Wednesday, October 26, 2016

October, 2016, Part 4, The Unfolding Disaster That Is Obama Care - Making Up Excuses For Failure, IRS Harassment of Citizens, and More

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) The October 14, 2016 issue of The Week magazine did an article on the downfall of Obama Care called, “Why Obama Care Is Struggling.” It covers much of the failures we have already discussed this week and adds in a few others along with the very few, and very weak, Obama Care success stories:

  • Some of the largest health insurers in the country, UnitedHealthcare, Aetna, Humana, and Blue Cross Blue Shield are rapidly pulling out of the Obama Care market because they are losing billions of dollars by being in those markets.
  • Only 12.7 million people enrolled in the Obama Care exchanges this year, far short of the forecasted and promised 21 million who should have already enrolled. [Note: not included in the article is the reality that over 1.6 million original enrollees out of the 12.7 million have already been kicked out of their policies because they never paid the first installment of their premiums so the miss relative to the 21 million is even worse.]
  • As many as 19% of those customers will have access to only one Obama Care insurer in 2017, very short of Obama's promise that Obama Care would increase competition, not reduce competition to only one provider.
  • The main reason cited for the failure is that not enough young people have signed up for Obama Care policies, preferring to pay the penalty for not having insurance.
  • While the business case and financials of the Obama Care effort required at least 35% of the enrollees to be aged between 18 and 34, in reality that percentage is only a meager 28%.
  • Another problem with the shortfall is that small businesses did not kick employees off of their business insurance plans and onto the Obama Care policies as often as the Obama Care planners and forecasters expected, leaving the Obama Care insurers with older, sicker, and more expensive customers than expected.
  • As a result, Obama Care insurance companies either have to hike up premium costs which drives away customers or strip down the benefits of their insurance policies, forcing customers to pay higher prices for less robust insurance coverage which drives away customers so much that many insurance companies decide that from a financial perspective, it is better to be out of the Obama Care world than be in it and take a financial beating.
What a mess, missed customer forecasts, higher premiums, less competition. Now, to be truthful, the article does point out that 20 million more people have health care insurance vs. the times previous to the Obama Care legislation. Also, the percentage of Americans without insurance coverage has dropped from 16% to 9% since Obama Care was passed. But there is a problem with considering the increased quantity of people having healthcare insurance vs. the quality of their healthcare insurance:

  • Many of those with Obama Care policy customers are paying more and getting less than what they had with their previous insurance policies, policies that Obama Care outlawed and doomed to termination.
  • Which gets us to another point, the 12.7 million who enrolled in Obama Care policies in 2016, were not all people who had not had health insurance before the law was enacted; likely more than half of the 12.7 million just traded their existing policies for Obama Care policies, often under duress, so that the incremental number of Americans insured under Obama Care insurance policies is likely closer to 4 or 5 million.
  • Half of those Americans that are now insured as a result of the law, have gotten insurance via Medicaid, a reality that places upwards of 10 million people on a government program that will add tremendous costs to our national debt, provide health care via very narrow networks of less than the best doctors and hospitals, it is a government program that is hurtling towards financial insolvency, is corrupted with inefficiencies and criminal fraud, and if a Harvard study is to be believed, being a Medicaid patient does not make you any healthier vs. not having Medicaid coverage at all.
So yes, Obama Care did increase the number of Americans with health care insurance coverage. But Obama never promised that it would be lousy coverage that costs a lot, has high deductibles, had narrow networks of doctors and hospitals that were not of the highest quality, the reality that we see today. Quality also matters, it is not just quantity that matters.

[Note: the article tries to make the point that “overall government spending on healthcare was $2.6 trillion less last year than what it was expected to be before Obama Care…” This is obviously a ridiculously wrong number. The entire Federal government budget is just under $4 trillion a year so to claim that it is spending $2.6 trillion LESS, not in total, $2.6 trillion LESS, a year on healthcare is obviously either a falsehood meant to make Obama Care look better than it is or a gross typo.]

