May, 2014 The Unfolding Disaster That Is Obama Care Update, Part 1:

Unfortunately, its that time of month again where we need to review the latest fiascos and disasters coming out as a result of Obama Care. Over the past few years, but especially since last August, we have been reviewing what is turning out to be the worst piece of legislation ever to be enacted by Washington. It is a law that is increasing rather than decreasing health care costs across the country, restricting our freedom and liberties, and failing miserably to get more Americans health care insurance.

The biggest failure of all is that the writers and supporters of this legislation never understood the true root causes of our ever escalating health care costs. By never understanding the root causes, their legislative efforts had little chance of actually eliminating the root causes. Instead, we are stuck with a Rube Goldberg like health insurance contraption that has little chance of fulfilling the President’s solemn vow that the average American household would see an annual $2,500 reduction in their health insurance costs.

The dozens of disasters we have previously reviewed can be seen by looking at past month’s posts or searching for the phrase, “the unfolding disaster that is Obama Care” in the search box above. Of particular timeliness is the multiple monthly posts we have had to do since last August. We have proposed our simple, root cause based solution to our nation’s health care problem in previous posts and will not be reviewing them again in this series, that solution can be viewed in past posts. This week we will be blitzing through what is another sad list of failures from this legislation.

1) The Obama administration took a victory lap back in early April when they claimed that about 8 million Americans had signed up for Obama Care, claiming this proved that the law was a success. However, we have also covered the fact that reputable sources have shown that five to six million Americans LOST their current health care coverage as a result of Obama Care. Thus, the net gain due to Obama Care is not eight million but just around two to three million when you take out those Americans who lost insurance coverage.

But that is old news. The new news is the world renowned consulting group McKinsey did an analysis of Obama Care enrollees and found that only 25% of the enrollees had previously been uncovered for health care insurance. Thus, there were not eight million newly insured Americans under the program, only two million newly insured, 25% of eight million. 

Thus, billions and billions of dollars were spent only to get two million uninsured Americans insured, leaving about another 48 million uninsured. At this rate, it will take far more than two decades to get the primary objective of Obama Care fulfilled, hardly a success by any stretch of the imagination.

2) The LA Times recently ran an article that points out how the Obama administration is trying to manipulate the law to keep everything together as just about everything is coming apart. The Times article pointed out that an impending illegal Obama Care bailout is in the works for heath insurance companies across the country.

The Times found and reported on how a little noticed HHS regulation issued May 16 opened the door for the Department of Health and Human Services, and the American taxpayer, to spend billions of taxpayer dollars bailing out health insurance companies through Obama Care's "risk corridor" program. According to the text and intent of the law, the risk corridor programs were supposed to be revenue neutral for the Federal government and the American taxpayer. It was supposed to be funded by the insurance industry itself and the funds would be used to make up profit shortfalls of member companies relative to Obama Care.

But as the results of the Obama Care enrollees profile analyses became clearer, insurance industry lobbyists started doing their thing in Washington relative to the self imposed caps on the risk corridors' funds. Their lobbyist group in Washington, America's Health Insurance Plans, sent a letter to the Obama Care people in the government which demanded that, "risk corridors should be operated without the constraint of budget neutrality." 

In other words, the insurance lobby wanted a guarantee that if Obama Care's losers needed more money out of the risk corridor program than Obama Care's winners were paying in, that U.S. taxpayers would be forced to pay the difference. 

And that is what the HHS people did last week, according to the LA Times, putting the American taxpayer on the hook for another big industry bailout, not unlike the bailouts of General Motors, AIG, mortgage brokers, banks, etc. You cannot say this program was a success if billions of dollars are illegally paid out to some of the biggest companies in the country to cover their loses in a program they freely signed up for themselves.

3) The law was written so that if you are an Obama Care policy holder and your income falls below a certain level, the Federal government, via the American taxpayer, will pay you a subsidy to help pay for your Obama Care premiums. However, according to a recent Washington Post article, the Obama administration never built the necessary software that tie IRS records to the Obama Care subsidies data systems. 

This foul up exists even though the Obama administration had promised Republicans in Congress that it would be up and running in time so that the American taxpayer would not get screwed in paying too much out in subsidies. Thus, according to the Post, there is likely to be a lot of financial shock next year when Obama Care policy holders file their income tax. 

