Wednesday, October 21, 2015

October, 2015, Bonus Post, The Unfolding Disaster That Is Obama Care: Epic Co-op Failures

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements it rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:

  • Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
  • Our food chain is infested with overdoses of high fructose corn syrup, salt, and other unhealthy additives.
  • Americans smoke too much.
  • Americans do not exercise enough.
  • The country is in serious need of health care tort reform.
  • Barriers to insurance company competition across state lines need to come down.
  • Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
  • Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
  • Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.
You cannot resolve any problem unless you understand and address the underlying root causes. No difference here but with a big exception: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused deductibles and co-pays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care., To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

A week ago or so we spend several days reviewing the latest unfolding disasters from the worst piece of legislation ever written by Washington. I had thought I would not do any more Obama Care stuff until next month but since last week a number disasters from the law have already popped so I decided to cover them today rather than wait until next month:

1) Benjamin Miller is an ordinary American who lives in Indiana. His plight and run-in with the IRA illustrates how inane and stupid the Obama Care legislation is relative to its personal insurance mandate. This part of the bill requires Americans to pay a fine via their IRS tax filings if they did not have health insurance coverage.

Before Obama Care was enacted, Mr. Miller was paying $398 a month for a health insurance plan that he was perfectly happy with. Once the legislation was enacted, the cost of his monthly health insurance premiums jumped over a thousand dollars to a whopping $1,400 month, a more than three fold increase. He decided that $1,400 was more than he could afford and thus, he dropped the insurance policy rather than pay an EXTRA $12,000 a year. 

So then the IRS got involved and send him a bill for $2,344 for not having health insurance coverage as required by Obama Care. He posted the IRS bill on Facebook to prove he was not being deceptive. Accompanying the Facebook post were his comments: “So I chose not to pay $1,400 a month so [I] got a nice little fine. Thanks Obama for the fine for not having insurance … Thanks for the Affordable Care Act. Thanks for making it so affordable!”

This insanity shows why the legislation is so horrible and so little thought was put into it. This American was going through life, very happy with an affordable health insurance plan that suited his needs. The Federal government comes along with Obama Care and says we know best, your insurance costs is going to go up three fold, increase more than a thousand dollars a month for basically the same coverage and if you do not do what we tell you, we will treat you as a criminal and fine you over $2,000, an number that will go up in the future if Mr. Miller does not get insurance coverage.

In either case, he pays an extra $12,000 a year for the same coverage or he pays over $2,000 for the Obama Care fine, that is thousands of dollars that are not being spent to grow the economy. Less dinners out, less movies, less disposable income. 

Is it any wonder the economic recovery that has transpired concurrently with the rollout of Obama Care is probably the weakest recovery ever? Mr. Miller’s saga is being repeated millions of times across the country as Obama Care has caused household insurance premiums, deductibles and co-pays to skyrocket, putting more money in the coffers of insurance companies and the U.S. Treasury and taking it out of the economy.

2) One reason for doing this bonus post on the unfolding disaster that is Obama Care is that at the rate that Obama Care insurance co-ops are failing across the country, they might all be gone by next month. Recall what an Obama Care co-op is:

  • A co-op is basically a state based, newly created private insurance company concept that was established via Obama Care.
  • The legislation spent $2.4 billion to establish health insurance co-ops in 24 states across the country, supposedly offering affordable health insurance policies to those without insurance coverage.
  • The purpose of the co-op was to provide a competitive market place in mostly rural areas where it was felt there would not be enough existing health insurance companies competing to drive down costs.
In our update last week we reported on how four of those co-ops, Iowa, Louisiana, Nevada, and New York had already gone bankrupt and out of business or had announced they were going out of business because of their failing financial situation.

