Universal Health Care Messaging
Bob Jensen at
Trinity University
Great 2011 Health Statistics --- http://www.census.gov/prod/2011pubs/11statab/health.pdf
Let me state at the very beginning that I'm in favor of nationalized health care. Between 2008 and 2010 the Democrats had substantial majorities in the House and Senate and an enormously popular President Obama could've legislated nationalized health care without any help from a single Republican. Instead the Democrats blew it and gave birth to an abomination that is yet another unfunded entitlement nail in the coffin of the United States.
I also like Germany's combination of public and private health insurance
system for a number of reasons, including the fact that it like the health plans
of most other nations is a pay-as-you go plan.
Health Insurance in Germany ---
http://www.toytowngermany.com/wiki/Health_insurance
The worst of all plans is the U.S. plan that, in large measure, will be charged to a Chinese credit card. What bothers me the most are the blatant lies our leaders broadcast to voters just to get a health care bill passed. I would be much less critical if they had flat out been honest about what they really intend for this legislation to cost. One example of a political lie is that Cadillac insurance plans will be taxed. The unions didn't object very loudly because they know full well that by 2018 when the tax is supposed to commence, Congress will have repealed all or most of the Cadillac tax. The same is true with many other provisions of the legislation that can be altered at taxpayer expense. Also our leaders promised that nearly a half trillion dollars will be saved by reducing third party payments to physicians. But those projections are easily altered if physicians truly demand higher reimbursements.
I just wish that Congress had passed a pay-as-you-go tax as part of this legislation, where people at all levels of income and wealth pay their fair share of the health benefits they receive. Middle class America should foot their own bills for health care through substantial tax increases on the middle class.
The Worst Bill Ever:
"Epic new spending and taxes, pricier insurance, rationed care, dishonest
accounting: The Pelosi health bill has it all," The Wall
Street Journal, November 1, 2009 ---
http://www.trinity.edu/rjensen/Health.htm#110709
Jensen Comment
Nancy Pelosi catered to just about every special interest in the United States
and doled out earmark frauds like jelly beans to get
economy/jobs destroying bill through the House. The old folks on
Medicare and the young stuck with unemployment because of the bill came back in
2010 and kicked her ass in the polls. Thanks to the health care abomination that
was passed we now have a swamp filled with tea that paralyzes the government of
the United States.
February 15, 2010 (including Health Insurance in Germany)
November 10, 2009 (The Most Frightening Legislation in the Shrinking History of the United States)
America, what is happening to you?
“One thing seems probable to me,” said Peer Steinbrück,
the German finance minister, in September 2008....“the United States will lose
its status as the superpower of the global financial system.” You don’t have to
strain too hard to see the financial crisis as the death knell for a
debt-ridden, overconsuming, and underproducing American empire.
Richard Florida, "How the Crash Will
Reshape America," The Atlantic, March 2009 ---
http://www.theatlantic.com/doc/200903/meltdown-geography
History Timeline of Health Care Reform in the United States
Something AARP Wants Kept Secret
Introductory Quotations and Links
Full Text of H.R. 3962 ---
http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.3962
A Personal Experience
Why many physicians will turn away their Medicare patients just like my wife was
turned away by her surgeon in the South Texas Spinal Clinic in San Antonio
because she was on Medicare ---
http://www.trinity.edu/rjensen/Health.htm#SpinalClinic
"The Worst Bill Ever: Epic new spending and taxes, pricier insurance, rationed
care, dishonest accounting: The Pelosi health bill has it all," The Wall
Street Journal, November 1, 2009 ---
http://www.trinity.edu/rjensen/Health.htm#110709
Jensen Comment
Nancy Pelosi catered to just about every special interest in the United States
(except Medicare patients) and doled out earmark frauds like jelly beans to get
economy/jobs destroying bill through the House. Please pray for Senate
sensibility.
Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009
Obamacare Chart --- http://www.trinity.edu/rjensen/ObamaCareChart.pdf
A Brief History of Health Insurance
in the United States ---
http://everylearner.com/bm/knowledgenews/americana/health-insurance-history-1.shtml
A key stimulus was in 1945 when the National War Labor Board made it possible
for unions to negotiate coverage.
More importantly, however, business firms could get tax deductions for health
benefits that were not taxable,
Thereby, workers did not have to pay for health insurance out of after-tax
dollars.
Humor
The Wall Street Journal Guide to
Obamacare, October 14, 2009 ---
Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage
"Follow the Money," by Ben Shapiro,
Townhall, October 21, 2009 ---
http://townhall.com/columnists/BenShapiro/2009/10/21/follow_the_money
Fathom the odd hypocrisy that the administration wants
every citizen to prove they are insured, but people don't have to prove they are
citizens.
Ben Stein
October 15, 2010 message from Bob Jensen to the AECM
Hi David,
There are many reasons why people cannot or should not stay in the main careers. Professional athletes are generally over the hill before age 40 in terms of beating out their competitors, but they generally find alternative employment. We can't trust many pilots and bus drivers and combat buddies after age 55. But they too can find alternative employment.
Trinity University has a management professor named Don VanEynde who was a Battalion Commander in Vietnam, earned a PhD from Columbia University after military retirement, and has been one of the most popular, if not the most popular, campus-wide professors for 15 years. He's still going strong even though he's older than me. .
Professors have many advantages in that many physical ailments like Professor Fordham's arthritis do not detract from outstanding performance as long as wisdom, memory, scholarship, and enthusiasm have not yet waned. .
When tragedy does strike at any age that prevents working in virtually any productive capacity, it's possible to start collecting social security and Medicare before the prescribed ages for retirement. Due to being injured on the job as a surgical nurse, my wife commenced collecting SS disability benefits and Medicare when she 54 years old. After her spinal injury (she was ordered by a surgeon to lift a 300 lb instrument table over a power cord and had to be put immediately on traction for 30 days in the hospital) she worked for 10 more painful years before undergoing the first of her eventual 12 spine surgeries. Each surgery led to worse enduring pain --- http://www.trinity.edu/rjensen/Erika2007.htm She most certainly is not a poster child for million-dollar spine surgeries. Worker compensation paid for the early surgeries until she was declared eligible for social security disability and Medicare.
The problem is that Congress provided disability entitlements without nearly enough funding such that these entitlements now are enormous drivers of present and future multi-trillion deficits being passed on to current and future children in the United States. Extending SS retirement ages will most certainly increase the numbers of disability claims, but the majority of older workers are gratefully not eligible for disability status before retirement at higher ages. Disabled people can start collecting Medicare at any age as soon as they are declared eligible for SS disability benefits.
Disabled people should've been funded outside the SS retirement system, but members of Congress were too chicken to establish a separate Disability and Medical Fund. They sneaked the financial entitlements of the disabled onto the SS retirement and Medicare systems and passed the funding deficits on to our present and future children.
Between 1776 and 1950 the care of the elderly and disabled was the responsibility of their own savings, their parents, their children, and in extreme cases the County Homes. After the disabled became the responsibility of the Federal government, heirs confiscated their parents' savings and children were unburdened of parental care responsibilities. Federal and state governments took on the housing, care, and feeding of every disabled person. In theory, savings of the elderly are to be used for nursing home care, but fraud is rampant in terms of passing these costs on to taxpayers.
We can argue endlessly whether disabled people should be the responsibilities of their families or taxpayers or employers. For example, perhaps I should've been more financially responsible for my wife's disability than the social security and Medicare systems. On this subject I can truly be an academic who can take on any side in a debate. Perhaps worker compensation insurance should've covered my injured wife for a longer period of time, but the worker compensation insurance firm worked tooth and nail to pass her on to SS and Medicare.
The point is that government funding for the disabled should be a pay-as-you-go system taxation rather than a Ponzi scheme of deficit financing. The present entitlement system is not only unfair to future generations, it threatens the very survival of the United States --- http://www.trinity.edu/rjensen/Entitlements.htm
Bob Jensen
Deficit tops $1 trillion second year in a row ($1.29 trillion
before November and December) ---
http://money.cnn.com/2010/10/15/news/economy/treasury_fy2010_deficit/index.htm
Long-term problem:
There has been a lot of political hysteria expressed over the annual deficits of the past two years.Fiscal experts note, however, that the abnormally large deficits incurred in the wake of the financial crisis are not the primary source of the country's biggest fiscal problems.
The biggest source of fiscal concern remains the so-called structural deficit, which is made up primarily of spending on the big three entitlement programs. That structural deficit will continue to balloon faster than the economy grows long after the current downturn has ended.
Indeed, the Government Accountability Office projects that by the end of this decade, the vast majority of all federal tax revenue will be swallowed up by just four things: Interest payments on the country's debt, and the payment of Medicare, Medicaid and Social Security benefits.
The president's bipartisan fiscal commission, charged with recommending ways to get U.S. debt under control, will issue a report in December.
I'm in favor of health care reform that completely nationalizes health insurance phased in reasonably with high tax pay-as-you-go restriction and strict cost-saving caps on punitive damage lawsuits. I really favor former Senator Bill Bradley's long-forgotten Canada-like proposal:
The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care. Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury. Such a bipartisan outcome would lower health care costs, reduce errors (doctors and nurses often don’t report errors for fear of being sued) and guarantee all Americans adequate health care. Whenever Congress undertakes large-scale reform, there are times when disaster appears certain — only to be averted at the last minute by the good sense of its sometimes unfairly maligned members. What now appears in Washington as a special-interest scrum could well become a triumph for the general interest. But for that to happen, the two parties must strike a grand bargain on universal coverage and malpractice tort reform. The August recess has given each party and its constituencies a chance to reassess their respective strategies. One result, let us hope, may be that Congress will surprise everyone this fall.
Bill Bradley, "Tax Reform’s Lesson for Health Care Reform," The New York Times, August 30, 2009 ---
http://www.nytimes.com/2009/08/30/opinion/30bradley.html?_r=1
IOUSA (the most frightening movie in American
history) ---
(see a 30-minute version of the documentary at
www.iousathemovie.com )
I have come to the conclusion that the real reason
this gifted communicator (Obama) has become
so bad at communicating is that he doesn't really believe a word that he is
saying. He couldn't convey that health-care reform would be somehow cost-free
because he knows it won't be. And he can't adequately convey either the
imperatives or the military strategy of the war in Afghanistan because he
doesn't really believe in it either. He feels colonized by mistakes of the past.
He feels trapped by the hand that has been dealt him.
Leftist Leaning Tina Brown, "Obama's Fog War," The
Daily Beast ---
http://www.thedailybeast.com/blogs-and-stories/2009-12-03/what-is-obama-talking-about/
Jensen Comment
And President Obama was the dealer.
Voters are increasingly worried about unemployment,
but Democratic leaders in Congress remain obsessed with passing health- care
reform. Senate Majority Whip Richard Durbin was asked recently if a health-care
bill would pass the Senate by the end of this month. "It must," he said. "We
have to finish it." Still, many in the trenches are uneasy about the sprawling,
complex bill they privately acknowledge has no bipartisan support, doesn't
seriously tackle soaring costs and will increase insurance premiums. That may
explain Majority Leader Harry Reid's haste—he has ordered a rare Sunday session
this weekend to hurry up the debate. Public support for the bill averages only
39.2% backing in all polls compiled by Pollster.com.
John Fund, "Why Dems Are Obsessed by
Health Reform: They believe the liberal base expects them to deliver and
will punish them if they don't," The Wall Street Journal, December 4,
2009 ---
http://online.wsj.com/article/SB10001424052748704007804574575584229775884.html#mod=djemEditorialPage
America spends far more on health care per capita than any other nation in
the world.
One reason is that America spends trillions each year on people that other
nations let go of for cost reasons:
(1) Extremely premature and lightweight newborns that other nations cannot or do not afford to save;
(2) Dying people prolonged by machines in intensive care units that have no hope of leaving ICU alive.
Born at 9.1 Ounces She Would've been
thrown away in most other nations
Cozy in her incubator, set to 81.5 degrees, heart going
at 174 beats a minute as she snoozed in her red, footy pajamas, Oliviyanna
Harbin-Page may be a global record-holder. Born Aug. 5 to 16-year-old Jamesha
Harbin of Eight Mile after 21 to 24 weeks of gestation, Oliviyanna weighed only
259 grams, or 9.1 ounces -- possibly making her, according to the University of
South Alabama Children's & Women's Hospital, the world's smallest surviving
baby. She now weighs 3 pounds 2 ounces. One of three girl triplets -- the other
two are identical, she is fraternal
"Baby who may be world's smallest surviving newborn could go home soon," by Roy
Hoffman, al.com, December 18, 2009 ---
http://blog.al.com/live/2009/12/baby_who_may_be_worlds_smalles.html
What went so wrong in the health care system of the United States?
Mostly what went wrong is our ill-conceived and underfunded attempts to reform
the system!
The New York Times Timeline History of Health Care Reform in the United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page.
The $61 Trillion Margin of Error, and What "Empire Decline" Means in
Layman's Terms
This is a bipartisan disaster from the beginning and will be until the end
David Walker --- http://en.wikipedia.org/wiki/David_M._Walker_(U.S._Comptroller_General)
Niall Ferguson --- http://en.wikipedia.org/wiki/Niall_Ferguson
Call it the fatal arithmetic of imperial decline.
Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at
Risk: How Great Powers Fail," Newsweek Magazine
Cover Story, November 26, 2009 ---
http://www.newsweek.com/id/224694/page/1
Please note that this is NBC’s liberal Newsweek Magazine and not Fox News
or The Wall Street Journal.
. . .
In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.
. . .
Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.
Continued in article --- http://www.newsweek.com/id/224694/page/1
Niall Ferguson is the Laurence A. Tisch professor of history at Harvard University and the author of The Ascent of Money. In late 2009 he puts forth an unbooked discounted present value liability of $104 trillion for Social Security plus Medicare. In late 2008, the former Chief Accountant of the United States Government, placed this estimate at$43 trillion. We can hardly attribute the $104-$43=$61 trillion difference to President Obama's first year in office. We must accordingly attribute the $61 trillion to margin of error and most economists would probably put a present value of unbooked (off-balance-sheet) present value of Social Security and Medicare debt to be somewhere between $43 trillion and $107 trillion To this we must add other unbooked present value of entitlement debt estimates which range from $13 trillion to $40 trillion. If Obamacare passes it will add untold trillions to trillions more because our legislators are not looking at entitlements beyond 2019.
The Meaning of "Unbooked" versus "Booked" National Debt
By "unbooked" we mean that the debt is not included in the current "booked"
National Debt of $12 trillion. The booked debt is debt of the United States for
which interest is now being paid daily at slightly under a million
dollars a minute. Cash must be raised daily for interest payments. Cash is
raised from taxes, borrowing, and/or (shudder) the current Fed approach to
simply printing money. Interest is not yet being paid on the unbooked debt for
which retirement and medical bills have not yet arrived in Washington DC for
payment. The unbooked debt is by far the most frightening because our leaders
keep adding to this debt without realizing how it may bring down the entire
American Dream to say nothing of reducing the U.S. Military to almost nothing.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail," Newsweek Magazine Cover Story, November 26, 2009 --- http://www.newsweek.com/id/224694/page/1
This matters more for a superpower than for a small Atlantic island for one very simple reason. As interest payments eat into the budget, something has to give—and that something is nearly always defense expenditure. According to the CBO, a significant decline in the relative share of national security in the federal budget is already baked into the cake. On the Pentagon's present plan, defense spending is set to fall from above 4 percent now to 3.2 percent of GDP in 2015 and to 2.6 percent of GDP by 2028.
Over the longer run, to my own estimated departure date of 2039, spending on health care rises from 16 percent to 33 percent of GDP (some of the money presumably is going to keep me from expiring even sooner). But spending on everything other than health, Social Security, and interest payments drops from 12 percent to 8.4 percent.
This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.
The Meaning of Present Value
Initially it might help to explain what present value means. When I moved from
Florida State University to Trinity University in 1982, current mortgage rates
were about 18%. As part of my compensation package, President Calgaard agreed to
have Trinity University carry my mortgage. I purchased a home at 9010 Village
Drive for $300,000 by paying $100,000 down and signing a 240 month mortgage at
12% APR and a 1982 present value of $200,000. At payments of $2,202 per month my
total cash obligation (had I not refinanced from a bank when mortgage rates went
below 12%) would've been $528,521. However, since money has time value, the
present value of that $528,521 was only $200,000.
In a similar manner, Professor Ferguson's $104 trillion present value translates to over $300 trillion in cash obligations of Social Security and Medicare before being tinkered with changed entitlement obligations.
The "Burning Platform" of the United States Empire
Former Chief Accountant of the United States, David Walker, is spreading the
word as widely as possible in the United States about the looming threat of our
unbooked entitlements. Two videos that feature David Walker's warnings are as
follows:
David Walker claims the U.S. economy is on a "burning platform" but does not go into specifics as to what will be left in the ashes.
The US government is on a “burning platform” of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon.
David M. Walker, Former Chief Accountant of the United States --- http://www.financialsense.com/editorials/quinn/2009/0218.html
An "Empire at Risk"
Harvard's Professor Niall Ferguson is equally vague about what will happen if
the U.S. Empire collapses from its entitlement burdens.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail," Newsweek
Magazine Cover Story, November 26, 2009 ---
http://www.newsweek.com/id/224694/page/1
This is how empires decline. It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. Which is why voters are right to worry about America's debt crisis. According to a recent Rasmussen report, 42 percent of Americans now say that cutting the deficit in half by the end of the president's first term should be the administration's most important task—significantly more than the 24 percent who see health-care reform as the No. 1 priority. But cutting the deficit in half is simply not enough. If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.
The precedents are certainly there. Habsburg Spain defaulted on all or part of its debt 14 times between 1557 and 1696 and also succumbed to inflation due to a surfeit of New World silver. Prerevolutionary France was spending 62 percent of royal revenue on debt service by 1788. The Ottoman Empire went the same way: interest payments and amortization rose from 15 percent of the budget in 1860 to 50 percent in 1875. And don't forget the last great English-speaking empire. By the interwar years, interest payments were consuming 44 percent of the British budget, making it intensely difficult to rearm in the face of a new German threat.
Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
Empire Collapse in Layman's Terms
In 2010, hundreds upon hundreds of people will daily sneak across the U.S.
border illegally in search of a job, medical care, education, and a better life
under the American Dream. By 2050 Americans will instead be exiting in
attempts to escape the American Nightmare and sneak illegally into BRIC nations
for a job, medical care, education, and a better life under the BRIC Dream.
A BRIC nation at the moment is a nation that has vast resources and virtually no entitlement obligations that drag down economic growth --- http://en.wikipedia.org/wiki/BRIC
In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries") is an acronym that refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and prominently used by Goldman Sachs in 2001. According to a paper published in 2005, Mexico and South Korea are the only other countries comparable to the BRICs, but their economies were excluded initially because they were considered already more developed. Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. The four countries, combined, currently account for more than a quarter of the world's land area and more than 40% of the world's population.
|
Brazil, Russia, India and China,
(the BRICs) sometimes lumped together as
BRIC to represent fast-growing developing economies, are selling off
their U.S. Treasury Bond holdings. Russia announced earlier this
month it will sell U.S. Treasury Bonds, while China and Brazil have
announced plans to cut the amount of U.S. Treasury Bonds in their
foreign currency reserves and buy bonds issued by the International
Monetary Fund instead. The BRICs are also soliciting public support
for a "super currency" capable of replacing what they see as the
ailing U.S. dollar. The four countries account for 22 percent of the
global economy, and their defection could deal a severe blow to the
greenback. If the BRICs sell their U.S. Treasury Bond holdings, the
price will drop and yields rise, and that could prompt the central
banks of other countries to start selling their holdings to avoid
losses too. A sell-off on a grand scale could trigger a collapse in
the value of the dollar, ending the appeal of both dollars and bonds
as safe-haven assets. The moves are a challenge to the power of the
dollar in international financial markets. Goldman Sachs economist
Alberto Ramos in an interview with Bloomberg News on Thursday said
the decision by the BRICs to buy IMF bonds should not be seen simply
as a desire to diversify their foreign currency portfolios but as a
show of muscle. "BRICs Launch Assault on Dollar's Global Status," The Chosun IIbo, June 14, 2009 --- http://english.chosun.com/site/data/html_dir/2009/06/12/2009061200855.html Their
report, "Dreaming with BRICs: The Path to 2050," predicted that
within 40 years, the economies of Brazil, Russia, India and China -
the BRICs - would be larger than the US, Germany, Japan, Britain,
France and Italy combined. China would overtake the US as the
world's largest economy and India would be third, outpacing all
other industrialised nations. The first economist, an early Nobel Prize Winning economist, to raise the alarm of entitlements in my head was Milton Friedman. He has written extensively about the lurking dangers of entitlements. I highly recommend his fantastic "Free to Choose" series of PBS videos where his "Welfare of Entitlements" warning becomes his principle concern for the future of the Untied States 25 years ago --- http://www.ideachannel.com/FreeToChoose.htm |
"Social Security to See Payout Exceed Pay-In This Year," by Mary
Williams Walsh, The New York Times, March 24, 2010 ---
http://www.nytimes.com/2010/03/25/business/economy/25social.html?hp
The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.
This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.
Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.
The problem, he said, is that payments have risen more than expected during the downturn, because jobs disappeared and people applied for benefits sooner than they had planned. At the same time, the program’s revenue has fallen sharply, because there are fewer paychecks to tax.
Analysts have long tried to predict the year when Social Security would pay out more than it took in because they view it as a tipping point — the first step of a long, slow march to insolvency, unless Congress strengthens the program’s finances.
“When the level of the trust fund gets to zero, you have to cut benefits,” Alan Greenspan, architect of the plan to rescue the Social Security program the last time it got into trouble, in the early 1980s, said on Wednesday.
That episode was more dire because the fund could have fallen to zero in a matter of months. But partly because of steps taken in those years, and partly because of many years of robust economic growth, the latest projections show the program will not exhaust its funds until about 2037.
Still, Mr. Greenspan, who later became chairman of the Federal Reserve Board, said: “I think very much the same issue exists today. Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.”
The Social Security Administration is expected to issue in a few weeks its own numbers for the current year within the annual report from its board of trustees. The administration has six board members: three from the president’s cabinet, two representatives of the public and the Social Security commissioner.
Though Social Security uses slightly different methods, the official numbers are expected to roughly track the Congressional projections, which were one page of a voluminous analysis of the federal budget proposed by President Obama in January.
