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With all of the other political class insanity going on, insanity that required us to use eight consecutive posts to cover it earlier this month, we have been ignoring the biggest insanity of them all, Obama Care. The failures within the overall structure of the Obama Care legislation have been mounting up on almost a daily basis. Thus, we are going to take a few days to cover all of the disasters and hardships that this fatally flawed legislation is dumping on America and Americans.
To set the stage of the next few days, let’s review a list of sub-failures within the overall failure that is Obama Care, as documented by the Heritage Foundation. This will give us a context of how much is falling apart within the law. We will follow up these “dirty dozen” global failures with more detailed news of other failures in subsequent posts.
1. The CLASS Act: ABANDONED, THEN REPEALED
The CLASS component of Obama Care was supposed to provide quality, reasonably priced long term health care to cover the potential costs of nursing home stays. However, it became the first of many failures of Obama Care when Obama’s Health and Human Services (HHS) department admitted early on that the CLASS parameters could never be implemented in a financially sound manner.
Even a Congressional Democrat called the CLASS Act “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” Congress eventually repealed this component of Obama Care because of its insanity.
The bad news from a financial and taxpayer perspective was that CLASS was supposed to be one of the few positive financial contributors to the overall profitability of Obama Care. Once it was repealed for being idiocy, the overall Obama Care financials went from horrible to worse than horrible.
2. Health Care Exchanges: MISSED DEADLINES
Health care exchanges were an invention of Obama Care and are supposed to be places where Americans without health care insurance could go and purchase low cost health care insurance. Each state was supposed to set up their own state exchanges and allow different insurance companies to present their insurance plans and compete for customers.
Obama Care made the exchanges optional for the states and promised that if the states elected not to operate their own state based exchanges, the Federal government would step in and operate a Federal exchange in that state. As a result of the voluntary aspect of the legislation, the majority of states opted out of setting up their own exchanges to save the expense of operating one and let the Feds operate them in their states, increasing the cost, complexity, and likelihood of failure of the exchange process.
And the likelihood of failure is getting larger as time goes by. A Government Accountability Office (GAO) report released in June found that “critical” activities to create a federal exchange have not been completed, and the missed deadlines “suggest a potential for challenges going forward.” It seems like in this case, “challenges” is a government code word for “failures.”
3. HHS mandate: DELAYED; UNDER LEGAL CHALLENGE
Last year, the Obama administration announced a partial delay for Obama Care’s birth control mandates, mandates that would go against the tenets and beliefs of various religious organizations and business owners. This is a blatant attack on the Constitution’s freedom of religion protection.
However, many employers, e.g. the Hobby Lobby retail chain, have filed legal actions against the mandates, which forces them to fund products they find morally objectionable or pay massive fines. Thus, if the court actions are successful, and chances are some of them might be successful, given how many there are, another component of Obama Care would have gone down in flames.
4. Small business plan choice: DELAYED
The original plan of the health insurance exchanges was that people could go to the Obama Care exchanges to get a choice from a menu of competing health care insurance plans. But the Obama administration basically admitted in April that this choice option will not be ready on time for the small business health exchanges. i.e. there will only be one choice and one choice only.
This breaks another promise of Obama Care. Liberal blogger Joe Klein called “a really bad sign” of “Obama Care incompetence.” “Really bad sign,” I believe is yet another code word for “failure.”
5. Child-only plans: UNINTENDED CONSEQUENCES
According to the Heritage Foundation analysis of the legislation, something they call a “drafting error” in Obama Care has led to less access to health care for children with pre-existing conditions. A 2011 report found that in 17 states, health insurers are no longer selling child-only health insurance plans as a result of Obama Care because they fear that individuals will apply for coverage only AFTER being diagnosed with a costly illness.
6. Basic health plan: DELAYED
This government-run plan for states created as part of Obamacare, has also been delayed. According to Heritage, one Democrat criticized the Administration for failing to “live up” to the law and implementing the plan as it written in the legislation.
7. High-risk pools: UNDERPERFORMING; FUNDING LOW
Like everything else the political class and government do, this program for individuals with pre-existing conditions is mired down and much higher costs and much lower enrollment than originally forecasted. This program was originally expected to cover up to 700,000 Americans.
However, only about 110,000 people have enrolled and the Administration has already had to halt new enrollments into the program since the $5 billion program is already running out of funding. This halt had to occur even though it has attained only about 14% of its expected enrollment. As a former professional forecaster in the corporate world, if my forecasts had been off by such a wide margin I would have been fired for incompetence.