Well, since then, according to writing by Melissa Quinn, writing for the Heritage Foundation, the number of failed co-ops is now up to six, more than 25% of all co-ops created with taxpayer money, with Kentucky and Tennessee joining the failure parade. Ms. Quinn’s article totalled up the damage and debris so far in Obama Care’s co-op world:

  • Tennessee - $73,306,700 received from the American taxpayer, 31,109 people enrolled, cost per enrollment = $2,356
  • Iowa - $145,312,100 received from the American taxpayer, 91,477 people enrolled, cost per enrollment = $1,588
  • New York - $265,133,000 received from the American taxpayer, 209,136 people enrolled, cost per enrollment = $1,268
  • Kentucky - $146,494,772 received from the American taxpayer, 51,655 people enrolled, cost per enrollment = $2,836
  • Louisiana - $65,790,660 received from the American taxpayer, 16,322 people enrolled, cost per enrollment = $4,031
  • Iowa - $65,925,396 received from the American taxpayer, 20,578 people enrolled, cost per enrollment = $3,204
  • Total - $761,962,620 received from the American taxpayer, 420,277 people enrolled,cost per enrollment = $1,813
What a waste of money. Three quarters of a billion dollars wasted for no return. Pretty inefficient process when it costs about $2,000 to sign up a single customer on average. Pathetic execution.

Her article goes on to report more disturbing and depressing results about the co-ops, based on official government documents:

  • More than 400,000 Americans now have to go out and somehow find new insurance coverage as a result of these six co-ops failing or face stiff fines like Mr. Miller got hit with.
  • 23 out of the 24 original co-ops lost money in 2014.
  • 13 of the co-ops signed up significantly fewer customers than forecasted.
  • It is unknown if any of the Federal taxpayer money loaned to these failed co-ops would ever be recovered.
What an incredibly poorly thought through process. More than 25% failure rate already, over $700 million likely lost taxpayer wealth, and over 400,000 Americans having their lives inconvenienced and their health coverage endangered. Three disasters at one pop.

3) But since I came across the Heritage Foundation article above, I stumbled across even more bad news from the Obama Care co-op world. According to an article on the Daily Caller website on October 16, 2015, writer Richard Pollock reported that now seven of the co-ops have already closed or announced those closing in the near future. And more importantly, according to a recent report from the Department of Health and Human Services inspector general, the remaining co-ops are in deep financial trouble and the inspector general expects more to go out of business soon.

But to show you how quickly things are falling apart, just three days later, October 19, 2015, Richard Pollock, also writing for the Daily Caller reported on some startling new developments:

  • According to various news reports and Congressional members, the Obama administration is hiding a secret list of 11 Obama Care insurance co-ops that they fear could be the next co-ops to go out of business in addition to the others that have already failed.
  • And despite the constantly broken promise of being the “most transparent administration ever,” the Obama administration refuses to release the names of those co-ops in financial trouble despite calls from Congress and news journalists to do so.
  • Even worse, Mr. Pollock claims that the number of failed co-ops is already up to eight, with five having tanked in the past three weeks.
  • If correct, than nineteen out of the 24 co-ops are either financially dead or about to be financially dead, likely taking with them much of the $2.4 billion in taxpayer funds that they were staked to.
  • The defunct or soon to be defunct co-ops will force almost half a million Americans to find a new source for health insurance.
  • The secret 11 co-ops are on so-called “enhanced oversight” by the Federal Centers for Medicare and Medicaid (CMS), which manages the Obama Care program. 
  • The 11 received formal letters from CMS demanding that they take urgent actions to avoid closing.
  • Aaron Albright, chief CMS spokesman, said 11 co-ops “are either on a corrective action plan or enhanced oversight. We have not released the letters or names.” He gave no grounds for withholding the information from either the public or Congress.
  • The CMS has so far ignored a formal request from members of Congress investigating the failure of the co-op program.
  • Senator Charles Grassley, a member of the Senate Finance Committee, is not happy with the CMS stonewalling situation: “Since the public’s business generally ought to be public, CMS should have a good reason for not disclosing which co-ops are troubled.” 
  • He was joined in criticism of the CMS’s lack of transparency by Congressman Adrian Smith: “It’s time for CMS to stop shielding these failures from the public and start identifying faltering co-ops. Taxpayers deserve more accountability and consumers deserve to know whether the insurance they are forced to buy will still exist at the end of next year.”
You can now see why we did this bonus piece. At the current rate, if we had waited until next month for our usual Obama Care disaster review, the entire co-op infrastructure could be gone. Never has so much failed in any piece of Washington legislation that was ever passed. Costs go up, co-ops go down, the unfolding disasters that are Obama Care.

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