August, 2014 The Unfolding Disaster That is Obama Care, Part 2: 2015, Costs Still Going Up, Doctors Shunning The Legislation, and Americans Hating The Legislation

Every month since last August we have had to do multiple posts each month in order to keep up with the unfolding disaster that is Obama Care. It is easily the worst piece of legislation ever passed by the Federal government under any previous Presidential administration. Runaway costs, dysfunctional or non functioning website, high potential for identity theft, less coverage for more cost, cancelled insurance policies, etc., it was a failure in every way imaginable.

And those failures have continued to unfold every month, which is why we are going to take a few days now to cover what has happened just since last month’s updates. Before we do that, let’s do a quick reminder of where the program is from a numbers perspective:

• The Obama administration claimed that about 8 million Americans signed up for an Obama Care health care insurance plan during the initial sign up period.
• However, recent research from reputable sources found that it is likely that only between 80 and 90% of those who signed up actually followed through and paid for and bought a policy.
• If we take the midpoint of that range and assume only 85% followed through with payment, that 8 million sign up number is really only 6.8 million real policy holders.
• But other reputable research found that only about 57% of those who signed up for an Obama Care policy were previously uninsured, the other sign ups already had health insurance coverage and just churned out to an Obama Care policy.
• Thus, the actual number of INCREMENTAL Americans with health insurance via Obama Care is 57% of 6.8 million or around 3.9 million people.
• That means that 2.9 million Americans were not incremental insurance policy holders, they just churned from an existing policy into an Obama Care policy.
• Somewhere between 5 and 6 million people had their current health insurance policies cancelled as a result of Obama Care, policies that often were perfectly fine and acceptable to those carrying those policies.
• If we assume a best case view from the Obama Care perspective and assume all of the 2.9 million people who were not incremetnal to the Obama Care numbers came from this pool of 5-6 million people, than the net number of Americans who lost health insurance coverage as a result of Obama Care is between 2.1 and 3.1 million people (5 or 6 million less 2.9 million people).
• Thus, we have to take the 3.9 million people that were truly incremental because of Obama Care and subtract out either 2.1 or 3.1 million, ending up with a net gain in insured Americans of between 800 thousand and 1.8 million.
• After years of trying, billions and billions of dollars spent, we may have gotten incremental, expensive, and narrow insurance coverage to less than two million Americans.

Only in Washington can the nation spend billions and billions of dollars of taxpayer wealth and end up with a problem that is hardly any better than when before the program started. Insane.

That is where we stand today. Let’s follow up our conversation and discussion from yesterday and see what additional disasters have come to the surface since we last talked about Obama Care:

1) One of the main objectives of Obama Care was to reduce the cost of health insurance and thus, theoretically, make it more widely available. In fact, the President promised that the average American family would see a $2,500 annual savings in their health insurance costs every year. 

That may have been the legislation’s objective but that is not what is likely to happen. The wonderful website, Bankrupting America, on August 6, 2014 did a great summary of how much health insurance premiums and rates are likely to INCREASE in 2015, not decrease by $2,500:

• Florida state officials recently announced that Florida Blue, the state’s largest health insurer, would be raising its Obama Care policy premiums by an average of 18% for 2015. 
• Overall, Florida health insurance rates are likely to go up between 11 and 23%. According to state officials, “Fourteen companies, including three new insurers, are planning to sell to Floridians through healthcare.gov in 2015. Of the 11 returning plans, eight filed average rate increases ranging from 11 to 23 percent, and three filed rate decreases ranging from 5 to 12 percent. Florida Blue, the largest insurer, is raising its premiums by an average of 18 percent. Humana proposed an average 14 percent increase for its HMOs, while Molina proposed a 12 percent average rate decrease.”
• According to recent reporting in the New York Times: “in their requests for 2015, some of the exchange’s most popular companies are asking for double-digit rate increases. MetroPlus is asking for an average increase of 18.5 percent, including 28 percent for customers in its high-end Platinum plan. Empire HealthChoice H.M.O. is asking for an increase of 18 percent, and Health Republic, conceived by the Freelancers Union, is asking for a 15 percent average increase, including nearly 19 percent for some customers.”
• The Obama Care policy purchasers in North Carolina tended to be older and less healthy customers than what was expected. For example, North Carolina Blue Cross initially sought to have a marketplace customer pool of about 50% being 34 years old or younger. But only 32% of those that signed up for state Obama care policies matched this younger demographic. As a result, North Carolina Obama Care customers are likely to see increases in 2015 to make for this bad mix that befell insurance companies selling Obama Care policies in the state. 
• A recent analysis and report from PricewaterhouseCoopers found that 27 states and D.C. have already released Obama Care premium rate increases for 2015, with Nevada having the highest average increase, 36%, and the average increase across all of the studied states being about 7.5%. 
• So far, Iowa is also among one of the states with the highest average premium rate increases for 2015 with Obama Care policies in that state expected to raise rates by an average of 11.5% with the range being between 8.7 and 14.3%.
• At these rates, the cost of an average Obama Care policy in Nevada will double in cost in less than three years, less than seven years in Iowa, and less than 10 years across the national average.