8. Early retiree reinsurance: BROKE
More bad forecasting. The original $5 billion in funding for this program was supposed to last until 2014 but the program’s money ran out in 2011, years ahead of schedule.
9. Waivers: UNINTENDED CONSEQUENCES
After the legislation originally passed, HHS found that some of the law’s mandates would raise costs so much that employers would drop coverage rather than face skyrocketing health insurance premiums. This forced the administration to grant temporary waivers of compliance, which only delayed the pain of Obama Care. More than half of the waivers went to union health insurance plans even thought most unions were supporters of the legislation when it was being debated and written. Talk about hypocrisy.
10. Co-ops: DEFUNDED
In early 2013, Congress blocked additional funding to this Obama Care program, and with good reason: In one case, a new health insurance co-op was called “fatally flawed” by Vermont’s state insurance commissioner.
11. “Employee free choice”: REPEALED
This provision, which would have allowed certain workers to use contributions from their employers to buy exchange health plans, was repealed in April 2011. Apparently, businesses generally considered it too complex and unworkable.
12. Medicaid expansion: REJECTED BY MANY STATES
In its 2013 ruling on Obama Care which found it Constitutional, the Supreme Court also made Obama Care’s Medicaid expansion optional for states. The court ruled that Obama Care, as it written and enacted, engaged in “economic dragooning” that puts “a gun to the head of states.” Many states are rejecting Obama Care’s call to expand Medicaid, knowing that expansion will saddle them with additional, unsustainable costs going forward.
There you have it in a very succinct direct description, the “dirty dozen” major failures of Obama Care. Consider the words used to accurately describe what has happened since the legislation was passed: Abandoned, delayed, repealed, broke, unintended consequences, rejected, defunded, and underperforming. Hardly a robust endorsement of the law.
Has any other piece of legislation in our history been written so poorly, so poorly thought out, and so poorly executed as this piece of garbage? As any piece of legislation ever been so blind to the root causes of an issue, in this case, our high and rising health care costs? Has any piece of legislation ever had such a negative impact on economic growth and unemployment?
The answer to these questions is an easy “no.” No legislation has ever been so horrific as this legislation. And in the next few days we will get under these major disasters to examine some of the other disasters and disgraces that are unfolding underneath these more global issues and failures.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
Term Limits Now!: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.robertringer.com/
This is a third in a series of posts we are doing that updates the growing disaster that is Obama Care as many of its components begin to roll out. In the previous two posts we saw how many Americans are seeing their working hours cut as a result of Obama Care defining full time workers to be those working more than 30 hours a week, how the cost of food, will likely be going up as a result of the legislation, how businesses will be forced to post nutritional information that no one will ever read, etc.
The insanity of this fiasco continues today with the following:
1) A December 1, 2012 article from the Huffington Post, Walmart, the nation’s largest private employer, will begin denying health insurance to newly hired employees who work fewer than 30 hours a week, most likely a result of the Federal government’s definition of what a full time worker is.
The policy is to take effect in January, under which Walmart also reserves the right to eliminate health care coverage for certain workers if their average workweek dips below 30 hours, something that happens often and at the discretion of company managers.
Here we see another company looking to avoid paying excessive taxes and fines associated with Obama Care, hurting some of its employees in the process by cutting them off from company health care insurance. Even worse, most of the part time employees would be eligible to receive subsidized health care insurance via the Federal government, increasing the cost burden on the Federal government and the American taxpayer.
Thus, Walmart has been able to use this ill-written piece legislation to reduce its corporate expense at the expense of the American taxpayer. Insanity.
2) Orlando Health, a not-for-profit network of community and specialty hospitals, is just one example of the massive layoffs expected in the coming year. Officials with the Central Florida-based healthcare services provider announced recently that the largest staff reduction in its nearly 100-year history will result in cutting up to 400 jobs, starting immediately.
Louisiana State University announced in October it would cut 1,495 positions and various health care programs within its seven hospitals to reduce more than $150 million from its budget in anticipation of Obama Care requirements.
Gary Bauer, president of Washington DC-based American Values, warns that this is only the beginning of an economic disaster that will haunt America for years: "The ripple effects, the negatives on our economy, are going to be playing out for not just months, but for years. And I doubt we will ever be able to totally measure the complete cost in manpower and in money, in addition to taxes, that ObamaCare will end up costing the American people, proving once again there is no such thing as a free lunch, and there is no such thing as free healthcare.”
