Fix Health Care Policy

Even CBO Is Skeptical of Obamacare

Congressional Budget Office (CBO) Director Douglas Elmendorf recently spoke at the University of Southern California about the economic impact of Obamacare. He predicts that Obamacare will further depress the nation’s employment picture.

CBO’s analysis of Obamacare predicts that it will reduce the amount of labor being used in the economy by roughly half a percent. Elmendorf states that this impact will be small, but in reality the impact is small only in relative terms. For instance, a half-percent loss in jobs in the American economy today would translate into about 750,000 additional Americans losing work. (more…)

Tags: Congressional Budget Office, Douglas Elmendorf, health care spending, job loss, ObamaCare

Governor Bredesen Got the Calculations Right

In yesterday’s Wall Street Journal, Tennessee Governor Philip Bredesen explained how Obamacare has created a situation where the state government and many of its employees will find it mutually advantageous to the get rid of the employer-sponsored insurance program the state currently offers. As we have noted, Bredesen correctly acknowledges that it will be better for all parties if the state of Tennessee pays the fines involved with not offering an insurance program and subsequently dumps many of its employees onto the federally subsidized insurance exchange.

Here’s how the Governor’s insightful logic works: Beginning in 2014, state exchanges will offer large subsidies to individuals and their families who don’t receive health insurance through their workplace. Former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin and Cameron Smith have brought attention to generosity of these subsidies, noting that “a family earning about $59,000 a year would receive a premium subsidy of about $7,200” beginning in 2014,” whereas “even a family earning about $95,000 would receive a subsidy of almost $3,000.” As Heritage analysts have suggested, employers and employees alike benefit from an employer dropping employer-sponsored health insurance and simply assisting employees in attaining health insurance (with the help of the subsidies) in the exchanges. (more…)

Tags: Congressional Budget Office, health care costs, premium increase, state health insurance exchange, Tennessee Gov. Philip Bredesen

Obamacare Frankenstein Is Scarier Than “Zombie Legislation”

In a recent article in the New England Journal of Medicine, Henry J. Aaron, senior fellow in economic studies at the Brookings Institution, writes that rolling back and defunding Obamacare would create “zombie legislation … [i.e.,] a program that lives on but works badly.”

If Aaron is looking for a B horror movie reference to describe the state of American health care under Obamacare, “Frankenstein” would be a much more appropriate choice. Obamacare is a slipshod, pieced-together monster made of bad policy and covered in bolts and scars from the legislative process.

Though proponents of the health care law may still be heard shouting, “It’s alive! It’s alive!,” the truth is that conservatives and liberals alike recognize that, as Aaron puts it, “successful implementation poses remarkable challenges and will require adequate funding, enormous ingenuity, and goodwill from federal and state officials, as well as cooperation from private insurers, businesses, and private citizens.” (more…)

Tags: defund Obamacare, Henry Aaron, zombie legislation

Side Effects: Obamacare Strengthens Compliance-Based Medicine

Obamacare alters the practice medicine by putting a stronger emphasis on adherence to government-determined measures of quality.

The Centers for Medicare and Medicaid Services (CMS) already offers hospitals financial incentives to report on their compliance with certain measures of care. These are posted on Hospital Compare, a site where, according to Kaiser Health News, “patients can shop around by putting in their zip codes and the website churns out a list of nearby hospitals, with detail on available services, care outcomes, patient satisfaction ratings and more.”

These quality indicators include some measures of outcome, but they overwhelmingly focus on measuring processes. A recent study by the University of Michigan looked at whether process measures actually indicate that higher quality of care is being achieved. (more…)

Tags: Centers for Medicare and, high-risk surgery, measuring processes, patient outcomes

Settling the Question of a Real Estate Tax in Obamacare

By now, Americans have become well acquainted with the fact that the Patient Protection and Affordable Care Act (PPACA) will have a multitude of adverse effects. The new law is certain to add to the federal deficit. It increases taxes on all Americans in a number of different ways, encourages employers to dump coverage, and will cause many to lose their current health plan. However, a circulating claim that the PPACA includes a tax on real estate sales has misinformed the American public.

There is not a new specific tax on all real estate transactions in the PPACA. But that’s not the end of the story. There is a surtax on real estate transactions that are already taxed under current law. Capital gains in excess of $500,000 from the sale of primary residences already face the capital gains tax. The new tax in the PPACA will raise the rate on these gains.

