The Obama Care Health Care Reform Legislation - Continuing To Become A Disaster

We have stayed away from the recently passed national health care reform legislation that Obama and the Democrats passed through a back door in the Senate rules called reconciliation for a few weeks. Never mind that the majority of Americans were and are against the legislation and that it would have never passed if presented with any guts through the normal Senate law making processes. It has been passed and, at least for now, is the law of the land.

We have been extremely critical of the legislation in the past so let's review why it is a disaster that keeps on unfolding from past posts:

• The political class never figured out what the root cause or causes of high health care costs were in this country. As a result, they produced a law that did not solve any underlying causes, all it did was raise taxes, redistribute existing medical expenses and revenues, and criminalize millions of Americans who may choose not to partake in the requirement in the law that makes it a crime for anyone not to purchase health insurance.


• Probable underlying causes of escalating health care costs, as cited many times by people more expert in the field than any politicians include the facts that 1) Americans smoke too much, 2) Americans are too overweight, 3) Americans do not exercise enough, and 4) while states have seen reduced health care costs when they passed medical tort reform, the Federal health care legislation had no tort reform provision. Thus, the four main reasons for high health care costs still exist and any legislation, like Obama care, will fail if it does not solve those problems.


• Obama care was supposed to reduce the national debt by $135 billion over the first ten years, or about $13.5 billion a year. However, a May 11, 2010 Associated Press article reported that the law, as passed, "neglected" to include some expenses that will be required to fulfill the requirements of the law. The article reported that additional funding bills of at least $115 billion will need to be passed in order to fulfill the law's needs, wiping out all or most of the contemplated $135 billion savings. In any case, even if the savings were $13.5 billion, this amount would be less than 1% of the deficit that the Obama administration will run up in 2010, hardly earth shattering.


• The May 11 article did not include another $200 billion that Congress has promised to doctors that honor the Medicare and Medicaid programs to offset the cuts in Obama care. Thus, the legislation promised to cut payments to doctors in those programs but the Democrats and Obama will offset those cuts with other spending programs, definitely making the law deficit inflating.


• An article in the June issue of Kiplinger's Personal Finance Magazine reported that the long term care component in the health care reform legislation will be a failure since the benefits from the program won't come close to covering the cost of a nursing home stay. According to the article's research, the Federal program under Obama care will cost about the same as a private plan but deliver only about one third of the benefit. Such a deal.

But we knew all this from previous posts. Let's look at some updated information and reporting:

• According to an Associated Press article from July 2, 2010, hospital emergency rooms will likely grow more crowded int he future, not less crowded, as promised by Obama care. Unknown to the political class, the uninsured are not the ones filling up emergency rooms, they are just as likely to use an emergency room as those that have insurance. The most prevalent users of emergency rooms are those people covered under Medicaid and that program is expected to grow by 16 million under the new law. Thus, a primary objective of Obama care, reducing the use of emergency rooms, is likely to be a failure.


• The article reported that already is a shortage of emergency room doctors and with growing volumes of patients coming into emergency rooms, waiting times and medical care are likely to suffer even more.


• Furthermore, fewer and fewer doctors of all types are more likely to refuse Medicaid patients in the future, given the perceived low level of payments from the government, forcing more people into emergency rooms.


• The most discouraging news in the article is that when similar legislation was passed several years ago in Massachusetts with the same objective of decreasing emergency room traffic, the exact opposite happened. Emergency room traffic continued to increase and increase faster than the national average. Thus, the political class had a perfect market test of their concept to learn from and opted to ignore it. In other words, they did not understand a root cause of a problem. Sound familiar (see above)?


• An article in a recent edition of The Week magazine, reported that a large, large number of the nation's doctors are nearing retirement. As always in economics and reality, reduce the supply (more doctors retiring than entering the industry) and increase the demand through this legislation and prices (and costs) are sure to go up. Another Obama care objective that is likely to be missed.


• An article by Peter Suderman in the August issue of Reason magazine reported on a number of aspects of the legislation that we have already mentioned. First and foremost, if you do not purchase health care insurance, you could be fined up to $695. However, since health care insurance is likely to cost much, much more than that, you can assume that many people will be willing to take the risk of not getting caught and save the difference. Couple this with the fact that, according to Mr. Suderman, the IRS, which is responsible for collecting the fines does not have the authority or the resources to force people or investigate people who falsely claim to have insurance, i.e. an honor system with no teeth to enforce it is in play.


• Mr. Suderman goes on to point out what happened in Massachusetts relative to the provision that no one can be turned down for insurance for a pre-existing condition. In Massachusetts, state residents would go without insurance until they needed it. They then would sign up with an insurance carrier (remember, they cannot be denied under Massachusetts' law and Obama care), have their health problem taken care of, and then drop the insurance. Another example of Obama and the Democrats ignoring a real life test of their grandiose plans that have already failed in the real world.

Failure to understand the root causes, ignoring real world experiences that prove their plans would be a failure, shady financial estimates and dealings, and a backroom, Politburo-like passage process make this an ongoing and unfolding disaster. As we have said all along, we need to go back to square one, impanel a set of subject matter experts (as outlined in "Love My Country, Loathe My Government" Step 28), let them come up with a a set of alternatives (void of lobbyists' inputs) based on a root cause analysis process and sound economic analyses , and let the American people vote on the solution that they want, cutting the political class out of the equation altogether. In the meantime, we can let Congress worry about other pressing issues like whether or not Guam is going to capsize (see the June 28 post). Hopefully, they can resolve that issue and leave the real issues such as health care reform to the experts and the rest of America.

Our new book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at http://www.loathemygovernment.com/. It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

YQF3W74UXXEA

Also visit the following sites for freedom:
http://www.cato.org/
http://www.reason.com/
http://www.robertringer.com/
http://www.realpolichick.blogspot.com/
http://www.flipcongress2010.com/