October, 2015, Bonus Post, The Unfolding Disaster That Is Obama Care: Epic Co-op Failures

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.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused deductibles and co-pays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care., To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

A week ago or so we spend several days reviewing the latest unfolding disasters from the worst piece of legislation ever written by Washington. I had thought I would not do any more Obama Care stuff until next month but since last week a number disasters from the law have already popped so I decided to cover them today rather than wait until next month:

1) Benjamin Miller is an ordinary American who lives in Indiana. His plight and run-in with the IRA illustrates how inane and stupid the Obama Care legislation is relative to its personal insurance mandate. This part of the bill requires Americans to pay a fine via their IRS tax filings if they did not have health insurance coverage.

Before Obama Care was enacted, Mr. Miller was paying $398 a month for a health insurance plan that he was perfectly happy with. Once the legislation was enacted, the cost of his monthly health insurance premiums jumped over a thousand dollars to a whopping $1,400 month, a more than three fold increase. He decided that $1,400 was more than he could afford and thus, he dropped the insurance policy rather than pay an EXTRA $12,000 a year. 

So then the IRS got involved and send him a bill for $2,344 for not having health insurance coverage as required by Obama Care. He posted the IRS bill on Facebook to prove he was not being deceptive. Accompanying the Facebook post were his comments: “So I chose not to pay $1,400 a month so [I] got a nice little fine. Thanks Obama for the fine for not having insurance … Thanks for the Affordable Care Act. Thanks for making it so affordable!”

This insanity shows why the legislation is so horrible and so little thought was put into it. This American was going through life, very happy with an affordable health insurance plan that suited his needs. The Federal government comes along with Obama Care and says we know best, your insurance costs is going to go up three fold, increase more than a thousand dollars a month for basically the same coverage and if you do not do what we tell you, we will treat you as a criminal and fine you over $2,000, an number that will go up in the future if Mr. Miller does not get insurance coverage.

In either case, he pays an extra $12,000 a year for the same coverage or he pays over $2,000 for the Obama Care fine, that is thousands of dollars that are not being spent to grow the economy. Less dinners out, less movies, less disposable income. 

Is it any wonder the economic recovery that has transpired concurrently with the rollout of Obama Care is probably the weakest recovery ever? Mr. Miller’s saga is being repeated millions of times across the country as Obama Care has caused household insurance premiums, deductibles and co-pays to skyrocket, putting more money in the coffers of insurance companies and the U.S. Treasury and taking it out of the economy.

2) One reason for doing this bonus post on the unfolding disaster that is Obama Care is that at the rate that Obama Care insurance co-ops are failing across the country, they might all be gone by next month. Recall what an Obama Care co-op is:

• A co-op is basically a state based, newly created private insurance company concept that was established via Obama Care.
• The legislation spent $2.4 billion to establish health insurance co-ops in 24 states across the country, supposedly offering affordable health insurance policies to those without insurance coverage.
• The purpose of the co-op was to provide a competitive market place in mostly rural areas where it was felt there would not be enough existing health insurance companies competing to drive down costs.

In our update last week we reported on how four of those co-ops, Iowa, Louisiana, Nevada, and New York had already gone bankrupt and out of business or had announced they were going out of business because of their failing financial situation.

Well, since then, according to writing by Melissa Quinn, writing for the Heritage Foundation, the number of failed co-ops is now up to six, more than 25% of all co-ops created with taxpayer money, with Kentucky and Tennessee joining the failure parade. Ms. Quinn’s article totalled up the damage and debris so far in Obama Care’s co-op world:

• Tennessee - $73,306,700 received from the American taxpayer, 31,109 people enrolled, cost per enrollment = $2,356
• Iowa - $145,312,100 received from the American taxpayer, 91,477 people enrolled, cost per enrollment = $1,588
• New York - $265,133,000 received from the American taxpayer, 209,136 people enrolled, cost per enrollment = $1,268
• Kentucky - $146,494,772 received from the American taxpayer, 51,655 people enrolled, cost per enrollment = $2,836
• Louisiana - $65,790,660 received from the American taxpayer, 16,322 people enrolled, cost per enrollment = $4,031
• Iowa - $65,925,396 received from the American taxpayer, 20,578 people enrolled, cost per enrollment = $3,204
• Total - $761,962,620 received from the American taxpayer, 420,277 people enrolled,cost per enrollment = $1,813

What a waste of money. Three quarters of a billion dollars wasted for no return. Pretty inefficient process when it costs about $2,000 to sign up a single customer on average. Pathetic execution.