Mr. Goss said Social Security’s annual report last year projected revenue would more than cover payouts until at least 2016 because economists expected a quicker, stronger recovery from the crisis. Officials foresaw an average unemployment rate of 8.2 percent in 2009 and 8.8 percent this year, though unemployment is hovering at nearly 10 percent.
The trustees did foresee, in late 2008, that the recession would be severe enough to deplete Social Security’s funds more quickly than previously projected. They moved the year of reckoning forward, to 2037 from 2041. Mr. Goss declined to reveal the contents of the forthcoming annual report, but said people should not expect the date to lurch forward again.
The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.
The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.
Although Social Security is often said to have a “trust fund,” the term really serves as an accounting device, to track the pay-as-you-go program’s revenue and outlays over time. Its so-called balance is, in fact, a history of its vast cash flows: the sum of all of its revenue in the past, minus all of its outlays. The balance is currently about $2.5 trillion because after the early 1980s the program had surplus revenue, year after year.
Now that accumulated revenue will slowly start to shrink, as outlays start to exceed revenue. By law, Social Security cannot pay out more than its balance in any given year.
For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.
In a year like this, the paper gains from the interest earned on the securities will more than cover the difference between what it takes in and pays out.
Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.
Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015.
After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.
Mr. Greenspan recalled in an interview that the sour economy of the late 1970s had taken the program close to insolvency when the commission he led set to work in 1982. It had no contingency reserve then, and the group had to work quickly. He said there were only three choices: raise taxes, lower benefits or bail out the program by tapping general revenue.
The easiest choice, politically, would have been “solving the problem with the stroke of a pen, by printing the money,” Mr. Greenspan said. But one member of the commission, Claude Pepper, then a House representative, blocked that approach because he feared it would undermine Social Security, changing it from a respected, self-sustaining old-age program into welfare.
Mr. Greenspan said that the same three choices exist today — though there is more time now for the painful deliberations.
“Even if the trust fund level goes down, there’s no action required, until the level of the trust fund gets to zero,” he said. “At that point, you have to cut benefits, because benefits have to equal receipts.”
Where Did Social Security Go So Wrong?
Social Security in the United States currently refers to the Federal Old-Age,
Survivors, and Disability Insurance (OASDI) program. It commenced only as an old
age ("survivors:") retirement insurance program as a forced way of saving for
retirement by paying worker premiums matched by employer contributions into the
SS Trust Fund. Premiums were relatively low due heavily to the proviso that the
SS Trust Fund got to keep all the premiums paid for each worker and spouse that
did not reach retirement age (generally viewed as 65). Details are
provided at
http://en.wikipedia.org/wiki/Social_Security_(United_States)#Creation:_The_Social_Security_Act
If Congress had not tapped the SS Trust Fund for other (generally unfunded social programs of various types), the SS Trust Fund would not be in any trouble at all if it were managed like a diversified investment fund. But it became too tempting for Congress to tap the SS Trust Fund for a variety of other social programs, the costliest of which was to make monthly living allowance payments to each person of any age who is declared "disabled." In many cases a disabled person collects decades of benefits after having paid less than a single penny into the SS Trust Fund. It's well and good for our great land to provide living allowances to disabled citizens, but without funding from other sources such as a separate Disability Trust Fund fed with some type of other taxes, the disability payments mostly drained the SS Trust Fund to where it is in dire trouble today.
The obligation to pay pensioners as well as disabled persons was passed on to current and future generations to a point where the Social Security and Disability Program is no longer self-sustaining with little hope for meeting entitlement obligations from worker premiums and employer matching funds. The SS Trust Fund will have deficits beginning in 2010 that are expected to explode as baby boomers collect benefits for the first time.
Where Did Medicare Go So Wrong?
Medicare is a much larger and much more complicated entitlement burden relative
to Social Security by a ratio of about six to one or even more. The Medicare
Medical Insurance Fund was established under President Johnson in1965.
Note that Medicare, like Social Security in general, was intended to be insurance funded by workers over their careers. If premiums paid by workers and employers was properly invested and then paid out after workers reached retirement age most of the trillions of unfunded debt would not be precariously threatening the future of the United States. The funds greatly benefit when workers die before retirement because all that was paid in by these workers and their employers are added to the fund benefits paid out to living retirees.
The first huge threat to sustainability arose beginning in 1968 when medical coverage payments payments to surge way above the Medicare premiums collected from workers and employers. Costs of medical care exploded relative to most other living expenses. Worker and employer premiums were not sufficiently increased for rapid growth in health care costs as hospital stays surged from less than $100 per day to over $1,000 per day.
A second threat to the sustainability comes from families no longer concerned about paying up to $25,000 per day to keep dying loved ones hopelessly alive in intensive care units (ICUs) when it is 100% certain that they will not leave those ICUs alive. Families do not make economic choices in such hopeless cases where the government is footing the bill. In other nations these families are not given such choices to hopelessly prolong life at such high costs. I had a close friend in Maine who became a quadriplegic in a high school football game. Four decades later Medicare paid millions of dollars to keep him alive in an ICU unit when there was zero chance he would ever leave that ICU alive.
On November 22, 2009 CBS Sixty Minutes aired a video featuring experts
(including physicians) explaining how the single largest drain on the Medicare
insurance fund is keeping dying people hopelessly alive who could otherwise be
allowed to die quicker and painlessly without artificially prolonging life on
ICU machines.
"The Cost of Dying," CBS Sixty Minutes Video, November 22, 2009
---
http://www.cbsnews.com/stories/2009/11/19/60minutes/main5711689.shtml?tag=mncol;lst;1
What is really sad is the way Republicans are standing in the way of making
rational cost-benefit decisions about dying by exploiting the "Kill Granny"
political strategy aimed at killing a government option in health care reform.
See the "Kill Granny" strategy at ---
www.defendyourhealthcare.us
The third huge threat to the economy commenced in when disabled persons (including newborns) tapped into the Social Security and Medicare insurance funds. Disabled persons should receive monthly benefits and medical coverage in this great land. But Congress should've found a better way to fund disabled persons with something other than the Social Security and Medicare insurance funds. But politics being what it is, Congress slipped this gigantic entitlement through without having to debate and legislate separate funding for disabled persons. And hence we are now at a crossroads where the Social Security and Medicare Insurance Funds are virtually broke for all practical persons.
Most of the problem lies is Congressional failure to sufficiently increase Social Security deductions (for the big hit in monthly payments to disabled persons of all ages) and the accompanying Medicare coverage (to disabled people of all ages). The disability coverage also suffers from widespread fraud.
Other program costs were also added to the Social Security and Medicare insurance funds such as the education costs of children of veterans who are killed in wartime. Once again this is a worthy cause that should be funded. But it should've been separately funded rather than simply added into the Social Security and Medicare insurance funds that had not factored such added costs into premiums collected from workers and employers.
The fourth problem is that most military retirees are afforded full lifetime medical coverage for themselves and their spouses. Although they can use Veterans Administration doctors and hospitals, most of these retirees opted for the underfunded TRICARE plan the pushed most of the hospital and physician costs onto the Medicare Fund. The VA manages to push most of its disabled veterans onto the Medicare Fund without having paid nearly enough into the fund to cover the disability medical costs. Military personnel do have Medicare deductions from their pay while they are on full-time duty, but those deductions fall way short of the cost of disability and retiree medical coverage.
The fifth threat to sustainability came when actuaries failed to factor in the impact of advances in medicine for extending lives. This coupled with the what became the biggest cost of Medicare, the cost of dying, clobbered the insurance funds. Surpluses in premiums paid by workers and employers disappeared much quicker than expected.
A sixth threat to Medicare especially has been widespread and usually undetected fraud such as providing equipment like motorized wheel chairs to people who really don't need them or charging Medicare for equipment not even delivered. There are also widespread charges for unneeded medical tests or for tests that were never really administered. Medicare became a cash cow for crooks. Many doctors and hospitals overbill Medicare and only a small proportion of the theft is detected and punished.
The seventh threat to sustainability commenced in 2007 when the costly Medicare drug benefit entitlement entitlement was added by President George W. Bush. This was a costly addition, because it added enormous drains on the fund by retired people like me and my wife who did not have the cost of the drug benefits factored into our payments into the Medicare Fund while we were still working. It thus became and unfunded benefit that we're now collecting big time.
In any case we are at a crossroads in the history of funding medical care in the United States that now pays a lot more than any other nation per capita and is getting less per dollar spent than many nations with nationalized health care plans. I'm really not against Obamacare legislation. I'm only against the lies and deceits being thrown about by both sides in the abomination of the current proposed legislation.
Democrats are missing the boat here when they truly have the power, for now at least, in the House and Senate to pass a relatively efficient nationalized health plan. But instead they're giving birth to entitlements legislation that threatens the sustainability of the United States as a nation.
In any case, The New York Times presents a nice history of other
events that I left out above ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
"THE HEALTH CARE DEBATE: What Went Wrong? How the Health Care Campaign
Collapsed --
A special report.; For Health Care, Times Was A Killer," by Adam Clymer, Robert
Pear and Robin Toner, The New York Times, August 29,
1994 ---
Click Here
http://www.nytimes.com/1994/08/29/us/health-care-debate-what-went-wrong-health-care-campaign-collapsed-special-report.html
November 22, 2009 reply from Richard.Sansing [Richard.C.Sansing@TUCK.DARTMOUTH.EDU]
The electorate's inability to debate trade-offs in a sensible manner is the biggest problem, in my view. See
Richard Sansing
The New York Times Timeline History of Health Care Reform in the
United States ---
http://www.nytimes.com/interactive/2009/07/19/us/politics/20090717_HEALTH_TIMELINE.html
Click the arrow button on the right side of the page. The biggest problem with
"reform" is that it added entitlements benefits without current funding such
that with each reform piece of legislation the burdens upon future generations
has hit a point of probably not being sustainable.
Call it the fatal arithmetic of imperial decline.
Without radical fiscal reform, it could apply to America next.
Niall Ferguson, "An Empire at Risk: How Great Powers Fail,"
Newsweek Magazine Cover Story, November 26,
2009 ---
http://www.newsweek.com/id/224694/page/1
. . .
In other words, there is no end in sight to the borrowing binge. Unless entitlements are cut or taxes are raised, there will never be another balanced budget. Let's assume I live another 30 years and follow my grandfathers to the grave at about 75. By 2039, when I shuffle off this mortal coil, the federal debt held by the public will have reached 91 percent of GDP, according to the CBO's extended baseline projections. Nothing to worry about, retort -deficit-loving economists like Paul Krugman.
. . .
Another way of doing this kind of exercise is to calculate the net present value of the unfunded liabilities of the Social Security and Medicare systems. One recent estimate puts them at about $104 trillion, 10 times the stated federal debt.
Continued in article
This is now President Obama's problem with or without new Obamacare entitlements that are a mere drop in the bucket compared to the entitlement obligations that President Obama inherited from every President of the United States since FDR in the 1930s. The problem has been compounded under both Democrat and Republican regimes, both of which have burdened future generations with entitlements not originally of their doing.
Professor Niall Ferguson and David Walker are now warning us that by year 2050 the American Dream will become an American Nightmare in which Americans seek every which way to leave this fallen nation for a BRIC nation offering some hope of a job, health care, education, and the BRIC Dream.
Bob Jensen's threads on health care ---
http://www.trinity.edu/rjensen/Health.htm
Bob Jensen's threads on entitlements ---
http://www.trinity.edu/rjensen/entitlements.htm
Quotations
Let me get this straight.
We're about to get a health care plan shoved down our
throats that is Written by a committee whose head says he doesn't understand it,
Passed by a Congress that hasn't read it but exempts themselves from it, signed
by a president that also hasn't read it, With funding administered by a treasury
chief who was caught not paying his Taxes, overseen by a surgeon general who is
obese, and financed by a Country that's nearly broke.
What could possibly go wrong?
IS THIS A GREAT COUNTRY OR WHAT!
Forwarded by Maureen
Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected
Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/
"How can Obama Top a Great Speech," by
Joan Walsh, Salon, September 10, 2010 ---
http://www.salon.com/opinion/walsh/politics/2009/09/10/healthcare_speech/index.html
Jensen Answer
Dear Ms Walsh, President Obama can top his great speech by filling in details of
truthful estimates of Obamacare costs and how he plans to finance these added
costs of wider coverage of health issues and more people covered. Thus far his
sweeping claims of cost savings sound like snake oil.
Video tutorial on the President's strategy and the legislative process for passing health reform legislations --- http://www.kaiseredu.org/tutorials/reformprocess/player.html
H.R. 3200 Summary
http://www.trinity.edu/rjensen/Health.htm#HR3200
Introduced in
the House on July 14, 2009
Also see
http://www.defendyourhealthcare.us/houseandsenatebills.html
H.R. 676 Summary ---
http://www.trinity.edu/rjensen/Health.htm#HR676
Introduced in House on January 26. 2009
U.S. Debt/Deficit Clock --- http://www.usdebtclock.org/
Bob Jensen's threads on pending
economic disaster ---
http://www.trinity.edu/rjensen/Entitlements.htm
Jensen Comment
Because of the present health care
system in the United States is unjust and inefficient, I am in favor of a
National Health Plan modeled after the Canadian National Health Plan where
Canadians are taxed for a huge portion of their health services irrespective of
their levels of income. Any system that does not make users of the system share
heavily in the cost of the services will be unjust, abused, and inefficient ---
http://www.trinity.edu/rjensen/Health.htm#Canada
Having said that I prefer a Canadian-style national health plan for the U.S., I wish democrats in Congress would use their power and vote one in in spite of protests around the country. With a 60-vote surplus in the House and only needing 51 votes in the Senate, the Democrats could vote in National Health Care in an instant. The reason they won't is that most of them would be voted out of office the next time they come up for re-election. They know this!
But Americans at all levels of income would have to
agree to much higher taxes
The average Canadian family
spends more money on taxes than on necessities of life such as food, clothing,
and housing, according to a study from The Fraser Institute, an independent
research organization with offices across Canada. The Canadian Consumer Tax
Index, 2007, shows that even though the income of the average Canadian family
has increased significantly since 1961, their total tax bill has increased at a
much higher rate.
The Fraser Institute,
April 16, 2007 ---
http://www.newswire.ca/en/releases/archive/April2007/16/c5234.html
Jensen Comment
I put the portion of the Canadian tax dollars going into comparable health and
social services contained in Obamacare legislation to be about 40% of each
Canadian's tax dollar where malpractice coverage and government fraud is greatly
controlled relative to the United States ---
http://www.trinity.edu/rjensen/Health.htm#Canada
Canada greatly restricts the number of free riders in the system and negotiates
much lower prescription drug prices relative to insurance companies and Medicare
in the United States. Malpractice awards in Canada are tightly controlled.
So the present (health care) system is an
unsustainable disaster, but you can keep your piece of it if you want. And the
Democrats wonder why selling health care reform to the public has been so hard?
Ramesh Ponuru, "Obamacare's Fatal Flaw:
Democrats claim their plans will save money, but they have too many conflicting
goals," Time Magazine August 17, 2009, Page 35
Jensen Comment
The problem is that they keep adding expensive medical services that sound great
on paper, but few people, companies, and certainly not government can afford
these uncapped benefits.
YouTube - ABC's John Stossel Destroys/Pulverizes/Crushes Obama's anti-American 'Health Care' Plan --- Click Here
Congressman Mike Rogers' opening statement on Health Care reform in Washington
D.C. ---
http://www.youtube.com/watch?v=G44NCvNDLfc
Jacob Hacker: Fixing America's Healthcare System (not humor)
---
http://fora.tv/2008/07/21/Jacob_Hacker_Fixing_America_s_Healthcare_System
Jack Webb on Health Care and America (Humor) ---
http://pubsecrets.wordpress.com/2009/09/05/just-the-facts-barack/
Video: Jon Stewart reveals Glenn Beck speaking about health care from
both ends of his digestive tract ---
http://www.thenation.com/blogs/notion/462437/breaking_rush_newt_and_sarah_supported_death_panels_too
Americans who want to tip the debate in the most
progressive direction should take advantage an opening provided at the last
minute during negotiations to get a bill approved by the House Energy and
Commerce Committee. And they should do so by advocating even more aggressively
for
single-payer health care.
John Nichols, "Why Single Payer
Advocacy Matters Now More Than Ever ," The Nation, August 4, 2009 ---
Click Here
Jensen Comment
Passionate advocates of universal health care are screaming "yes, yes, yes"
without even caring how health care will be funded or whether or not it will
further destruct the U.S. economy. The cannot care because they're so willing to
vote yet before a funding proposal is even put forth. I actually favor
single-payer nationalized health care but I'm unwilling to destroy by beloved
homeland in a passionate rage for the gold plated version that this debt-ridden
nation can ill afford at the present time ---
http://www.trinity.edu/rjensen/Entitlements.htm
"Schumer: Healthcare Changes This Year 'No Matter What'" ---
Click Here
U.S. Debt/Deficit Clock ---
http://www.usdebtclock.org/
Jesus, the Great Healer, wants Obamacare
according to MSNBC (even if top preachers are "dreadfully silent").
Watch the video ---
http://hotair.com/archives/2009/08/13/msnbc-host-hey-wouldnt-jesus-want-us-to-have-universal-health-care/
But what helps many Americans as individuals may
hurt society as a whole. That's the paradox. Unchecked health spending is
depressing take-home pay, squeezing other government programs—state and local
programs as well as federal—and driving up taxes and budget deficits. The
president has said all this; he simply isn't doing much about it. He offers the
illusion of reform while perpetuating the status quo of four decades: expand
benefits, talk about controlling costs. The press should put "reform" in quote
marks, because this is one "reform" that might leave the country worse off.
Robert J. Samuelson, Health Reform
That Isn't: Despite the Rhethoric, Costs (and trillion dollar deficits)
Will Rise, Newsweek Magazine, August 3, 2009, Page 26 ---
http://www.newsweek.com/id/208439/page/2
Samuelson is the author of The Great -Inflation and Its Aftermath.
For starters, $1 trillion of extra debt-financed
spending would cause the government to pay about $300 billion of extra interest
in the next decade. Moreover, the CBO's method of estimating the cost of such a
program doesn't recognize the incentives it creates for households and firms to
change their behavior. The House health-care bill gives a large subsidy to
millions of families with incomes up to three times the poverty level (i.e., up
to $66,000 now for a family of four) if they buy their insurance through one of
the newly created "insurance exchanges," but not if they get their insurance
from their employer. The CBO's cost estimate understates the number who would
receive the subsidy because it ignores the incentive for many firms to drop
employer-provided coverage. It also ignores the strong incentive that
individuals would have to reduce reportable cash incomes to qualify for higher
subsidy rates. The total cost of ObamaCare over the next decade likely would be
closer to $2 trillion than to $1 trillion.
Martin Feldstein, "ObamaCare's
Crippling Deficits The higher taxes, debt payments and interest rates needed to
pay for health reform mean lower living standard," The Wall Street Journal,
September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage
In 1935 President Franklin Roosevelt engineered the Social Security Act with honest and well-defined components of benefits and costs. It was intended to only be a supplemental pension program to force people to save something for their retirements. Later on Congress muddled the program up by adding social services (such as lifetime pensions for disabled people of all ages and death benefits for families of soldiers who died in service). Medicare and Medicaid health coverage was later added to massively increase the entitlements obligations of Social Security as pension fund (as originally crafted).
The Wall Street Journal Guide to Obamacare, October 14,
2009 ---
Click Here
http://online.wsj.com/article/SB10001424052748704471504574441193211542788.html?mod=djemEditorialPage
Bumper Stickers --- http://www.upyoursobama.com/
Obamacare: Call us when you're shovel ready
Bankrupt America? Yes we can
America needs a leader, not a (teleprompter) reader
Congressional pirates are the worst kind
Are you better off than $5 trillion before?
Community organize Timbuctoo
The Promise and Peril of Big Data --- http://www.aspeninstitute.org/sites/default/files/content/docs/pubs/InfoTech09.pdf
Frightening Clauses in the Pending House Bill (H.R. 3962) in November 2009
Full Text of H.R. 3962 --- www.defendyourhealthcare.us .
"We Pay Them to Lie to Us," by my hero
John Stossel, Townhall, November 25, 2009 ---
http://townhall.com/columnists/JohnStossel/2009/11/25/we_pay_them_to_lie_to_us
When you knowingly pay someone to lie to you, we call the deceiver an illusionist or a magician. When you unwittingly pay someone to do the same thing, I call him a politician.
President Obama insists that health care "reform" not "add a dime" to the budget deficit, which daily grows to ever more frightening levels. So the House-passed bill and the one the Senate now deliberates both claim to cost less than $900 billion. Somehow "$900 billion over 10 years" has been decreed to be a magical figure that will not increase the deficit.
It's amazing how precise government gets when estimating the cost of 10 years of subsidized medical care. Senate Majority Leader Harry Reid's bill was scored not at $850 billion, but $849 billion. House Speaker Nancy Pelosi said her bill would cost $871 billion.
How do they do that?
The key to magic is misdirection, fooling the audience into looking in the wrong direction.
I happily suspend disbelief when a magician says he'll saw a woman in half. That's entertainment. But when Harry Reid says he'll give 30 million additional people health coverage while cutting the deficit, improving health care and reducing its cost, it's not entertaining. It's incredible.
The politicians have a hat full of tricks to make their schemes look cheaper than they are. The new revenues will pour in during Year One, but health care spending won't begin until Year Three or Four. To this the Cato Institute's Michael Tanner asks, "Wouldn't it be great if you could count a whole month's income, but only two weeks' expenditures in your household budget?"
To be deficit-reducers, the health care bills depend on a $200 billion cut in Medicare. Current law requires cuts in payments to doctors, but let's get real: Those cuts will never happen. The idea that Congress will "save $200 billion" by reducing payments for groups as influential as doctors and retirees is laughable. Since 2003, Congress has suspended those "required" cuts each year
Do you feel the leaked information from a global warming alarmist organization is meaningful? This was an illegal information leak that should be ignored It makes me question my belief in global warming activists It's an example of dangerous scientific politicization I haven't really heard about the controversy
This was an illegal information leak that should be ignored (1 %)
It makes me question my belief in global warming activists (8 %)
It's an example of dangerous scientific politicization (86 %)
I haven't really heard about the controversy (5 %)
Our pandering congressmen rarely cut. They just spend. Even as the deficit grows, they vomit up our money onto new pet "green" projects, bailouts for irresponsible industries, gifts for special interests and guarantees to everyone.
