The Devastation That Is Obama Care, February Update, Part 2: Killing Marriages, Killing Work Hours, and More

Just when you thought we could stay away from the devastating effects of Obama Care, another set of bad surprises pop up. We thought we had contained the damage in a series of posts from earlier this year that began with the following post:

http://www.loathemygovernment.blogspot.com/2013/01/the-devastation-that-is-obama-care-part.html

Yesterday's post was Part 1 of a February update to that original series of Obama Care posts. Today is the second half of that update.

Unfortunately, more bad news has arisen:

1) One of the biggest reasons why Obama Care is falling apart is that the creators never understood the root causes of our high and escalating health care costs. Until you understand the root causes, you cannot develop the right solutions to address those root causes and anything you try to do without that basis is probably doomed to failure:

• Americans eat too much.
• Americans eat too much of the wrong kinds of food.
• Americans smoke too much.
• The Washington political class subsidizes these bad habits by paying American farmers to grow unhealthy food and making tobacco farming more lucrative via Federal subsidies.
• Government regulations inhibit health care insurance competition across state lines.
• Obama Care never included any major tort reform to remove unnecessary legal expenses out of the system.
• Obama Care never “followed the money” to quantify who and what entities were making obscene profits off of obscene health care costs.

Without understanding the root causes of high health care costs, Obama Care turned into nothing more than a poorly structured, poorly run and poorly financed health care insurance program, not a comprehensive health care industry reform program. That is why some components of Obama Care, e.g. the CLASS program, which was supposed to provide long term care for Americans, have already been shut down because of their failure to address the true causes of our problems.

Which brings us to the next component of Obama Care which is about to be shut down even before the whole piece of legislation is implemented. According to a February article from the Washington Post:

• Tens of thousands of Americans who cannot get health insurance because of a preexisting medical condition will be no longer be able to get coverage from an Obama Care program because funding for that program is running out.
• These so-called “high-risk pools” will be closed to new applicants no later than March 2, depending on the state.
• According to an HHS spokesperson, the closing of the program to new applicants is being taken in order to protect the interests of those who had already signed up for the program, about 135,000 people.
• The program launched in 2010 and was supposed to last until 2014 but now will be shut down in the coming weeks because of a lack of funds.
• In another back handed slap at bad government forecasting, the original business case assumed that about 375,000 people would sign up for the program. However, only 135,000 enrolled, about a third of the expected enrollment, but the cost of servicing this one third is far higher than what was expected, causing the shutdown of the system to new enrollees
• In a moment of rare candid honestly from a Washington bureaucrat, that same HHS spokesperson is quoted in the article: “What we’ve learned through the course of this program is that this is really not a sensible way for the health-care system to be run.” Could not agree more.

Another Obama Care program blows its forecasts, exceeds its budget, and does not deliver what it promised to deliver. Par for the course.

And let’s do some simple math to see why this is another epic failure. The article states that between nine million and 25 million Americans are uninsured and have a preexisting health problem. If the current program has 135,000 enrollees and they have blown through $5 billion in three years or so, then the cost of insurance coverage for these enrollees comes out to about $37,000 per person or about $12,000 a year per person. If we take the mid point of the uninsured estimates, we end up with 17 million Americans (9 plus 25 divided by 2) who are uninsured because of preexisting health conditions.

Thus, using the results of this program, the average cost ($12,000) times the number needing insurance (17 million) comes out to an annual cost of over $200 billion a year. There is no way the country and the Federal government could afford this cost. This one program alone would eat up about 8% of the entire 2012 revenue stream of the Federal government:

http://www.whitehouse.gov/omb/budget/Historicals

Which gets us back to our original point, you have to reduce the root causes of the high health care costs in this country, the root causes that cause these preexisting conditions. You cannot paper over them with complicated and expensive Obama Care insurance programs that just do not work since “what we’ve learned through the course of this program is that this is really not a sensible way for the health-care system to be run.”

2) Another perverse incentive of Obama Care is to make marriage less palatable for Americans and American families in the lower income ranges. Consider the opinions of two experts on the matter:

• Former Obama Treasury Department executive David Gamage was quoted The Wall Street Journal last year: “Consider a couple with children in which one of the parents earns most of the family’s income. If the couple marries, the family would lose thousands of dollars of subsidies that could otherwise be used to pay for health insurance for the children and the lower-income spouse. If the couple is already married, divorce may be their only option for obtaining affordable insurance for their children and the lower-income parent.”
• Diana Furchtgott-Roth of the Manhattan Institute testified in front of a Congressional hearing:“Health insurance premium credits in the new law are linked not directly to income, but to the poverty line, resulting in a particularly steep marriage penalty for low-income Americans. With $10,890 as the poverty line for one person and an additional $3,820 for a spouse, marriage means less government help with health insurance.