Her article goes on to report more disturbing and depressing results about the co-ops, based on official government documents:

• More than 400,000 Americans now have to go out and somehow find new insurance coverage as a result of these six co-ops failing or face stiff fines like Mr. Miller got hit with.
• 23 out of the 24 original co-ops lost money in 2014.
• 13 of the co-ops signed up significantly fewer customers than forecasted.
• It is unknown if any of the Federal taxpayer money loaned to these failed co-ops would ever be recovered.

What an incredibly poorly thought through process. More than 25% failure rate already, over $700 million likely lost taxpayer wealth, and over 400,000 Americans having their lives inconvenienced and their health coverage endangered. Three disasters at one pop.

3) But since I came across the Heritage Foundation article above, I stumbled across even more bad news from the Obama Care co-op world. According to an article on the Daily Caller website on October 16, 2015, writer Richard Pollock reported that now seven of the co-ops have already closed or announced those closing in the near future. And more importantly, according to a recent report from the Department of Health and Human Services inspector general, the remaining co-ops are in deep financial trouble and the inspector general expects more to go out of business soon.

But to show you how quickly things are falling apart, just three days later, October 19, 2015, Richard Pollock, also writing for the Daily Caller reported on some startling new developments:

• According to various news reports and Congressional members, the Obama administration is hiding a secret list of 11 Obama Care insurance co-ops that they fear could be the next co-ops to go out of business in addition to the others that have already failed.
• And despite the constantly broken promise of being the “most transparent administration ever,” the Obama administration refuses to release the names of those co-ops in financial trouble despite calls from Congress and news journalists to do so.
• Even worse, Mr. Pollock claims that the number of failed co-ops is already up to eight, with five having tanked in the past three weeks.
• If correct, than nineteen out of the 24 co-ops are either financially dead or about to be financially dead, likely taking with them much of the $2.4 billion in taxpayer funds that they were staked to.
• The defunct or soon to be defunct co-ops will force almost half a million Americans to find a new source for health insurance.
• The secret 11 co-ops are on so-called “enhanced oversight” by the Federal Centers for Medicare and Medicaid (CMS), which manages the Obama Care program. 
• The 11 received formal letters from CMS demanding that they take urgent actions to avoid closing.
• Aaron Albright, chief CMS spokesman, said 11 co-ops “are either on a corrective action plan or enhanced oversight. We have not released the letters or names.” He gave no grounds for withholding the information from either the public or Congress.
• The CMS has so far ignored a formal request from members of Congress investigating the failure of the co-op program.
• Senator Charles Grassley, a member of the Senate Finance Committee, is not happy with the CMS stonewalling situation: “Since the public’s business generally ought to be public, CMS should have a good reason for not disclosing which co-ops are troubled.” 
• He was joined in criticism of the CMS’s lack of transparency by Congressman Adrian Smith: “It’s time for CMS to stop shielding these failures from the public and start identifying faltering co-ops. Taxpayers deserve more accountability and consumers deserve to know whether the insurance they are forced to buy will still exist at the end of next year.”

You can now see why we did this bonus piece. At the current rate, if we had waited until next month for our usual Obama Care disaster review, the entire co-op infrastructure could be gone. Never has so much failed in any piece of Washington legislation that was ever passed. Costs go up, co-ops go down, the unfolding disasters that are Obama Care.

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

August, 2015, Part 3, The Unfolding Disaster That Is Obama Care: And The Co-ops Are Imploding

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 discussed the reality that the majority of Obama Care state operated health insurance exchanges are either already kaput or on the verge of imploding. Well, it turns out the vast majority of Obama Care health co-ops might be in even worse shape. Health co-ops were set up across the country, about two dozen of them, to offer insurance policies to people that were living in areas that did not have a lot of insurance company competition. 