Originally, this year's suspension, "the doc fix," was included in the health care bills, but when it clearly pushed the cost of "reform" over Obama's limit and threatened to hike the deficit, the politicians moved the "doc fix" to a separate bill and pretended it was unrelated to their health care work.
Megan McArdle of The Atlantic reports that Rep. Paul Ryan of Wisconsin asked the Congressional Budget Office what the total price would be if the "doc fix" and House health care overhaul were passed together. "The answer, according to the CBO, is that together they'd increase the deficit by $89 billion over 10 years." McArdle explains why the "doc fix" should be included: "They're passing a bill that increases the deficit by $200 billion in order to pass another bill that hopefully reduces it, but by substantially less than $200 billion. That means that passage of this bill is going to increase the deficit."
From the start, Obama has promised to pay for half the "reform" cost by cutting Medicare by half a trillion over 10 years. But, Tanner asks, "how likely is it that those cuts will take place? After all, this is an administration that will pay seniors $250 to make up for the fact that they didn't get a Social Security cost-of-living increase this year (because the cost of living didn't increase). And Congress is in the process of repealing a scheduled increase in Medicare premiums."
Older people vote in great numbers. AARP is the most powerful lobby on Capitol Hill. Like the cut in doctor's pay, the other cuts will never happen.
I will chew on razor blades when Congress cuts Medicare to keep the deficit from growing.
Medicare is already $37 trillion in the hole. Yet the Democrats proudly cite Medicare when they demand support for the health care overhaul. If a business pulled the accounting tricks the politicians get away with, the owners would be in prison.
Something AARP Wants Kept Secret
"McCain Urges Seniors to Abandon AARP," Fox News,
December 3, 2009 ---
http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/
"Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare
change will cost taxpayers a bundle and lead to poorer drug coverage," Tom
Scully, The Wall Street Journal, December 7, 2009 ---
http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage
There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.
As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.
The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.
It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.
But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.
It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.
The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.
Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.
In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.
To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.
There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.
Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.
"What the Pelosi Health-Care Bill Really Says: Here are some important passages in the 2,000 page legislation," by Betsy McCaughey, The Wall Street Journal, November 7, 2009 --- Click Here
The health bill that House Speaker Nancy Pelosi is bringing to a vote (H.R. 3962) is 1,990 pages. Here are some of the details you need to know.
What the government will require you to do:
• Sec. 202 (p. 91-92) of the bill requires you to enroll in a "qualified plan." If you get your insurance at work, your employer will have a "grace period" to switch you to a "qualified plan," meaning a plan designed by the Secretary of Health and Human Services. If you buy your own insurance, there's no grace period. You'll have to enroll in a qualified plan as soon as any term in your contract changes, such as the co-pay, deductible or benefit.
• Sec. 224 (p. 118) provides that 18 months after the bill becomes law, the Secretary of Health and Human Services will decide what a "qualified plan" covers and how much you'll be legally required to pay for it. That's like a banker telling you to sign the loan agreement now, then filling in the interest rate and repayment terms 18 months later.
On Nov. 2, the Congressional Budget Office estimated what the plans will likely cost. An individual earning $44,000 before taxes who purchases his own insurance will have to pay a $5,300 premium and an estimated $2,000 in out-of-pocket expenses, for a total of $7,300 a year, which is 17% of his pre-tax income. A family earning $102,100 a year before taxes will have to pay a $15,000 premium plus an estimated $5,300 out-of-pocket, for a $20,300 total, or 20% of its pre-tax income. Individuals and families earning less than these amounts will be eligible for subsidies paid directly to their insurer.
• Sec. 303 (pp. 167-168) makes it clear that, although the "qualified plan" is not yet designed, it will be of the "one size fits all" variety. The bill claims to offer choice—basic, enhanced and premium levels—but the benefits are the same. Only the co-pays and deductibles differ. You will have to enroll in the same plan, whether the government is paying for it or you and your employer are footing the bill.
• Sec. 59b (pp. 297-299) says that when you file your taxes, you must include proof that you are in a qualified plan. If not, you will be fined thousands of dollars. Illegal immigrants are exempt from this requirement.
• Sec. 412 (p. 272) says that employers must provide a "qualified plan" for their employees and pay 72.5% of the cost, and a smaller share of family coverage, or incur an 8% payroll tax. Small businesses, with payrolls from $500,000 to $750,000, are fined less.
Eviscerating Medicare:
In addition to reducing future Medicare funding by an estimated $500 billion, the bill fundamentally changes how Medicare pays doctors and hospitals, permitting the government to dictate treatment decisions.
• Sec. 1302 (pp. 672-692) moves Medicare from a fee-for-service payment system, in which patients choose which doctors to see and doctors are paid for each service they provide, toward what's called a "medical home."
The medical home is this decade's version of HMO-restrictions on care. A primary-care provider manages access to costly specialists and diagnostic tests for a flat monthly fee. The bill specifies that patients may have to settle for a nurse practitioner rather than a physician as the primary-care provider. Medical homes begin with demonstration projects, but the HHS secretary is authorized to "disseminate this approach rapidly on a national basis."
A December 2008 Congressional Budget Office report noted that "medical homes" were likely to resemble the unpopular gatekeepers of 20 years ago if cost control was a priority.
• Sec. 1114 (pp. 391-393) replaces physicians with physician assistants in overseeing care for hospice patients.
• Secs. 1158-1160 (pp. 499-520) initiates programs to reduce payments for patient care to what it costs in the lowest cost regions of the country. This will reduce payments for care (and by implication the standard of care) for hospital patients in higher cost areas such as New York and Florida.
• Sec. 1161 (pp. 520-545) cuts payments to Medicare Advantage plans (used by 20% of seniors). Advantage plans have warned this will result in reductions in optional benefits such as vision and dental care.
Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/• Sec. 1402 (p. 756) says that the results of comparative effectiveness research conducted by the government will be delivered to doctors electronically to guide their use of "medical items and services."
Questionable Priorities:
While the bill will slash Medicare funding, it will also direct billions of dollars to numerous inner-city social work and diversity programs with vague standards of accountability.
• Sec. 399V (p. 1422) provides for grants to community "entities" with no required qualifications except having "documented community activity and experience with community healthcare workers" to "educate, guide, and provide experiential learning opportunities" aimed at drug abuse, poor nutrition, smoking and obesity. "Each community health worker program receiving funds under the grant will provide services in the cultural context most appropriate for the individual served by the program."
These programs will "enhance the capacity of individuals to utilize health services and health related social services under Federal, State and local programs by assisting individuals in establishing eligibility . . . and in receiving services and other benefits" including transportation and translation services.
• Sec. 222 (p. 617) provides reimbursement for culturally and linguistically appropriate services. This program will train health-care workers to inform Medicare beneficiaries of their "right" to have an interpreter at all times and with no co-pays for language services.
• Secs. 2521 and 2533 (pp. 1379 and 1437) establishes racial and ethnic preferences in awarding grants for training nurses and creating secondary-school health science programs. For example, grants for nursing schools should "give preference to programs that provide for improving the diversity of new nurse graduates to reflect changes in the demographics of the patient population." And secondary-school grants should go to schools "graduating students from disadvantaged backgrounds including racial and ethnic minorities."
• Sec. 305 (p. 189) Provides for automatic Medicaid enrollment of newborns who do not otherwise have insurance.
For the text of the bill with page numbers, see www.defendyourhealthcare.us .
Ms. McCaughey is chairman of the Committee to Reduce Infection Deaths and a former Lt. Governor of New York state.
Making Sense of Health Care Reform (from the AccountingWeb on September 1,
2009) ---
http://www.accountingweb.com/topic/tax/making-sense-health-care-reform
President Obama's Budget for 2010 --- http://www.whitehouse.gov/omb/
The Lies and Deceptions
Americans stubbornly resist this landmark
legislation in part because virtually every major claim about its benefits is
turning out to be false—and people recoil when misled.
Karl Rove, The Wall Street Journal, September 30, 2010 ---
http://online.wsj.com/article/SB10001424052748704116004575522073624475054.html?mod=djemEditorialPage_t
Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by
Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/
In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:
In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country. We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth. We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs. The model implies a typology of medical technology productivity: (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g. stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients. Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the U.S. to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth.
This paper strikes me as sensible, explanatory, and non-ideological to the max. It would be nifty if the people who work in Washington read it, and thought about it, and maybe even acted on it. (And it would be nifty if the Knicks beat the Celtics too, but I’m not holding my breath for either outcome …)
Here’s a very good paragraph from the paper:
The science section of a U.S. newspaper routinely features articles on new surgical and pharmaceutical treatments for cancer, obesity, aging, and cardiovascular diseases, with rosy predictions of expanded longevity and improved health functioning (Wade, 2009). The business section, on the other hand, features gloomy reports of galloping health insurance premiums (Claxton et al., 2010), declining insurance coverage, and unsustainable Medicare and Medicaid growth leading to higher taxes (Leonhardt, 2009) and downgraded U.S. debt (Stein, 2006). Not surprisingly, there is some ambiguity as to whether these two trends, in outcomes and in expenditures, are a cause for celebration or concern.
And the authors offer good specific examples of what they built their argument on, noting the …
Continued in article
"The Truth About Health Care Reform and the Economy: Separating economic fact from economic myth," by Veronique de Rugy, Reason Magazine, April 15, 2011 --- http://reason.com/archives/2011/04/15/the-truth-about-health-care-re
Myth 1: Health care reform will reduce the deficit.
Fact 1: Health care reform will increase the deficit.
The Patient Protection and Affordable Care Act includes many provisions that have nothing to do with health care: the CLASS act, a student loan overhaul, and many new taxes. These provisions don't change the health care system. They just raise money to pay for the new law. Strip them away and the law’s actual health care provisions don't lower the deficit—they increase it!
The chart below uses data from Congressional Budget Office (CBO) to clarify the fiscal consequences of health care reform.
. . .
As you can see, from 2012 to 2021, the Congressional Budget Office estimates that the health care act will reduce deficits by $210 billion (note that this estimate differs from the widely cited $143 billion figure used during the lead-up to the passage of the act). During this same time period, however, the actual health care reform provisions of the law will increase deficits by $464 billion.
Of course, one should not evaluate the health care legislation on its fiscal impacts alone. In theory we should get some fiscal benefits. But the key question is how they net out. Still, no matter what you think about the benefits of the health care legislation, it is incorrect to claim that health care reform will save money. It won’t.
Myth 2: The U.S. health care system is a free-market system.
Fact 2: Roughly half of all U.S. health care is currently paid for by the government.
. . .
Even in the absence of the health care reform law, government programs including Medicare and Medicaid already fund almost half of American health care. Roughly a third of the remaining expenditures are funded by private insurers—mainly through subsidized and highly regulated employee plans. Not exactly a free market.
As this chart shows, state and federal entities make up over half of the health insurance market. Of course, the Patient Protection and Affordable Care Act will only increase the share of government involvement in the health care market.
Myth 3: Medicare spending increases life expectancy for seniors. Reductions in Medicare spending will therefore reduce their life expectancy.
Fact 3: Increases in life expectancy for seniors are due to increased access to health care, not to Medicare.
While Medicare spending has certainly decreased seniors’ out of pocket health care expenses (by 1970, Medicare reduced out of pocket expenses by an estimated 40 percent relative to pre-Medicare levels), the program’s effect on mortality is much less clear.
. . .
Continued in article
"Mayberry OMG: Those false ads cost taxpayers $3.5 million,"
The Wall Street Journal, March 25, 2011 ---
|http://online.wsj.com/article/SB10001424052748704604704576220640964310506.html#mod=djemEditorialPage_t
President Obama met with the winner of the "save award" in the Oval Office the other day, the contest for federal employees who find ways to make government more efficient. Trudy Givens, of Portage, Wisconsin, suggested that the feds stop mailing out paper copies of the Federal Register (available online since 1994) to the provinces. Her good idea will cut about $4 million a year in printing and postage.
We don't work for the government, but here's our "save" suggestion: How about not spending some $3.5 million to deceptively promote ObamaCare?
It turns out it cost the Health and Human Services Department $2.78 million to buy airtime for three cable TV ads last year, featuring Andy Griffith praising the new entitlement. The "Matlock" eminence rendered his services pro bono, but Porter Novelli didn't. The media consulting firm racked up 668 billable hours and earned $404,384.40 producing the spots, according to documents released by the outside GOP advocacy group Crossroads GPS through the Freedom of Information Act.
At least Porter Novelli didn't charge taxpayers for fact-checking. Among Mr. Griffith's many deceptive claims, he tells his fellow seniors that their Medicare benefits won't change (they will, most immediately in Medicare Advantage) and that ObamaCare strengthens the program's finances (it doesn't, according to the chief Medicare actuary). Lovable ol' Andy of Mayberry then says "that new health-care law sure sounds good" to him, in a transparent bid to win over senior voters in advance of the 2010 election.
The next time the President wants to run misleading ads ahead of an election, he might hit up the Democratic Party or use his bully pulpit, rather than passing the bill to taxpayers. Meantime, an Administration functionary says in a new promotional Web video for the save award—how much did that one cost to produce?—that "Something that seems relatively small if replicated over the full length of the federal government can really result in substantial savings."
How about we go one better and save several trillion dollars by repealing a health-care bill that Americans still hate despite Sheriff Andy's endorsement?
"PolitiFiction True 'lies' about ObamaCare," The Wall Street
Journal, December 23, 2010 ---
http://online.wsj.com/article/SB10001424052748703886904576031630593433102.html?mod=djemEditorialPage_t
So the watchdog news outfit called PolitiFact has decided that its "lie of the year" is the phrase "a government takeover of health care." Ordinarily, lies need verbs and we'd leave the media criticism to others, but the White House has decided that PolitiFact's writ should be heard across the land and those words forever banished to describe ObamaCare.
"We have concluded it is inaccurate to call the plan a government takeover," the editors of PolitiFact announce portentously. "'Government takeover' conjures a European approach where the government owns the hospitals and the doctors are public employees," whereas ObamaCare "is, at its heart, a system that relies on private companies and the free market." PolitiFact makes it sound as if ObamaCare were drawn up by President Friedrich Hayek, with amendments from House Speaker Ayn Rand.
This purported debunking persuaded Stephanie Cutter, a special assistant to the President. If "opponents of reform haven't been shy about making claims that are at odds with the facts," she wrote on the White House blog, "one piece of misinformation always stood out: the bogus claim . . ." We'll spare you the rest.
PolitiFact's decree is part of a larger journalistic trend that seeks to recast all political debates as matters of lies, misinformation and "facts," rather than differences of world view or principles. PolitiFact wants to define for everyone else what qualifies as a "fact," though in political debates the facts are often legitimately in dispute.
For instance, everyone can probably agree that Medicare's 75-year unfunded liability is somewhere around $30.8 trillion. But that's different from a qualitative judgment, such as the wisdom of a new health-care entitlement that was sold politically as a way to reduce entitlement spending. But anyway, let's try to parse PolitiFact's ObamaCare reasoning.
Evidently, it doesn't count as a government takeover unless the means of production are confiscated. "The government will not seize control of hospitals or nationalize doctors," the editors write, and while "it's true that the law does significantly increase government regulation of health insurers," they'll still be nominally private too.
In fact—if we may use that term without PolitiFact's seal of approval—at the heart of ObamaCare is a vast expansion of federal control over how U.S. health care is financed, and thus delivered. The regulations that PolitiFact waves off are designed to convert insurers into government contractors in the business of fulfilling political demands, with enormous implications for the future of U.S. medicine. All citizens will be required to pay into this system, regardless of their individual needs or preferences. Sounds like a government takeover to us.
PolitiFact is run by the St. Petersburg Times and has marketed itself to other news organizations on the pretense of impartiality. Like other "fact checking" enterprises, its animating conceit is that opinions are what ideologues have, when in reality PolitiFact's curators also have political views and values that influence their judgments about facts and who is right in any debate.
In this case, they even claim that the government takeover slogan "played an important role in shaping public opinion about the health-care plan and was a significant factor in the Democrats' shellacking in the November elections." In other words, voters turned so strongly against Democrats because Republicans "lied," and not because of, oh, anything the Democrats did while they were running Congress. Is that a "fact" or a political judgment? Just asking.
As long as the press corps is nominating "lies of the year," ours goes to the formal legislative title of ObamaCare, the Patient Protection and Affordable Care Act. For a bill that in reality will raise health costs and reduce patient choice, the name recalls Mary McCarthy's famous line about every word being a lie, including "the" and "and."
"Bachmann Exposes $105 Billion Secret," by Phyllis Schlaffy,
Townhall, March 15, 2011 ---
http://townhall.com/columnists/phyllisschlafly/2011/03/15/bachmann_exposes_$105_billion_secret
When ObamaCare was passed by the Senate on Christmas Eve of 2009, senators had less than 72 hours to compare a 383-page package of amendments to the 2,074-page bill. Public outrage over backroom deals (such as the Cornhusker Kickback and the Louisiana Purchase) led to the election of Scott Brown in Massachusetts.
Democrats then cooked up a plan to link the now-2,409-page Senate-passed ObamaCare bill to dozens of amendments contained in a separate 150-page Budget Reconciliation bill that could pass both houses by a simple majority. That's when then-Speaker Nancy Pelosi famously told the then-Democratic majority, "We have to pass the bill so that you can find out what is in it."
When President Obama signed ObamaCare into law, that set in motion a series of funding triggers and money transfers that add up to $105,464,000,000 in pre-authorized appropriations that are scheduled to be paid up through FY2019. In laymen's language, that means writing postdated checks that are guaranteed to be paid out over the next eight years.
This money was divided into dozens of smaller amounts so the big total would not be apparent. For example, Section 2953 of ObamaCare included a pre-funded appropriation of $75 million a year for five years to "educate adolescents" in "adult preparation subjects" such as "stress management" and "the development of healthy attitudes and values about adolescent growth and development, body image, racial and ethnic diversity, and other related subjects."
Section 4101(a) of ObamaCare prefunded $200 million a year over four years for the construction of school-based health centers. In Section 4002, a total of $17,750,000,000 will be deposited over 10 years to a discretionary account controlled by the HHS secretary (currently Kathleen Sebelius), who may spend that money "to provide for expanded and sustained national investment in prevention" and to "help restrain the rate of growth in private and public sector health care costs."
Continued in article
White did President Obama turn down IBM's offer to, for free, to detect
medical fraud?
Video: Did White House Snub Fraud Fighter?
http://news.yahoo.com/video/politics-15749652/did-white-house-snub-fraud-fighter-22352314
Is Medicare a "Medicare is a good example of a government program that is highly efficient?"
-----Original Message-----
From: AECM, Accounting Education using Computers and Multimedia [mailto:AECM@LISTSERV.LOYOLA.EDU] On Behalf Of Peters, James M Sent: Thursday, September 23, 2010 10:37 AM
To: AECM@LISTSERV.LOYOLA.EDU
Subject: Re: accounting basicsI think it is time to push back against all this anti-government rhetoric that just isn't based on observed evidence. Whether goverments work best or markets work best is a function of the task to be performed and the nature of the product. Governments have proven they can provide better health insurance and health care than the private sector. Medicare is a good example of a goverment program that is highly efficient and spends 97% of your tax dollars on health care while private sector firms spend only 70% to 75% of your premium dollars on health care. Some firms reach 80%, but they are the exception. Government run hospitals in the US are now rated as among the best, if not the best in the nation. The Veterans Hospitals have better records of treatment success and lower costs that the vast majority of private hospitals.
Market advocates seem to forget free market theory. Free markets only work when certain, rather restrictive conditions are met. Among the most frequently violated are equal power and knowledge among all market participants. Even Adam Smith in the Wealth of Nations advocated a strong role for governments in keeping markets free. When conditions are right, markets work brilliantly. However, (a rhetorical question) how many market in the industrialize world really meet the conditions of truly free markets? My answer is very few.
Governments do some things much better than markets. The key is recognizing the market conditions that lead to government advantage and letting governments handle those areas. Auditing is a prime candidate for government intervention because of no auditor can truly be objective when they are being paid by the client. The markets cannot function properly in auditing because the true customer, the general public, isn't a party to the transaction. Audits aren't just for the current owners, they are for perpsective owners as well, which means the general public. The general public needs to be represented at the table when auditors are hired.
The other key is to recognize that governments fail when people fail to be informed voters. All governments, like all markets, are not made equal. Some work better than others. In democracies, the effectiveness of the government is a function of the involvement and knowledge of the electorate. Thus, we are all responsible for our own government's success and failures. The fact that America seems to have a disfunctional government right now is that we have a disfunctional electorate that seems to enjoy mindless shouting matches over informed policy dialog. Other nations don't suffer from this disease.
Let's all join John Stewart in Washington DC for the "Return Sanity to America" rally. It is a start to building a government that can live up to its potential.
Jim
September 23, 2010 reply from Bob Jensen
Hi Jim,
If this is your idea of "observed evidence" then I've no hope for you in the academy. For one thing a good academic would be more precise about definitions like “better health care.” For example, some other nations come out “better” in infant mortality because they throw away very premature small babies and don’t count them into survival rates. What does “better” mean in terms of who invents the latest and greatest medications to fight cancer?
Medicare, for example, is one of the least-efficient government programs that arguably has the worst internal accounting controls of all other government programs except, possibly, the defense program. An "efficient" program would have stellar internal controls preventing fraud and error.
President Obama repeatedly asserts that "Medicare and Medicaid are largest deficit drivers" ---
http://www.politifact.com/truth-o-meter/statements/2009/jun/25/barack-obama/obama-says-medicare-and-medicaid-are-largest-defic/And Medicare is not a very good example of "government" efficiency since the private sector delivers virtually all the medical services. The Medicare service providers are notoriously inefficient by prescribing billions of dollars in unneeded services, medications, non-existent medical equipment, and lifetime disability benefits to crooks that are not disabled.
I don't care to continue on in the AECM with debates over extreme political dogma since this is truly outside what subscribers expect from the AECM. They wanted to learn more about the PwC re-branding and the future of auditing/assurance services. I doubt that they want to hear a rant about joining a Glenn Beck-bashing by Jon Stewart in Washington DC. Most of us do not support the extremes of Beck or Stewart and certainly do not want the AECM to be a rallying call for either extreme. That is not in the mission of the AECM.