Thus, despite the President’s claim in his recent state of the union message that he wanted to strengthen families (“We’ll work to strengthen families by removing the financial deterrents to marriage for low-income couples,”) because that is best for Americans and American families, his health care reform disaster does just the opposite, financially incenting people not to get married or to get divorced.

3) We have reported on the many instances where private businesses and companies are cutting the hours of their employees to less than 30 hours a week due to the asinine Obama administration ruling that anyone working 30 hours or more a week is considered a full time employee relative to Obama Care, forcing them to provide full health insurance coverage to these employees. Since many of these businesses’ business model, particularly those in the restaurant industry, cannot support these extra, onerous costs, they have cut their employees hours. Now these Americans still do not have health care insurance AND they have fewer hours to work and lower take home pay.

But this situation is not restricted just to private businesses and restaurant businesses:

• The Virgina Pilot newspaper reported on February 8, 2013 that thousands of part-time state workers will see their weekly working schedules reduced to no more than 29 hours a week going forward. The reason given for the drop in hours is that under Obama Care employees working 30 hours a week or more receive health care benefits, which would cost Virginia tens of millions of dollars a year. The new policy will mean a pay cut for many part-timers, including adjunct college professors.
• The Huffington Post reported back in November, 2012 that Youngstown State University will reduce the hours of part-time employees to ensure that the university is not required to provide them with health insurance coverage under Obama Care. Adjunct professors and lecturers would see their payable hours reduced to that magic number, 29 hours a week or less. Reason given for the decrease: onerous costs of Obama Care.
• We have already reported on how the Community College Of Allegheny County will cut the hours for some instructors to avoid paying for their health insurance coverage under Obama Care’s 30 hour rule, cuts that are affecting about 400 employees.

Again, insanity. These people will still not be able to afford health care insurance and will see a cut in take home pay nonetheless.

4) The Portland Press ran an article on February 18, 2013 that questioned the assertion made when Obama Care was passed that health care costs would go down. Many organizations, states, and politicians who supported the passage of the bill are now backpedaling on the potential devastating affects it may have on their constituents:

• State insurance regulators in California, recently sent a letter to the Obama administration in a recent letter to express their fears and concerns about "rate and market disruption."
• Oregon's insurance commissioner predicts that the new Obama Care regulations could push up premiums for younger Americans by as much as 30% and urged administration officials to slow the rollout of the new regulations.
• Insurance regulators in California, Oregon, Rhode Island and several other states have asked the administration to phase in the new requirement over several years in order to not jolt the insurance market or America.
• An advocate for consumers in their 20s, Young Invincibles, is also worried, sending a letter to administration officials suggesting that additional steps may be needed to protect young people from rising premiums. Remember, one of the insane aspects of Obama Care is that insurance costs for older Americans is reduced at the expense of raising insurance costs for younger Americans, those that are far more likely to have lower personal wealth than older Americans.
• Following up on that point, the Congressional Budget Office estimates that insurance costs for those who buy insurance coverage on their own probably will be 10-13% higher in 2016.

The article lays out a scenario that is very likely to occur in 2014 for many Americans, especially younger Americans:

• As health insurance rates come down for older people, the insurance rates will likely increase for consumers in their 20s.
• If that happens, young, healthy people could elect not to get health insurance and pay the small penalty if AND when they actually get caught by the IRS.
• This is the logical personal financial path for them to take since the cost of their insurance will be going much higher than the relatively minor fine they MIGHT eventually face.
• That, in turn, would leave an older, sicker population in the insurance pool on average, which typically inflates premiums and will leave millions of Americans without health care insurance.

In other words, the entire Rube Goldberg structure of this idiotic legislation will come tumbling down in bad financials, sick Americans, and much higher national debt.

Unfortunately, the bad news keeps oncoming from this massive, ill-conceived, complex, doomed to failure piece of legislation. But we should not be surprised, experts and news outlets have been correctly predicting this coming doom for years. For a nice synopsis of this history, consider going to the following link for a detailed, but easy to read, trek through the past few years to see what was predicted to fail is now actually failing:

http://hotair.com/archives/2013/01/22/obama-concedes-obamacare-didnt-do-anything-for-rising-health-care-costs/

I am sure this is not the last set of disasters we will cover relative to Obama Care. Unfortunately.

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