2) Zachary Tracer, Katherine Doherty, and Tatiana Darie, writing for Bloomberg on October 14, 2016, continued the bad news train coming out of the Obama Care disaster:

  • According to an analysis by Bloomberg, 1.4 million Obama Care policy holders in 32 states will lose access to their policies in 2017, forcing them to find other insurance options. 
  • Most of the damage is being caused by major insurance companies pulling out of the Obama Care world.
  • The search for replacement policies will like lead to fewer insurance policy choices that are more expensive.
  • S&P Global Ratings predict that 2017 enrollment in Obama Care insurance policies will be down by 8%.
  • Just in Washington DC 7,800 Obama Care customers will lose access to their current policies.
  • Kaiser Family Foundation has predicted that at least 19% of people in the Obama Care individual market will have the ability to choose from exactly one provider in 2017.
  • In North Carolina, Blue Cross Blue Shield will be the only Obama Care option in 95 out of the state’s 100 counties since Aetna and UnitedHealthcare have withdrawn from the state, leaving 284,000 state residents without Obama Care health insurance policies.
  • 117,000 residents in Tennessee will lose access to their Obama Care policies.
Another article, another set of implosions.

3) Obama Care from the beginning always had a little bit of the “Big Brother” syndrome ala George Orwell’s 1984. The government was forcing you to buy a product/service that you may or may not want to buy and making you a criminal if you did not heed their warnings and tracking your behavior to make sure you obeyed.

That Big Brother feeling came about again with a current IRS program that was put in place to ensure your compliance. The IRS, the enforcement arm, the “muscle” behind Obama Care is sending out official IRS letters to uninsured Americans (“reaching out” in their words) to remind them (“attracting” in their words) they need to get insured or be fined. The emphasis of the IRS has been to “remind”younger Americans to get insured because in order for Obama Care to work, younger Americans have to subsidize older, less healthy Americans, kind of a cross generational subsidy program from Americans with generally less wealth paying the bills of Americans with generally more wealth to their name.

House Majority Leader Kevin McCarthy, Majority Whip Steve Scalise and Ways & Means Chairman Kevin Brady recently sent a letter to IRS Commissioner John Koskinen. It stated, “We strongly object to any action by the Administration to improperly use sensitive taxpayer information to identify and harass individuals who have rejected the Patient Protection and Affordable Care Act (ACA) by choosing to pay a tax rather than be forced into a health care plan they don’t need and don’t want.” 

Their other concern is that the IRS was using “protected taxpayer information” to conduct the outreach program and that “We do not believe it to be an appropriate tax administration activity, or a good use of scarce taxpayer resources, to use protected return data to direct taxpayers on their personal coverage decisions.”

So yes, Big Brother IRS is watching and like Santa Claus, knows if you have been naughty or nice when it comes to your personal decision on health care insurance, the First Amendment be damned.

4) This next story is great because it shows how out of touch many of the Obama Care architects are relative to the current meltdown of the program and how deep they are into denial. According to David Ruiz, writing for the Washington Free Beacon on August 16, 2016, Zeke Emanuel, one of the more primary and certainly one of the more obnoxious architects of Obama Care, implied that Aetna’s decision to withdrawal from 70% of the Obama Care exchanges markets is not because they were losing money on Obama Care policies but it was to spite the government for not allowing its merger with Humana.

Is he that much out of touch with reality or just pissed off that his work is turning out to be a disaster? Let’s consider some facts:

  • Blue Cross and BlueShield have also pulled out of a bunch of Obama Care markets because of heavy financial losses.
  • UnitedHealthcare has pulled out of a bunch of Obama Care markets because of heavy financial losses.
  • Humana and other insurance companies have pulled out of a bunch of Obama Care markets because of heavy financial losses.
  • 17 out of the 23 Obama Care co-ops have gone out of business already because of heavy financial losses.
  • We know for a fact that younger, healthier Americans did not sign up for Obama Care in the volume expected which increased insurance company costs more than expected.
  • The primary objective of any business executive is to maximize shareholder wealth so no executive would stop operating in a profitable market category if they were maximizing shareholder wealth in that category, i.e. being profitable serving that category.

And despite all of these realities, this sore loser blames Aetna for doing something the whole market has done or is considering doing. By the way, Emanuel provides not proof, no income statements, no Aetna financial disclosures, no Aetna SEC documents, he just accuses them of doing what everyone else is doing. Pathetic.

One last set of unfolding Obama Care disasters tomorrow.

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