3) One of the easiest to read yet most insightful analyses of Obama Care, and what a disaster it is and will become, was written by Greg Scandlen on November 28, 2912 for the National For Policy Analysis (http://healthblog.ncpa.org/troubles-ahead-troubles-behind/). One part of his writing was a succinct summary of what has already gone horribly wrong as a result of Obama Care:
- The CLASS Act. This feeble attempt to create long-term care insurance was thrown overboard by the administration itself after it became apparent it would be impossible to do.
- The 1099 provision. This requirement that businesses issue a 1099 to any vendor from whom they purchased $600 of goods and services in a year was repealed after business owners explained what an impossible burden it would impose.
- Federal high risk pools. These pools were created and well-funded, but hardly anyone enrolled due to the complexity and cost.
- Retiree health subsidies. This had the opposite problem. Large corporations and unions were more than happy to accept free money to do what they were doing anyway (provide health benefits to retirees), but all the money ran out in about a third of the time expected.
- CO-OPs. Once again, Congress put so many restrictions on what was supposed to be a non-profit health plan in each state that none have come into being even though billions were spent.
- Small employer tax credits. The complexity and confusion of these credits deterred all but a handful of companies from applying.
- Medical Loss Ratios. The MLR requirements have had the very predictable effect of discouraging innovation and higher-deductible or “mini-med” health plans.
- Medicaid expansions. The Supreme Court made these expansions voluntary for the states and it currently looks as though fewer than half will do it.
- Health IT. The HITECH bill was enacted separately from ObamaCare, and many billions have been spent on it, but reports from the field indicate the top-down efforts result in lower quality and less efficiency.
- Limits on FSA funding. It is cruelly ironic, but the families most disadvantaged by the new $2,500 limit on FSA funding are those with special needs children.
- Limits on the Medical Expense Deduction. Beginning in 2013, a taxpayer will be able to deduct only those medical expenses that exceed 10% of income, up from the current 7.5%. Once again it is the sickest families that will be hurt.
This is just what has gone wrong already. He also points out what is likely to fail going forward:
- As we have already reported, Mr. Scandlen points out that The Health Insurance Exchanges are supposed to be operational by October, 2013, only ten months from now, but virtually nothing has been done to create them.
- Even if the exchanges eventually get established, the exchange subsidies will vary by income and family size. But there is no government agency in existence that has the slightest idea what a family’s current income is so it is unclear, and pretty impossible, to determine what families and what individuals are entitled to what subsidies, levels that will very by state.
- The closest source of income determination is the IRS systems but that information is a year or more out of date since you have to wait until April of the following year to know what the previous year’s income was.
- Even then, you will have to have fifty state data systems operations interfacing with the Federal data systems operations. I do not have to tell you how infinitesimally small the odds of that happening accurately, quickly, and efficiently are.
Consider some common sense reasoning, a trait lost on those that wrote and approved Obama Care, relative to determining income levels and the level of subsidies: people will have to pay premiums based on what they earned over a year ago. Someone might have been unemployed last year, entitling them to hefty subsidies, but making good money and who do not need or deserve a subsidy today, or the inverse: someone with a great job last year, indicating they do not deserve a subsidy, might be unemployed this year and be in need of a subsidy. How the exchange reconcile these situations is still unknown and certainly not anywhere close to being in place.
The one optimistic note sounded by Mr. Scandlen, and other experts he cites in his writing, is that Obama Care is soooooo bad that it might collapse under its own bureaucratic weight and complexity. Unfortunately, even if that good event comes to pass, the havoc it would have already wreaked on the economy, the nation’s health care processes and operations, and taxpayer wallets will be catastrophic.
4) An LA Times article from November 30, 2012 also discussed the major problems that are arising due to the fact that many more states than expected will not be implementing Obama Care state level health insurance exchanges. On top of this chaos, the article points out that many, many other legal challenges to various aspects of the legislation will be going forward, with ramifications one way or the other on top of the already mass confusion the law is creating:
- Oklahoma's attorney general has sued the IRS to block them from coming into that state to impose penalties under Obama Care and additional state level lawsuits probably will follow.
- The Pacific Legal Foundation is challenging the individual mandate, I.e. the provision that forces Americans to buy health care insurance. This provision originated in the Senate, even though the Constitution requires that tax measures originate in the House.
- The mandate requiring a person purchase health care insurance is also vulnerable because it is not uniform across all states.
- And, finally, more than 40 lawsuits allege the law violates the 1st Amendment's protection of religious freedom.
I believe Betty Davis once said in a movie, “it’s going to be a bumpy ride.” Combine bad legislation with government and political class incompetence, overlaid with dozen of pending lawsuits, and bumpy is probably an understatement.
The ride and associated bumps continue tomorrow.
Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com
It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.
Please visit the following sites for freedom:
http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w
