Tuesday, June 16, 2015

June, 2015, Part 4, The Unfolding Disaster That Is Obama Care: The Supreme Court Implications, The Economic Implications,and The Human Suffering Implications

Every month for the past three years or so we have had to take time out and review the latest insanity and disasters from the Obama Care legislation. Long ago it only took a day or so to cover it all. But then the law starting taking effect and the “unfolding disaster that is Obama Care” made it impossible to contain the bad news, the heartache, the rising costs, and the stress put on American families to just a day or two.

To review the past discussions on this horrid piece of legislation, enter the term "unfolding disaster" in the search box above or just page through previous month's posts on the right side of this page and click on the various references to Obama Care. Very quickly, as your read the past posts, you will see that this is easily the worst piece of legislation ever passed by Washington.

Not only has it disrupted lives, stymied the economy, and increased healthcare costs in this country, it never addressed the various root causes of high healthcare costs. Thus, by never addressing some of the root causes listed below, the legislation has virtually no chance of actually reducing healthcare costs in this country:
  • Americans eat too much of the wrong kind of food.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The healthcare industry in this country needs serious tort reform.
  • Federal government crop subsidies lead to our food chain being infested with unhealthy sugar and high fructose corn syrup.
  • Current government healthcare programs, Medicare and Medicaid, lose upwards of $100 billion a year to waste and criminal fraud, billions of dollars that could be used to reduce other healthcare costs in this country.
  • Cross state line insurance competition needs to be made easier to do.
  • The Obama effort never “followed the money” to actually map out where the high costs paid by Americans for healthcare actually end up.
Since Obama Care never addressed these root causes, we are still going to have those root causes resulting in higher and higher healthcare costs regardless of how well Obama Care is implemented. And since the prime objective of Obama Care was to reduce costs, the legislation will end up being a failure.

So with that gloomy set up, let’s see what Obama Care disasters unfolded in the past month or so.

1) One of my favorite TV shows is “The Big Bang Theory.” Penny is a character on the show, she is a full time waitress and a part time actress. She is constantly verbally sparring with another character on the show, Sheldon, who is a condescending academic genius. There is a running gag where Penny tells Sheldon never to tick off the people who can spit on your food before it is served.

Which brings us to a quote from the President this past week, a taunt directed at the Supreme Court which is about to hand down a ruling that could collapse the entire Obama Care legislation: "This should be an easy case. Frankly, it probably shouldn't even have been taken up." In other words, you dummies on the Supreme Court, why did you even waste your time on this situation?

Which tells me three things:
  • The President is really scared that the Supreme Court will come down with a negative ruling for the law and help it self-destruct and is trying one last desperate attempt to sway the judges.
  • Or, the ruling has already been made, it is not good, the President knows it is not good, and is trying to rally public support to make the Supreme Court out as the bad guys.
  • Finally, he is really the Sheldon character, calling the Supreme Court (Penny) dumb for even considering the case, in which case the Supreme Court, being comprised of human beings who probably do not like being called dumb, just spit on his food (the Obama Care legislation) to get the final say.
In any case, calling someone dumb while they still control the fate of something you value makes that person the real dummy.

2) The Supreme Court case we are talking about is called King Vs. Burwell. It challenges the administration’s contention that it did not mean what it said in the legislation, namely that only people who get Obama Care policies through state exchanges are entitled to Federal subsidies to pay for those policies. Those people who got their Obama Care policies from the Federal exchange, are not entitled to Federal subsidies, as clearly spelled out in the legislation that Democrats in Congress approved and Obama signed off on.

The writing and intention of this condition is clear in the actual reading of the law. Obama is trying to convince the judges that this is a mere typo and that from a compassion perspective, the judges should ignore was enacted and let his administration does whatever it wants, regardless of what the law says. The reason for the panic is that if the Court cuts off subsidies to about two thirds of Obama Care policy holders, the costs go up, the policyholders cancel their now much more expensive policies and the whole house of cards collapses.

If somehow the judges rule for Obama, then democracy as we know it is over. Any President in the future could then interpret any law anyway he or she wanted, Congress be damned. Obama Care legislation clearly states that only policies obtained via the state exchanges can get subsidies. That was debated, that was what was written into the law, that was what was enacted but is not what the reality is. The administration said, we will ignore that part of the law and do what we want, rule of law be damned.

Theoretically, in the future a Republican President could come into office and say that Roe Vs, Wade is outdated, I will ignore it. He or she could say that “don’t ask, don’t tell” is not what it means,I will ignore it. He or she could say that the Clean Air Act does not apply to clean air,I will ignore it. When the law says “no” and a President wants it to say “yes,” and acts as if it does say “yes,” democracy is over and dictatorship has taken its place.

3) But what it be such a bad thing if the Supreme Court did deal a death blow to Obama Care? From an economic perspective, one recent analysis and research effort says the economy would enjoy a revitalization if Obama Care went away.