They will find out that as a result of the Obama Care income software having never been built and used, they received too large of a subsidy, requiring them to pay more in taxes next April. The Heritage Foundation recently discussed a study which estimated that up to 38% of Obama Care enrollees will see an incremental tax hit when they file their income tax returns.

How many Obama Care policy holders do we think will cancel their program next year when the find out that they are not entitled to as much financial help as the Obama Care effort promised them? That eight million claimed enrollees might take a mighty big step backwards next April.

4) We have previously reported on how hundreds and hundreds, possibly thousands by now, of companies and other types of organizations have had to cut back hiring, cut employee hours, and cut down the size of their staffs as a result of Obama Care, all of which is killing the chance for decent economic growth in this country.

And the downsizing pain is not over. A Des Moines, Iowa NBC affiliate recently reported that Mercy Medical Center, a hospital in Des Moines, will have to lay off 29 staff people, a cut that is being partly attributed Obama Care, according to Bob Ritz, president of Mercy Medical Center: “As the federal government and state payment systems continue to ratchet down on what they pay us and our costs go up, we have to look for opportunities to create cost efficiencies. And one way you do that is you reduce your management costs. So if we have a department that has a director and a manager and two supervisors for let’s say 75 staff, we may remove one of those positions to what we say are the layers of management.”

Just a another few dozen people who likely lost their careers and futures as a result of this dysfunctional law.

5) We will finish up today with a quote from my favorite politician, Nancy Pelosi. She is not my favorite because of what she does for America but what she does for blog writers everywhere, speaking up on topics where it becomes obvious she lives in different reality vs. most Americans. She is constantly spouting off numbers and results that are not real and not true with little understanding of what she is saying, at least in our world and reality.

Her latest out of this world observation goes as follows: “So what this legislation has done is it will save a trillion dollars over the lifetime of the bill, and it will — it will reduce costs for people. And even if they pay a little more in some cases, they’re getting much better care.”

Couple of problems, Ms. Pelosi:

1. The Congressional Budget Office now puts the cost of Obama Care over the next ten years at comfortably above $2 TILLION in costs, not a TRILLION dollars in savings.
2. It will not reduce costs for the majority of Americans. The professional group representing insurance actuaries have already shown that health care premium and deductible costs as a result of Obama Care will go up, and up substantially, in 45 states and decrease or stay the same in only five states
3. They are not paying a “little more” in some states, they are paying a lot more.
4. And finally, they are not getting better care. The Obama Care policies they are stuck with has a highly restricted set of doctors and hospitals allowed under the terms of Obama Care policies, so that they are not getting better care, especially when you recall that many of the best hospitals and clinics in the country, e.g. Sloan Kettering in New York, are NOT included in Obama Care policies’ coverage.

It just amazes me that one person so intimately involved in the nation’s political business can be so out of touch with the reality of Americans’ lives and the unintended consequences of her legislative efforts. I still wonder what the color of the sky is in her world.

That will do it for today but rest assured plenty more disasters will be put forth in the course of the next week or so.

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/
http://www.youtube.com/watch?v=08j0sYUOb5w

Replacing Obama Care With Something That Actually Works: Part 2

Over the past two weeks we have been reviewing the unfolding disaster that is Obama Care. The first seven posts were the result of our research into real life realities of people getting their work hours cut, their jobs terminated, seeing their insurance polices being cancelled, enduring their insurance premiums going up substantially along with their deductibles,  losing access to their doctors and hospitals, and the pitiful rollout of the Obama Care website.

The next four posts were detailed analyses and research by experts in the health care industry that verified what we had already proven: Obama Care is the worst piece of legislation ever created by the Washington political class. It fails on so many levels: data systems, logic, root cause problem analysis, cronyism, financials, etc,

Yesterday, we started to discuss how to fix what Obama Care has broken. Using the root cause analysis philosophy proposed in our book, “Love My Country, Loathe My Government,” we started to list out a series of simpler, easier to implement and more effective steps to combat high health care costs in this country. Obama Care provides an aspirin to make the pain of high health care more palatable but with very serous side effects. Our approach attacks the root causes of our high health care costs with no side effects.

