1) A May 6, 2013 report by CNBC laid out how the Federal government was going to enforce the mandate that every American buy health care insurance or be fined for not having the insurance. This component of the legislation is critical to the entire financial integrity of Obama Care. It is supposed to force healthy Americans, generally younger Americans, to pay money for health insurance coverage. This pot of money from generally younger Americans will somehow then be used to fund health care for less healthy Americans, usually older Americans.
The IRS is tasked with the job of finding and fining those nasty Americans who dare not to purchase health care insurance, undermining the financial integrity of Obama Care. But do not hold your breath waiting for the IRS to do this job effectively, as laid out in the CNBC report:
- The law severely limits the IRS’s ability to collect penalties and fines.
- The IRS can only ask an American for the Obama Care fine money, but there are no civil or criminal penalties if that American refuses to pay it.
- The IRS cannot seize bank accounts or dock wages to collect fines and penalties.
- No interest accumulates for unpaid penalties.
- The only recourse the IRS has under Obama Care is to withhold tax refunds to collect the penalty but ONLY if someone overpaid taxes.
But it gets worse. The Treasury Department, according to CNBC, stated the cost for all of this IRS enforcement is expected to total $881 million for years 2010 through 2013. But former IRS Commissioner Douglas Shulman told Congress in 2012 that he and the IRS would need another $13.1 billion for the job in 2014. Another political class cost estimate that is insanely off target if Mr. Shulman is to be believed.
Bad planning with inadequate funding, totally expected from the political class.
2) The Townhall website reported on another Obama Care disaster on May 4, 2013, a disaster that had also been reported by other news sources. An Obama Care component, the Pre-Existing Condition Insurance Plan, has almost burned through its $5 billion budget years earlier than originally planned.
Now, Health and Human Service Secretary Sebelius has proposed that the states that run the administration of the program find a way to pay for it themselves. Remember, Obama Care was supposed to use Federal funds and taxes to pay for most of Obama Care’s features and programs. Now, before the entire legislation is even completely rolled out, another component is under dire financial strain, endangering the operation.
The basis of this latest problem is that the legislation capped spending on the program at $5 billion, and the money is running out because the beneficiaries turned out to be costlier to care for than expected. Advanced heart disease and cancer are common diagnoses for the group. Duh, who would have thought?
Obama did not ask for any additional funding for the program in his latest budget, and a Republican bid to keep the program going by tapping other funds in the health care law failed to win support in the House last week. Thus, no one in Washington is smart enough to come up with a solution to another failing aspect of the law.
State officials say one likely consequence of the money crunch will be a cost shift to people currently in the program, resulting in drastic increases in health care insurance premiums and copayments. Additionally, the real fear is that those sick people in the program might just drop out of the program because of the increased expenses.
Thus, the Obama promise to that this legislation will reduce Americans' health care costs and provide more insurance coverage is imploding from ignorant planning and over promising while under funding.
3) The closing paragraph from the Townhall article neatly summed up the overall Obama Care report card so far:
Republicans should have pushed harder to fix this program, but the issue brings up that Obamacare was poorly designed and poorly implemented from the start. It turns out that if legislation relies on moving pieces, state partnerships, and delayed implementation, the legislation is just poorly designed.
Succinct and accurate: poor.
4) The United Liberty website on February 2, 2013 reported on a General Accountability Office (GAO) analysis that determined Obama Care could cost taxpayers and the national debt about $6.2 TRILLION in the long-term if cost-savings measures in the legislation do not work.
The GAO report was requested by Senator Jeff Sessions, who is the ranking Republican on the Senate Budget Committee. The analysis explains that the “effect of PPACA [Obama Care] on the long-term fiscal outlook depends largely on whether elements designed to control cost growth are sustained.”
What is the chance of these costs actually working? If you believe one of the foremost experts in the field of healthcare, those chances are pretty low. In Congressional testimony in 2011, Richard Foster, Chief Actuary of the Centers for Medicare and Medicaid Services was asked by Congressman Tom McClintock for a simple true or false response on two of the main assertions made by supporters of the law: that it will bring down skyrocketing health care costs and will it let people keep their current health insurance if they like it.
On the cost control issue, “I would say false, more so than true,” Foster responded.
Who should we believe that costs will be contained by Obama Care: the head actuary for Medicare and Medicaid or politicians in Washington? Given the historical lack of trustworthiness of the politicians in Washington, I bet on the actuary.
5) Even the Federal Reserve Board is coming to the realization that Obama Care is a drag on the economy. The Federal’s Beige Book, released on March 6, identified Obama Care as a factor in slowing hiring and employment growth.
The Beige Book is published eight times a year and it details the economic activity in the 12 different Federal Reserve regions. As this most recent report explains, “Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.”
But this is not new news. Federal Reserve presidents have cited Obama care as a hiring drag for a few years now. In 2010, the Federal Reserve Bank president of Atlanta said, “We have frequently heard strong comments to the effect of ‘My company won’t hire a single additional worker until we know what health insurance costs are going to be.’”
There is little more clarity on what the new costs are going to be for business owners as we get closer to the full disaster that is Obama Care. This is why three different Federal Reserve regions have directly linked Obama Care to slower hiring, resulting in persistently high unemployment levels and anemic overall economic growth.
The Federal Reserve thinks that this legislation will stunt growth, the head actuary of Medicare and Medicaid thinks this legislation will substantially add to the national debt, the IRS has virtually no way to make the insurance mandate component effective, and early components of the law are already running out of money with no plan to make them solvent short of increasing the premiums of the component. Unfortunately, the bad news continues tomorrow relative to the ever growing nightmare called Obama Care.
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