The theory is that these nimble and aggressive entities could offer low cost Obama Care policies and keep the single or low number of established insurance company competitors from dominating the market, keeping costs down. Well, nice theory but a failure in practice, as described by the writing of Melissa Quinn, writing for the Heritage Foundation in late July, 2015:

• The Louisiana health co-op recently became the second Obama Care co-op to go belly up financially despite receiving $66 million from the American taxpayer to get established.
• $66 million ended up getting 17,000 Louisiana residents health insurance, a per customer cost of about $3,800 per customer.
• These 17,000 customers were garnered in the first two years of Obama Care despite the business plan for this co-op forecasting that 28,000 customers would be served in just the first year.
• Louisiana Insurance Commissioner Jim Donelon issued a statement on why the co-op failed: “It is a difficult time for health insurers of every size. The onerous burdens of Obamacare have shocked health insurance markets and caused instability in pricing and predictability, and as a result, we’ve seen premiums spike upward. Start-ups in insurance, especially health insurance, are always a tough row to hoe. Obamacare has made that even more difficult.” 
• But wait: wasn’t Obama Care supposed to make insurance cheaper and not spike premiums higher? Wasn’t Obama Care supposed to make getting insurance easier, and not “even more difficult?”
• CoOportunity Health, a co-op that served Nebraska and Iowa, has already shut down after its customers’ medical claims far outpaced what it brought in from premiums.
• CoOportunity received more than $145 million in taxpayer backed loans from the Centers for Medicare and Medicaid Services, with repayment of those loans being in doubt since the co-op is now defunct.
• In a separate article Ms. Quinn went on to explain that 22 of the 23 Federal funded and taxpayer backed co-op were unprofitable in 2014, according to a Federal recent audit.
• Many of the co-ops enrolled far fewer people in policies than expected or needed to stay solvent and viable.
• While in total the co-ops received $2 billion in taxpayer backed loans, many of those loans are unlikely to ever be paid, given the dire financial straits of the vast majority of those co-ops are in.
• The Arizona co-op is the top loser from an enrollment perspective, gathering just 860 Arizona residents as customers in 2014 against a target of 23,998. This comes out to an almost unbelievable hit rate of 3.5% of target.
• On the other extreme, the New York co-op signed up 155,402 people vs. its target of 30,864.
• 22 out of 23 of the co-ops lost money in 2014.
• The Tennessee co-op froze its enrollment levels during the second ObamaCare enrollment period because of its perilous financial situation.
• According to the audit report, the Centers for Medicaid and Medicare Services placed four co-ops on “enhanced oversight and corrective action plans” status and two were put on notice for low enrollment

Another day, another failure of an Obama Care component. Yesterday, it was the exchanges we saw that were imploding. Today, it is the Obama Care co-ops that are imploding. In both cases, taxpayer money is lost with no benefit received, insurance costs continue to go up, and the mess gets bigger and bigger. Tomorrow, more messes and more wasted wealth.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.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

February, 2015, Part 2, The Unfolding Disaster That Is Obama Care: Medicaid Failure, Co-op Failure, and EWhoe Foods Success

Every month for the past two years or so we have had to dedicate numerous posts each month to cover the many, many unfolding disasters that have been spawned by the Obama Care legislation. This is easily the worst piece of legislation ever enacted by the Washington political class for so many reasons:

• First of all it will never work in reining in the high cost of health care in this country since it never addressed the underlying root causes of our high costs, mistakenly implementing a Rube Goldberg like health insurance solution for what is mostly a public health problem.
• It will add over a trillion dollars to the national debt even though Obama promised it would not add “a single dime” to the debt.
• It has stifled economic growth and job creation.
• It has increased taxes on every American, either directly or indirectly, despite Obama’s promise that it would not.
• It has forced upwards of seven million Americans to lose access to their preferred health insurance policies.
• It has caused millions of Americans to lose access to their preferred Doctors, hospitals, and current medical treatments.
• Nationally, it has increased the cost of health care premiums and deductibles as compared to before the legislation was passed.
• It has opened up millions of Americans to the real threat of identity theft since Obama Care’s data systems security protocols are woefully inadequate.
• Even those that have obtained health care insurance under Obama Care policies are finding that their choice of doctors and hospitals are extremely narrow and more narrow than before the legislation was passed, resulting in many policy holders not getting access to the premier doctors and hospitals in this country.’The legislation has made a shortage of primary care physicians even worse since it is forcing primary care physicians to either retire earlier of move on to over options.
• Tens years from now the Congressional Budget Office predicts that tens of millions of Americans will still be without health care insurance coverage, the primary reason for the legislation in the first place.
• It has burdened the failing Medicaid system with millions of more applicants without fixing the massive problems with the system, causing more and more doctors to discontinue taking Medicaid and in some cases, Obama Care patients, resulting in the cruel irony that “you finally have health insurance but you do not have health care.”
• It failed to deliver on the Obama promise that the average American family would see a $2,500 annual reduction in their health insurance costs.
• While the legislation was supposed to reduce the number of emergency room visits, it has actually increased the number of emergency room visits.
• While it was supposed to make people healthier, the legislation’s resultant hig co-pay levels and high deductible levels has forced many Obama Care patients to defer medical treatment because of the higher costs.

We could go on but you get the idea. This is a disastrous piece of legislation across multiple parameters. To get more details on each of the above disasters and explore other disasters of the legislation, just enter the phrase, “the unfolding disaster that is Obama Care” in the search box above.

So, let’s take a few days and take a look at the latest Obama Care disasters and fiascoes:

1) One of the supposed benefits of Obama Care is that more people would be able to enroll in the Federal government’s Medicaid program since Obama Care raised the maximum income level for being eligible for Medicaid. How this was thought to be a great idea is baffling since:

• Medicaid is just one of several Federal government social support programs that is hurdling towards fiscal insolvency. Adding more people to a sinking ship is never a good idea.
• Medicaid currently loses about $30-40 billion a year to criminal fraud and waste. Making it larger without reforming it will allow it to lose billions more each year to fraud and waste.
• Given that government reimbursements to Medicaid doctors is low and getting lower, adding more people to the Medicaid rolls is already shrinking the number of doctors accepting Medicaid patients, reinforcing the ultimate Obama Care irony, you now have health insurance but you cannot get health care.

Given this context of Medicaid failure, consider some thoughts that were written by U.S. Senator John Barrasso and included in an article on the Heritage Foundation website. The statistics cited are based on Obama Care results through the third quarter of 2014 but the conclusions still hold true five months later [note: Senator Barrasso is also a medical doctor]:

• As of the third quarter of 2014, Medicaid expansion was responsible for most of the increase in the number of Americans getting health insurance coverage as a result of Obama Care. The original estimate from the administration and the Congressional Budget Office was that only half of the newly insured would be via Medicaid but a far higher percentage ended up getting Medicaid coverage.
• He reaches this conclusion by noting through the first nine months of 2014, 5.8 million Americans obtained traditional health insurance policies via private companies and Obama Care but almost five million Americans lost their private insurance policies as a result of Obama Care, resulting in a net gain in privately insured Americans of only 900,000 or so.
• In the same time period, 7.5 million newly insured people got Medicaid health insurance coverage, meaning that about 89% of the newly insured were obtained strictly via Medicaid enrollments.
• Rather than only 900,000 incrementally insured via private policies, the original Obama Care plan and forecasts called for an incrementally privately insured number of 6 million people, 5 million more than actually happened.
• Conversely, the original plan and forecasts called for an additional six million more Medicaid insured people but the actual number was 25% higher or 7.5 million.
• Overall, the original plan called for 12 million incrementally insured Americans of which only 50% were Medicaid enrollees while in reality the incremental number in late 2014 was only 8.4 million, 30% below expectations, of which 89% were Medicaid enrollees vs. a forecasted percentage of only 50%.