Yesterday, we discussed how to terminate two of the leading cause of high health care costs:

1. Americans eat too much and eat too much of the wrong kind of food.
2. Americans smoke too much.

While resolving those two issues would be a gigantic step forward to a healthier America and lower overall health care costs, several additional common sense steps are required:

Root Cause #3 - Americans do not exercise enough. Yesterday, we discussed a recent piece of research from the Centers For Disease Control that found about one third of American adults are obese. It is very difficult to be healthy and free of medical costs over the long term if you are obese. The strain on the heart and kidneys from obesity leads to heart disease and diabetes.

Thus, a public health effort is needed to get Americans up and moving. Having insurance under an Obama Care scheme does not reduce obesity, get Americans exercising, or reduce health care costs. I am not a public health care expert but here or a few things that could be done to get America moving:

• Make Americans pay more for insurance if they are overweight since they incur a higher level of medical needs than non-obese people, i.e. led the cost causer also be the cost payer, as a little motivation to get in shape.
• Leverage contacts with the NFL, NBA, NHL, and MLB to get those high profile athletes involved in community health and exercise programs. If the leagues do not get involved then do not invite their championship teams to the White House for a photo op as has been the custom for decades. Help us get America in shape and get to visit the White House. 
• Subsidize YMCA and other gym memberships to get people moving, spending a little money now to avoid a lot more money down the road. Set up the program so that if people do not go to the gym, they pay more than if they do go to the gym.
• Make getting in shape a  national priority of the White House with high visibility events with celebrities to get America moving.
• Other efforts that true public health officials can come up with beyond my layman’s ideas.

It took America decades to get into the most obese situation in the history of mankind. Only a concentrated, long term public health effort can reverse that trend and start reducing the cost of obesity related health care costs. Obama Care does nothing of the sort.

Root Cause #4 - The age of America is getting older. With an aging population comes a lot of aging diseases such as dementia, Parkinson’s, Alzheimier’s, higher incidences of cancer, etc. Without curing or mitigating these ravaging age-related diseases, it makes no difference if Obama care works or not, the overwhelming costs of these aging diseases will crush the health care industry and our economy.

What is needed is something akin to the bold challenge that JFK threw out to the country in the early 1960s when he dared the country to put a man on the moon by the end of the decade. That challenge gave the nation a focus and a drive that eventually was realized.

The same challenge should be laid down in this area: 

• Within ten years, reduce the incidence of breast and lung cancer by X%.
• Within ten years, find cures of dementia and Alzheimer’s diseases.
• Within ten years, find cures for Parkinson’s disease.

I am obviously not the right person to lay out the eventual goals and success criteria for such worthy goals. But somewhere in this country someone is capable of doing so and by putting together a plan, with regular benchmarks, maybe we can duplicate the success of the Kennedy moon dare with a handful of focused health care dares today.

Obama Care does nothing of the sort, making Americans healthier. All it does is provide overpriced, generalized health care insurance without regard to improving health.

Root Cause # 5 - Tort Reform. One of the important drivers of escalating health care costs is the threat of malpractice litigation by an over energetic legal class. This threat of malpractice legal action results in two bad drivers of high health care costs:

1. Doctors over prescribe tests and analyses in order to make absolutely sure that their actions could withstand a review in court even though defensive actions, loads of extra tests,  are usually not necessary or warranted.
2. Outlandish malpractice decisions and settlements increase doctors’ malpractice insurance costs which are  then passed on to consumers of those doctors’ services.

It does not have to be that way. Many states have taken tort reform action, resulting in substantial sanity brought into the litigation arena and the reduction in costs. We examined these success stories in the following post:

http://loathemygovernment.blogspot.com/2009/11/please-do-not-bother-me-with-facts.html

Highlights of that post include the following realities (source: American Tort Reform Association website):

• The state of Texas implemented significant tort reform in the medical field in 2003.
• Soon after the legislation, the AMA dropped Texas from its list of states in medical liability crisis.
• Malpractice claims went down and doctor recruitment and retention are up.
• The five largest Texas insurers actually CUT their insurance rates which saved doctors tens of millions of dollars.
• The Texas Medical Liability Trust, the state's largest liability carrier, reduced its premiums by 17%.
• Fifteen new insurance companies entered the Texas market.
• Health Care Indemnity, the state's largest carrier for hospitals, reduced its insurance rates by 15%.
• The American Physicians Insurance Exchange and the Doctor's Company also reduced their premiums.