Also I see no need to censor the other subscribers of the AECM if they happen to disagree with Jim Peterson’s political dogma. Even if I were a Glenn Beck supporter (which I’m not) I would not urge AECM subscribers to join me in Beck’s big Washington DC rally (where you would never find me).
It’s a free country, and I suspect you will be among the Glenn Beck bashers at Jon Stewart’s rally for liberals. But I don’t think you should plead with AECM subscribers to join you in this political burning of Beck’s books.
Bob Jensen
In 2009 President Barack Obama is engineering a universal health care bill by appealing to the with blatant and deceitful estimates of costs in a muddled up system of inclusions of social services that are only remotely linked to health care (such as marriage counseling).
Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.
Some of the blatant lies are as follows:
Fuzzy CBO Accounting Tricks
"ObamaCare by the Numbers: Part 2," by John Cassidy, The New Yorker,
March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html
This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.
EXPRESS:
The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.
The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.
The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.
Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.
LOCAL:
For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.
Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.
The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.
The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”
Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.
My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.
Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.
Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)
If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”
So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.
The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.
Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)
In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.
Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.
The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.
The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.
At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.
On a quiet Friday afternoon this summer, the central justification for President Obama’s health-care overhaul died a quiet death. On that day, a bipartisan coalition in Congress reversed the scheduled Medicare cuts to physician payments, ensuring that, over the next decade, the White House’s reforms will cost many billions more than advertised. After over a year of debate and lofty rhetoric, the reality is this: the president’s goal of “bending” the health-care cost curve has unraveled in just a few months.
The president and his supporters argued that we need ObamaCare in order to tame the federal budget deficit. When he signed the bill into law, the president touted the importance of the legislation in reducing long-term deficits. Democrats cited Congressional Budget Office scoring showing that the health legislation would reduce the deficit over ten years to the tune of roughly $130 billion. But that was back in March.
In May, the CBO released its quantitative analysis showing that discretionary spending not accounted for in the previous scores would cost $115 billion. The CBO director himself expressed significant doubts about potential deficit reduction. Speaking to the Institute of Medicine, he said: “Rising health costs will put tremendous pressure on the federal budget during the next few decades and beyond. In CBO’s judgment, the health legislation enacted earlier this year does not substantially diminish that pressure.”
That brings us to the quiet Friday afternoon of June 25. By cancelling scheduled Medicare cuts, the president and his Congressional allies have made the fiscal problem even worse: Not only do those fiscal problems remain, but White House reforms meant to address them will push net federal-government health expenditures further into the red. Any notion of fiscal balance has been lost.
Yet cancelling these scheduled Medicare cuts is nothing new. Time and again, Republican and Democratic leaderships in Congress have haphazardly voted to undo scheduled cuts.
Congress reversed planned Medicare physician cuts in 1999—and 2004, 2005, 2006, and 2008. In fact, since 1997, when members of both parties agreed to automatic cuts if spending rose faster than population and economic growth, the program has been cut just once, in 2002. Maybe it’s the pressure of the doctors’ lobby. Maybe it’s the seniors’ lobby. Maybe it’s both.
And this Democratic Congress has been no better. In fact, just months after passing Obama’s health-reform legislation, Democrats vigorously and successfully pushed to postpone the Medicare cut until November (they had previously voted to delay it from April to June 2010).
More worrisome is this: in liberal circles, it’s popular to argue that Congressional efforts to control Medicare costs under the Sustainable Growth Rate (SGR) formula have been overly successful. James R. Horney and Paul N. Van de Water make exactly this point in a publication for the liberal Center on Budget and Policy Priorities. They write: “Even though Congress did not allow the full cuts required under the SGR formula to take effect, it has still cut the physician reimbursement rate substantially – at its current level, the reimbursement rate in 2010 will be 17 percent below the rate for 2001, adjusted for inflation.” Picking up on this point, Paul Krugman recently argued that Medicare has been historically very successful at reigning in costs. But praising Medicare cost containment in a time of heavy health-care cost inflation is like praising Lehman Brothers for making good investments in Latin America when the market for subprime mortgages was imploding.
Let’s put this in perspective: health inflation was 3.4 percent last year, just over double the basic inflation rate. Tellingly, the worst cost increases were experienced by Medicare (costs were up 8.6 percent), and Medicaid (9.9 percent).
Unfortunately, the White House and Congress squandered a great opportunity to bend the cost curve downwards, opting instead for the status quo. The quiet congressional vote in June shows how far the administration has strayed from its reform rhetoric. If we are ever to reign in health care spending, we need leaders who will make tough choices and tough cuts. Their rhetoric must become reality.
"What Difference Has RomneyCare Made?" by John C. Goodman,
Townhall, July 9, 2011 ---
http://townhall.com/columnists/johncgoodman/2011/07/09/what_difference_has_romneycare_made
. . .
On paper, it looks as though the state has made major progress in insuring the uninsured. From 6.4% of the population in 2006, the uninsured hover around 2% today. However, one study found that nearly all of the newly insured are either on Medicaid, in a state-subsidized plan or in an employer subsidized plan. Only 7% of the newly insured, or about 30,000 people, are directly paying their own way. It’s relatively easy to get people to sign up for insurance when coverage is free or almost free. And it’s not very expensive if you pay for the subsidies using money you would have spent anyway on free care for those who can’t pay their medical bills.
But aside from moving money from one bucket to another, have any real problems been solved? The evidence isn’t positive.
There are three major problems in health care all over the world: cost, quality and access. Since nothing in the Massachusetts reform addressed the problems of rising costs and less than adequate quality, those problems have remained more or less unchanged. What about access to care? Surely, newly insured people have more options in the medical marketplace.
The trouble is that almost all of the newly insured are in health plans that pay doctors and hospitals a lot less than what private insurance pays. Like other places around the country, Massachusetts Medicaid (called MassHealth) pays providers so little that patients often turn to hospital emergency rooms and community health centers for their care when they can’t find doctors who will see them. People in the newly subsidized private insurance plans aren’t faring much better because these plans pay only slightly more than what Medicaid pays.
The only solid analysis of what has actually happened to patients at this point is a study by Sharon Long and Paul Masi published in the journal Health Affairs. According to the study:
• There has been no significant change in the number of Massachusetts patients seeking care in hospital emergency rooms since the reform was implemented, and there has actually been an increase in emergency room use by people with incomes below 300% of the poverty level.
• There has been an increase in doctor visits but no change in visits to specialists and an actual decrease in “medical tests, treatment and follow up care,” which I assume is care for the chronically ill.
• There has been no change in the percent of the population reporting a failure to “get needed care for any reason within the past 12 months” and remarkably that includes one-third of those with incomes below 300% of the poverty level.
The problem with counting up doctor visits is that a visit is not always a visit. Nationally, in the state children’s health insurance program (CHIP) doctors have responded to an increase in the demand for their services by scheduling more appointments, but spending less time with patients. Also, you would think that the Massachusetts reform would shift health care resources from the general population to those with less income. But there is no evidence that has happened. On measures of access, the gap between the poor plus the near poor and everyone else appears not to have changed at all!
Ask yourself why you care whether other people have health insurance? The most likely reason is that you want people to have access to health care. But lack of access to care is a huge problem in Massachusetts right now. As I previously reported more than half of all family doctors and more than half of all internists are not accepting new patients. The wait is more than a month before a new patient is able to see a family doctor, and the wait to see an internist averages 48 days. The average wait in Boston to see a family doctor is more than two months.
What I am now reporting will be different than what you may have read in the newspapers or at other health blogs. MIT Professor Jon Gruber calls Massachusetts an unqualified success, citing some of the very same studies I am citing. But since Gruber was one of the architects of the Massachusetts health reform, this is like a student grading his own exam.
What about elevating the Massachusetts reforms to the national level in the form of ObamaCare? As I have previously reported, ObamaCare is likely to result in less access to care for our most vulnerable populations: the disabled and the elderly on Medicare, the poor on Medicaid and the near poor in newly subsidized private insurance. But that is only the beginning.
ObamaCare threatens a federal takeover of the practice of medicine. It threatens to cost millions of people their jobs. It threatens to cause a wasteful restructuring of American industry in a way that will make us less efficient and less competitive in the international marketplace. It will cause millions to lose their employer sponsored insurance. And it threatens to create health plans with perverse incentives to underprovide care to the patients most in need of the miracles of modern medical science.
ObamaCare will be anything but benign.
"The Massachusetts Health-Care 'Train Wreck': The future of
ObamaCare is unfolding here: runaway spending, price controls, even limits on
care and medical licensing," by Joseph Rago, The Wall Street Journal,
July 7, 2010 ---
http://online.wsj.com/article/SB10001424052748704324304575306861120760580.html?mod=djemEditorialPage_t
.
President Obama said earlier this year that the health-care bill that Congress passed three months ago is "essentially identical" to the Massachusetts universal coverage plan that then-Gov. Mitt Romney signed into law in 2006. No one but Mr. Romney disagrees.
As events are now unfolding, the Massachusetts plan couldn't be a more damning indictment of ObamaCare. The state's universal health-care prototype is growing more dysfunctional by the day, which is the inevitable result of a health system dominated by politics.
In the first good news in months, a state appeals board has reversed some of the price controls on the insurance industry that Gov. Deval Patrick imposed earlier this year. Late last month, the panel ruled that the action had no legal basis and ignored "economic realties."
In April, Mr. Patrick's insurance commissioner had rejected 235 of 274 premium increases state insurers had submitted for approval for individuals and small businesses. The carriers said these increases were necessary to cover their expected claims over the coming year, as underlying state health costs continue to rise at 8% annually. By inventing an arbitrary rate cap, the administration was in effect ordering the carriers to sell their products at a loss.
Mr. Patrick has promised to appeal the panel's decision and find some other reason to cap rates. Yet a raft of internal documents recently leaked to the press shows this squeeze play was opposed even within his own administration.
In an April message to his staff, Robert Dynan, a career insurance commissioner responsible for ensuring the solvency of state carriers, wrote that his superiors "implemented artificial price caps on HMO rates. The rates, by design, have no actuarial support. This action was taken against my objections and without including me in the conversation."
Mr. Dynan added that "The current course . . . has the potential for catastrophic consequences including irreversible damage to our non-profit health care system" and that "there most likely will be a train wreck (or perhaps several train wrecks)."
Sure enough, the five major state insurers have so far collectively lost $116 million due to the rate cap. Three of them are now under administrative oversight because of concerns about their financial viability. Perhaps Mr. Patrick felt he could be so reckless because health-care demagoguery is the strategy for his fall re-election bid against a former insurance CEO.
The deeper problem is that price controls seem to be the only way the political class can salvage a program that was supposed to reduce spending and manifestly has not. Massachusetts now has the highest average premiums in the nation.
In a new paper, Stanford economists John Cogan and Dan Kessler and Glenn Hubbard of Columbia find that the Massachusetts plan increased private employer-sponsored premiums by about 6%. Another study released last week by the state found that the number of people gaming the "individual mandate"—buying insurance only when they are about to incur major medical costs, then dumping coverage—has quadrupled since 2006. State regulators estimate that this amounts to a de facto 1% tax on insurance premiums for everyone else in the individual market and recommend a limited enrollment period to discourage such abuses. (This will be illegal under ObamaCare.)
Liberals write off such consequences as unimportant under the revisionist history that the plan was never meant to reduce costs but only to cover the uninsured. Yet Mr. Romney wrote in these pages shortly after his plan became law that every resident "will soon have affordable health insurance and the costs of health care will be reduced."
One junior senator from Illinois agreed. In a February 2006 interview on NBC, Mr. Obama praised the "bold initiative" in Massachusetts, arguing that it would "reduce costs and expand coverage." A Romney spokesman said at the time that "It's gratifying that national figures from both sides of the aisle recognize the potential of this plan to transform our health-care system."
An entitlement sold as a way to reduce costs was bound to fundamentally change the system. The larger question—for Massachusetts, and now for the nation—is whether that was really the plan all along.
"If you're going to do health-care cost containment, it has to be stealth," said Jon Kingsdale, speaking at a conference sponsored by the New Republic magazine last October. "It has to be unsuspected by any of the key players to actually have an effect." Mr. Kingsdale is the former director of the Massachusetts "connector," the beta version of ObamaCare's insurance "exchanges," and is now widely expected to serve as an ObamaCare regulator.
He went on to explain that universal coverage was "fundamentally a political strategy question"—a way of finding a "significant systematic way of pushing back on the health-care system and saying, 'No, you have to do with less.' And that's the challenge, how to do it. It's like we're waiting for a chain reaction but there's no catalyst, there's nothing to start it."
In other words, health reform was a classic bait and switch: Sell a virtually unrepealable entitlement on utterly unrealistic premises and then the political class will eventually be forced to control spending. The likes of Mr. Kingsdale would say cost control is only a matter of technocratic judgement, but the raw dirigisme of Mr. Patrick's price controls is a better indicator of what happens when health care is in the custody of elected officials rather than a market.
Naturally, Mr. Patrick wants to export the rate review beyond the insurers to hospitals, physician groups and specialty providers—presumably to set medical prices as well as insurance prices. Last month, his administration also announced it would use the existing state "determination of need" process to restrict the diffusion of expensive medical technologies like MRI machines and linear accelerator radiation therapy.
Meanwhile, Richard Moore, a state senator from Uxbridge and an architect of the 2006 plan, has introduced a new bill that will make physician participation in government health programs a condition of medical licensure. This would essentially convert all Massachusetts doctors into public employees.
All of this is merely a prelude to far more aggressive restructuring of the state's health-care markets—and a preview of what awaits the rest of the country.
"Your Health Care Costs, Going Higher," by Carrie Lukas,
Townhall, June 1, 2010 ---
http://townhall.com/columnists/CarrieLukas/2010/06/01/your_health_care_costs,_going_higher
How much will the new health care law cost? That was a matter of particular dispute during the debate of the Patient Protection and Affordability Act. The bill's authors monkeyed around with the numbers, delaying some benefits, creating new revenue raisers, and pushing off known, needed reforms, so that the Congressional Budget Office (CBO) could come up with a score below the $900 billion target.
Only the most naďve failed to recognize that those numbers were meaningless: Ultimately, they would have no relationship to how much the legislation would add to taxpayers' burdens and bloat the federal budget. CBO has since been revising its estimates upward: Another $115 billion for additional administrative costs associated with the new law. In addition, Congress now struggles to pass a change to the Medicare reimbursement rates, which will cost $23 billion just to patch the problem over for two years.
Taxpayers must be warned that these are just the first of many upward revisions by CBO. As Congressman Paul Ryan pointed out during the health care debate, the CBO score was based on ten years of increased taxes and Medicare cuts, and only six years of benefits. Former CBO Director Douglas Holtz-Eakin just released his own analysis of the law and found that, far from reducing the deficit as the President and Congressional proponents promised, the law will add more than $500 billion to the deficit during the first ten years and another $1.4 trillion in the decade after that.
Yet the program's cost for taxpayers are just a small part of the costs that will be borne by American citizens. Speaker Pelosi explained that only when the bill passed would Americans know what's in it, and she was right. Since the bill became law it's consequences for businesses and the medical system is becoming more obvious. Several large companies reported that they would suffer multi-million dollar losses due to the law's new taxes. Companies are also noting the incentives created by the law to drop insurance coverage for their employees. As Holtz-Eakin wrote: “Caterpillar recently noted that it could save 70 percent on health care costs by dropping coverage and paying the penalties; AT&T's $2.4 billion cost of coverage would drop to just $600 million for penalties.” Altogether, Holtz-Eakin estimates that as many as 35 million Americans could lose their employer-sponsored health insurance.
So much for being able to keep your insurance. Americans are also learning how other provisions will drive up insurance costs. This year, “children” up to the age of twenty-six will become eligible for their parents' health insurance policy. Analysts estimate that this change will increase the cost of all family policies by about one percent.
One percent itself isn't a big deal, but it's a reminder of the relationship between mandated benefits and price. The federal government will soon foist numerous new mandates upon insurance companies: free preventive care services, an end to benefit caps, limits on price differentials for those with pre-existing conditions, and many more to come. Far from freebies, these are expensive benefits and their costs will be spread around the insured population, driving premium prices up.
The law also gives government new powers to dictate how much insurance companies operate. As a result, insurance companies will have to find new ways to make ends meet, such as by reducing payments to doctors. And those doctors will also find ways to trim back costs, by consolidating practices to reduce overhead and taking on fewer patients.
Americans need not wait for the federal law to fully take effect to understand what's in store. They can also look to Massachusetts, where a similar health care law is already in force. Health care policy expert Grace Marie Turner recently reviewed the problems that plague Massachusetts. Health care costs for a family of four in the Bay State are the highest in the nation, with per capita health care spending 27% higher than the rest of the nation. The increased demand for medical services has created a shortage of doctors, making it difficult to get an appointment and creating long wait times. Ironically this has led to increased use of emergency rooms, a problem that greater insurance coverage was supposed to solve. Insurance companies need to raise rates to cover additional expenses, but the Governor is threatening to cap rate hikes, which will leave private insurers operating at a loss. How long is that sustainable?
The debate about how much this new health care law will cost Americans is far from over. Undoubtedly, as more of the law is implemented, we will learn more about its many hidden costs and consequences. But one thing is for sure, this new law will cost more, and like much, much more than the law's proponents promised.
There are lies and then there are damn
lies
"Pelosi Claims Health Care Reform to Save $1.3 Trillion; No Mention in CBO
Estimate," by Matt Cover, CNS News, March 26, 2010 ---
http://www.cnsnews.com/news/article/63373
House Speaker Nancy Pelosi (D-Calif.) said that the health care reform package the House passed on March 21 would ultimately save the country $1.3 trillion over the next 20 years. That claim, however, was not made by the Congressional Budget Office (CBO) in its cost estimate of the bill.
Pelosi, speaking to reporters at her weekly Capitol Hill press conference on Thursday, said that one of the most important reasons for passing the legislation was that it would save the government so much money.
“[O]ne of the main reasons to do the bill was that it saves the taxpayers $1.3 trillion — $1.3 trillion — over the life of the bill and the 10 years beyond,” she said.
However, no such figure appears in the Congressional Budget Office’s estimate of the package President Obama signed into law Tuesday.
According to a CBO letter sent to Pelosi on March 20, the day before that House passed the bill, the health reform bill and an accompanying package of amendments is expected to reduce the deficit by $143 billion over the 2010-2019 time period.
For the following decade, the CBO does not attempt to quantify the bill’s possible effects on the budget because, as it says, there are simply too many unknown factors for any estimate to be accurate.
“CBO has developed a rough outlook for the decade following the 2010–2019 period by grouping the elements of the legislation into broad categories and (together with JCT) assessing the rate at which the budgetary impact of each of those broad categories is likely to increase over time,” the report says.
The CBO did give a broad range that the package might reduce the deficit, saying that if Congress did not modify the law over the next 20 years, it could reduce the deficit “during that decade in a broad range between one quarter percent and one-half percent of gross domestic product (GDP).”
The CBO said that any estimates beyond 20 years were unreasonable, and declined to give any in their letter to Pelosi.
“CBO has not extrapolated estimates further into the future because the uncertainties surrounding them are magnified even more.”
While some press accounts attributed Pelosi’s figure to internal calculations based on the CBO’s 20-year projections, CNSNews.com could not confirm this despite repeated requests to the Speaker’s office asking to name the source of the figure.
In addition, in a March 19 letter to Rep. Paul Ryan (R-Wisc.) the CBO explained that the health care bill will begin adding to the deficit the moment congressional Democrats change the payment system Medicare uses to pay doctors.
Known as the “Doc Fix,” the change was removed from earlier versions of the bill in order to make it appear deficit- friendly. However, if Democrats go ahead with the changes as expected, the CBO explained that the deficit will rise by nearly $60 billion.
"CBO estimates that enacting H.R. 3961 [Doc Fix], by itself, would cost about $208 billion over the 2010–2019 period," the CBO informed Ryan. "CBO estimates that enacting H.R. 3961 together with those two bills [health care and a companion package of amendments] would add $59 billion to budget deficits over the 2010–2019 period."
"Signed, sealed, delivered," The Economist, March 27, 2010, Page 31 ---
http://www.economist.com/world/united-states/displaystory.cfm?story_id=15769767"SignThe first big idea that he stresses is the creation of a new agency to spearhead innovation and scale up any of the many pilot schemes contained in the bills that manage to reform delivery or payment systems. It is true that the reform effort began with earnest intent to “bend the cost curve”. Alas, explains Mark McClellan of the Brookings Institution, the most meaningful proposals have since been watered down or delayed.
The second lever of change that Mr Orszag says is underappreciated is an excise tax introduced on the most expensive (or “Cadillac”) insurance plans. Most economists like this idea, as it is likely to discourage excessive consumption of health care. Unfortunately, because of political pressure from labour unions and other groups, the Cadillac tax has been diluted, and delayed until 2018. Sceptics wonder if a future Congress will really implement this tax when the time comes. Mr Orszag is right that, if implemented, this provision will represent an important lever of cost control. But it’s a big “if”.
"What You Get With Free Health Care," by Janice Shaw Crouse, Townhall, March 29, 2010 ---
http://townhall.com/columnists/JaniceShawCrouse/2010/03/29/what_you_get_with_free_health_careOne of the prime arguments used to sell ObamaCare was that it would reverse the financial crisis and save the country a gazillion dollars — with benefits beginning in its first year. Sadly, somebody’s arm got twisted to produce Congressional Budget Office (CBO) figures — nicely timed for the House vote — to supposedly back up the Democrats’ arguments. Nobody seemed to understand that the CBO figures were just estimates. Yet, as they say, the devil is in the details. The CBO details clearly indicate that having the government’s role expanded to provide universal coverage will significantly increase costs, as well as premiums and taxes. Worse, the CBO notes that most of the current costs of the U.S. world-class health care are from providing new, cutting-edge treatments and ever-expanding medical technologies. They add, “Given the central role of medical technology in cost growth, reducing or slowing spending over the long term would probably require decreasing the pace of adopting new treatments and procedures or limiting the breadth of their application.”
