave it to employers, who provide coverage for about three out of five Americans under age 65.
“With or without health care reform, employers are committed to offering health care benefits and want to manage costs,” said Tracy Watts, a senior health care consultant with Mercer, which advises many large employers. “The health care reform law itself has driven employers, as well as the provider community, to advance some bolder strategies for cost containment.”
First, employers would push harder to control their own costs by shifting more financial responsibility to workers.
Data from Mercer’s employer survey suggests that a typical large employer can save nearly $1,800 per worker by replacing traditional preferred provider plans with a high-deductible policy combined with a health care account. “That is very compelling,” said Watts.
It won’t stop there. Many employers are convinced they have to go beyond haggling over money, and also pay attention to the health of their workers.
“As important as it is to manage the cost of medical services and products, and eliminate wasteful utilization, there has been a strong recognition that ultimately healthier populations cost less,” said Dr. Ian Chuang, medical director at the Lockton Companies, advisers to many medium-size employers. His firm touts programs that encourage employees to shed pounds, get active or quit smoking.
Employer health plans were already allowed to use economic incentives to promote wellness, and the overhaul law loosened some limits.
A Towers Watson survey found that 35 percent of large employers are currently using penalties or rewards to discourage smoking, for example, and another 17 percent plan to do so next year. The average penalty ranges from $10 to $80 a month, but one large retailer hits smokers who pick its most generous health plans with a surcharge of $178 a month, more than $2,100 a year.
Overall, one of the most intriguing employer experiments involves setting up private health insurance exchanges, markets such as the health care law envisions in each state. Major consulting firms such as Mercer and Aon Hewitt are developing exchanges for employers.
As under the health care law, the idea is that competition among insurers and cost-conscious decisions by employees will help keep spending in check. Aon Hewitt’s exchange would open next January, with as many as 19 companies participating, and some 600,000 employees and dependents.
“The concept of an exchange does not belong to Obamacare,” said Ken Sperling, managing the project for Aon Hewitt. “We’re borrowing a concept that was central to the health care law and bringing it into the private sector. Whether the law survives or not, the concept is still valid.”
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Investor’s Business Daily Editorial
Medicare: Backers like to say the more people know about ObamaCare, the more they’ll like it. So why is the administration spending $8.3 billion to hide a key provision from millions of seniors until after the election?
That’s precisely what administration officials are doing right now as a way to mask the effect of ObamaCare’s deep cuts to the popular Medicare Advantage program.
Championed by Republicans in 1997, Medicare Advantage offers seniors an escape valve from the creaky, government-run Medicare insurance program.
The idea was that private insurance companies could better manage costs than the government’s own top-down insurance plan, and give enrollees more and better benefits while still saving taxpayers money.
Medicare Advantage has proved popular with seniors, 12 million of whom have enrolled. But the left loathes it, arguing that Medicare overpays insurance companies, thereby ripping off taxpayers to enrich this industry.
Obama himself long complained about Medicare Advantage while running for office and while pitching ObamaCare.
In his 2009 health care speech to Congress, he said Medicare Advantage offered “unwarranted subsidies” that “do everything to pad (insurance company) profits and nothing to improve your care.” And he repeatedly vowed to “eliminate” these subsidies.
ObamaCare delivered — targeting Medicare Advantage for $145 billion in spending cuts over the next 10 years, equal to almost 30% of ObamaCare’s planned Medicare cuts.
Whatever merits to the claim that Medicare Advantage overpays insurers — there’s some evidence that this does happen — the fact is that ObamaCare’s payment cuts will, if left in place, drive many out of the Medicare Advantage business.
Medicare’s own actuary reported that ObamaCare would eventually force more than 7 million seniors off their private plans and back onto traditional Medicare as insurers flee the market.
Obama may not care that this violates his endlessly repeated promise that “if you like your health plan you can keep it.”
But somewhere along the way, someone in his administration realized that millions of seniors would soon catch on that he was lying — and that this would happen just before the November election, when seniors make their annual Medicare Advantage selections.
Not wanting to confront angry voters who’ve seen their health care choice eliminated by ObamaCare, the administration apparently decided instead to paper over these spending cuts, pumping $8.3 billion back into the program through “bonuses” to Medicare Advantage plans.
