Gitzo Loc: Indiana

Drilling More Holes in Obamacare’s Sinking Ship



Article By; Daniel J. Mitchell | Jan 24, 2014



The President’s main “accomplishment” has been such a disaster that I wonder whether it’s time to feel sorry for Obama.

And if you looked in the dictionary for a definition of Schadenfreude, you might find a picture of me reading a story exposing more evidence that Obamacare isn’t working.

Heck, I’ve even shared Hitler parody videos (two of them!) mocking the law.

But to paraphrase Mae West, there’s no such thing as too much of a good thing.

Today, we’re going to look at the opinions of two experts, both of whom expect further bad news for Obamacare.

Here’s some of what Michael Tanner, my Cato colleague, wrote for the New York Post.

…“the State of ObamaCare” is growing ever more troubled. For starters, it’s falling far short of the goal of universal coverage. …just 1.5 million have actually completed the ObamaCare checkout, including payment. Worse, surveys indicate that less than a third of those enrolling were previously uninsured. …Even using the most optimistic reading of these figures, fewer than 11 percent of uninsured Americans have gotten coverage because of the ObamaCare law; most likely, fewer. This is what we’re getting for the $2.7 trillion that ObamaCare will cost over the next 10 years? Plus, we should subtract the roughly 500,000 Americans who, by the White House’s own count, have lost insurance because of ObamaCare.
And Mike expects things will get worse over time.

…that’s just the tip of the iceberg, because those policy-killing rules will hit another part of the market over the course of this year — namely, the “small group” market, where employers now buy health policies that cover about 78 million Americans. Many of those with cancelled plans will ultimately end up with similar, if more expensive, employment-based policies, but some are likely to simply wind up uninsured. …Then there’s the bad news about who is enrolling in ObamaCare plans — or rather, who isn’t: not enough of the young and healthy folks that the program needs to overpay for insurance so as to offset the costs of covering older and sicker people. …Oh, and a Reuters survey finds that new enrollees are also less healthy than ObamaCare’s designers hoped, too. Humana, one of the nation’s largest insurers, reports that so far enrollment in its exchange-based plans has been far “more adverse than previously expected.”

Megan McArdle of Bloomberg is similarly unimpressed with how Obamacare has developed.

Enrollment is below expectations: According to the data we have so far, more than half of the much-touted Medicaid expansion came from people who were already eligible before the health-care law passed, and this weekend, the Wall Street Journal reported that the overwhelming majority of people buying insurance through the exchanges seem to be folks who already had insurance.

Coverage is less generous than many people expected, with narrower provider networks and higher deductibles. The promised $2,500 that the average family was told they could save on premiums has predictably failed to materialize. And of course, we now know that if you like your doctor and plan, there is no reason to think you can keep them.
But it’s going to get worse, she writes.

The Barack Obama administration is in emergency mode, pasting over political problems with administrative fixes of dubious legality, just to ensure the law’s bare survival — which is now their incredibly low bar for “success.” Although the fixes may solve the short-term political problems, however, they destabilize the markets, which also need to work to ensure the law’s survival. The president is destroying his own law in order to save it.
The article has lots of detail, but here are a few highlights of the bad things that already have happened.

Obamacare’s exchange facility was conceived as a “three-legged stool”: guaranteed issue, community rating, mandate. …Take one away, and the whole thing is in danger of collapsing. Unfortunately, whenever someone has voiced discontent with the way things are going, the administration has taken a hacksaw to another leg. …some folks who had policies they liked before were being forced to drop them and buy new policies they didn’t like so much. That caused an outcry, followed by an emergency grandfathering rule. Other major emergency fixes include…A one-year delay of the employer mandate…Numerous extensions of enrollment and payment deadlines…Changes in the rules governing the “risk corridor” programs that cover excess losses at insurers.
And here are the bad things that Megan expects will happen in the future.

…the worst is yet to come. Here’s what’s ahead…

2014: Small-business policy cancellations…

Summer 2014: Insurers get a sizable chunk of money from the government to cover any excess losses. When the costs are published, this is going to be wildly unpopular…

Fall 2014: New premiums are announced…

2014 and onward: Medicare reimbursement cuts eat into hospital margins…

Spring 2015: The Internal Revenue Service starts collecting individual mandate penalties…

Spring 2015: The IRS demands that people whose income was higher than they projected pay back their excess subsidies…

Spring 2015: Cuts to Medicare Advantage…

Fall 2015: This is when expert Bob Laszewski says insurers will begin exiting the market if the exchange policies aren’t profitable…

Fall 2017: Companies and unions start learning whether their plans will get hit by the “Cadillac tax,”…

January 2018: The temporary risk-adjustment plans, which the administration is relying on to keep insurers in the marketplaces even if their customer pool is older and sicker than projected, run out…

Fall 2018: Buyers find out that subsidy growth is capped for next year’s premiums…I expect that the administration is going to issue “temporary” administrative fixes for most of the law’s unpopular bits — just as it has so far. That’s not going to get any easier as midterms and then a presidential election creep closer.

