Thursday, July 21, 2016

July, 2016, Part 2, The Unfolding Disaster That Is Obama Care: More Failing Co-ops And More Denials Of Failure Realities From The Obama Administration

Earlier this month we did a single post on the unfolding disaster that is Obama Care. We have been doing this theme for years and years where we have been constantly amazed and depressed about how much havoc this poor piece of legislation has rained down on Americans and how much of a medical, insurance, economic, and operational disaster it has been. We did mention at that earlier post that we only had to devote one day of discussion to the disaster this month vs. the multiple days we have had to do just about every other month for the past four years.

But apparently we spoke too soon. In just the few days since we did that solo post, a number of other Obama Care disasters have hit the fan that we should discuss before next month rolls around. So here goes, with the typical introduction of missed root causes that we always preface our unfolding Obama Care disasters with.


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 its 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: 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 insurance premiums, 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.

This week we will be reviewing the latest unfolding disasters from the worst piece of legislation ever written by Washington:

1) Obama Care co-ops were supposed to be marketplace based competitors in the geographic areas in the country that did not have a lot of competitors offering health insurance policies to Americans. They were seeded with over $2 billion of taxpayer wealth and set off to compete in the world.

Twenty three co-ops were eventually launched, providing health insurance policies to hundreds of thousands of Americans. However, there was a problem. Most of them were dismal financial failures. Since the Obama Care legislation demanded that all insurers take on any and all customers, regardless of their pre-existing health, and given that Obama Care never addressed the root causes of high healthcare costs as listed above that would have reduced the nation’s health care costs, the co-ops were swamped with high cost customers whose premium payments could not cover their operating costs.

The last time we had checked in with the co-ops, 15 of them had already gone belly up financially, stranding hundreds of thousands Americans without health insurance coverage and burning up over a $1 billion of taxpayer wealth with nothing to show for it in return. And according to Toni-Anne Barry, writing for the Americans For Tax Reform website on July 13, 2016, the Illinois Obama Care co-op recently went bankrupt also, the 16th co-op out of 23 to do so.

Details of this failure including the following:
  • 49,000 customers of the Illinois Obama Care co-op are now without health insurance coverage.
  • The Illinois co-op and the other failed 15 co-ops have cost the American taxpayer at least $1.7 billion so far.
  • The Illinois co-op lost a whopping $90 million in 2015 and in an odd twist of irony and lunacy is suing the Federal government because of the Obama Care legislation, the same legislation that formed and funded the co-op in the first place.
  • The article cites a Daily Caller article that showed the while co-op executives were raking in salaries that were often multiple times higher than the average health insurance executive salaries, many of these high paying co-op executives had little or no experience in the health insurance industry.
  • 21 out of the 23 original Obama Care co-ops lost money in 2015, i.e. Illinois may not be the last one to go down in ruins.
A list of all failed co-ops and their cost to taxpayers as compiled by the House Energy and Commerce Committee is found below:
  • CoOportunity Health - Iowa and Nebraska: Cost: $145,312,100
  • Louisiana Health Cooperative, Inc.: Cost: $65,790,660
  • Nevada Health Cooperative: Cost: $65,925,396
  • Health Republic Insurance of New York: Cost: $265,133,000
  • Kentucky Health Care Cooperative - Kentucky and West Virginia: Cost: $146,494,772
  • Community Health Alliance Mutual Insurance Company - Tennessee: Cost: $73,306,700
  • Colorado HealthOp: Cost: $72,335,129
  • Health Republic Insurance of Oregon: Cost: $60,648,505
  • Consumers' Choice Health Insurance Company - South Carolina: Cost: $87,578,208
  • Arches Mutual Insurance Company – Utah: Cost: $89,650,303
  • Meritus Health Partners – Arizona: Cost: $93,313,233
  • Consumers Mutual Insurance – Michigan: Cost: $71,534,300
  • InHealth Mutual – Ohio: Cost: $129,225,604
  • HealthyCT – Connecticut: Cost: $127,980,768
  • Oregon Health’s CO-OP – Oregon: Cost: $56,656,900
  • Land of Lincoln Health – Illinois: Cost: $160,154,812
Total Taxpayer Dollars Lost -  $1,711,040,390

These costs obviously do not include the costs and risks that hundreds of thousands of customers of these failed co-ops endured as a result of this unfolding disaster.

2) Let’s stay with failing co-ops for the second topic today and focus on a Washington Free Beacon article by Ali Meyer from July 14, 2016. She points out that not only have 16 out of the original Obama Care co-ops gone out of business already but 6 of the remaining 7 are on the financial results critical list. 