How’s that for dispelling the claims that quality will remain high, rationing won’t happen, and technology will continue to expand while costs go down? The real life record of government control is a long way from matching the soaring rhetoric that has dominated the media coverage of the health care debate. Further, in those countries where massive government intervention has replaced free market enterprise, the reality is far short of the utopian promises and the policies that have been spun out so recklessly and misleadingly. Price controls, inevitably, limit innovation. If that happens to medical research and technological advancement, the results will be disastrous.
Continued in article
Note that I’m not in favor of repealing the recent legislation. But I am in favor of adding a public option so long as taxation and insurance premiums are added to fully cover the annual costs of health insurance. And let's stop the BS on the left and on the right side of this debate.
Fuzzy CBO Accounting Tricks
"ObamaCare by the Numbers: Part 2," by John Cassidy,
The New Yorker,
March 2010 ---
http://www.newyorker.com/online/blogs/johncassidy/2010/03/obamacare-by-the-numbers-part-2.html
This is a long and somewhat involved followup to my previous post on ObamaCare. . For those of you with O.A.D.D. (online attention-deficit disorder), I’ve provided an express and local version.
EXPRESS:
The official projections for health-care reform, which show it greatly reducing the number of uninsured and also reducing the budget deficit, are simply not credible. There are three basic issues.
The cost and revenue projections rely on unrealistic assumptions and accounting tricks. If you make some adjustments for these, the cost of the plan is much higher.
The so-called “individual mandate” isn’t really a mandate at all. Under the new system, many young and healthy people will still have a strong incentive to go uninsured.
Once the reforms are up and running, some employers will have a big incentive to end their group coverage plans and dump their employees onto the taxpayer-subsidized individual plans, greatly adding to their cost.
LOCAL:
For future reference (or possibly to roll up and beat myself over the head with in my dotage) I have filed away a copy the latest analysis (pdf) of health-care reform from the Congressional Budget Office. By 2019, it says, the bills passed by the House and Senate will have cut the number of uninsured Americans by thirty-two million, raised the percentage of people with some form of health-care coverage from eighty-three per cent to ninety-four per cent, and reduced the federal deficit by a cumulative $143 billion. If all of these predictions turn out to be accurate, ObamaCare will go down as one of the most successful and least costly government initiatives in history. At no net cost to the taxpayer, it will have filled a gaping hole in the social safety net and solved a problem that has frustrated policymakers for decades.
Does Santa Claus live after all? According to the C.B.O., between now and 2019 the net cost of insuring new enrollees in Medicaid and private insurance plans will be $788 billion, but other provisions in the legislation will generate revenues and cost savings of $933 billion. Subtract the first figure from the second and—voila!—you get $143 billion in deficit reduction.
The first objection to these figures is that the great bulk of the cost savings—more than $450 billion—comes from cuts in Medicare payments to doctors and other health-care providers. If you are vaguely familiar with Washington politics and the letters A.A.R.P. you might suspect that at least some of these cuts will fail to materialize. Unlike some hardened skeptics, I don’t think none of them will happen. One part of the reform involves reducing excessive payments that the Bush Administration agreed to when it set up the Medicare Advantage program in 2003. If Congress remains under Democratic control—a big if, admittedly—it will probably enact these changes. But that still leaves another $300 billion of Medicare savings to be found.
The second problem is accounting gimmickry. Acting in accordance with standard Washington practices, the C.B.O. counts as revenues more than $50 million in Social Security taxes and $70 billion in payments towards a new home-care program, which will eventually prove very costly, and it doesn’t count some $50 billion in discretionary spending. After excluding these pieces of trickery and the questionable Medicare cuts, Douglas Holtz-Eakin, a former head of the C.B.O., has calculated that the reform will actually raise the deficit by $562 billion in the first ten years. “The budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed,” he wrote in the Times. “So fantasy in, fantasy out.”
Holtz-Eakin advised John McCain in 2008, and he has a reputation as a straight shooter. I think the problems with the C.B.O.’s projections go even further than he suggests. If Holtz-Eakin’s figures turned out to be spot on, and over the next ten years health-care reform reduced the number of uninsured by thirty million at an annual cost of $56 billion, I would still regard it as a great success. In a $15 trillion economy—and, barring another recession, the U.S. economy should be that large in 2014—fifty or sixty billion dollars is a relatively small sum—about four tenths of one per cent of G.D.P., or about eight per cent of the 2011 Pentagon budget.
My two big worries about the reform are that it won’t capture nearly as many uninsured people as the official projections suggest, and that many businesses, once they realize the size of the handouts being offered for individual coverage, will wind down their group plans, shifting workers (and costs) onto the new government-subsidized plans. The legislation includes features designed to prevent both these things from happening, but I don’t think they will be effective.
Consider the so-called “individual mandate.” As a strict matter of law, all non-elderly Americans who earn more than the poverty line will be obliged to obtain some form of health coverage. If they don’t, in 2016 and beyond, they could face a fine of about $700 or 2.5 per cent of their income—whichever is the most. Two issues immediately arise.
Even if the fines are vigorously enforced, many people may choose to pay them and stay uninsured. Consider a healthy single man of thirty-five who earns $35,000 a year. Under the new system, he would have a choice of enrolling in a subsidized plan at an annual cost of $2,700 or paying a fine of $875. It may well make sense for him to pay the fine, take his chances, and report to the local emergency room if he gets really sick. (E.R.s will still be legally obliged to treat all comers.) If this sort of thing happens often, as well it could, the new insurance exchanges will be deprived of exactly the sort of healthy young people they need in order to bring down prices. (Healthy people improve the risk pool.)
If the rules aren’t properly enforced, the problem will be even worse. And that is precisely what is likely to happen. The I.R.S. will have the administrative responsibility of imposing penalties on people who can’t demonstrate that they have coverage, but it won’t have the legal authority to force people to pay the fines. “What happens if you don’t buy insurance and you don’t pay the penalty?” Ezra Klein, the Washington Post’s industrious and well-informed blogger, asks. “Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”
So, the individual mandate is a bit of a sham. Generous subsidies will be available for sick people and families with children who really need medical care to buy individual coverage, but healthy single people between the ages of twenty-six and forty, say, will still have a financial incentive to remain outside the system until they get ill, at which point they can sign up for coverage. Consequently, the number of uninsured won’t fall as much as expected, and neither will prices. Without a proper individual mandate, the idea of universality goes out the window, and so does much of the economic reasoning behind the bill.
The question of what impact the reforms will have on existing insurance plans has received even less analysis. According to President Obama, if you have coverage you like you can keep it, and that’s that. For the majority of workers, this will undoubtedly be true, at least in the short term, but in some parts of the economy, particularly industries that pay low and moderate wages, the presence of such generous subsidies for individual coverage is bound to affect behavior eventually. To suggest this won’t happen is to say economic incentives don’t matter.
Take a medium-sized firm that employs a hundred people earning $40,000 each—a private security firm based in Atlanta, say—and currently offers them health-care insurance worth $10,000 a year, of which the employees pay $2,500. This employer’s annual health-care costs are $750,000 (a hundred times $7,500). In the reformed system, the firm’s workers, if they didn’t have insurance, would be eligible for generous subsidies to buy private insurance. For example, a married forty-year-old security guard whose wife stayed home to raise two kids could enroll in a non-group plan for less than $1,400 a year, according to the Kaiser Health Reform Subsidy Calculator. (The subsidy from the government would be $8,058.)
In a situation like this, the firm has a strong financial incentive to junk its group coverage and dump its workers onto the taxpayer-subsidized plan. Under the new law, firms with more than fifty workers that don’t offer coverage would have to pay an annual fine of $2,000 for every worker they employ, excepting the first thirty. In this case, the security firm would incur a fine of $140,000 (seventy times two), but it would save $610,000 a year on health-care costs. If you owned this firm, what would you do? Unless you are unusually public spirited, you would take advantage of the free money that the government is giving out. Since your employees would see their own health-care contributions fall by more than $1,100 a year, or almost half, they would be unlikely to complain. And even if they did, you would be saving so much money you afford to buy their agreement with a pay raise of, say, $2,000 a year, and still come out well ahead.
Even if the government tried to impose additional sanctions on such firms, I doubt it would work. The dollar sums involved are so large that firms would try to game the system, by, for example, shutting down, reincorporating under a different name, and hiring back their employees without coverage. They might not even need to go to such lengths. Firms that pay modest wages have high rates of turnover. By simply refusing to offer coverage to new employees, they could pretty quickly convert most of their employees into non-covered workers.
The designers of health-care reform and the C.B.O. are aware of this problem, but, in my view, they have greatly underestimated it. According to the C.B.O., somewhere between eight and nine million workers will lose their group coverage as a result of their employers refusing to offer it. That isn’t a trifling number. But the C.B.O. says it will be largely offset by an opposite effect in which employers that don’t currently provide health insurance begin to offer it in response to higher demand from their workers as a result of the individual mandate. In this way, some six to seven million people will obtain new group coverage, the C.B.O. says, so the overall impact of the changes will be minor.
The C.B.O.’s analysis can’t be dismissed out of hand, but it is surely a best-case scenario. Again, I come back to where I started: the scale of the subsidies on offer for low and moderately priced workers. If economics has anything to say as a subject, it is that you can’t offer people or firms large financial rewards for doing something—in this case, dropping their group coverage—and not expect them to do it in large numbers. On this issue, I find myself in agreement with Tyler Cowen and other conservative economists. Over time, the “firewall” between the existing system of employer-provided group insurance and taxpayer-subsidized individual insurance is likely to break down, with more and more workers being shunted over to the public teat.
At that point, if it comes, politicians of both parties will be back close to where they began: searching for health-care reform that provides adequate coverage for all at a cost the country can afford. What would such a system look like? That is a topic for another post, but I don’t think it would look much like Romney-ObamaCare.
"Premiums Will Decrease 3000% So You Should Get A Raise When
H'care Is Passed"
Barach Obama ---
http://www.youtube.com/watch?v=lUd-slJc-GY&feature=player_embedded
"Obamacare: Cooked Books You Can Believe In," by Deeroy Murdock,
National Review, March 11, 2010 ---
http://article.nationalreview.com/427508/obamacare-cooked-books-you-can-believe-in/deroy-murdock?page=1
The non-partisan Congressional Budget Office likewise warned last December 23 that Obamacare’s putative savings “would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. . . . To describe the full amount of [Hospital Insurance] trust fund savings as both improving the government’s ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government’s fiscal position.”
Consequently, Sen. Jeff Sessions (R., Ala.) predicts: “Taxpayers will be left holding billions in debt bonds to the Medicare Trust Fund that must be repaid.”
The Senate’s Obamacare bill would take $52 billion in anticipated Social Security revenues and divert them to offset Obamacare’s overall net cost. But wait: Those who have been promised future Social Security payments expect that $52 billion to be available to prevent their pension checks from bouncing. These $104 billion in political pledges cost only $52 billion.
This bill also includes something called Community Living Services and Support. This “CLASS Act” would offer long-term-care insurance with premiums invoiced immediately, but with benefits commencing in 2016. In the interim, the CBO expects a $72 billion surplus to accumulate. Congressional Democrats already have dedicated that sum to counterbalance and thus lower Obamacare’s perceived cost. But the Treasury needs that same $72 billion to finance the CLASS Act’s medical services. So, which is it?
Senate Budget Committee Chairman Kent Conrad (D., N.D.) described this scam in the Washington Post as “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.”
Continued in article
In his speech Wednesday (March
3, 2010) , demanding an "up or down" vote, the president
seemed convinced and committed—but nothing he said sounded true. His bill will
"bring down the cost of health care for millions," it is "fully paid for," it
will lower the long term deficit by a trillion dollars.
"What a Disaster Looks Like: ObamaCare will have been a colossal waste
of time—if we're lucky," by Peggy Noonan, The Wall Street Journal, March 4,
2010 ---
http://online.wsj.com/article/SB10001424052748704187204575101742162779612.html?mod=djemEditorialPage_t
All this contributes to a second problem, which is a growing credibility gap. In his speech Wednesday, demanding an "up or down" vote, the president seemed convinced and committed—but nothing he said sounded true. His bill will "bring down the cost of health care for millions," it is "fully paid for," it will lower the long term deficit by a trillion dollars.
Does anyone believe this? Does anyone who knows the ways of government, the compulsions of Congress, and how history has played out in the past, believe this? Even a little? Rep. Bart Stupak said Thursday that he and several of his fellow Democrats won't vote for the Senate version of the bill because it says right there on page 2,069 that the federal government would directly subsidize abortions. The bill's proponents say this isn't so. It would be a relief to have a president who could weigh in believably and make clear what his own bill says. But he seems to devote more words to obscuring than clarifying.
Continued in article
"Congressional Budget Office Says Dems Are Using Accounting Trick To Claim Medicare 'Savings'," by Megan McArdle, Business Insider, December 23, 2009 --- http://www.businessinsider.com/congressional-budget-office-says-dems-are-using-accounting-trick-to-claim-healthcare-savings-2009-12
"This bill will strengthen Medicare and extend the life of the program." -
President Barack Obama, after the Senate health care bill secured 60 votes.It's from the Wonk Room blog at the Center for American Progress, and as you can see, it puts this claim up there front and central. As you can see from the quote above, it's not just an error made by one pundit. As I recall, the claim was made more than once during the Senate debate, and of course, by our president in selling the bill. The graphic was very widely distributed.
Unfortunately, the CBO finally got around to ruling on this question, and no, this is not actually going to fix the Medicare budget problem; it's an artifact of the way the government accounting is done.
The explanation is a little complicated, and I'm not sure how many of you want to go through it, but I'll try my hand at a reasonably succinct explanation. Basically, Medicare, like Social Security, has a "trust fund" (actually, more than one), which is supposed to fund it until the trust fund is exhausted in 2019. The "trust fund" does not exist in any meaningful sense, because its "assets" consist of claims on the general fund, i.e. all the rest of the tax money. As Medicare goes into deficit, it trades in those assets to cover its funding gap, which means the general fund has to find the money to pay off the special bonds by either raising taxes, cutting other spending, or borrowing more money. After the trust fund is exhausted, the general fund has to find the money to pay for the Medicare deficit by either . . . raising taxes, cutting other spending, or borrowing more money. The difference to taxpayers is nil.
Technically, when you cut Medicare spending, that money shows up as an increase in the Medicare trust fund, rather than some other possible accounting entry. But the effect on the unified budget is the same: the money saved by cutting Medicare is spent on other stuff. Whether Medicare is "calling bonds" or "demanding money to cover its deficit", we still have to find exactly as much money to pay for Medicare as we did before. Which is a lot of money. One of the reasons the projected deficits for the rest of the decade are so big is that the cost of Medicare is outstripping the revenue raised by its payroll tax, and so we have to shovel in more and more money from the general fund.
You can dedicate that money to paying for Medicare--but then you have to introduce a corresponding future liability on the general fund, in the amount of the Medicare savings. That would mean that this bill would increase the deficit by hundreds of billions of dollars, rather than reducing it.
Or as the CBO says:
The key point is that the savings to the HI trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs. Trust fund accounting shows the magnitude of the savings within the trust fund, and those savings indeed improve the solvency of that fund; however, that accounting ignores the burden that would be faced by the rest of the government later in redeeming the bonds held by the trust fund. Unified budget accounting shows that the majority of the HI trust fund savings would be used to pay for other spending under the PPACA and would not enhance the ability of the government to redeem the bonds credited to the trust fund to pay for future Medicare benefits. To describe the full amount of HI trust fund savings as both improving the government's ability to pay future Medicare benefits and financing new spending outside of Medicare would essentially double-count a large share of those savings and thus overstate the improvement in the government's fiscal position.
It's a little disappointing, really. At the rate that Democratic politicians were generating ever-more-spectacular budget savings from the same old set of health care proposals, I had expected our looming fiscal problems to be permanently resolved by this time next week.
From TheAtlantic - shaping the national debate on the most critical issues of our times, from politics, business, and the economy, to technology, arts, and culture.
Lie: Billions will be saved from new Medicare billing efficiencies and
fraud prevention
Never ending fraud in Medicare billings:
Unaudited overpayments, unqualified items, and criminal vendors
One spending sinkhole can be traced to large
medical-equipment suppliers, device makers, and pharmaceutical companies, which
government auditors and industry veterans describe as a recalcitrant bunch.
Medical manufacturers know public agencies generally pay first and ask questions
later—if ever. Medicare receives 4.4 million claims
daily; fewer than 3% are reviewed before being paid within the legally required
30 days.
"A Hole in Health-Care Reform: Overbilling by medical-equipment suppliers,
device makers, and drug companies has cost taxpayers billions.
New legislation will do little to stem the tide,"
by Chad Terhune, Business Week, December 10, 2009 ---
http://www.businessweek.com/magazine/content/09_51/b4160046945722.htm?link_position=link3
President Barack Obama and his Democratic allies on Capitol Hill say that a vast expansion of health coverage can be funded by squeezing out waste and fraud rather than cutting benefits. Whether that turns out to be true may help determine the success of the sweeping reform package being debated by Congress. Slashing costs is no easy task, and stopping fraud is even tougher. No less than $47 billion in Medicare spending went to dubious claims in the year ended Sept. 30, according to the U.S. Health & Human Services Dept. That's 10.7% of the $440 billion program that subsidizes care for the elderly. Medicaid, the government program for the poor, lets billions trickle away at roughly the same rate. The $10 million annual increase that Congress is allocating to fight fraud may not be enough to do the trick.
One spending sinkhole can be traced to large medical-equipment suppliers, device makers, and pharmaceutical companies, which government auditors and industry veterans describe as a recalcitrant bunch. Medical manufacturers know public agencies generally pay first and ask questions later—if ever. Medicare receives 4.4 million claims daily; fewer than 3% are reviewed before being paid within the legally required 30 days.
One way to get a sense of the scale of the seepage—and the challenge facing the Administration—is to look at whistleblower lawsuits filed under the federal False Claims Act. That law allows company employees to sue on behalf of the government to recover improperly claimed federal funds.
A suit filed by William A. Thomas, a former senior sales manager at Siemens Medical Solutions USA, one of the nation's largest medical suppliers and a unit of German engineering giant Siemens (SI), offers a case study in the difficulty of containing costs. Thomas, a 15-year Siemens Medical veteran, alleges in federal court in Philadelphia that for years the company overbilled the Veterans Affairs Dept. and other government agencies by hundreds of millions of dollars for MRI and CT scan machines and other expensive equipment. These high-tech systems—used to examine everything from damaged knees to suspected cancers—cost $500,000 to $3 million apiece, sometimes more. Thomas, who retired from Siemens in 2008, claims that with no justification other than larger profits, his former employer charged its government customers far more than private-sector buyers for the same equipment.
"Billions and billions could be saved with the right government regulation and oversight applied to health care," Thomas, 56, says in an interview. "But I think corporations will continue running circles around the federal government."
In court filings, Siemens has denied any wrongdoing and has sought to have the Thomas suit dismissed. A company spokesman, Lance Longwell, declined to elaborate for this article, citing the litigation.
The Thomas suit illustrates some of the vagaries of False Claims Act cases, hundreds of which are filed every year against government contractors in a range of industries. As the plaintiff, Thomas stands to pocket up to 30% of any court recovery, with the rest going to the Treasury. The Justice Dept., which can intervene in such suits to help steer them, announced last year that it will stay out of the case against Siemens for now. Yet Thomas' allegations have helped drive a parallel criminal investigation of Siemens' equipment marketing practices by the Defense Dept. and the U.S. Attorney's Office in Philadelphia.
In April federal investigators searched for records at the headquarters of Siemens Medical in Malvern, Pa., a suburb of Philadelphia. Ed Bradley, special agent-in-charge of the Defense Criminal Investigative Service, confirmed that the investigation is continuing but declined to comment further.
Longwell, the Siemens Medical spokesman, says the company is cooperating with criminal investigators. In March, just weeks before the search of its offices, Siemens won a new $267 million contract to provide radiology equipment to the U.S.
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Jensen Comment
The GAO has declared that many huge sink holes for fraud and waste are
unauditable --- the Pentagon, the IRS, Medicare, and the list goes on and on.
But the Congress that funds these programs is manipulated by special interest
groups who do not want these audits. The new sink hole on the block is almost
anything green.
What is happening to America?
Sadly, Medicare patients in Texas may once again be turned away by their doctors under the pending 2009 House version of Obamacare:
The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):
Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.
Unfortunately, it appears that under Obamacare, Texas will once again have to return to lawyer-ambulance-chasing days of old and revise its Constitution that presently limits attorneys' fees and imposes caps on damages. A former colleague at Trinity University on November 5, 2009 explained in a private message some of the reasonable details of the current Texas restrictions on damages in Texas (sounds reasonable to me and is more generous to patients and lawyers than Canada's really tight restrictions):
It is not true (under the revised Texas Constitution) that those who have been harmed by a physician’s malfeasance will not have their day in a Texas court. They will be able to claim real damages (economic - loss of income and medical costs) as well as punitive and pain and suffering damages – the difference is that some types of damages (non-economic) will be capped. What most of us don’t understand, is that the fear of these huge punitive damages causes physicians to practice defensive medicine – ordering more tests, ordering procedures just to make certain that they’re not missing anything. All these tests and procedures would be great and expected if they in themselves did not pose a risk to the patient, but many of them do. So, physicians must constantly balance their certainty of their diagnosis against the risk to the patient of additional tests. When we add huge punitive damages, we tip the scales in favor of more tests and procedures, which may, in fact, be more risky for the patient. And, in the end the burden for million dollar awards is borne by us all not just the physicians.
Since it is difficult to undo the health damage that has occurred, oversight of the physician is at the heart of the matter. There are ways to insure quality, standard-of-care medical practice outside of expensive court proceedings. So in addition to tort reform, the focus should equally be on systems of accountability for physicians.I think it is an outright lie that Obamacare will not cause many medical specialists to turn their backs on Medicare patients for much the same reason that Erika was turned away by a surgeon from the South Texas Spinal Clinic after having two of his surgeries. It will be amazing that any highly specialized neurosurgeon will accept the losses of treating Medicare patients.
The sad part is that Obamacare will reduce fees allowed to be charged to Medicare patients while at the same time greatly increase the cost of malpractice insurance for physicians treating those patients.
Canadian Malpractice Insurance Takes Profit Out Of
Coverage," by Jane Akre, Injury Board, July 28, 2009 ---
Click Here
The St. Petersburg Times takes a look at the cost of insurance in Canada for health care providers.
