Wednesday, September 24, 2014

September, 2014 Part 5 The Unfolding Disaster That Is Obama Care - Enrollees Continue to Drop Out And Still A Drag On The Economy

Over the past few years, but especially over the past thirteen months, we have had to devote more and more posts each month to the unfolding disaster that is Obama Care. This legislation, without a doubt, is the worst piece of legislation ever passed, likely passed by the most inept and useless set of Washington politicians that this country has ever had to endure. The disasters from this law include at least the following downsides:
  • It has and will continue to increase the national debt.
  • It will leave tens of millions of Americans still uninsured ten years from now.
  • It has restricted overall economic growth.
  • It raised taxes on all Americans in dozens of ways.
  • It has reduced the job growth rate in this country.
  • It has turned many full time workers into part time workers.
  • It has generally increase the cost of health insurance, both premiums and deductibles, over what was available in the insurance market before it was passed.
  • The Constitution was violated any number of times when the Obama administration unilaterally and illegally changed components of the law without the permission of Congress or the American people.
  • The American people were lied to over and over, directly by the President and Democrats in Congress, on the ramifications of the law.
  • It has caused millions of American to lose access to the current insurance policies they had.
  • It has caused millions of Americans to lose access to their preferred doctors, preferred hospitals, and in many cases, current medicine treatments.
  • It has likely increased the volume of people visiting hospital emergency rooms.
  • It has caused thousands of doctors to retire early or change professions in order to not deal with the bureaucracy and idiocy of the law.
  • It has exposed the inability of the Federal government and various state governments to develop, launch, and operate a successful program.
  • It has exposed millions of Americans’ personal financial information to identity thieves.
  • It never addressed, and thus, never resolved, the root causes of our escalating health care costs in this country.
I am sure that I omitted some of the negative ramifications of the legislation but you get the idea. To review past discussions of past disasters from Obama Care, enter ”the unfolding disaster that is Obama Care” in the search box above.

Let’s see what disasters we can find today.

1) Last month, we did a thorough analysis that showed that the Obama Care effort did not incrementally deliver health care insurance to 8 million Americans as the administration claimed. In reality, depending on what assumptions you use, at best only 800,000 to 1.8 million Americans incrementally got private health insurance as a result of the billions of dollars spent on Obama Care. Those numbers, analysis assumptions, and calculations can be accessed for review at:

A recent blog post on Amy Ridenour's National Blog, written by David Hogberg, also took a look at how 8 million Obama Care signups is really not 8 million signups. His analysis goes as follows:
  • Mr. Hogberg quotes reporting by The Hill that government figures show that enrollment has already dropped to 7.3 million, down from the announced 8.0 million.
  • The main reason for this large 9% drop already is that the lower number reflects the fact that 700,000 or so people never followed through to pay for their Obama Care policy and thus, they never acquired Obama Care insurance. 
  • Mr. Hogberg is skeptical that the 7.3 million number is legitimate since he cites the reality that last month, writer Jed Graham of Investor’s Business Daily reported that Aetna, the “nation’s third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers.” 
  • That would mean that 17% of the drop in the total number Obama care enrollees came from just a single company, Aetna, 120,000 (Aetna’s lost Obama Care customers) divided by 700,000 = 17%.
  • Thus, it is highly likely that the 700,000 number drop is too optimistic since if Aetna lost 120,000 customers (almost 17% of all of its Obama care enrollees), than what did the hundreds of other insurance companies lose including health insurance giants like UnitedHealthcare. Cigna, and others, both large and small?
  • And this 700,000 drop does not include the 115,000 or more enrollees that are going to lose their insurance coverage since they never should have received it in the first place, per a previous post.
What a mess. The 8 million number was in all likelihood the high water point for Obama Care enrollees. If the number was still at that level, you can be sure that the Obama administration would be bragging about it to support Democrats running for election in November. The fact that they are not bragging is a great indication that there is nothing to brag about and that that 8 million number has dropped like a rock over just the past few months.

2) Allen B. West used to be a Florida Congressman, he lost his reelection bid in 2012 and since then has been an active speaker and commentator on all things political, including Obama Care. A recent online post by him cited the feelings and pessimism of a number of people in the health care industry relative to the negative ramifications of Obama care:
  • Health economist John Goodman recently stated that three Federal Reserve Banks, in Philadelphia, New York and Atlanta, have surveyed the businesses in their Fed area and roughly one fifth of the employers are saying they cut back on employment: “Roughly one fifth are saying they’re moving from full time to part time. More than one in ten are saying they’re doing more outsourcing – all this because of the new health care reform.”
  • Goodman has gone on to say: “And so we see this everywhere that people are restricted, they’re pushed below 30 hours, they count as part time and when they’re part time, the employer doesn’t have to provide health insurance. Even among full-time workers, their take home pay is going to go down because one thing that almost all the employers are doing in response to Obamacare is raising the deductibles, raising the co-payments and making the employee pay more of the premium.”
  • Doug Holtz-Eakin, former Director of the Congressional Budget Office, recently stated: “For the smaller employers — those that have between 20 and 49 employees — you get a negative impact on jobs, you get a negative impact on wages in those jobs. What this means for small business as a whole is over $22 billion of earnings gone for their workers and 350,000 jobs.”
  • Merrill Matthews of the Institute for Policy Innovation: “You have a kind of a natural cliff there, that keeping your employees under that magic number relieves employers of the mandate to provide insurance. The 30-hour cutoff is how the administration determines whether you’re full time or part time."
  • Tevi Troy of the American Health Policy Institute: “Yes we are going to see increased cost to employers who are trying to provide health care for their employees, but employers don’t just take that lying down.”
So here you have the expert opinions of an economist who specializes in health care, a former government executive, a think tank executive, and an industry spokesperson who all come to the same conclusions: Obama Care is killing small businesses ability to grow, hire, and expand which is a primary driver of the nation’s anemic economic growth since the last recession.

As with the enrollment numbers above, if Obama Care was growing the economy or at least not stifling it, I am sure the Obama administration would be shouting at the top of their lungs that the legislation has been good for the economy as we approach the November elections. Their silence on the regarding the economy and Obama Care speaks volumes in this political season.

That will do it for today. Only two disasters but they are significant. More proof that the original Obama Care numbers were highly inflated relative to reality and the continuing reality, according to the economic numbers and subject matter experts in the field, the legislation is killing small business growth and overall economic growth.

More disasters to follow for the next few days.

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