The administration’s lame excuse is that this is simply a “demonstration project” to see how the bonus money can be used to encourage the private plans to improve quality.
But the attempt to disguise its real purpose was so inept that it didn’t take the Government Accountability Office long to uncover the scam.
Among the glaring problems with this “experiment”:
• It’s seven times larger than any demonstration project Medicare has ever attempted.
• Almost all the bonus money is front-loaded. In fact, in the first year, the extra bonuses will fill in more than 70% of ObamaCare’s scheduled Medicare Advantage cuts. That will, conveniently, keep Medicare Advantage plans up and running through the election.
• For all the money, the so-called experiment was so poorly designed that it won’t produce any credible results.
The entire project is so transparently political that the normally reserved GAO urged the Health and Human Services Department to cancel it altogether.
Canceling is just the beginning. The bigger question lawmakers must answer is this: Can it really be legal for a Cabinet agency to spend $8.3 billion in taxpayer money simply to help Obama get re-elected?
Would you give up your health insurance for a raise?
A minority of big companies offered extra pay to workers who waived their health benefits last year. This practice, which was common decades ago, could see a resurgence once the biggest parts of President Barack Obama’s health care reform law take effect in 2014 and start to rearrange the health insurance market.
Last year, 17 percent of employers with at least 500 workers gave a little extra money to those who turned down an offer of health insurance, according to a survey conducted by the human-resources advisory firm Mercer that will be published later this month. The Huffington Post obtained early access to the data. The median amount of extra pay was $1,000, which is considerably less than the $11,664 average cost an employer and worker incur for job-based health insurance this year, according to the consulting company Towers Watson.
Jobs are the most common source of health insurance for working-age Americans and provide 154 million people with coverage, according to the Congressional Budget Office. But the implementation in 2014 of new benefit requirements on employers and individuals, along with the creation of health insurance “exchanges” and federal subsidies for individuals, families, and small businesses, will change how many Americans get health plans, unless the Supreme Court strikes down the law on constitutional grounds.
The health care reform law includes a “pay or play” requirement that companies with at least 50 employees must either provide employees with health benefits or pay penalties as high as $3,000 per worker to offset the government’s cost of subsidizing insurance coverage. Although jobs are projected to remain the number-one source of health coverage, some workers will be affected, since the penalty is less money than the insurance coverage.
In some cases, that will mean higher paychecks to make up for lost benefits. In 2006, Dallas resident Red Coine was offered that deal by Cisco Systems, where he was a network engineer working as a contractor. Coine, who is now 35, got an extra $200 a month and bought his own health insurance for $88, so he came out $112 ahead. “I never regretted giving up the company insurance, and no one ever mentioned to me or complained about not having it,” he told HuffPost via email.
The connection between jobs and health insurance has been weakening over the years for reasons unrelated to Obama’s health care reform law. Rising health care costs have led more employers to drop coverage: Between 2001 and 2011, the percentage of companies offering health benefits dropped from 68 percent to 60 percent.
The health care reform law created incentives that will lead some employers to maintain coverage or begin offering benefits, but cost pressures will likely cause other companies to stop providing health insurance to some or all of their workers. According to another Mercer survey, 91 percent of firms with at least 500 workers are likely to keep offering health benefits.
Employees of smaller companies are more likely to lose coverage, but are already more likely to not have it in the first place, according to Mercer.
Overall, 14 million fewer workers will get insurance from their jobs as a result of health care reform, and all but 2 million will find coverage elsewhere, thanks to the law’s federal subsidies and insurance market reforms, according to the Congressional Budget Office. Economists also predict companies that drop insurance for some or all of their workers will boost their compensation by raising pay or strengthening other fringe benefits.
People earning between 133 percent and 400 percent of the federal poverty level — $30,657 to $92,200 for a family of four this year — would qualify for federal tax credits to defray the cost of health insurance, which could make it cheaper than the coverage available at work, said Tom Billet, a senior consultant at Towers Watson.
Modified from Huffington Post
California residents are having difficulty obtaining accurate price estimates for medical procedures despite a state law requiring hospitals to publish average charges for common procedures on a state website, the Los Angeles Times reports.