Tort reform in Mississippi caused the following to occur:

• The Medical Assurance Company Of Mississippi, which provides malpractice insurance to 70% of the doctors in Mississippi, reduced premiums 5% in 2006.
• This comes on the heels of not raising premiums in 2004 and 2005 after raising them up to 20% a year in earlier years.
• Four other insurance companies returned to Mississippi to do business, likely resulting in more competition and further malpractice cost reductions.

Tort reform in West Virginia caused the following to occur:

• An increase in the number of doctors practicing in the state.
• West Virginia Physicians' Mutual sought permission to reduce malpractice insurance 5% in 2005 while insuring more doctors.
• Woodbrook Casualty Insurance also applied for a rate reduction.

Given these results, why wasn’t tort reform a major portion of Obama Care? Reduced insurance costs leading to reduced health care costs leading to more doctors and more competition, all good things. Want to bet the ABA lobbyists had a lot to do with that?

In our root cause analysis and solutions, tort reform is a major resolver of our high health care costs problem.

Root Cause #6 - Limited insurance company competition across state lines. More competition in any aspect of human events results in better products and lower costs. Unfortunately, in this country, there are a lot barriers to insurance companies competing across state lines. Simple solution: terminate those state line barriers and allow any insurance company to compete anywhere in the country for health insurance customers. There is very little, if any, downside to cross state competition.

Root Cause #7 - Atrocious Federal government inefficiencies in existing health care programs. Many times in this blog we have pointed out how inefficient and disgusting the waste and fraud is in the Federal government’s administration of Medicaid and Medicare:

• Medicaid wastes or loses to fraud and criminal activity between $30 to $40 billion a year.
• Medicare wastes or loses to fraud and criminal activity between $70 to $90 billion a year.

Thus, if Obama and the Washington political class were actually running an efficient government operation, they would have had anywhere between $100 billion and $130 billion a year to either get Americans healthier, leaner, and off of the smoking habit or would have been able to provide health insurance payment support without disrupting every American’s life and destroying the economy.

Consider the math. The latest, reasonable estimate of uninsured Americans I remember seeing is about 40 million. If we take the midrange of the waste listed above, $115 billion a year, we could give every uninsured American almost $2,900 a year to cover their health insurance costs. A family of four would get about $11,500 a year to cover health insurance, more than enough for a good family insurance policy. 

Instead, given the incompetence of Washington, that $115 billion or so is wasted every year and now the same people that cannot manage Medicare and Medicaid want to manage a whole new government program without fixing what is wrong today. Insane. 

There is enough wealth in this country to get everyone covered without new taxes, without cutting worker’s work hours down to under 30 hours a week, without killing job growth, without taking away freedom or choice, and without another massive government bureaucracy. Too bad the President and Congress have no idea how to operate efficiently.

That’s it, resolving the high cost of health care in this country without the idiocy and waste of Obama Care, is simple if you know how to solve a problem and define the underlying root causes:

1. Americans eat too much and eat too much of the wrong kind of food.
2. Americans smoke too much.
3. Americans do not exercise enough.
4. Americans are getting older on average resulting in a substantial increase in aging-related diseases.
5. There is an urgent need for tort reform to reduce doctors’ operating costs.
6. There is an urgent need to allow more insurance company competition across state lines.
7. There is an embarrassingly high need to force the Washington political class to stop wasting taxpayer wealth today on existing health care program, shifting that saved wealth into helping uninsured Americans survive health crisis without destorying the country and the economy in the process.

Seven root causes, all resolved with simple solutions that we have proposed over the past two days. However, simple solutions is usually a foreign concept to those in the White House and Congress, leaving us with a Rube Goldberg contraption called Obama Care with way too many moving parts, way too many unnecessary parts, and no chance of success. 

Remember, try to pare things down, few moves accomplish a lot. Public health drives, tort and insurance reform and fixing existing health care programs. Those are the only few moves that are needed to resolve a big societal issue. 

Tomorrow we will look at a few alternative solutions, based on work done by Republican politicians, work that the mainstream media has deemed to never show in the light of day.

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/
http://www.youtube.com/watch?v=08j0sYUOb5w