The Tax Foundation clears the air by explaining how the new tax will work: (more…)

Tags: adverse effects, deficit, dump coverage, ObamaCare, real estate tax, sales tax

Side Effects: Obamacare Hurts Low-Income Workers

With a struggling economy and stagnant unemployment rate, the last thing the United States needs is any public policy that will hurt job growth. Unfortunately, Obamacare’s new federally mandated, essential benefits package will diminish new job opportunities, especially for low-income workers.

This is expected to occur because the new law requires employers to offer health care coverage or pay a penalty. And they can’t offer basic health plans. Instead, all job-based health plans must include what the government determines to be “essential benefits.” Since benefits that employers provide to their work force mark a dollar-for-dollar reduction in cash wages, more benefits in these government-mandated plans will mean less available income for salaries or new jobs. Inevitably, this provision will further drive up the health care costs for businesses, forcing them to hold back on new hiring and investments. (more…)

Tags: essential benefits, low-income jobs, mandates, ObamaCare, Side Effects, unemployment

Government Intervention in Health Care Increases Costs

Yesterday, the Council for Affordable Health Insurance (CAHI) released its annual report on health insurance mandates in the states. They report that mandated benefits—i.e., medical procedures that states require insurance providers to cover—across the 50 states are on the rise, jumping from 2,133 in 2009 to 2,156 in 2010. But that’s just part of the story.

The report also shows that mandated benefits increase the cost of health insurance and by how much. This should come as no surprise. Requiring insurers to offer a higher value product comes at a higher expense.

Lawmakers across the 50 states have determined that benefits such as the following are necessary to include in essential health coverage: in vitro fertilization (15 states), oriental medicine (three states), services provided by acupuncturists (12 states), athletic trainers (three states), and massage therapists (two states). While CAHI does not pass judgment on the necessity of any of the mandates, it is clear that not all patients need these kinds of benefits, much less want to pay for them. (more…)

Tags: Council of Affordable Health Insurance, health insurance mandates, increased premiums, ObamaCare

HHS Waivers and the Three I’s of Obamacare

Yuval Levin has made the important point that, when HHS granted waivers exempting some employer health plans from Obamacare’s prohibition on annual benefit limits, it was the “kind of government by whim, and not by law” that is “the essence of the regulatory state.” It is indeed a very troubling effect, and one that will be a byproduct of numerous other Obamacare provisions as well.

That said, it is worth noting that the “McDonald’s issue” also highlights the ignorance and incompetence behind the crafting of this health-care legislation.

As to the first: Anyone with more than a passing familiarity with health-insurance markets should be aware of the existence of the so-called “mini-med” plans in question. Mini-med health plans are essentially the mirror image of “high-deductible” plans. They cover routine care with little or no co-pays, but not major medical expenses. Most people probably don’t know that, it’s true, but it’s simply inexcusable to be a congressman (or a congressional health staffer) responsible for writing this legislation and not realize that prohibiting health plans from setting annual coverage limits will drive mini-med plans out of the market. (more…)

Tags: McDonald's, mini-med plan, Obamacare waiver

What’s the Worst That Could Happen With The New Health Law?

The Patient Protection and Affordable Care Act is one of the largest and most complicated overhauls ever enacted. Policy experts continue to debate the impact it will have.

Among the issues that has raised concerns is its cost. Supporters point to an estimate by the Congressional Budget Office that the law will reduce the nation’s budget deficit by about $140 billion over the next 10 years.

But according to an analysis by The Heritage Foundation, the health overhaul could end up costing American taxpayers millions of dollars in higher health insurance premiums or put a tremendous amount of pressure on an already soaring national debt. The foundation offers an interactive Web calculator where readers can test their own judgments about the effect of the law, too. (more…)

Some Company Retirees Can’t Keep Their Health Care Plan After All

Late last month global consulting firm Towers Watson started sending its retirees scary notices that their health-care premiums were about to go up substantially. Some retirees point to Obamacare as the source of their woes, and even the company warns that “health care reform may affect the future of all retiree medical coverage.”

Retirees such as Joan Mitchell said the change could be devastating. She’s 75 years old and her husband, George, a retiree of Sun Oil Co., is 84. The two live on fixed incomes.

“We live within our means,” Mitchell said. “This could affect our means.”

Mitchell worked for Towers Perrin, a precursor to Towers Watson, for 22 years. She started as an executive secretary and eventually became an internal consultant with a staff of 20 people. (more…)