Barriers To Finding Accurate Pricing
Although the law — enacted in 2006 — requires hospitals to publicly post average charges for common medical procedures, most facilities do not list prices on their own websites, where residents are more likely to seek cost information. In addition, the prices listed on the state Office of Statewide Health Planning and Development website often are not what people actually pay for a procedure. Insured patients would pay a smaller amount than listed on the site, depending on the price negotiated by their insurer. In addition, prices provided by hospitals contacted by the Times often did not include physician costs or other related expenses.
David Byrnes, spokesperson for OSHPD, said the agency does not have the authority to request additional hospital data beyond billing charges. Meanwhile, insurers cannot provide detailed data that include specific names of hospitals or clinics because they would be in violation of contracts with health care providers.
California Insurance Commissioner Dave Jones (D) said he wants more consumers to have access to insurers’ pricing information. He said, “Consumers don’t really know the health-cost consequences of their decisions,” adding, “and they have more of their money at stake.”
State Sen. Ted Lieu (D-Torrance) has offered a bill that would require hospitals to disclose all potential charges for medical procedures — including all physician and lab fees — in certain cases. The Senate is scheduled to conduct a second hearing on the legislation later this month.
The California Medical Association and the California Hospital Association are concerned about the measure. The groups say hospitals should not be responsible for providing physician charges because doctors are independent contractors and cannot be employed by hospitals under state law.
The California Medical Association says insurance companies are better positioned to assist residents with questions about out-of-pocket costs. Molly Weedn, spokesperson for the group, said, “We have to ask whether we want physicians focusing on paperwork or treating patients”
Survey of true “small businesses” explores how employers feel about health care reform, why they provide coverage, and how far they’re willing to go to save money
Mountain View, CA – March 21, 2012 – The majority (85%) of small businesses are not making changes or long-term plans based on health care reform legislation, according to a recent survey of small business owners released today by eHealth, Inc.
Beginning in 2014, the Patient Protection and Affordable Care Act of 2010 (ACA) requires businesses with the equivalent of fifty or more full-time employees to provide health insurance coverage for their workers. However, businesses with fewer than 50 employees are exempt from this requirement, although employees may be required to purchase their own coverage.
eHealth’s Small Employer Health Insurance Survey focuses on these small businesses, many of them family-run. Nearly nine-in-ten (88%) of the small businesses responding to the survey had ten employees or fewer. The survey was conducted anonymously online between February 10 and March 13, 2012 and gathered responses from a total of 236 small businesses that had purchased group health insurance policies through eHealthInsurance.com.
Based on their size (fewer than 50 employees) none of the businesses surveyed would be required by the ACA to offer health insurance coverage to employees in 2014. However, the majority (60%) planned to continue offering coverage for their employees in 2014. Among those employers who considered themselves knowledgeable about aspects of the ACA, a larger majority (69%) said they had no plans to stop offering coverage to employees. According to the survey, most employers feel they have a moral obligation to provide health insurance for employees or feel they need to continue to do so in order to recruit and retain talented workers.
Small businesses are still sensitive to health care costs, however, with nearly all respondents (95%) citing “affordability” as one of the two most important factors when choosing a plan. Small businesses are also open to creative solutions to reduce health coverage costs. Many are willing to drop benefits like dental and vision (58%) or consider raising deductibles and offering accident or critical illness coverage (74%) in order to keep costs lower and continue offering employees health insurance.
eHealth’s Small Employer Health Insurance Survey report can be downloaded in full here or through the eHealth, Inc. Media Center.
Additional Survey Results
- Nearly eight-in-ten small businesses (79%) report spending $200 or more for health insurance per insured employees or dependent each month
- A majority (53%) said they required employees to contribute 10% or less of the total cost for their own or their dependents’ monthly health insurance premiums
- More than six-in-ten (61%) reported that enrollee deductibles on their group health insurance plans were $1,500 or less per year
- One-third of respondents (34%) said they might consider dropping employer-based group health insurance beginning in 2014
- A majority of respondents (53%) said that they always or sometimes impose waiting periods before allowing new employees to join the company health insurance plan
- More than four-in-ten (44%) said they felt a “moral obligation” to provide employees with health insurance
- Most small businesses identified “affordability” (95%) and “richness of benefits” (68%) as the two most important factors when choosing a health insurance plan
- Only six percent considered the insurer’s brand a top-two factor when choosing a plan
THIS ARTICLE IS AN EDITORIAL FROM INVESTORS BUSINESS DAILY
The Obama Record: Little noticed in the president’s remarks attacking the Supreme Court last week were two whoppers he told about ObamaCare. Then again, since that reform was built on untruths, why should he stop now?
