June, 2014, The Unfolding Disaster That Is Obama Care, Part 2: Higher Costs Continue, Another State Exchange Bites The Dust, and More

This is our second post in this month’s update series of the unfolding disaster that is Obama Care. For years and especially the past nine months, we have done a monthly review of all the idiocy, costs, an d ineffectiveness of the legislation known as Obama Care. It is a piece of legislation that was supposed to lower health care costs in this country but in general has caused health care costs to spike upward while destroying many of the good assets of the health care industry in this country. 

To review past discussions of this disastrous legislation just browse the menu on the right side of this page of put the phrase, “the unfolding disaster that is Obama Care” in the search box above. The following news articles and analyses are just the most recent findings and unintended bad consequences of the worst piece of legislation ever written.

1) A recent study by the Manhattan Institute found that Obama Care will actually increase the cost of health insurance more expensive rather than less expensive in this country: 

• Obama Care will increase the underlying health insurance premiums by 41% on average. 
• The greatest increases will be for young healthy males who are the guinea pigs for subsidizing others who are generally older and sicker than young healthy males.
• Obama Care subsidizes will primarily benefit those nearing retirement, another indication that younger Americans are being used to subsidize the health care of older Americans, an age group that is usually wealthier than younger people just starting out in life and their careers.
• Overall, 41 states plus D.C. will experience health insurance premium rate increases. 
• According to Forbes, commenting on this Manhattan Institute analysis, “This nearly-complete analysis finds that the average state will face underlying premium increases of 41 percent. Men will face the steepest increases: 77, 37, and 47 percent for 27-year-olds, 40-year-olds, and 64-year-olds, respectively. Women will also face increases, but to a lesser degree: 18%, 28%, and 37% for 27-, 40-, and 64-year-olds.”
• In addition, the eight states that will experience the largest premium increases are southern and western states: Nevada (179 percent increase), New Mexico (142 percent increase), Arkansas (138 percent increase), North Carolina (136 percent increase), Vermont (117 percent increase), Georgia (92 percent increase), Dakota (77 percent increase) and Nebraska (74 percent increase).

Thus, another third party analysis of reality, confirming what we have pointed out previously from other third part, impartial analyses, Obama Care is doing the exact opposite of what it was supposed to do, it is raising and not lowering the cost of health care and health insurance in this country. This is a far throw from what the President promised, I.e. that the average family would see an average $2,500 reduction in their annual health care insurance premiums.

2) But some people would correctly point out that the above mentioned analysis did not take into count the Federal government subsidies that the legislation provides to lower income Americans. For that point of view, consider the following graph from an analysis done by Forbes:






The Forbes analysis came to similar conclusions:

• For those Americans aged 27, Obama Care will raise their health insurance premiums 52% on average for males (going from $133 a month to $201 a month) and 22% for females.
• This is to be expected since the Obama Care legislation is based on forcing younger Americans to pay more for insurance they are far less likely to need to subsidize older and sicker Americans who are much more likely to need health care and insurance.
• Once the Federal subsidies are figured in for those that are eligible, the increase for 27 year old males is still a whopping 41% while the female cost actually goes down a little by 5%.

In no case to we come close to the Obama promise of a $2,500 a year decrease in health insurance premiums.

3) Let's stay with this increasing of health insurance premiums trend by reviewing once again a recent University of Minnesota analysis of what impact the legislation will have on consumer costs. Although we have discussed the findings in previous posts, it is worthwhile going over them again since this is a third analysis that proves again what we just proved above, namely that Obama Care is a cost increaser and not a cost decreaser.

The University of Minnesota analysis forecasted the insurance cost increases at the national level and in 10 key states into the future:

• The Annual Cost Of An Obama Care Individual Exchange Health Plan Will Increase $1,375 Within 5 Years.
• The Annual Cost Of A Family Obama Care Exchange Health Plan Will Increase $4,198 Within 5 Years. 
• The Largest Cost Increase For An Obama Care Individual Exchange Health Plan ($1,677) Within 5 Years Will Be In New Hampshire.
• At The National Level, 489,000 MORE Individuals Will Be Uninsured Within The Next 5 Years compared top when the legislation was enacted.

Only in Washington can you pass legislation that is supposed to dramatically reduce costs and get more people health insurance and end up with dramatically higher costs and fewer people covered by health insurance, at least according to the University of Minnesota study, and many other scholarly analyses.

4) According to a recent Associated Press news report, the bureaucracy of managing and administering the entire Obama Care process is still really screwed up:

• At least 2 million newly Obama Care insured Americans are at risk since of being in trouble with the IRS and law according to a recent government report.
• Government officials determined data from Obama Care application forms do not match what was in other government records, which could affect how much consumers pay for their health plans or if they are even legally eligible for benefits and Obama Care subsidies.
• And this estimate could actually be too low, meaning that millions of Americans may not be eligible for the subsidies they are receiving.
• That would make them liable for repaying those subsidies at tax time next year or be prosecuted for perjury if they intentionally put misleading information on their Obama Care applications.
• This is worst news than what government officials told The Washington post a few months ago that more than 1 million of those enrolled in Obama Care plans may have received incorrect subsidies, and that the government was unable to fully fix the errors. 
• And it gets worse since a recent survey done by Roll Call reported that, based on its 50-state survey, at least 2.9 million Americans who signed up for Medicaid as part of the Obama Care enrollment process STILL have not had their applications processed, many of which are over six months old. 

What a mess and what a disgrace. Three years lead time and billions of dollars spent and still the political class and Federal government could not get it right, from an embarrassingly bad website design that failed immediately to paying out taxpayer wealth to millions of people who may not deserve it under the legislation’s guidelines to still not being able to process peoples’ applications six months or more after they were submitted. I am not sure you could have done a worse job of implementation if you were trying to screw it up.

5) One last disaster from Obama Care for today, as if the first four were not enough. After spending about $130 million to build a faulty website, Maryland state government officials decided to flush good money after bad and voted to spend $43.5 million more to transition the state’s health insurance exchange site to new technology that is supposed to fix the original enrollment snafus.

According to the Associated Press, the additional funding includes a $29.3 million, five-year contract with Xerox to host this new technology that has already been used in Connecticut’s health exchange Obama Care. Another $14.2 million, three-year contract was approved for Deloitte to handle software licensing, whatever that means.

Fortunately, Maryland officials claim that more Federal money will not be requested to fix the botched website process. Which is only right since the American taxpayer had already given the state of Maryland received $180 million to fund its botched Obama Care health insurance exchange.

That will do it for today, more disasters to follow and review tomorrow. Through all of these realities and analyses a few things become crystal clear:

1. The Federal government and the political class that operate it are totally inept when it comes to implementing anything of any magnitude. Obama Care and the latest scandal in the Veterans Administration and its poor health care treatment of veterans are just two examples of this principle of incompetence.
2. The unintended consequences of the legislation are far more devastating then if nothing had been done, e.g. higher insurance costs, less freedom, lower health care quality and coverage, etc.

More of the same tomorrow.

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