A neurosurgeon in Miami pays about $237,000 for medical malpractice insurance. The same professional in Toronto pays about $29,200, reports Susan Taylor Martin.
A Canadian orthopedic surgeon pays just over $10,000 for coverage that costs a Miami physician $140,000. An obstetrician in Canada pays $36,353 for insurance, while a Tampa Bay obstetrician pays $98,000 for medical malpractice insurance.
For those of you interested in Erika's saga with spine surgeries, you can
read about more of the details at
http://www.trinity.edu/rjensen/Erika2007.htm
She has a metal rack on her spine that extends from her neck to her hips.
Surgeons broke her back in three places before attaching the rods and screws, In
spite of the rack she can bend over while standing and pick a paper towel up
from the floor.
"The Cost of Health Care Reform,"
by Michael Tanner, Townhall, November 7, 2009 ---
http://townhall.com/columnists/MichaelTanner/2009/11/07/the_cost_of_health_care_reform
The Democratic leadership simply shifted some of the bill's cost to other bills. For example, for purposes of the health care bill, the Democrats assume that a currently scheduled 21 percent cut in Medicare reimbursements will take affect next year. However, at the same time, they have introduced a separate bill repealing those cuts at a cost of $250 billion, so that cost isn't technically part of health care reform. And your household budget would look so much better if you didn't have to pay your mortgage and car payment. (The Senate just tried to do something similar, only to have the cynical ploy rejected 53-47, with 13 Democrats refusing to play along.)
If you count that cost honestly, the bill's cost rises to nearly $1.3 trillion. And that still understates the bill's cost.
The CBO provides ten year projections of a bill's cost, between 2010 and 2019 in this case. But most provisions of the health bill don't take effect until 2014. So the "10-year" cost projection only includes six years of the bill. Again, consider your household budget. Wouldn't it be great if you could count a whole month's income, but only two weeks expenditures? If we look at the bill more honestly over the first 10 years that the programs are actually in existence, say from 2014 to 2024, it would actually cost more than $2.3 trillion. And, this doesn't include approximately $200 billion in additional spending for public health programs, a reinsurance program for retiree health care, and new preventive care programs that was added to the bill after it was submitted for official "scoring." So call the total cost somewhere in excess of $2.5 trillion.
Continued in article
We believe premiums would come down for several
reasons. Companies would no longer need to spend as much money on administrative
costs, to screen out people with pre-existing conditions (prohibited by all
reform bills). If they wanted to participate on the exchanges (and have access
to millions of new customers), the companies would also be forced to compete
with other private plans, and possibly a public option, encouraging them to
lower premiums and accept lower profits.
The New York Times Editorial, November 1, 2009 ---
http://www.nytimes.com/2009/11/01/opinion/01sun1.html?hp
"Health Cost Containment Troublesome Issue," SmartPros,
November 10, 2009 ---
http://accounting.smartpros.com/x68073.xml
Some Democrats and analysts are raising alarms that bills to reform the U.S. healthcare system fall short of President Obama's pledge to slow health spending.
Obama has made cost containment a key leg to healthcare reform. However, health economists say it isn't possible to know whether the bills would meet that goal, with many saying they doubt they would even come close, The New York Times reported Tuesday.
Both the House and the Senate propose cost-saving measures. The House bill, which passed Saturday, projects $440 billion in Medicare savings over 10 years. The Senate Finance Committee bill projects about $420 billion. White House officials said additional savings in the private sector would be realized as well.
Experts, even those whom the White House consulted, said the measures represent only small steps toward revising the existing fee-for-service system, which drives up costs by paying health providers for each visit or procedure performed -- and some lawmakers are paying attention, the Times said.
"My assessment at this point," said Sen. Ron Wyden, D-Ore., and a member of the Finance Committee, "is that the legislation is heavy on health and light on reform."
Sen. Susan Collins, R-Maine, during a news conference Monday with Sen. Lamar Alexander, R-Tenn., shared her concern about the cost-containment issue. Collins said she also has met with moderate Democrats who share her view.
"I don't believe we need more pilot projects to show us that healthcare delivery reforms are necessary," Collins told the Times. "I think people are much more upset over the cost of care than the administration is acknowledging."
Jensen Comment
You can argue for coverage of all new insureds irrespective of pre-existing
conditions on the basis of social equity, but the reasoning of the NYT editorial
above is pure hogwash. If this were true at least one medical insurance company
would've added to profits by ending pre-screening expenses. Pre-existing
conditions often require the most expensive kinds of treatment for such things
as organ transplants, cataracts, kidney dialysis, etc.
Also eliminating pre-existing conditions coupled with the inevitable coverage of illegal immigrants creates moral hazard in that when Grandma Lopez in Mexico City needs an eye operation, her relatives will float her across the Rio Grande primarily for immediate $25,000 eye surgery. If she wants to return she might even walk back across the border unassisted after she can see better.
Lie: States like Texas that have capped punitive damages in
medical lawsuits probably may not keep their limiting caps according to pending
Obamacare legislation. Such caps purportedly have significantly lowered medical
insurance rates in those states.
"Pelosi Health Care Bill Blows a Kiss to Trial Lawyers," Andrew Breitbart,
October 30, 2009 ---
Click Here
The health care bill recently unveiled by Speaker Nancy Pelosi is over 1,900 pages for a reason. It is much easier to dispense goodies to favored interest groups if they are surrounded by a lot of legislative legalese. For example, check out this juicy morsel to the trial lawyers (page 1431-1433 of the bill):
Section 2531, entitled “Medical Liability Alternatives,” establishes an incentive program for states to adopt and implement alternatives to medical liability litigation. [But]…… a state is not eligible for the incentive payments if that state puts a law on the books that limits attorneys’ fees or imposes caps on damages.
So, you can’t try to seek alternatives to lawsuits if you’ve actually done something to implement alternatives to lawsuits. Brilliant! The trial lawyers must be very happy today!
While there is debate over the details, it is clear that medical malpractive lawsuits have some impact on driving health care costs higher. There are likely a number of procedures that are done simply as a defense against future possible litigation. Recall this from the Washington Post:
“Lawmakers could save as much as $54 billion over the next decade by imposing an array of new limits on medical malpractice lawsuits, congressional budget analysts said today — a substantial sum that could help cover the cost of President Obama’s overhaul of the nation’s health system. New research shows that legal reforms would not only lower malpractice insurance premiums for medical providers, but would also spur providers to save money by ordering fewer tests and procedures aimed primarily at defending their decisions in court, Douglas Elmendorf, director of the nonpartisan Congressional Budget Office, wrote in a letter to Sen. Orrin Hatch (R-Utah).”
Lie: The U.S. infant mortality rate is much higher than even in Cuba and Europe
Longtime readers will recall that we caught Kristof playing similar games with statistics back in January 2005, when he claimed that the U.S. infant-mortality rate was worse than communist Cuba's and much worse than European rates. We pointed out that a central reason U.S. rates are high is that American physicians make heroic efforts to save extremely premature infants, who nonetheless have a mortality rate in excess of 50%. In other countries, these babies are simply discarded and not even counted in the statistics.
Wall Street Journal Editors Newsletter, November 6, 2009
Lie: Capping punitive damages does not save a significant amount of
money in medical costs.
Here’s an academic study of over 10 million insured. Although 1-2% on average does not sound very large, it adds up if you eventually count in medical insurance costs of 200-300 million insured people.
Limiting medical malpractice punitive (as opposed to damage) awards has also been shown in Canada to greatly reduce costs of the National Health Care Plan.
The Impact of Tort Reform on Employer-Sponsored
Health Insurance Premiums
Ronen
Avraham (University of Texas at Austin, School of Law(, Leemore S. Dafny
(Kellogg School of Management, Northwestern University) and NBER Max M.
Schanzenbach, (Northwestern University, School of Law)
September 2009 ---
Click Here
http://www.kellogg.northwestern.edu/faculty/dafny/personal/Documents/Working%20Papers/ADS_9_09w_ack.pdf
Abstract
We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce “defensive” healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.
Lie: Baucus' Senate bill taxes gold plated medical insurance that's
only a tax on the rich
Yeah right! How about postal workers? This is misleading at best since the many
unions have negotiated gold plated coverage for their rank and file. Some of the
best medical insurance in the U.S. is given to some of the lowest-paid
workers in the U.S. who can ill-afford a tax on their premium insurance plans.
Unions are against this tax, so it will most certainly die in the House
negotiations and force our Keystone Cops to scurry for other taxes or borrow
more trillions from China.
Lie: In an effort to rush through Obamacare in 2009, Congress
will drop demands for a government-operated health insurance competitor in
favor of a non-profit Fannie Health Insurance Cooperative
not run by the government. (this promise no longer exists in the current
House version of the the pending legislation)
This is obvious bait and switch fraud. The
bait is to get Obamacare passed this year by
making grandiose claims about not having government health insurance to compete
unfairly with private health insurance companies. The
switch is that Fannie HIC, like Fannie Mae, is doomed from get
go and will have to be taken over by the government.
Fannie HIC will insure tens of millions of minimum-wage workers, part-time workers, the unemployable, and the otherwise unemployed. There's zero chance of having premium revenues come anywhere close to cash outflows for expanded health, mental health and social service coverage demanded in H.R. 3200. Before she even commences operation, Fannie HIC will have to become a government owned and operated and subsidized health insurance company competing with private insurance companies.
One can only hope that Congress will be so proud of Fannie HIC that this cooperative-gone-government company will provide the only health insurance coverage available to members of the House, Senate, and Executive branches of Federal and State Governments. Fat Chance!
Whereas Fannie Mae cost taxpayers hundreds of billions of dollars in toxic mortgages mandated by Rep. Barney Frank and Sen. Chris Dodd, Fannie HIC will cost taxpayers untold trillions. Well, maybe not. The economic disasters Bernanke, Geithner, and Summers are agreeing to print U.S. dollars in lieu of having to tax and borrow to fund trillion dollar government spending deficits. Isn't that a brilliant idea? --- http://blog.mises.org/archives/009457.asp
Video: David Dreman Warns About 10-12% Inflation, Simoleon Sense,
August 5, 2009 ---
http://www.simoleonsense.com/videodavid-dreman-warns-about-10-12-inflation/
For starters, $1 trillion of extra debt-financed
spending would cause the government to pay about $300 billion of extra
interest in the next decade. Moreover, the CBO's method of estimating the
cost of such a program doesn't recognize the incentives it creates for
households and firms to change their behavior. The House health-care bill
gives a large subsidy to millions of families with incomes up to three times
the poverty level (i.e., up to $66,000 now for a family of four) if they buy
their insurance through one of the newly created "insurance exchanges," but
not if they get their insurance from their employer. The CBO's cost estimate
understates the number who would receive the subsidy because it ignores the
incentive for many firms to drop employer-provided coverage. It also ignores
the strong incentive that individuals would have to reduce reportable cash
incomes to qualify for higher subsidy rates. The total cost of ObamaCare
over the next decade likely would be closer to $2 trillion than to $1
trillion.
Martin Feldstein, "ObamaCare's
Crippling Deficits The higher taxes, debt payments and interest rates needed
to pay for health reform mean lower living standard," The Wall Street
Journal, September 7, 2009 ---
http://online.wsj.com/article/SB10001424052970203585004574393110640864526.html?mod=djemEditorialPage
"Fact Check: Obama Uses Iffy Math on Deficit Pledge," SmartPros, September 10, 2009 --- http://accounting.smartpros.com/x67604.xml
President Barack Obama used only-in-Washington accounting Wednesday when he promised to overhaul the nation's health care system without adding "one dime" to the deficit. By conventional arithmetic, Democratic plans would drive up the deficit by billions of dollars.
The president's speech to Congress contained a variety of oversimplifications and omissions in laying out what he wants to do about health insurance.
A look at some of Obama's claims and how they square with the facts or the fuller story:
---
OBAMA: "I will not sign a plan that adds one dime to our deficits either now or in the future. Period."
THE FACTS: Though there's no final plan yet, the White House and congressional Democrats already have shown they're ready to skirt the no-new-deficits pledge.
House Democrats offered a bill that the Congressional Budget Office said would add $220 billion to the deficit over 10 years. But Democrats and Obama administration officials claimed the bill actually was deficit-neutral. They said they simply didn't have to count $245 billion of it - the cost of adjusting Medicare reimbursement rates so physicians don't face big annual pay cuts.
Their reasoning was that they already had decided to exempt this "doc fix" from congressional rules that require new programs to be paid for. In other words, it doesn't have to be paid for because they decided it doesn't have to be paid for.
The administration also said that since Obama already had included the doctor payment in his 10-year budget proposal, it didn't have to be counted again.
That aside, the long-term prognosis for costs of the health care legislation has not been good.
CBO Director Douglas Elmendorf had this to say in July: "We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount."
---
OBAMA: "Nothing in this plan will require you or your employer to change the coverage or the doctor you have."
THE FACTS: That's correct, as far as it goes. But neither can the plan guarantee that people can keep their current coverage. Employers sponsor coverage for most families, and they'd be free to change their health plans in ways that workers may not like, or drop insurance altogether. The Congressional Budget Office analyzed the health care bill written by House Democrats and said that by 2016 some 3 million people who now have employer-based care would lose it because their employers would decide to stop offering it.
In the past Obama repeatedly said, "If you like your health care plan, you'll be able to keep your health care plan, period." Now he's stopping short of that unconditional guarantee by saying nothing in the plan "requires" any change.
---
OBAMA: "The reforms I'm proposing would not apply to those who are here illegally." One congressman, South Carolina Republican Joe Wilson, shouted "You lie!" from his seat in the House chamber when Obama made this assertion. Wilson later apologized.
THE FACTS: The facts back up Obama. The House version of the health care bill explicitly prohibits spending any federal money to help illegal immigrants get health care coverage. Illegal immigrants could buy private health insurance, as many do now, but wouldn't get tax subsidies to help them. Still, Republicans say there are not sufficient citizenship verification requirements to ensure illegal immigrants are excluded from benefits they are not due.
---
OBAMA: "Don't pay attention to those scary stories about how your benefits will be cut. ... That will never happen on my watch. I will protect Medicare."
THE FACTS: Obama and congressional Democrats want to pay for their health care plans in part by reducing Medicare payments to providers by more than $500 billion over 10 years. The cuts would largely hit hospitals and Medicare Advantage, the part of the Medicare program operated through private insurance companies.
Although wasteful spending in Medicare is widely acknowledged, many experts believe some seniors almost certainly would see reduced benefits from the cuts. That's particularly true for the 25 percent of Medicare users covered through Medicare Advantage.
Supporters contend that providers could absorb the cuts by improving how they operate and wouldn't have to reduce benefits or pass along costs. But there's certainly no guarantee they wouldn't.
---
Video Shocker
"Health Care Shocker: Special Democratic Voting Counties Would Get Protected Medicare Benefits," Brietbart ---
http://www.breitbart.tv/healthcare-shocker-special-democratic-voting-counties-would-get-protected-medicare-benefits/OBAMA: Requiring insurance companies to cover preventive care like mammograms and colonoscopies "makes sense, it saves money, and it saves lives."
THE FACTS: Studies have shown that much preventive care - particularly tests like the ones Obama mentions - actually costs money instead of saving it. That's because detecting acute diseases like breast cancer in their early stages involves testing many people who would never end up developing the disease. The costs of a large number of tests, even if they're relatively cheap, will outweigh the costs of caring for the minority of people who would have ended up getting sick without the testing.
The Congressional Budget Office wrote in August: "The evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall."
That doesn't mean preventive care doesn't make sense or save lives. It just doesn't save money.
---
OBAMA: "If you lose your job or change your job, you will be able to get coverage. If you strike out on your own and start a small business, you will be able to get coverage."
THE FACTS: It's not just a matter of being able to get coverage. Most people would have to get coverage under the law, if his plan is adopted.
In his speech, Obama endorsed mandatory coverage for individuals, an approach he did not embrace as a candidate.
He proposed during the campaign - as he does now - that larger businesses be required to offer insurance to workers or else pay into a fund. But he rejected the idea of requiring individuals to obtain insurance. He said people would get insurance without being forced to do so by the law, if coverage were made affordable. And he repeatedly criticized his Democratic primary rival, Hillary Rodham Clinton, for proposing to mandate coverage.
"To force people to get health insurance, you've got to have a very harsh penalty," he said in a February 2008 debate.
Now, he says, "individuals will be required to carry basic health insurance - just as most states require you to carry auto insurance."
He proposes a hardship waiver, exempting from the requirement those who cannot afford coverage despite increased federal aid.
---
OBAMA: "There are now more than 30 million American citizens who cannot get coverage."
THE FACTS: Obama time and again has referred to the number of uninsured as 46 million, a figure based on year-old Census data. The new number is based on an analysis by the Kaiser Commission on Medicaid and the Uninsured, which concluded that about two-thirds of Americans without insurance are poor or near poor. "These individuals are less likely to be offered employer-sponsored coverage or to be able to afford to purchase their own coverage," the report said. By using the new figure, Obama avoids criticism that he is including individuals, particularly healthy young people, who choose not to obtain health insurance.
Jensen Comment
In fairness, a single-payer medical insurance provider that covered all
Americans would probably result in cost savings in the long run. However,
President Obama realistically proclaims that such an abrupt changeover with lead
to unprecedented turmoil and inefficiencies, to say nothing of quality of care,
if the U.S. Government abruptly decided to insure 300 million Americans in one
fell swoop.
And the cost of phasing in a single-payer system would cause massive deficits, including the windfall profits that government would have to pay present medical insurance companies to operate efficiently over the years before they must operate before being terminated.
The fact of the matter is that we will be forced to live with inefficient private insurers until they are shut down or take over by government. In the meantime, government spending deficits will soar due to increased numbers of insured Americans, illegal immigrants, and expanded scope of coverage (mental health, pre-existing conditions, marriage counseling, and expanded social services).
"How Congress Is Cooking the Books," by Michael Tanner, The New York Post, September 30, 2009 --- Click Here
LAST week, the Senate Finance Committee voted 12-11 not to wait for the Congressional Budget Office to "score" its health-care bill before the committee votes on it. Imagine that: Some senators actually wanted to know how much the bill costs before voting on it.
Let them get away with something like that, and before you know it they'll be demanding honest accounting practices -- sending the whole legislative process to hell in a hand basket.
When it comes to the health-care-reform debate, you see, honest budgeting is nowhere to be seen.
Start with the simple matter of how much health-care reform will cost. The House bill, HR 3200, will cost roughly $1.3 trillion over 10 years -- or so we're told. By the same token, the Senate Finance Committee bill is supposed to cost just under $900 billion. Sure, that's a lot of money -- but it still badly understates the true cost.
The CBO provides 10- year projections of a bill's cost. But most provisions of the health bill don't take effect until 2014. So the "10-year" cost projection only includes six years of the bill.
Plus, the costs ramp up slowly. In its first year, the House bill would only cost about $6 billion; in its first three, less than $100 billion. The big costs are in the final years of the 10-year budget window -- and beyond. In fact, over the first 10 years that the House bill would be in existence (2014 to 2024), its costs would be closer to $2.4 trillion. Similarly, the real cost of the Senate bill over 10 years of operation is estimated at $1.5 trillion.
Worse, the trajectory of the costs after 10 years rises dramatically -- meaning "reform" would cost even more in its second 10 years and beyond.
Such gimmicks also infest the projections of how much reform will add to the deficit. CBO says the House bill adds $235 billion to the deficit. But that, again, cuts off arbitrarily in 2019. Beyond that date, the bill adds enormously to the deficit, about $1.5 trillion in the second 10 years. In fact, if the health-reform bill were treated like other entitlements, such as Social Security and Medicare, which are required to have a 75-year actuarial forecast, its unfunded liabilities would exceed $9.2 trillion.
Of course, the Senate Finance Bill is supposed to be deficit-neutral. But that claim relies on other forms of budgetary flimflam.
For example, the Senate bill relies on Medicare "savings" that Congress keeps refusing to make. Specifically, Medicare has long been ordered to cut 21 percent from what it pays health-care providers -- yet, each year since 2003, for reasons both good and bad, Congress has voted to defer the cuts.
Does anyone else really think that Congress is simply going to slash payments to doctors and hospitals by 21 percent across the board?
Of course, President Obama has long said we can cut Medicare by $500 billion simply by eliminating fraud, waste and abuse. That would be the same "fraud, waste and abuse" that the government has been cutting since Ronald Reagan first used the term.
The truth is that health-care reform is going to cost us a lot. And we're going to pay for it in higher taxes and more debt.
No wonder they don't want us to know.
"Medicare Part D 'Reforms' Will Harm Seniors An ObamaCare
change will cost taxpayers a bundle and lead to poorer drug coverage," Tom
Scully, The Wall Street Journal, December 7, 2009 ---
http://online.wsj.com/article/SB10001424052748704107104574569930258127214.html#mod=djemEditorialPage
There is a little-noticed provision buried deep in both the House and Senate health-care reform bills that is intended to save billions of dollars—but instead will hurt millions of seniors, impose new costs on taxpayers, and charge employers millions in new taxes.
As part of the Medicare Modernization Act in 2003, Congress created a new drug benefit—called Medicare Part D—for retirees at a cost of about $1,900 per recipient per year. Many private employers already provided drug coverage for their retirees, and the administration and Congress did not want to tempt employers into dropping their coverage. Actuaries calculated that if the government provided a subsidy of at least $800, employers would not stop covering retirees.
The legislation created a $600 tax-free benefit (the equivalent of $800 cash for employers), and it worked. Employers continued to cover about seven million retirees who might have otherwise been dumped into Medicare Part D.
It was a good arrangement for all involved. An $800 subsidy is cheaper than the $1,900 cost of providing drug coverage. And millions of seniors got to keep a drug benefit they were comfortable with and that in many cases was better than the benefit offered by the government.
But now that subsidy is coming in to be clipped. This fall congressional staff, looking for a new revenue source to pay for health reform, proposed eliminating the tax deductibility of the subsidy to employers. The supposed savings were estimated by congressional staff to be as much as $5 billion over the next decade.
It sounds smart—except that nobody asked how many employers will drop retiree drug coverage. Clearly, many will. The result is that, instead of saving money, the proposed revenue raiser will force Medicare Part D costs to skyrocket as employers drop retirees into the program.
The careful calculation that was made in 2003 to minimize federal spending and maximize private coverage will go out the window if this provision becomes law. Any short-term cost savings that Congress gets by changing the tax provision will be overwhelmed by higher costs in the long run.