At that press event, Obama told any justice thinking of overturning ObamaCare’s central tenet that “in the absence of an individual mandate, you cannot have a mechanism to ensure that people with pre-existing conditions can actually get health care.”
But this is false.
In fact, Obama himself argued precisely the opposite during the 2008 campaign, saying a mandate wasn’t needed to achieve universal coverage. “The reason people don’t have health insurance isn’t because they don’t want it,” he said then. “It’s because they can’t afford it.”
Plus, ObamaCare itself proves a mandate isn’t needed to cover those with pre-existing conditions. The law set up federal “high risk” pools that offer insurance to those denied it by private companies. Yet instead of making this a permanent solution, Obama kills these pools off in 2014 in favor of the mandate.
Obama also claimed at that press conference that the law “was passed by a strong majority of a democratically elected Congress.”
The House approved it by a slim 7-vote margin, with 34 Democrats joining every Republican to oppose it. Less than a year later, the House voted to repeal ObamaCare by a significantly larger margin, 245-189.
But as the old saying goes, lies beget more lies. Here’s just a sampling of past Obama prevarications about his signature reform law:
“If you like your doctor, you will be able to keep your doctor, period. If you like your health care plan, you’ll be able to keep your health care plan, period. No one will take it away, no matter what.”
Fact: The Congressional Budget Office estimates that as many as 20 million will be forced off their plans as employers dump workers into the government health exchanges to avoid ObamaCare’s costs. A survey by McKinsey and Co. found that nearly a third of employers were likely to drop coverage for employees once ObamaCare kicked in.
And an analysis by the Medicare actuary found that ObamaCare’s attacks on Medicare’s private insurance options would force nearly 8 million seniors out of plans they’ve chosen.
“If any bill arrives from Congress that is not controlling costs, that’s not a bill I can support. It’s going to have to control costs.”
Fact: The law Obama signed contains no meaningful cost-control provisions, something every honest health care analyst admits.
“We will bring down premiums by $2,500 for the typical family.”
Fact: The CBO projects that premiums over the next decade will climb at a faster rate than they did in the past five years. The CBO also projects that premiums in the individual insurance market will be as much as 13% higher in 2016 as a result of the law. Premiums for small businesses could go up 1%. Meanwhile, a study done for Wisconsin by one of the architects of ObamaCare found that “the majority of individuals in the nongroup market will pay more in premiums for health insurance in 2016 than they do today.” The average increase: 30%.
“And it will slow the growth of health care costs for our families, our businesses, and our government.”
Fact: ObamaCare will accelerate spending at every level. In 2014, when the law takes full effect, national spending on health care will shoot up 8% and go on climbing at more than 6% a year, according to official government forecasts.
“The plan I’m proposing will cost around $900 billion over 10 years.”
Fact: The current Congressional Budget Office report pegs the 10-year cost of ObamaCare at $1.7 trillion. The only way Obama could get his price tag down so low is by putting off the start date by four years. Once Obama-Care fully kicks in, it will add $260 billion a year, and rising, to the budget.
“To help ensure that everyone can afford the cost of a health care option in our exchange, we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.”
Fact: Despite spending $800 billion to subsidize premiums in the government-run exchanges, over the next 10 years, along with $931 billion in new Medicaid costs, ObamaCare will still leave 27 million — or 10% of the population — uninsured, according to the CBO.
We could go on, but you get the idea.
The best thing the Supreme Court could do for the country is to chuck the entire law, and give Congress the opportunity to put together an honest package of reforms.
As doubts grow about the survival of the federal healthcare law, state officials are considering ways to keep key elements of the legislation alive in California.
Skepticism of the Affordable Care Act by conservative Supreme Court justices during oral arguments last week has raised the possibility the court will strike the individual mandate to purchase health coverage or throw out the entire law as unconstitutional.
Even if the whole law is scrapped nationally, many of its consumer protections, such as guaranteed coverage for children, are expected to survive in California. But a massive expansion of coverage for the poor and the uninsured would be doubtful without tens of billions of dollars in federal aid.
