August, 2015, Part 2, The Unfolding Disaster That Is Obama Care: Insurance Companies Get Richer and Bigger and State Exchanges Implode

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 it 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 but with a big exception: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

Today and probably for the next few days, we will look at the latest disasters from Obama Care, including the gathering evidence that Obama Care policy holders are in for a big and ugly financial surprise in their 2016 costs along with some personal stories on how Obama Care is causing havoc with American families.

1) Yesterday, we briefly touched on the reality that Obama Care is killing competition in the insurance and healthcare industries, a process that is likely to increase consumer costs while simultaneously reduce quality and choices. Chriss Street writing for Breitbart on July 26, 2015 provided some more details on the killing of competition and the reasons why health care costs will go up even faster as the range of competitors dwindles:

• Anthem insurance recently announced it was buying Cigna insurance for a whopping $54 billion. 
• This will make Anthem the largest insurer in the state of California.
• Anthem will have 40% of the California insurance when the merger is done, surpassing the current market leader, Kaiser, which has 35% of the state market. Thus, two giant insurance companies will control 75% of the insurance market in California.
• The five largest health insurance companies in the country will end up as three evenlarger companies once the large mergers are complete.
• The health insurance stock prices have tripled in some cases since the passage of Obama Care, far surpassing the growth of the overall stock market. The S&P Health Care index is up 305% since Obama took office.
• Since Obama took office, the rise in stock prices for healthcare companies has been the fastest growth rate in history.
• While overall economic inflation was .8% in 2014, health care spending grew six times as fast at 5.0%, something that was supposed to slow down under Obama Care.
• Even worse, prescription drug spending was up a whopping 13.0% in 2014.
• In 2014, health care spending in the country relative to our GDP was 17.8%, up from the 16% level when Obama took office.
• According to the article, “Influence Alley,” as printed in the National Journal, the American Health Insurance Plans organization, the industry’s lobbyist, spent $102.4 million to lobby Congress relative to the Obama Care legislation.
• And life could get even more lucrative in the next few years since, as we have previously reported, many states are likely to grant insurance rate requests that are quite high: New Mexico’s largest insurer, Health Care Service Corp, has formally asked for a premium increase of 51.6%, Tennessee’s largest insurer, Blue Cross Blue Shield of Tennessee, wants a 36.3% increase, Maryland’s largest insurer, CareFirst BlueCross BlueShield, has asked for a 30.4% increase, and Oregon’s top insurer, Moda Health, wants a 25% increase.

So, in summary, the health insurance companies are getting richer, in all likelihood stockholders in many insurance companies are getting rich as merger mania spreads in the industry, costs for consumers are going up which makes them poorer, and healthcare costs for the country continue to skyrocket. Everyone see the problem with this reality? All caused because Obama Care rewarded insiders and lobbyists and never addressed the root causes of our high healthcare costs.

2) An Associated Press (AP) article by Ricardo Alonso-Zaldivar from July 26, 2015 pointed out another gross failure of Obama Care, the so-called state-based and run health insurance exchanges that were online marketplaces where consumers could log onto the exchange website and shop for and purchase insurance.

The highlights of their failure includes the following realities:

• Many of the states exchanges ended up with higher than expected costs and lower than expected enrolment, causing many of them to consider turning over their operations to the Feds, shutting down, or merging with other co-ops in other states.
• Hawaii's Obama Care exchange received $205 million in Federal startup grants, spent about $139 million, enrolled 8,200 customers at a whopping cost of about $17,000 per customer, and is imploding so fast that it is turning over its responsibilities to the Federal government.
• Twelve states and the District of Columbia have their own state level Obama Care exchanges and about half of them are under severe financial strain despite getting a total of almost $5 billion in taxpayer grants to get operational. Experts estimate about half face financial difficulties.
• According to a recent statement by Hawaii Governor David Ige: "The viability of state health insurance exchanges has been a challenge across the country, particularly in small states, due to insufficient numbers of uninsured residents." But wasn’t Obama Care supposed to be so good that people would flock to sign up and those that did not want insurance also sign up to avoid being fined?
• Covered California, the state of California exchange, missed its signup target by 20% this past year.
• To help cover their financial shortfalls, Justine Handelman, policy chief at the Blue Cross Blue Shield Association thinks that the idea of the exchanges could actually make health care LESS affordable, the exact opposite of what Obama Care was supposed to do: "Our biggest concern is that you may see many states looking to enact taxes and fees, and that makes health care less affordable." 
• Hawaii is the third state exchange defaulting to the Federal Obama Care exchange system, following Nevada and Oregon, which made their switch last year. 
• Minnesota's MNsure exchange cut its budget, also saw a shortfall in their recent set of enrollees, the legislature and governor have proposed no viable plans to fix the process, and Governor Mark Dayton has stated that MNsure's fate is on the table, including the option of shifting operations to HealthCare.gov.
• The U.S. attorney in Boston has subpoenaed records dealing with Massachusetts’ Health Connector, the Massachusetts exchange.
• Colorado officials are considering changes to its exchange ranging from pooling call centers with other states to folding down everything and defaulting to the Federal exchange. And the Colorado exchange is viewed as one of the most financially solvent of all state exchanges
• A Federal government audit found that the state of Maryland used taxpayer funded grants from Washington to pay for $28.4 million in costs that should have been allocated to the state's Medicaid program. 
• Vermont is also trying to fix its processes that has had major technology and system issues from the start.

What a mess. Billions of dollars wasted with little benefit in return, the incompetence at the state level exchanges appears to be as bad or worse than the incompetency at the Federal level. And remember, the Federal exchange system was barely working, requiring much more spending to fix it. What happens when multiple states start dumping their enrollee requirements onto the creaky and icky Federal exchange system? Probably more chaos, more identity theft issues and problems, and more taxpayer money spent and wasted.

The Obama Care legislation. The worst piece of legislation ever written and a piece of legislation that continues to unfold into new disasters every month. More disasters tomorrow.

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