The American Action Forum (AAF), a conservative leaning think tank, thinks that would be the case, economically. Douglas Holtz-Eakin, president of the American Action Forum recently told reporters his organization’s research sees many upsides for the downfall of Obama Care. For background, Holtz-Eakin does have some formidable credentials since he is a former director of the Congressional Budget Office and former chairman of the Council of Economic Advisers.

His reasoning goes as follows:
  • The majority of Obama Care policyholders previously had insurance policies that were cheaper and better fitted to those policyholders needs so many of the current Obama Care policy hodlers could eventually find their way back to more favorable, less expensive policies.In other words, not every Obama Care polciy holder would then be without health insurance.
  • As many policyholders went back to cheaper yet better insurance policies, they would be paying less for insurance, leaving more disposable income to spend in other parts of the economy.
  • The downfall of Obama Care would also free up millions of Americans who prefer not to have health insurance and hundreds of thousands of businesses who do not have to pay Obama Care penalties, freeing up untold billions of dollars to expand the economy.
  • This analysis estimates that this situation would add 1.2 million workers to the U.S. labor force and increase the hours for 3.3 million part time workers.
  • These workers would see wages go up between $830 and $940 a year, putting $13.6 billion back into economic growth.
  • “There will be fewer administrative burdens when employers offer full-time employment to qualified employees who will have the opportunity to become specialized and therefore more efficient in their work,” the study says. “We might also expect to see more job growth in these states as employers expand their businesses and offer more hours without the cost of complying with the ACA.”
  • Brittany La Couture, the health policy counsel at the AAF, agrees with the studies findings: “Because they will not be subject to the mandate, small to medium size employers may expand employment to more people, or allow their employees to work more than 30 hours per week.” 
  • Also, “AAF estimates that there are currently about 3.3 million part-time workers in the states affected by the ruling who are seeking but are unable to find full-time employment.”
  • And while the AAF leans conservative, the New York Times recently credited the organization with “following the numbers” and not being swayed purely by ideology.
Economic forecasting like this is often not much more than a stab in the dark. However, it does provide a rational and logical approach to considering the upside of terminating Obama Care, a solution that has no chance of ever fulfilling its goals and promises. 

4) While the AAF study shows that Obama Care has killed job creation and restricted economic growth, which could be reversed if Obama Care was killed, another study, this one by the American Health Policy Institute also concluded that the legislation is shrinking the labor force since it reduces incentives to work. Why? The more a person earns from working at a job, the less they get in Obama Care subsidies to pay for health insurance.

Thus, some people have and will decide the effort of working is not worth it given the decrease in Federal Obama Care subsidies. These people then become net takers from the Federal government, and the American taxpayer, than net contributors to the country and the economy. Eventually, these people become long term, chronic unemployed and their chances of ever finding full time, fulfilling work will approach zero over time. Nice law, incenting people to become idle, lazy and wards of the state.

5) As we often do in this series,m let's finish up today with some heart wrenching stories of how ordinary Americans have gotten screwed by this legislation, courtesy of the website:


We can argue economic theories and economic forecasts all day but these stories are the realities of Obama Care and they are not pretty:
ANGELLA - NEVADA: “Housekeeping is a tough job—many of us suffer serious injuries doing this work. And ObamaCare would cause my husband and I even more pain. The Obamacare website says we would have to pay $8,057.04 a year more to keep the great insurance we have now. That’s a $3.87 per hour pay cut. We work hard for our insurance. Why should we have to take a cut in pay for it?”

LIONEL - LOUISIANA: Baton Rouge public relations consultant Lionel Rainey said Wednesday the price of his health insurance will double even though he rarely makes a doctor’s appointment.

His policy is among the 92,793 individual insurance plans that Louisiana Commissioner of Insurance Jim Donelon reported would be discontinued because the coverage does not meet the coverage standards set by the federal Affordable Care Act.

Rainey’s plan didn’t meet the minimum standards but he was happy with it. “I don’t go to the doctor much. This was the plan that fit me and fit my lifestyle,” the 35-year-old said.

Rainey declined to name his insurer, but he said the new policy will cost him nearly $600 a month. He said he also will get coverage he does not need, such as a maternity plan. Rainey put plans to expand his business on hold when he got the letter from his insurance company.

He wanted to hire an additional person but is unsure whether he can afford it. As a newlywed, he also must buy insurance coverage for his wife, a full-time graduate student. He does not qualify for subsidies for the exchange.

MARY - CONNECTICUT: My husband & I are self-employed. We own a small retail business and pay for our own health insurance. When ObamaCare was introduced with all the hype of saving money and better coverage, we checked it out. The least expensive premium would triple our cost and increase our deductible from $5000 to $12,500. We then received a letter from our insurance carrier saying we could keep our current policy for another year, but after that, our premium will triple. We may have to close our business if something isn't done about this outrageous plan.

That will do it for today but we still have more unfolding Obama Care stories for tomorrow. Today we learned that the Supreme Court might,and should, render all of the unfolding Obama Care disasters moot when they rule alter this month. Killing off Obama Care might actually improve the economy beyond its tepid and weak performance since Obama Care was enacted. And individual Americans and their families continue to live through the horror of the law’s restrictions, requirements, and higher costs.

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