You cannot claim the legislation was successful when the cost of insurance is doubling in cost in such relatively short times. Thus, it has to be concluded that Obama Care failed in both its promise of reducing health insurance costs and its ability to support Obama’s claim that health insurance rates would go down dramatically in cost, not double in cost.

2) A story on the NPR website from August 4, 2014 examined a problem that we have been discussing for months: Obama Care insurance policies are many times so narrowly focused on very few doctors and hospitals that even though Obama care policy holders now have health insurance, they may have trouble getting health care.

The article centered on doctors in the state of Connecticut but you can be sure that what is happening there is happening around the country. They discussed the situation of a doctor in Hartford. Dr. Doug Gerard usually gets reimbursed about $100 for a patient he might see that has private insurance. However, a similar patient needing similar care with an Obama Care policy might give the doctor only $80 for the same level of attention and treatment.

As a result, Dr. Gerard only accepts patients from one of the three insurance companies serving Obama Care policies in Connecticut and that one provided him the highest reimbursement of the three: 

"I cannot accept a plan [in which] potentially commercial-type reimbursement rates were now going to be reimbursed at Medicare rates. You have to maintain a certain mix in private practice between the low reimbursers and the high reimbursers to be able to keep the lights on."

Thus, customers of two of the state’s Obama Care insurers are out of luck when it comes to using the services of this doctor and apparently, many others in the state. And this type of behavior is not restricted to just doctors. Hospitals are also being more selective, especially high end, specialty hospitals, with some of them not accepting customers of low reimbursing Obama Care policies. Conversely, the insurance companies themselves are not allowing better, usually more expensive hospitals into their networks in order to keep costs down but allowing medical care to suffer.

Again, the good news is you now have health insurance. The bad news is that the insurance policy is so inadequate that you cannot get health care. 

Why is this happening? As we have said countless times, Obama Care never attacked and tamed the root causes of our ever escalating health care costs. It mistook public health and other issues for a deficiency in health insurance coverage. By focusing on health insurance coverage, ignoring the root causes of higher and higher costs, all it did was to move costs around within the country’s health care market without reducing them.

3) One last unfolding disaster for today, we continue the disasters review again tomorrow; According to the recent polling on the view of Obama Care by the Kaiser Family Foundation:

• 53% of Americans now have an unfavorable opinion of Obama Care.
• This is up a whopping 8% from the previous month's poll results.
• This is the largest unfavorable opinion of Obama Care in the survey's four year history.
• Only 37% of people actually have a favorable opinion of the law.
• Those polled also felt Washington should spend more time on issues like the economy, the federal budget deficit, education and immigration rather than health care.

Thus, not only did the Washington political class screw up again, passing legislation that does not do what it is supposed to do but costing billions of dollars to fail, but focusing on an issue that the rest of America finds secondary in their lives.

Costs are going up, not down as promised. People are getting health insurance but are having trouble getting health care. A strong majority of Americans have an unfavorable view of the legislation and think it should be a secondary priority of Washington. How many ways can you screw up? In the case of Obama Care, countless. And we will count some more tomorrow.

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