Monday, July 4, 2011

Another Week, Another Obama Care Fiasco

Newspaper reports last week sent me looking for an old, inane Nancy Pleosi quote she made during the run up to the forced passage of Obama's health care reform legislation. During the debate, Ms. Pelosi stated: "We have to pass it (Obama Care) so you can find out what is in it away from the fog of controversy." The YouTube video of her actually saying this can be viewed at:

http://www.youtube.com/watch?v=KoE1R-xH5To

This statement was so wrong on so may levels:
  • Why should the American public have to wait until this massive legislation was passed? Shouldn't we have a right to understand how it is going to affect our lives BEFORE it becomes law?
  • Isn't it the job of our elected representatives to explain what is any the bill rather than blindly passing it and hope it works after passage?
  • What she sees as a fog of controversy I see as healthy debate. This legislation will significantly affect the lives of just about every American if it stays in effect, debate is certainly warranted rather than demonizing debate as controversy and a fog.
  • But we should not be surprised by this suppression of legitimate debate and her condescending attitude, i.e., we all will see what is in it after it is passed, since Pelosi publicly accused all of those opposed to Obama Care as being un-American.
My distaste for Ms. Pelosi's attitudes and negative impact on this country's financial situation and freedom is no secret. But at least now we can follow her advice and actually see what is actually in the legislation.

Keep in mind that Pelosi, Reid, and Obama claimed that Obama Care would reduce the Federal government's deficit by about $125 billion over the first ten years. However, subsequent unbiased analysis by the Congressional Budget Office identified about $105 billion of additional expenses not included in the $125 billion estimate. Thus, at best, using the administration's own numbers from the Congressional budget office, Obama Care would reduce the Federal deficit by $20 billion over ten years or a measly $2 billion a year. Again, best case.

An Associated Press article on June 30, 2011 reported that, due to wording in Obama Care, older Americans of the same age and same income with similar medical histories would pay substantially different amounts of dollars for private health care insurance, another unintended consequence of the legislation.

The article went through the math for hypothetical neighbors:
  1. Both neighbors are 62 years old.
  2. The both have the same income of $39,500 a year.
  3. One neighbor gets all of his $39,500 from working at a real job while the other neighbor gets $20,000 from part time work and collects $19,500 from Social Security.
  4. Neither of them gets health insurance at work so they have to purchase it individually from a private insurer since they cannot get Medicare insurance until they are 65 years old.
  5. If this was happening in 2014, they could purchase their health insurance from a health insurance exchange and also get Federal subsidies to make their premiums more affordable.
  6. The neighbor who is receiving early Social Security payments would pay $206 a month in the exchange to receive health care insurance.
  7. The neighbor who is not draining the Social Security budget and is working full time to get his $39,500 would have to pay $313 a month for the exact same coverage of his neighbor, 50% more.
The article quotes an expert in the field who believes that the more of your income that is in the form of Social Security benefits, the bigger the size of the savings you will get on your health insurance.

Now, Ms. Pelosi, how does this make sense? The good American, working full time, earning a living, paying taxes into both the income tax pool and Social Security tax pool, not pulling down scarce Social Security funds, gets penalized so heavily relative to his neighbor who is not paying in as many taxes to the government and who is actually draining down scarce Social Security funds? How fair is that? We have passed the bill, now see what is in it, and it is not pretty, government regulations arbitrarily rewarding less productive citizens vs. more productive citizens.

This snafu comes on the heels of another finding/screw up reported two weeks ago.  Medicare's top actuary found that up to 3 million middle class/middle income Americans, who get at least some of their household income from Social Security, could become eligible for nearly free health care coverage via Medicaid and Obama Care, and the American taxpayer, even though they could afford to pay for it. The actuary summed up his findings with the understatement that the situation "just doesn't make sense." How true.

And we can use this same statement to describe this week's unintended consequence from Obama Care. How pathetic, Pelosi says we needed to forego debate and just pass this thing to see what is in it. Well we did it that and it is not a pretty sight. Didn't anybody in Congress or on their staffs read this legislation before it was passed? These are some relatively simple things to figure out, why did we have to figure them out after the fact? Are those in Washington that math deficient?

Back to the deficit numbers we laid out above. If we take the average of the $206 and $313 numbers above that would be required to insure our neighbors, an annual equivalent of about $3,000, and hit it up against the additional 3 million Americans who will get free health care via Medicaid, the Federal government, and the American taxpayer, will unnecessarily be shelling out an additional $9 billion a year under Obama Care just in this small example.

This will totally wipe out the hypothetical $2 billion savings we discussed above and add about $70 billion to the Federal deficit over ten years. Tell me again Ms. Pelois, why this is a good deal? We are adding to the deficit, unnecessarily giving away taxpayer money, and institutionalizing government  discrimination against hard working Americans.

I can hardly wait to see what happens next week.



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