Some members in the House want to mitigate the cost of this provision by mandating that employers maintain existing levels of retiree coverage despite the reduced subsidy. But it's not that simple. A mandate would increase costs on businesses, which in turn would make it harder for those businesses to hire new employees. The mandate would effectively be a tax on employers that provide retiree benefits; this in turn will simply induce some unknown number of employers to terminate their retiree drug programs before the mandate kicks in.
In short, if the changes that are proposed for employer subsidies in the current Medicare Part D program are enacted, everyone will lose. Unions will lose as employers seek ways to drop retiree drug coverage. Seniors will lose as employers drop them into Medicare Part D. Medicare and taxpayers will lose as they face higher costs. And employers will lose as they find it harder to provide benefits.
To make matters worse, accounting rules for post-retirement benefits will require companies that keep their retiree benefits to record the entire accrued present value of the new tax the day the provision is signed into law. This would cause many employers to immediately post billions in losses, which could significantly impact our financial markets.
There are many reasons to pass health-care reform. There is no reason to hurt seniors, employers and taxpayers in the process. Businesses are struggling, and the Medicare trust funds have plenty of problems as it is. It makes no sense to make these problems worse.
Mr. Scully was the administrator of the Centers for Medicare and Medicaid Services from 2001-04 and was one of the designers of the Medicare Part D benefit.
'Liberals Seek Health Care Access for Illegals: A
group of House Democrats say it's unfair to bar illegal immigrants from
paying their own way in a government-sponsored exchange," The Washington
Times, September 27, 2009 ---
http://www.foxnews.com/politics/2009/09/27/liberals-seek-health-care-access-illegals/
Fearful that they're losing ground on immigration and health care, a group of House Democrats is pushing back and arguing that any health care bill should extend to all legal immigrants and allow illegal immigrants some access, The Washington Times reported on Monday.
The Democrats, trying to stiffen their party's spines on the contentious issue, say it's unfair to bar illegal immigrants from paying their own way in a government-sponsored exchange. Legal immigrants, they say, regardless of how long they've been in the United States, should be able to get government-subsidized health care if they meet the other eligibility requirements.
"Legal permanent residents should be able to purchase their plans, and they should also be eligible for subsidies if they need it. Undocumented, if they can afford it, should be able to buy their own private plans. It keeps them out of the emergency room," said Rep. Michael M. Honda, California Democrat and chairman of the Congressional Asian Pacific American Caucus.
Honda was joined by more than 20 of his colleagues in two letters laying out the demands.
Coverage for immigrants is one of the thorniest issues in the health care debate, and one many Democratic leaders would like to avoid. But immigrant rights groups and the Democrats who sent the letters say they have to take a stand now.
Jensen Comment
The key absurdity here is the statement "pay their own way." If a foreigner
in need of a $50,000 eye implant surgeries sneak into the U.S. for the main
purpose of paying $100 in premiums for each $50,000 surgery and then return
to their home countries, these aliens have hardly "paid their own way."
They've taken on illegal alien status mainly for getting expensive health
care on the cheap.
"What disturbs Americans of all ideological persuasions is the fear that almost everything, not just government, is fixed or manipulated by some powerful hidden hand," Frank Rich wrote in Sunday's New York Times.
That manipulation should disturb us. But contrary to Rich, it is not the work of "corporatists" who have sprung up to attack progressive reforms proposed by Obama and the Democratic majority. Manipulation is what we got many years ago when we traded a more or less free market for the "progressive" interventionist state. When government is big, the well-connected always have an advantage over the rest of us in influencing public policy.
Observe: Although President Obama and big-government activists demonize health-insurance companies, the companies "are still mostly on board with the president's effort to overhaul the U.S. health-care system," the Wall Street Journal reports; and ...
Although the activists criticize Big Pharma, "The drug industry has already contributed millions of dollars to advertising campaigns for the health care overhaul through the advocacy groups like Healthy Economies Now and Families USA. It has spent about $1 million on similar advertisements under its own name," the Times reports.
Big Pharma and Big Insurance want Obama-style health-care reform?
It's not so hard to understand. "The drug makers stand to gain millions of new customers," the Times said.
And from the Journal: "If health legislation succeeds, the [insurance] industry would likely get a fresh batch of new customers. In particular, many young and healthy people who currently forgo coverage would be forced to sign up." No wonder insurers are willing to stop "discriminating" against sick people. (Forget that the essence of insurance is discrimination according to risk.)
Not that Big Pharma and Big Insurance like every detail of the Democratic plan. Drug companies don't want Medicare negotiating drug prices—for good reason. If it forces drug prices down, research and development will be discouraged. (Depending whom you believe, Obama may or may not have agreed with the drug companies on this point.)
As for the insurance companies, they worry—legitimately—that a government insurance company—the so-called public option"—would drive them out of business. This isn't alarmism. It's economics. The public option would have no bottom line to worry about and therefore could engage in "predatory pricing" against the private insurers.
But despite these differences, the biggest companies in these two industries are on board with "reform."
It illustrates economist Steven Horwitz's First Law of Political Economy: "No one hates capitalism more than capitalists." In this case, big business wants to shape—and profit from—what inevitably will be an interventionist health-care reform. Can you think of the last time a major business supported a truly free market in anything?
In light of all this, it's funny to watch Democrats and their activist allies panic over the protests at congressional town meetings around the country. Tools of the corporate interests! they cry. But anyone opposing "socialized medicine" at the meeting can't be a mouthpiece for big business because, as we've seen, big business supports government control. Conservative groups may be encouraging people to vent their anger at congressmen who pass burdensome legislation without even bothering to read it, but that's no reason to insult the protestors as pawns. What's wrong with organizations helping like-minded people to voice their opinions? Why do Democrats, such as Speaker Nancy Pelosi, dismiss citizen participation as "AstroTurf"—not real grassroots—only when citizens oppose the kind of big government they favor?
They weren't so dismissive when George W. Bush was president and people protested—appropriately—his accumulation of executive powers.
"When handfuls of Code Pink ladies disrupted congressional hearings or speeches by Bush administration officials," Glenn Reynolds writes, "it was taken as evidence that the administration's policies were unpopular, and that the thinking parts of the populace were rising up in true democratic fashion. ... But when it happens to Democrats, it's something different: A threat to democracy, a sign of incipient fascism ... House Speaker Nancy Pelosi calls the 'Tea Party' protesters Nazis. ... "
So when lefties do it, it's called "community organizing."
When conservatives and libertarians do it, it's "AstroTurf."
Give me a break.
John Stossel is co-anchor of ABC News' 20/20 and the author of Myth, Lies, and Downright Stupidity. He has a new blog at http://blogs.abcnews.com/johnstossel.Jensen Comment
So who's against Obamacare? I think of the little people who are tired of being told that it's raining when hypocrites in Congress are peeing on our shoes. I think it's the little people who know full well that Obamacare will be neither less expensive nor less wasteful of consumer/taxpayer dollars. I think of the little people who are tired of spending deficits that are paving the road to Hell. I think it's the little people who fear the hoards of foreigners sneaking across our borders for free health care. I think it's the little people who wish that genuine photo identification should be required for voting and collection of benefits.John Stossel's right. The great divide between big government and big business is a myth. We're puppets on a string being exploited by the people in glass towers who blow up our economic bubbles and pop our balloons. Obamacare is just another way of justifying lousy health care from overworked and underpaid healthcare providers. Obamacare's another way to beat down small business and competition in America.
The Lie: How to lie with statistics
These Democrats are all over the map on where
precisely Americans place in the life-expectancy rankings. We're 24th,
according to Vice President Joe Biden and Sen. Barbara Boxer; 42nd,
according to Pennsylvania Gov. Ed Rendell; 35th, according to Washington
Post columnist Eugene Robinson; and 47th, according to Rep. Dennis Kucinich.
So the U.S. may have less of a "life expectancy" problem than a "Democratic
math competency" problem. (Coulter mentions other widely varying
medical statistics reported in the media)
Ann Coulter, "Would Your Company
Like to Sponsor the Next Installment of Liberal Lies on National Health
Care?" , Townhall, October 7, 2009 ---
Click Here
The Lie: That the
ten-year cost of the current H.R. 676/3200 is $1.5 trillion as estimated by the
non-partisan Congressional Budget Office. Even without the anticipated
massive fraud that's not factored into these estimates, there is an
accounting problem. Amidst the often emotional passions for passing
universal health (and social services) legislation, the accounting for it
will frontload revenues and defer costs
such that when President Obama finally admits his Obamacare will add to the
Federal deficit, the amounts to be added will be grossly underestimated.
This deception in accounting is what has Social
Security and Medicare entitlements in such deep, deep trouble as the cost
back loading is finally catching up with revenue shortfalls. President Roosevelt in 1935 promised a Trust Fund in which social security
revenues collected in early years would set aside for recipients in their
retirement years. Congress over the years decimated the Trust Fund for
social causes that, although very worthy, were not intended to be funded by
the Social Security Trust Fund.
"The Deficit and Health Care: Falls the Shadow,"
The Economist,
July 25-31, 2009, pp. 25-26 --- "
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=14085725
Most of the red ink results from the enormous hole the recession has punched in GDP and consequently in tax revenue, the cost of bailing out the financial system, and interest on the mounting debt. Only a small part of it comes from America’s big and growing entitlements, Medicare and Medicaid (health care for the elderly and poor, respectively) and Social Security (public pensions), whose worst fiscal problems lie beyond 2019. “Unless we demonstrate a strong commitment to fiscal sustainability,” Mr Bernanke remarked, “we risk having neither financial stability nor durable economic growth.”
Mr Obama knows all this: he promises repeatedly not to leave the problem to his successors. Yet he has done little to back up the rhetoric. His willingness to veto more F-22 spending is admirable, but the $1.75 billion at stake is immaterial. He will release an updated budget outlook in mid-August, but it is unlikely to contain any notable new initiatives. There is still no sign of a path towards fiscal tightening over the medium term as the economy recovers. Quite the opposite; Mr Obama has not wavered from his position that taxes on those earning less than $250,000 will not go up. In fact, they’ve been temporarily cut. He did say in an interview this week that he might set up a commission that could look at ways of reducing entitlements spending once the recession is over.
The president has promised that health-care reform will be deficit-neutral, but this is a slippery concept. A plan may be deficit-neutral over ten years, but add significantly to it thereafter by front-loading revenue and backloading costs. The CBO figures show that this is a big problem with the House plan, whose shortfall will balloon beyond the ten-year horizon.
Jim Cooper, one of the Democrats’ most fiscally hawkish congressmen, fears that if push comes to shove, his party will not long remain stalwart on deficit-neutrality. “Health care has been such an impossible dream for so many decades that a lot of today’s Congress would overlook the deficit problems. I hear it all the time from colleagues in leadership: ‘We always find enough money for defence. We’ll find enough for health care’.” Mr Galston, though, thinks that the public’s worries about the deficit will reinforce Mr Obama’s commitment that health reform should not boost the deficit over the medium or long term. This could mean that he ends up with a plan that covers fewer of the uninsured than many had hoped.
None of this deals with the still-gaping hole in the budget. Indeed, a truly deficit-neutral health-care plan may make it tougher to fill that hole: if the rich are already being taxed more to pay for health reform, that makes it harder to use them to address the wider deficit. There are other ways to reduce the deficit, including getting rid of the mortgage-interest deduction, raising the age of eligibility for Medicare and Social Security, altering the inflation-indexation formula, or proposing some sort of tax reform that raises additional revenue. These ideas need not be implemented immediately; that would contradict the purposes of stimulus. But the knowledge that they are in the works would help reassure the public and investors that the federal debt—forecast on current policies to explode from a net $5.8 trillion last year to a net $11.7 trillion in 2019—may be tamed.
The Lie: Business firms
will be able to carry on with their present health insurance providers. The
fact of the matter is that the present house bill explicitly puts death
conditions on Erisa-enabled self insurance plans used by millions of business firms.
The cost of switching to big insurance company coverage will be massive if
they are forced to pay for all the medical and social services mandated in
the current version of Obamacare legislation.
The Lie: The insurance industry abides by state
laws by not rescinding insurance coverage even when there is no fraud on the
part of the patient in information provided to the insurance company.
This is actually a blatant lie that Bill Moyers documented quite well ---
Video:
http://www.pbs.org/moyers/journal/07312009/watch.html
The Lie: Obama's relationship with tort lawyers
is the real driver of Obamacare costs
According to a 2007
study
by McKinsey&Company, physician
compensation bumps up health care spending in America by $58 billion
annually,on average, because U.S. doctors make twice as much as their OECD
peers. And even the poorest in
specializations
like radiology and surgery
routinely rake in around $400,000 annually. Doctors—and many
Republicans—constantly carp about the costs of "defensive medicine" because
it forces providers to perform unnecessary procedures and tests to insulate
them from potential lawsuits. But excessive physician salaries contribute
nearly three times more to wasteful health care spending than the $20
billion or so that defensive medicine does. "While the U.S. malpractice
system is extraordinary," the study notes, "it is only a small contributor
to the higher cost of health care in the United States." Meanwhile, other
studies have found that doctors' salaries contribute more to soaring medical
costs than the
$40 billion or so
that the uninsured cost in uncompensated care--the president's bete noir.
Shikha Dalmia, "The
Evil-Mongering of the American Medical Association: Obama's cozy
relationship with Big Medicine will hurt patients," Reason Magazine,
August 27, 2009 ---
http://www.reason.com/news/show/135682.html
The Lie: AARP endorsed
H.R. 3200 (Obama's Press Secretary belated admitted to the lie)
"Gibbs: Obama misspoke about AARP,"
Fox News, August 12, 2009 ---
Click Here
AARP = Armed and Really Pissed
"McCain
Urges Seniors to Abandon AARP," Fox News, December 3, 2009
---
http://www.foxnews.com/politics/2009/12/03/mccain-aarp-betrayed-senior-citizens/
The Lie: AARP
perpetuates a lie that government run insurance, like Medicare, is a good
deal for patients and taxpayers.
To put the reader at ease the (AARP) article says
that government run health care can’t be so bad since, after all, Medicare
is government run health care and everybody loves it. The article omits the
fact that Medicare is $38 trillion in the red. Yes, trillion with a “tr”)
and by Obama’s own admission is overrun by $500 billion of waste, fraud and
abuse. Obama says Medicare and Medicaid are responsible for our deficits. So
what does he do? He proposes the vast expansion of the Medicare and Medicaid
programs to further balloon our deficits and our health care inflation.
Herb Dennenberg, "AARP: The
Hype, The Lies, The Facts," The Bulletin (Philadelphia's oldest
newspaper), September 21, 2009 ---
Click Here
- The AARP Bulletin (September 2009) has a front-page headline on Obamacare: “The Hype, the Lies, the Facts: How to Tune Out the Fear-mongering and Misinformation and Make Sense of the Health Care Reform.” I’d add only one amendment to that AARP headline: “If you want to avoid the hype, the lies, and get the facts on Obamacare, don’t read the biased one-sided propaganda that AARP publishes in its Bulletin.”
The article is supposed to answer the question of AARP readers, “How do I know what to believe?” Anyone who reads the article critically or studies AARP history on this matter, knows they are in the tank for Obamacare, and in the guise of fair and balanced journalism they are presenting the Obamacare party line.
The article starts out by quoting Kathleen Hall Jamieson, director of he Annenberg Public Policy Center at the University of Pennsylvania, who runs FactCheck.org, a website that examines specious claims from all sides of the political spectrum. She says that health care reform has “serious consequences to people’s lives and it would be useful if as many people as possible actually understood what the proposals are about.” But, then she identifies the rise of the Internet and the decline of the mainstream press as a prime source of information which have put that prospect at risk.
Poor, pathetic Ms. Jamieson is saying, in effect, that the public was only getting the truth when they were relying on the biased, fraudulent, dishonest, and ultra-liberal mainstream media. That poor, pathetic “expert” who is “fact checking for the public” feels the truth is threatened now that multiple points of view, some of which are the opposing point of view, are presented by the Internet and now that the public is slowly beginning to realize that you can’t trust the mainstream media. (I would agree with Bernard Goldberg that the mainstream media is no longer mainstream. Until a good alternative description emerges, I’ll call it the biased, fraudulent, dishonest, and ultra liberal mainstream media.)
So, the AARP article is doing its readers a great public service by demonstrating that you can’t trust the AARP, FactCheck.org, Ms. Jamieson, and the Annenberg Public Policy Center at the University of Pennsylvania if you want fair and balanced information about such matters as Obama and Obamacare.
The article goes on to perpetuate every fraud and deceit that people like House Speaker Nancy Pelosi and the leadership of the Democratic Party have put forth to stigmatize and demonize dissent. For example, the article asks, “Could rumor-mongering affect the outcome? Recent violent interruptions at lawmakers’ town hall meetings suggest it might.” So, the AARP, which is supposed to represent senior citizens, is joining the chorus that sees those who oppose Obamacare and who exercise their First Amendment Rights at Tea Parties as mobsters, prone to violence, Nazis, Brown Shirts and all the rest. They are proving that AARP, the Democratic leadership, and the mainstream media believe in the First Amendment only for those in agreement with its radical, far-left policies.
The AARP and its editors and officers clearly have no conscience and no sense, as they would not carry forward such blatant propagandizing for Obamacare and hurl insults at their own membership. If they are in the business of informing their diverse membership, they should provide both sides of an issue, not just give the appearance of doing so while residing in the pocket of the pro-Obamacare forces.
No wonder AARP been losing membership by the tens of thousands. Sometime ago, it was estimated at 60,000 members lost and that figure is probably much higher by now. Their stance on this did not surprise me. I have already reported in one column how they, along with AMA and others, have sold out to Obama and Company to support his vision of health care reform. I’ve also reported how the AARP is not in the business of representing the interests of senior citizens, but is, in fact, a phony membership organization in the business of selling its members insurance, credit cards, mutual funds, and other services. In fact, facing the first page of the propaganda piece in question is a full-page ad for life insurance sold by AARP. The same issue carries ads for AARP mobile home insurance, AARP Medicare insurance supplements, and AARP auto insurance.
I want to be fair to AARP and its article on health care reform. It did have four words of truth in it. The inside headline reads, “The Assault on Truth.” Of course, that was intended to characterize the critics of Obamacare. However, it perfectly characterizes the article in question and AARP. Let me give you a few examples involving the questions asked and answered by the article:
Will The Government Take Over Health Care So We End Up With Socialized Medicine?
The answer is the standard party line: “No. Neither the president nor the congressional committees have suggested anything remotely resembling a government takeover of health care.”
This answer is based on the fact that Mr. Obama says he doesn’t want the single-payer, government-takeover system that is used in Canada. The article fails to state that Obama has long been on record as favoring the discredited single-payer system and has even said we will have to get there gradually. But the article doesn’t explain that you can have a government takeover without a single-payer system.
When you look at what some of these proposals do, you will see they involve the federal government deciding what kind of policies will be written, what kind of rates will be charged, what kind of government insurance companies will be established, what kind of end-of-life counseling will be provided for senior citizens. What’s more, when you start setting up dozens of new agencies and commissions to control the health care system and to decide on what is the “best” medical practice, you don’t need single-payer to bring about a government takeover. When you grant insurance to 47 million “uninsured,” you assure a shortage of health care providers that sets the stage for rationing. As Dick Morris pointed out, contrary to the view of Obama press secretary Robert Gibbs, “You don’t have to be a medical school graduate to figure that out. That’s an elementary school problem.”
If that’s not quite enough to convince you, when you populate the White House with radicals, communists, socialists and advocates of such things as compulsory abortion, compulsory sterilization, and providing medical care based on quality of life years remaining, meaning seniors will be locked out, you are setting the stage for something worse than single-payer.
The article also tries to refute the fact of government takeover by saying “socialized” medicine is also off the table. The article says socialized medicine involves government ownership of hospitals and employment of doctors, as in the United Kingdom. It says that’s not contemplated. But, again, when government and federal bureaucrats control virtually every aspect of the health care system, you don’t need formal ownership. Comprehensive control is the equivalent of government ownership, of socialized medicine, and of the discredited systems of Canada and the United Kingdom.
To put the reader at ease the article says that government run health care can’t be so bad since, after all, Medicare is government run health care and everybody loves it. The article omits the fact that Medicare is $38 trillion in the red. Yes, trillion with a “tr”) and by Obama’s own admission is overrun by $500 billion of waste, fraud and abuse. Obama says Medicare and Medicaid are responsible for our deficits. So what does he do? He proposes the vast expansion of the Medicare and Medicaid programs to further balloon our deficits and our health care inflation.
Will Private Insurance Be Outlawed Or Wither On The Vine?
Needless to say, the AARP article answers, “No. Obama and the congressional committees say their objective is to build on the current system – keeping employer-sponsored group insurance and giving more consumer protections to people who are employed by small businesses or buy insurance as individuals.”
The AARP article argues that those with employer-sponsored insurance are ineligible for the public plan. But the article forgets that many employers would stop giving coverage, as the penalty for not providing it is smaller than the cost of providing it. Even the New York Times, a lap dog for Obama, in an editorial dedicated to selling Obamacare, admitted that the public option would likely be less costly than many alternatives.
The article also ignores the fact that the public option, a government insurer, would be subject to rules made by the government, so the umpire of the marketplace would be on the side of the government insurer. That is not likely to produce a level playing field for private insurers.
Finally, the article ignores the ways proposed in Republican-sponsored bills that would encourage competition. For example, opening up a nationwide market for health insurance would be an obvious and easy way to increase competition. Now, the consumer is limited to companies admitted to do business in his state. The insurance exchanges, proposed in many bills, would also make sense, as they would ratchet up competition.
Incidentally, it is important to remember that with or without a public option or some variation of it in the form of co-ops, Obamacare still involves a government takeover. So, don’t think it is a big deal to delete the public option. The bill spells catastrophe with or without that provision.