Wow. If I was a Democrat politician, I would not be overly happy at that list – particularly since Obamacare already has caused several dozen involuntary retirements from Congress.

And if I was a partisan Republican, I would get down on my knees every day to give thanks because Chief Justice John Roberts was willing to disregard the Constitution to keep Obamacare alive.

But since I’m a humble policy wonk who simply wants to protect and restore economic liberty, I’m just glad that there’s growing recognition that Obamacare is a turkey that needs to be repealed. No wonder I’m getting more optimistic with each passing day.


This post has focused on Obamacare’s failings, so let’s close with an acknowledgement that it’s hard to beat something with nothing.

That’s why reformers need to advocate the types of policies that would undo decades of intervention and re-introduce market forces to the healthcare system.

ricklick

was Obamacare created to force companies to cut-back on full time to part-time employes,in order to force the employees to purchase government insurance at a higher cost, with limited doctors available? By the government generousity to those that couldn't pay for the insurance, would be grateful to the government for helping them.that would make the people grateful enough,to become servents of these people.

HEART Loc: God's Country - COLORADO

"Fall 2015: This is when expert Bob Laszewski says insurers will begin exiting the market if the exchange policies aren’t profitable…"

Already happening. Aetna CEO: http://hotair.com/archives/2014/01/23/aetna-ceo-we-might-have-to-pull-out-of-obamacare-because-its-not-attracting-uninsured/

ggttc Loc: TN

Poor Mr Bertolini

The CEO of Aetna Inc., Mark T. Bertolini, had a 2012 pay package that more than tripled — nearly quadrupled — his compensation the year before, according to documents filed Friday with the U.S. Securities and Exchange Commission.
Bertolini was compensated a total of $36.36 million last year, not including $11.1 million in stock awards which vest later and are based on the company's performance.
-Hartford Courant
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Notwithstanding the challenges related to fees and taxes and Medicare Advantage rate pressures, the company reiterated its 2014 EPS of at least $6.25 per share.

In an encouraging move, the company raised its revenue guidance for 2014 to more than $54 million from its earlier forecast of $53 billion.
-CNN Money
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 According to Bertolini's interview, Aetna only receives about 3% of its total revenue from Obamacare. I think the rapid growth of Medicare Advantage, a supplemental insurance program for seniors that helps defray the costs that Medicare doesn't cover, could more than offset the revenue lost from pulling out Obamacare if Aetna chose to do so. Aetna also exited New York and California's state-run health exchanges, which thus far are two of the three top-performing exchanges based on cumulative enrollment.
The other concern, as Bertolini pointed out, is that only one in nine new enrollees in Obamacare was truly uninsured prior to the start of the program. Most Obamacare enrollees are simply switching out of prior health insurance programs if Obamacare offers them larger subsidies. It's a smart move by consumers...
-The Motely Fool
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jjtotten Loc: Washington, Utah

I wonder how they determine that 1.5 million have already signed up and paid when the "back end" has not even been written.

jjtotten Loc: Washington, Utah

A single payer system run by the government was what Obama was after in the first place. They knew the "system" would fail and the feds would have to take it over. Why are we surprised when the web site that we paid millions for did not work?

HEART Loc: God's Country - COLORADO

Exiting the Obamacare markets does NOT affect Aetna's bottom line - it is just one more insurer that will NOT be in the Obamacare system; another example of the failed law and a failed president.

ggttc Loc: TN

Every insurance company gets subsidies from the government to offset the management of some Medicare benefits. This money comes from you, the taxpayer. Obamacare is going to cut these subsidies marginally. Keep in mind that we pay the Advantage Medicare premiums to the insurance companies..and they also get payed by the government...It is also going to cap the amount insurance companies can pay in salaries to 20%.

That's a good part of why you see all the sabre rattling from insurance companies.

jcjr8

Absolutely right. Counter to popular opinion, Obamacare as planned is succeeding right on schedule. It's intention all along was to bankrupt the economy and never had anything to do with healthcare. But who in this nation of slumberers would notice?

jcjr8

Are you making a point?