We spent the week or so reviewing the latest insanity from the Washington political class. Wasteful spending by many different government entities but especially the Defense Department, fraud riddled government programs, government programs that seem to always be over budget and under delivering, and a whole array of other insanity and idiocy.
We stayed away from the unfolding disaster that is Obama Care since that piece of legislation deserves its own, dedicated set of insanity posts. For many years, but especially over the past two years, we have written extensively on the myriad of disasters that this law keeps spawning. To review these past disasters, enter the search term "the unfolding disaster that is Obama Care" in the search box above.
Today is the second in the two part update to the Obama Care disasters that began yesterday:
1) Most people who follow the Obama Care legacy of disaster and deceit know who Jonathan Gruber is. He was a highly paid, MIT economist that is now generally viewed as one of the architects behind the Obama Care legislation. His economic models helped pave the way for the fiasco of Obama Care.
He was also the one who has been caught on video tape discussing how stupid Americans were and how the whole process of developing the legislation was done in the most non-transparent manner possible in order to hoodwink the public and get the legislation passed. His arrogance and condescension landed him in the front of Congressional committees where he was forced to eat a tremendous amount of humble pie and crow.
But apparently his history of talking too much is still catching up with him. In recently discovered videos and documents of his words, it turns out that most people working on the Obama Care legislation knew up front that Obama Care would be tremendously expensive and that the so-called cost control components of the legislation were merely mirages to hoodwink the country into getting the law passed.
In a 2009 interview, Gruber flatly states: “Why should we hold 48 million uninsured people hostage to the fact that we don’t yet know how to control costs in a politically acceptable way? Let’s get the people covered and then let’s do cost control.” In other words, lets lie now to get the legislation enacted and worry about the costs later, if at all, since we do not know how to control costs today.
But that was not the public message that Obama went forth with. He stated flatly that his legislation would “bend the cost curve” and not add “one dime to the national debt.” In other words, they all lied since we now know that Gruber knew and as did everyone else pushing this disaster that the cost control aspect was pure fiction, courtesy of Gruber’s inability to keep his mouth shut and his ego under control.
But the lies go on, still courtesy of Gruber’s big mouth: “The real substance of cost control is all about a single thing: telling patients they can’t have something they want. It’s about telling patients, ‘That surgery doesn’t do any good, so if you want it you have to pay the full cost.’” In other words, we are talking about a version of what Palin got crucified for, ”death panels.” Here is a primary architect of Obama Care basically admitting that at some point in time, the government and the politicians that operate it will determine whether you and I are entitled to health care treatment.
That my friend is a definition of a death panel. Bureaucrats making life and death decisions for you despite the fact you were told that death panels were not a reality within the Obama Care realm. It is cost control via health care denial, death panel and government edict. Thus, Obama on down lied about this also. They knew years ago that they had no clue how to control costs but said they did and never admitted that care denial was their only answer to cost control.
2) Speaking of cost control, Stephen Parente recently wrote about what is going to happen to Obama Care insurance costs in 2017 in his article, “Lull Before The Obama Care Rate Storm.” He points out that the rate increases on Obama Care policies were higher this year but not outrageously higher: “Americans visiting Healthcare.gov to purchase 2015 health-insurance plans are finding a nice surprise: Average premiums for the cheap “bronze” plans have increased only by 3.4% and premiums for the middle-of-the-road “silver” plans are rising by 5.8%, according to the American Action Forum. Where are the double-digit premium increases that so many predicted?”
Now this is still bad news in a sense since the President stated, in what is likely another of his many lies and deceptions, that the average American family would see a $2,500 annual decrease in their insurance policy costs once Obama Care was in effect. Obviously, the undelivered promise of a $2,500 decrease is a far cry from single digit increases.
But this disconnect gets far worse in a year or two. The legislation established two, temporary programs that make Obama Care policies far cheaper than the reality of the market: risk corridors and reinsurance. Without going into the gory details, the Obama administration is using taxpayer dollars to subsidize Obama Care insurance policy costs, administered through these two programs, until the end of the year 2016.
Beginning in 2017, these two programs are scheduled to disappear and the insurance companies will set their Obama Care policy costs based strictly on market conditions without the crutch of taxpayer support. According to Mr. Parente, “This is why premiums on Healthcare.gov are cheaper than many predicted. The taxpayer’s generosity allows insurance companies to hide the true cost this time in 2016. That’s when you’ll see the real spikes.”