There’s already legislation pending in Sacramento to further implement the federal overhaul, and those proposals could become the vehicle for a state substitute. Crucial to that effort, supporters say, would be ensuring all Californians purchase health coverage in order to spread the risk and lower costs for everyone.
“I would work with other state leaders to make sure California continues to move ahead,” said Dave Jones, state insurance commissioner. “We require everyone to have auto insurance in California, and the world hasn’t stopped spinning on its axis. All this political tumult generated by the far right is really ignoring the reality in California and elsewhere.”
Assemblyman William Monning (D-Carmel), who is chairman of the state Assembly Health Committee, said he would support a measure mandating Californians buy coverage if federal funding is still available to assist consumers.
But Monning said such a measure probably would take a two-thirds majority vote in the Assembly and Senate because such a state requirement to buy coverage could be considered a tax and require a super-majority. “It could be an uphill fight to get the political support to do that,” he said.
California went down this route before, nearly approving an individual mandate in 2008 as part of reform under then-Gov. Arnold Schwarzenegger.
Some health-policy experts said California could pursue other options to encourage healthy consumers to join the insurance pool and to help offset the medical costs of sicker policyholders. The state could impose an open enrollment period similar to what employers use and have penalties for people who try to sign up at a later time.
California insurers are preparing to fight any efforts to force them to accept sick applicants without some requirement that healthy Californians enter the market as well. Without that, the industry warns that premiums will rise substantially and even more people will drop coverage. The state has nearly 7 million uninsured, or about 21% of the population, according to the California HealthCare Foundation.
“California would need to look at the pillars upon which the entire Affordable Care Act is based and make sure there is not a problem that comes from pulling out one pillar of the structure,” said Patrick Johnston, president of the California Assn. of Health Plans.
Soon after President Obama signed the healthcare law in March 2010, California took the lead and became the first state to enact legislation for an insurance exchange, which is designed to negotiate the best rates with insurers and help millions of consumers shop for policies.
Since then, state lawmakers have passed other laws implementing federal reform, including provisions that guaranteed coverage for those under age 19, allowed young adults to remain on their parents’ policies until age 26 and mandated maternity coverage.
Jones said all those reforms — plus a new state requirement that health insurers spend at least 80% of premiums collected on medical care for individual policyholders — would remain intact without the federal law. Insurers contend that California’s rule on spending for medical care may not stand if the federal law is deemed unconstitutional.
But the biggest blow by far would come if the Supreme Court ruling cuts off federal money for the two most expensive parts of the federal healthcare program: an expansion of Medi-Cal — the state and federal program for the poor and disabled — and subsidies for families purchasing private coverage.
Under the federal law, California stands to get as much as $55 billion in federal funds for the Medi-Cal expansion from 2014 to 2019, according to the Kaiser Commission on Medicaid and the Uninsured, and a similar amount for subsidies for people who are now uninsured. An estimated 2 million people would be added to Medi-Cal, and 2.2 million Californians could be eligible for subsidies toward the purchase of private coverage.
Meanwhile, the California Health Benefit Exchange — using about $40 million in federal money — has been setting up an enrollment process and marketing campaign to reach consumers in preparation for a January 2014 launch.
Peter V. Lee, the exchange’s executive director and a former healthcare official in the Obama administration, said he’s aware state lawmakers are looking at a health insurance requirement for all Californians, but the exchange has not taken a position while the court’s decision is pending.
Lee said both a mandate and government subsidies are crucial components to ensure the exchange attracts a large enough pool of consumers to be effective.
“The exchange in California isn’t pausing, isn’t waiting, isn’t taking its foot off the gas,” Lee said. “There’s a broad consensus in this state that we need to address the access and affordability problem together.”
Consumer advocates are urging state leaders to forge ahead because, they say, the status quo is untenable for people with and without insurance. The average California family with coverage pays an additional $1,400 in premiums annually to cover the costs of the uninsured, according to the California Endowment, a private foundation focused on health issues.
“It is a little premature to be reading an obituary” for the federal law, Insurance Commissioner Jones said. “Having said that, we need to be prepared, and those conversations are occurring.”
Modified from an article by Chad Terhune, Los Angeles Times