Kevin Counihan, who is a top executive within the Centers for Medicare and Medicaid services, the organization that operates Obama Care procedures, recently testified before Congress that of the seven co-ops that are still in operation, six have been placed on “corrective action plans.” This means that these co-ops have at least one major problem in the areas of financials, operations, compliance, or management effectiveness. 

When asked during his testimony how many of the remaining 7 co-ops were profitable, Counihan gave the following ridiculous answer: “Profitability very much can depend on the month.” Really, if a co-op was a financial wreck for eleven months and barely made a profit for the twelfth month, would one then say that it “depends on the month?” Stupid, elusive, bs answer.

But inane Counihan answers still followed to other questions from members of Congress. Congressman Jim Jordan, who predicts that all 23 co-ops will eventually fail, asked: “Would it be a complete failure if every single co-op you guys authorized just two years ago failed? We all know that’s where it’s headed—16 have already failed, the seven left, six are on corrective action plans, they’re going to fail too so when all 23 fail would that be a complete failure?”

Counihan responded with this elusive non-answer: “I think it underscores how tough this business is.” How tough the business is or how bad an idea the co-op option was from both a management and financial perspective?

Congressman Jordan: “It seems by definition if 23 out of 23 fail, you should be able to say that of course by definition is a complete failure.”

Another nonsensical Counihan answer: “The co-op program has provided more choice, it’s provided more competition. It’s helped consumers in a variety of different states, given them opportunities that they may have not had before.” You cannot provide competition when you have already gone out of business just a few years into the venture. The choices in sixteen states with failed co-ops are already gone, the competition they would have provided is already gone. What a nonsensical stupid answer, a denial of what failure looks like.

3) One last update on the unfolding disasters of Obama Care for today, more to follow tomorrow. Remember how Obama constantly promised that the annual health insurance costs for an average American family could go down by up to $2,500 a year? How Obama Care was going to “bend the health care cost curve” in the country and reduce everyone’s health care costs? Numerous times in this series of Obama Care posts we have shown with actual government and insurance industry data how both of those claims are either outright lies or incredibly stupid statements that show how out of touch Obama was with reality.

Ali Meyer, writing for the Washington Free Beacon on July 18, 2016 shows how out of touch with reality these boasts and claims were. A recent analysis by the Centers for Medicare and Medicaid concluded that the nation’s total health care expenditures will hit a record $3.35 TRILLION in 2016. This is up 4.8% over 2015, six years after Obama Care was enacted and more than twice the rate of inflation. In addition, for the first time ever, the annual national cost for healthcare is over $10,000 for every American.

Going forward, the Centers’ analysis predicts even worse financial results:
  • Annual average increases in health care spending will average a whopping 5.8%.
  • This will be far higher than the expected annual rate of inflation and certainly higher than the expected growth in the overall economy which has never had a sustained growth rate anywhere close to 5.8%.
  • Health care spending represents 17.5% of the economy today but will grow to 20.1% of the economy by 2025.
So much for reducing annual health insurance costs by $2,500 or bending the cost curve. Of much like the blather from Counihan above, Andy Slavitt, the acting head of the Centers for Medicare and Medicaid, tried to spin his own organization’s bad news top make it seem like a victory: “The Affordable Care Act continues to help keep overall health spending growth at a modest level and at a lower growth rate than the previous two decades. This progress is occurring while also helping more Americans get coverage, often for the first time...As we look to the future we must continue our efforts that keep people healthy, providing access to affordable, quality care, while spending smarter across all categories of care delivery.” Such nonsense in light of what was promised and what his own organization found out in their analysis.

Nathan Nascimento, senior policy adviser to Freedom Partners, had a much more reality based view of the findings from the report, without the spin of Slavitt: “It’s absolutely insulting for this administration to say that the Affordable Care Act is keeping the growth rate for health spending at a ‘modest level. While this administration continues to turn a blind eye to the harmful impacts of this failed law, the reality is that health spending is now projected to represent one-fifth of our country’s total GDP in less than a decade. At a time when our national health spending now tops $10,000 per year for every living person, the truth is plain to see—there’s nothing affordable about the Affordable Care Act.”

There you have it for today. More co-ops dying on the vine, wasting millions and and millions of taxpayer money and cancelling health insurance coverage for hundreds of thousands of Americans and Obama administration mouthpieces that deny the numbers that are right in front of them: the co-ops are a failure and health care costs keep going up, the “cost curve” has NOT been bent as promised. More unfolding disasters tomorrow.

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