What happens when the taxpayer subsidies go away, which they will likely do since it is unlikely that the Republican controlled Congress is going to allow Obama to extend those subsidies beyond their current termination dates? Well a recent study from the University of Minnesota’s Medical Industry Leadership Institute took a shot at estimating the impacts of the subsidy withdrawal to insurance companies. Their forecasts are chilling from a family budget perspective:- Bronze plans could increase 45% for families, to about $13,000 from $9,000.
- Individual plans could see a 96% spike, to nearly $4,000 from $2,000.
- Other plan types, silver, gold and platinum, will see smaller, but still significant, increases but they are already very, very expensive.
- Premiums for cheaper plans will increase at a faster rate because their deductibles will likely decrease to meet ACA regulations starting in 2016.
- The study’s authors and analysts estimate that premiums will continue to rise after 2017 at higher rates than they did BEFORE Obama Care was enacted. In other words, the legislation made a bad situation worse in the long run.
- They go on to estimate that as costs go up, fewer and fewer people will pay for the now higher priced policies and will either move to cheaper, less comprehensive policies or terminate their insurance coverage altogether, the exact opposite of what Obama Care intended.
Now, whose number and forecasts should one believe, these from the University of Minnesota or Gruber’s MIT based forecasts? Given that Gruber’s models and lies have not worked out well or accurately, I would place my bet on the University of MInnesota’s models and forecasts since 1) many of them are already coming true and 2) their assumptions in 2017 are based on the reality of the legislation as it is written, i.e. those subsidies to insurance companies are going to go away.
So, higher costs and less people insured, the exact opposite of what the legislation set out to do. But so typical of Washington laws, they never attain their objective and usually make a problem situation worse. And in 2017, when premiums are skyrocketing and people are dropping their coverage, the root causes of our high health care costs, causes that we have listed numerous times in this blog, will still be present and still driving up health care costs.
Mr. Parent closes his article with a good description of the rock and hard place the legislation is in: “This leaves the Affordable Care Act in a precarious position. It was sold on the promises of affordability and universal coverage, yet neither promise can be kept after 2017. America’s debate over health-care reform is only getting started.”
3) One of the most negative aspects of Obama Care is that it has placed a tax on so-called medical devices to help pay for the legislation’s staggering costs. As a result, with less money to invest, medical device companies have been reducing their research and development expense, have restricted hiring or have already laid people off (with one comprehensive study estimating that 33,000 jobs have already been lost due to the tax), and have sought cheaper manufacturing options overseas, all because the taxes from Obama Care have impacted their operating profits.
This will have long term impacts across the board.The economy will grow less since more manufacturing would have left our shores. Unemployment will go up since hiring is constricted or reduced to keep expenses under control. And more importantly, with a reduction in research, life saving or life improving technologies in the medical device world may go undiscovered or delayed, making life more miserable for those the need help.
How real are these concerns? Quite real, if you believe the article recently written by Sean Hackbarth for the Heritage Foundation, “Medical Device Pioneer: If Medical Device Tax Existed When I Started I Wouldn’t Have Been As Successful.”
The pioneer is named Dr. Tom Fogarty and he is the inventor of the balloon catheter that is used to open blockages in blood vessels. His invention has probably been used millions of times to help get the blood flowing again in people's clogged blood vessels, saving lives, reducing health care costs, and making life more enjoyable for those with this type of problem. Last year he received the National Medal of Technology and Innovation in a ceremony at the White House.
But he recently penned an article in USA Today where he made the common sense argument against the medical device tax of Obama Care: “There is no way I could have had the same impact if the tax on medical devices was in place when I started over 50 years ago.”
In another interview, this one with last fall with the Silicon Valley Business Journal, he explained how and why investment in American device startups has dried up along with the innovation that these start ups might have brought to market: “It has had an absolutely huge impact. Nothing will start in the United States because of that tax. It will all go offshore. You can't start a business and pay taxes when you're not making any money. It's a non-starter. [The 2.3% tax applies to revenue not income.]”
That will do it for this update on the unfolding disaster that is Obama Care. We found more lies from Gruber and this President regarding cost containment and death panels, we can expect gigantic health insurance rate increases in less than two years, and Americans are losing out on what science and technology can bring to our lives and to reducing health care costs as a medical device tax is stifling innovation, inventions, and better lives besides hurting economic growth. Three big disasters from the biggest disaster of a law ever passed by Washington. Stay healthy my friends, you cannot afford not to an Obama Care world.
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http://www.youtube.com/watch?v=08j0sYUOb5w
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