Not surprising results since we have often previously talked about how badly the legislation missed its numbers and forecasts, about how poorly or deceptively the administration built its case for passage. Medicaid is not solution but it is what is happening as a result of the law. Medicaid is a financial drain on the Federal government’s revenues and American taxpayers’ wealth but it is coming to dominate the Obama Care experience.

The Senator nicely sums up the reality of the situation as follows: “Given the administration’s diminished expectation of only 9 million to 10 million exchange enrollees in 2015, and CBO's projection that the drop in workplace coverage will accelerate, Obamacare is likely to remain mostly an expansion of Medicaid for the foreseeable future.”

And an expansion of Medicaid is not a solution to ever higher healthcare costs in the nation.

2) We have previously discussed the reality that the second largest health insurance co-op in the nation, CoOpportunity in Iowa, went fiscally insolvent very quickly despite its size. Obama Care co-ops were supposed to act as a competitive balance in areas of the country that did not have a lot of private insurance competition in order to help keep insurance prices down.

Given that the Iowa co-op is already kaput, it is worthwhile to see how some of the other co-ops are doing:

• More 500,000 people who enrolled in private plans via Obama Care did so through co-ops.
• On average, each co-op received almost $109 million each from the American taxpayer via the Federal government to start operations, a total of $2.5 billion.
• The bottom line of the $109 million is that on average, it cost the American taxpayer a whopping $17,000 to enroll one person in an Obama Care insurance policy.
• Despite spending $2.5 billion of taxpayer money, the Heritage Foundation found that only one of the 22 funded co-ops it analyzed has been profitable so far [the financial status of the New Jersey co-op is not yet available].
• Forbes did an analysis and found that it cost about $4,600 to enroll a person for Obama Care on the Federal exchange, about one fourth the cost of enrolling via a co-op.

Bottom line: it does not look like this Obama Care idea is going to work either since the second biggest co-op has already gone belly up and they are far from cost competitive if it costs over $17,000 to enroll one person on average in an Obama Care policy. 

And the future does not look good either. The average per-person cost of enrollment in the Iowa CoOpportunity co-op was only $1,588.51 and it has already gone out of business. But most of the other co-ops have had average enrollment costs that are far higher than the Iowa co-op. For example, the Minuteman co-op in Massachusetts has had an average enrollment cost of over $85,000.

So much for reducing costs and increasing competition via the co-op route.

3) If the co-op idea is a failure, what could work? Well, the executives at Whole Foods are working on reducing their company health care costs and having some success in doing so. Their approach? The same thing we have been preaching for years, attack the root causes of high health care costs.

According to a recent Businessweek article, Whole Foods is attacking a root cause, the fact and reality that Americans for the most part are either obese or at least overweight. Obesity causes health care costs to skyrocket for a variety of diseases including heart disease and diabetes. Reduce the obesity level and health care costs have to come down since obesity related illnesses are curbed.

Thus, Whole Foods has undertaken the following steps:

• Creation of a week long clinic called Total Health Immersion provided for free for employees.
• The clinic includes medical testing, discussions with nutritionists, and healthy cooking classes.
• At some point, Whole Foods’ executives are planning on opening up the clinic concept to its customer base.
• They are also contemplating opening up another clinic concept based on the medical clinic that was created by Rosen Hotels and Resorts. 
• The Rosen medical clinic focuses on employee nutrition and preventive care which has helped the Rosen company reduce per-employee healthcare costs to about half the national average.

Imagine how inexpensive healthcare insurance would be if the country could reduce its health care bill by 50% like Rosen did. That is how you reduce health care costs, not by shoving millions of Americans into a broken and near bankrupt Medicaid program but still leaving the country obese and overweight.

So what did we learn today:

1. Medicaid accounts for most of the Obama Care “successes” despite being a broken program that provides inferior health care services to millions of Americans.
2. The Obama Care co-op process is turning into another expensive failure.
3. Some innovative companies are doing far more to attack high health care costs than Obama Care can even dream about accomplishing.

More unfolding disasters 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.loathemygovernmobama,washington post,politifactent.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.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w