All the other questions asked in the article also provide the wrong answers. For example, “Will Medicare be eliminated or gutted to pay for reforms?” The article answers, “No. It’s inconceivable that any lawmaker would commit political suicide by proposing to get rid of Medicare.” But the AARP article forgets that Obama has said that he would cut $500 billion in waste, fraud, abuse, and inefficiency out of Medicare. We’ve heard that line since the days of President Nixon, and we’re still waiting for that waste, fraud, abuse, and inefficiency to be eliminated. If Obama knows how to do it, what is he waiting for? Why hasn’t he proceeded to cut that waste, fraud, abuse and inefficiency out of the system to prove he knows what he’s doing and can give more than campaign speeches? He’s been in office about seven months, and yet he’s done nothing to solve this problem which he says is bankrupting the country and is responsible for the deficits. When you cut $500 billion out of Medicare and grant coverage to 47 million previously uninsured, you’re going to have to ration medical care, and that means rationing medical care for senior citizens.
The biggest barrels of red ink have been generated by Medicare and Medicaid to the tune of tens of trillions of dollars. So what does Obama do? He proposes, in effect, to vastly expand Medicare and Medicaid and to compound our problems.
The president and chief executive officer of AARP, in an editorial accompanying the article in question, endorse the lies, hype, and exaggeration in the article by writing that there has been too much fear-mongering and misinformation involved in the debate. They continue to give the false impression that they are above the fray, but then echo the party line coming from Obama and the Democratic leadership in Congress. AARP and its leadership have continued to demonstrate they are the ones getting in the way of a fair, balanced, and honest debate on heath care reform.
Meanwhile, we have the case of the Association for the Advancement of Retired Persons (AARP), and its fanciful Medicare claims. The self-styled seniors lobby is using all its money and influence to cheer on ObamaCare, even though polls show that most retired persons oppose it. AARP has spent millions of dollars on its TV ad campaign and bulletins and newsletters to its members, including eight million direct-mail letters over Labor Day. The AARP Web site claims that it is a "myth" that "health care reform will hurt Medicare," while it is a "fact" that "none of the health care reform proposals being considered by Congress will cut Medicare benefits or increase your out-of-pocket costs."
"Medicare and Gag Orders Humana gets whacked for telling the truth, AARP gets a pass for spreading falsehoods," The Wall Street Journal, September 24, 2009 --- Click Here
The Lie: "Preventative medicine as envisioned in Obamacare will make health care significantly cheaper.
So last week, CBO Director Doug Elmndorf wrote
a
letter to Congressmen explaining what cost savings they can expect from
preventive medical services: The evidence
suggests that, for most preventive services, expanded utilization leads to
higher, not lower, medical spending overall. It makes sense if you think
about what are called the “false positives”.
John Stossel, "Expanding
Preventive Care May Add to Costs, CBO Says," ABC News, August 13,
2009 ---
http://blogs.abcnews.com/johnstossel/2009/08/prevention-saves-money.html
See The Washington Post account ---
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/07/AR2009080703822.html
The Lie: H.R. 3200
proposed "Death Panels" to decide when decide when to refuse health
treatments..
False charges about Obamacare don't
help. Like the end-of-life tempest. Former Alaska Gov. Sarah Palin
popularized the term "death panels." She said: "The America I know and love
is not one in which my parents or my baby with Down syndrome will have to
stand in front of Obama's 'death panel' so his bureaucrats can decide, based
on a subjective judgment of their 'level of productivity in society,'
whether they are worthy
of health care". . .
. The House bill does deal with the issue. (The
Senate Finance Committee bill did until the provision was removed the other
day.) Section 1233 amends the Medicare law to add "advance care planning
consultation" (counseling about living wills and the like) to the list of
reimbursable
services. The provision defines "consultation,"
but nowhere does it require Medicare beneficiaries to participate or
authorize death panels. (Grassley voted for a similar provision in 2003 when
his Republican-controlled Congress added
drug coverage
to Medicare.)
John Stossel,
Townhall,
August 19, 2009 ---
http://townhall.com/columnists/JohnStossel/2009/08/19/obamacares_inevitable_logic
Jensen Comment
I agree that the "death panels" arguments were straw men. But then I do see
where the Obama was relying heavily on the cost savings attributable to
five-year health consultation plans with the aged. One has to wonder what
savings were lost with the Senate decided to drop the five-year
consultations? This seems prima facia to imply that quality of
care was intended to be reduced for the aged, including such things as hip
replacements and dialysis.
The chronically ill and those toward the end of
their lives are accounting for potentially 80 percent of the total health
care bill out here.
President Barach Obama as quoted from a David Leonhardt interview
reported in The New York Times:
The Lie: Surgeons bill Medicare $50,000 for a foot amputation.
American Academy of Orthopaedic Surgeons Responds to False Allegations of
President Obama
"Orthopedic Surgeons respond to Obama on amputation comment," by Thomas
Lifson, The American Thinker, August 16, 2009 ---
Click Here
The American Academy of Orthopaedic Surgeons (AAOS) is profoundly disappointed with President Obama's recent comments regarding the value of surgery and blurring the realities of physician reimbursements. The AAOS represents over 17,000 US board-certified orthopaedic surgeons who provide essential services to patients every day. As President Obama has said, "Where we do disagree, let's disagree over things that are real, not these wild misrepresentations that bear no resemblance to anything that's actually been proposed." In that spirit, we would like to bring some clarity to his comments and underscore the value that orthopaedic surgeons bring to Americans every day of every year.
First, surgeons are neither reimbursed by Medicare, nor any provider for that matter, for foot amputations at rates anywhere close to $50,000, $40,000 or even $30,000. Medicare reimbursements to physicians for foot amputations range from approximately $700 to $1200 which includes the follow up care the surgeon provides to the patient up to 90 days after the operation. Moreover, orthopaedic surgeons are actively involved in the preventive care he mentions. We are a specialty that focuses on limb preservation whenever possible and when it is in the best interests of the patient. Our approach to amputation follows the same careful, thoughtful approach, always with the patients best interest as the primary focus.
Continued in article
The Lie: The health insurance mandate is not a tax.
"Yes, health-insurance mandate is a tax." by Donald Lambro, Townhall, September 23, 2009 ---
http://townhall.com/columnists/DonaldLambro/2009/09/23/yes,_health-insurance_mandate_is_a_taxPresident Obama absolutely refuses to acknowledge there is a huge middle-class tax in the Senate Finance Committee's healthcare bill. The president flatly denies the legislation that the White House supports contains a stiff penalty tax that would hit uninsured middle-income people the hardest -- the very folks he promised would never see their taxes rise under his presidency.
Obama has repeatedly stated that promise throughout the healthcare debate, despite evidence to the contrary, and no one in the national news media has called him on it. That is, until George Stephanopoulos raised the issue with him Sunday on ABC's "This Week."
First, Stephanopoulos reminded the president that in his campaign for the presidency he was "against the individual mandate" that all Americans be required to buy health insurance.
"Yes," Obama replied.
Then Stephanopoulos hit him with the question no one apparently had asked him before. Pointing out that the Finance Committee plan contained just such a mandate whereby "the government is forcing people to spend money, fining you if you don't," he asked, "How is that not a tax?"
Obama replied, "No, but ... but, George, you ... can't just make up that language and decide that that's called a tax increase."
"You reject that it's a tax increase?" Stephanopoulos asked. Obama said, "I absolutely reject that notion."
But if Obama looked on page 29 of Senate Finance Committee Chairman Max Baucus' legislation -- the bill he hopes will enact his healthcare plans into law -- he would have read this line: "The consequence for not maintaining (health) insurance would be an excise tax."
What part of those two words doesn't he understand? The government imposes a raft of excise taxes on all of us: the tires for our cars, alcoholic beverages, jewelry and many other purchases. Now it wants to add health insurance to the tax-revenue list as a penalty for those who do not purchase a product the feds insist you must buy or else face fines up to $950 for an individual and up to $3,800 a year for a family.
Continued in article
The Lie: A huge portion
of Obamacare will be financed by further limiting what hospitals receive
from Medicare.
This will be a lie because it just will not work. I think
this is a wrong because it creates age discrimination that should not
be allowed. If government medical insurance pays hospitals more for younger
patients than older patients it will be age discrimination. If all
government medical insurance payments to hospitals is so tight-fisted that
the hospitals lose money on every government-insured patient (which is why
the Massachusetts hospitals are suing the Mass. universal health care plan),
then hospitals will have to rely more and more on private insurance plans to
keep those hospitals in business. This, in turn, will drive up the cost of
private insurance to a point where many businesses, especially small
businesses, will shift almost entirely to part-time workers.
Democrats are now blaming the defection of elderly voters from Obama care on the phony threats of euthanasia and rationing of treatment of older people. But this is not the underlying cause of the defection. The underlying cause is the genuine threat that government health insurance will pay less for hospital and doctor care that what is being paid for younger patients. President Obama needs to assure the elderly that hospitals and doctors will receive just as much from older patients as younger patients. Why don't Barack Obama, Nancy Pelosi, Chris Dodd, Keith Olbermann and Chris Matthews ever assure us that there will be no age discrimination in claims coverage?
Michael Moore lets the Obamacare cat out of the
bait and switch bag
Free Republic, August 11, 2009 ---
http://www.freerepublic.com/focus/f-bloggers/2313338/posts
In politics, knowing what your opposition thinks and says about you and your team is critical. But listening to what they’re saying about their own side can sometimes be even more telling.
In the latest issue of Rolling Stone, Michael Moore insists that Barack Obama’s ambitions are much farther left than he lets on. Thus, the President has been deliberately lying to us about everything from healthcare reform to the war on terror. But contrary to the Bush years, when perceived presidential deceit evoked liberal rage and a film to go with it, Moore adoringly approves of what he now sees as a necessary “rope-a-dope strategy” to advance his side’s cause.
The interview, part of a larger round table discussion also including Paul Krugman and David Gergen, asks the “three leading political observers” to analyze and discuss the first six months of the Obama presidency. The most startling perspective Moore provides is in regard to the current health care debate:
I take all of the things that make me nervous about the decisions that Obama has made, and I look and them through that lens – that it’s some kind of master plan. It’s like his continued support of a government-run option for health care. If a true public option is enacted – and Obama knows this – it will eventually bring about a single-payer system, because the profit-making insurance companies won’t be able to compete with a government plan and make the profits they want to make. At some point most of them will probably have to bow out of the business.
Michael Moore"Video: Obama Explains How His Health Care Plan Will ‘Eliminate’ Private Health Insurance," Breitbart, August 3, 2009 ---
http://www.breitbart.tv/uncovered-video-obama-explains-how-his-health-care-plan-will-eliminate-private-insurance/
The Lie: Every Obamacare Critic is a Racist
Since my post below about Obama supporters who tar all
of the President’s critics as racists, Fidel Castro has weighed in. Reuters
reports that Castro says Obama is trying to make positive changes but is being
fought at every turn by right-wingers who hate him because he is black: “(T)he
extreme right hates him for being African-American… I don't have the slightest
doubt that the racist right will do everything possible to wear him down,
blocking his program to get him out of the game one way or another, at the least
political cost," (Castro) said. More than a thousand...
John Stossel, ABC News,
August 27, 2009 ---
http://blogs.abcnews.com/johnstossel/2009/08/every-critic-a-racist.html
The Lie: The House Bill
presently states that business firms can opt out of providing health
insurance coverage for employees by paying an 8% of
gross payroll good-deal penalty to the government.
This is bait and switch fraud at its worst!
By the time the government insurance option becomes viable this will
increase to X% at whatever it takes to keep most working full-time employees
out of the government health insurance option. The reason partly is due to
the fact that it will take decades before the government option can process
the claims for between virtually the entire population of the United States
plus all the illegal aliens who will sneak into the country for health
services. The reason also is that President Obama promised to keep private
health insurance viable such that he must eventually make it virtually
impossible for employers to opt out of private medical insurance plans at
lower costs.
Two weeks ago I warned about the "bait and switch fraud" in the H.R. 3200 good news bait of an 8% of gross payroll penalty for employers who do not provide health insurance coverage for employees. In a surprising move, Congress is already switching the bait to 10% even before H.R. 3200 is passed. After its passage I look for the bait to be switched to an even higher percentage, maybe 50%, such that there is no way for employers to avoid an absolutely massive expense for health care coverage under the new rules of virtually no self insurance (policies will have to be purchased from large private insurance companies). virtually all pre-existing health issues will have to be covered instantly for each new person hired, part-time workers and illegal aliens will have to receive health insurance, and an array of social services will have to be covered including marriage counseling and family counseling.
The projected cost of employer-based health coverage is so huge that even a 10% penalty would still be cheaper. But employers should count on the bait being switched once again after Obamacare is legislated. The government medical insurance plan just will not be able to insure 200 million to 300 million people instantly if all employers opt out of health coverage by paying the X% penalty. Irrespective of the bait, the switch is inevitable!
The only reason I can see for switching the bait before H.R. 3200 is passed is to deceivingly make it look more deficit neutral and once again deceive the public and dimwitted members of Congress.
Even many Democrats are revolting against Speaker Nancy
Pelosi’s 5.4% income surtax to finance ObamaCare, but another tax in her House
bill isn’t getting enough attention. To wit, the up to 10-percentage point
payroll tax increase on workers and businesses that don’t provide health
insurance. This should put to rest the illusion that no one making more than
$250,000 in income will pay higher taxes.
"The Pelosi Jobs Tax: Workers will pay for the new health-care payroll
levy," The Wall Street Journal, July 30, 2009 ---
http://online.wsj.com/article/SB10001424052970203609204574316183688201934.html#mod=djemEditorialPage
Because of the present health care system in the United
States is unjust and inefficient, I am in favor of a National Health Plan
modeled after the Canadian National Health Plan where Canadians are taxed
for a huge portion of their health services irrespective of their levels of
income. In Canada, about 40% of taxpayer's tax dollars go
for health services. Any system that does not make users of the system share
heavily in the cost of the services will be unjust, abused, and inefficient.
Also in Canada the National Health Plan greatly restricts the size of
malpractice lawsuit lotteries for lawyers ----
http://www.trinity.edu/rjensen/Health.htm#Canada
USA Today
reported on July 31, 2009, Page 10A, (using OECD data for 2008) that health
care costs in Canada were $3,505 per capita Before any Obamacare legislation
for health care the per capita cost of health care in the United States was
$6,567. In large measure this due to the cost physicians, nurses, ambulance
services, and hospitals must pay for malpractice insurance. Thousands of
gynecologists in the United States dropped the obstetrics part of their
practices because of the enormous price of malpractice insurance. Many
hospitals dropped obstetrics services for the same reason.
Why Medical Malpractice Is Off Limits in Terms of Health Care Reform
The upshot is simple: A few thousand trial lawyers
are blocking reform that would benefit 300 million Americans. This is not
just your normal special-interest politics. It's a scandal—it is as if
international-trade policy was being crafted in order to get fees for
customs agents. Trial lawyers are agents, and their claims are only as valid
as those they represent. They argue, of course, that they are champions of
malpractice victims. As Anthony Tarricone, president of the trial lawyers
association (called the American Association of Justice) put it: "Trial
attorneys see first-hand the effects medical errors have on patients and
their families. We should keep those injured people in mind as the debate
moves forward." But under the current system, 54 cents of the malpractice
dollar goes to lawyers and administrative costs, according to a 2006 study
in the New England Journal of Medicine. And because the legal process is so
expensive, most injured patients without large claims can't even get a
lawyer. "It would be hard to design a more inefficient compensation system,"
says Michelle Mello, a professor of law and public health at Harvard, "or
one which skewed incentives more away from candor and good practices."
Philip K. Howard, "Why Medical
Malpractice Is Off Limits: A few thousand lawyers have a lock on
Democrats, who refuse any legal reform," The Wall Street Journal,
September 29, 2009 ---
http://online.wsj.com/article/SB10001424052970204488304574432853190155972.html?mod=djemEditorialPage
"Dean says Obamacare authors don't want to challenge trial lawyers," by: Mark Tapscott, Washington Examiner, August 26, 2009 --- Click Here
Whatever else he said Wednesday evening at the town hall hosted by Rep. Jim Moran, D-VA, former Democratic National Committee chairman and presidential candidate Howard Dean let something incredibly candid slip out about President Obama's health-care reform bill in Congress.
Asked by an audience member why the legislation does nothing to cap medical malpractice class-action lawsuits against doctors and medical institutions (aka "Tort reform"), Dean responded by saying: “The reason tort reform is not in the [health care] bill is because the people who wrote it did not want to take on the trial lawyers in addition to everybody else they were taking on. And that’s the plain and simple truth,”
Dean is a former physician, so he knows about skyrocketing medical malpractice insurance rates, and the role of the trial lawyers in fueling the "defensive medicine" approach among medical personnel who order too many tests and other sometimes unneeded procedures "just to be sure" and to protect themselves against litigation.
Texas Gov. Rick Perry recently described in an Examiner oped the medical-malpractice caps enacted by the state legislature at his urging that reversed a serious decline in the number of physicians practicing in the Lone Star state and the resulting loss of access to quality medical care available to Texas residents. Mississippi Gov. Haley Barbor also shared some of his successes in this area in a recent Examiner oped.
Credit goes to the American Tort Reform Association's Darren McKinney for catching this momentary outbreak of political honesty by Dean. McKinney has conveniently posted an audio recording of Dean speaking here, so you can listen for yourself. Mckinney has also offered more comment here, helpfully even including a link to the Examiner's recent analysis of the degree to which trial-lawyer political contributions go to Democrats in Congress.
Those contributions are why Dean knows it would be a difficult task indeed for Obama to persuade congressional Democrats to do anything that might offend the trial-lawyers lobby. The Examiner's David Freddoso and Kevin Mooney did the reporting on this link here.
Jensen Comment
Reports are that the Texas cap on punitive damages has been quite successful in restraining outrageous settlements of malpractice lawsuits.The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums Ronen Avraham (University of Texas at Austin, School of Law(, Leemore S. Dafny (Kellogg School of Management, Northwestern University) and NBER Max M. Schanzenbach, (Northwestern University, School of Law)
September 2009 --- Click Here
http://www.kellogg.northwestern.edu/faculty/dafny/personal/Documents/Working%20Papers/ADS_9_09w_ack.pdf
Abstract
We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of healthplans representing over 10 million Americans annually between 1998 and 2006, we find that caps on non-economic damages, collateral source reform, and joint and several liability reform reduce premiums by 1 to 2 percent each. These reductions are concentrated in PPOs rather than HMOs, suggesting that can HMOs can reduce “defensive” healthcare costs even absent tort reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has focused on particular medical conditions.
"The President's Tort Two-Step Special-interests and the health-care status," by Kimberly Strassel, The Wall Street Journal, September 11, 2009 --- Click Here
Tort reform is a policy no-brainer. Experts on left and right agree that defensive medicine—ordering tests and procedures solely to protect against Joe Lawyer—adds enormously to health costs. The estimated dollar benefits of reform range from a conservative $65 billion a year to perhaps $200 billion. In context, Mr. Obama's plan would cost about $100 billion annually. That the president won't embrace even modest change that would do so much, so quickly, to lower costs, has left Americans suspicious of his real ambitions.
It's also a political no-brainer. Americans are on board. Polls routinely show that between 70% and 80% of Americans believe the country suffers from excess litigation. The entire health community is on board. Republicans and swing-state Democrats are on board. State and local governments, which have struggled to clean up their own civil-justice systems, are on board. In a debate defined by flash points, this is a rare area of agreement.
The only folks not on board are a handful of powerful trial lawyers, and a handful of politicians who receive a generous cut of those lawyers' contingency fees. The legal industry was the top contributor to the Democratic Party in the 2008 cycle, stumping up $47 million. The bill is now due, and Democrats are dutifully making a health-care down payment.
During the markup of a bill in the Senate Health Committee, Republicans offered 11 tort amendments that varied in degree from mere pilot projects to measures to ensure more rural obstetricians. On a party line vote, Democrats killed every one. Rhode Island senator and lawyer Sheldon Whitehouse went so far as to speechify on the virtues of his tort friends. He did not, of course, mention the nearly $900,000 they have given him since 2005, including campaign contributions from national tort powerhouses like Baron & Budd and Motley Rice.
Even Senate Finance Chair Max Baucus, of bipartisan bent, has bowed to legal powers. The past two years, Mr. Baucus has teamed up with Wyoming Republican Mike Enzi to offer legislation for modest health-care tort reform in states. That Enzi-Baucus proposal had been part of the bipartisan health-care talks. When Mr. Baucus released his draft health legislation this weekend, he'd stripped out his own legal reforms. The Montanan is already in the doghouse with party liberals, and decided not to further irk leadership's Dick Durbin ($3.6 million in lawyer contributions), the Senate's patron saint of the trial bar.
Over in the House the discussion isn't about tort reform, but about tort opportunities. During the House Ways & Means markup of a health bill, Texas Democrat Lloyd Doggett ($1.5 million from lawyers) introduced language to allow freelance lawyers to sue any outfit (say, McDonald's) that might contribute to Medicare costs. Only after Blue Dogs freaked out did the idea get dropped, though the trial bar has standing orders that Democrats make another run at it in any House-Senate conference.
It says everything that Mr. Obama wouldn't plump for reform as part of legislation. The president knows the Senate would never have passed it in any event. Yet even proposing it was too much for the White House's legal lobby. Mr. Obama is instead directing his secretary of health and human services to move forward on test projects. That would be Kathleen Sebelius, who spent eight years as the head of the Kansas Trial Lawyers Association.
The issue has assumed such importance that even some Democrats acknowledge the harm. With bracing honesty, former DNC chair Howard Dean recently acknowledged his party "did not want to take on the trial lawyers." Former Democratic Sen. Bill Bradley, in a New York Times piece, suggested a "grand bipartisan compromise" in which Democrats got universal coverage in return for offering legal reform. The White House yawned, and moved on.
It isn't clear if Republicans would or should take that deal, but we won't know since it won't be offered. The tort-reform issue has instead clarified this presidency. Namely, that the bipartisan president is in fact very partisan, that the new-politics president still takes orders from the old Democratic lobby.
The Lie: President Obama
promises that millions of small mom and pop businesses will be able to stay
profitable and offer private insurance coverage under Obamacare. Wal-Mart is
promoting Obamacare precisely for the reason that smaller competitors will
go out of business. Small and medium sized businesses will fail do to the
added costs of coverage mandated in Obamacare legislation such as instant
coverage of expensive pre-existing health conditions and the cost of
mandated social services such as marriage and family counseling and vastly
increased costs of mental health coverage.
"What disturbs Americans of all
ideological persuasions is the fear that almost everything, not just
government, is fixed or manipulated by some powerful hidden hand," Frank
Rich wrote in Sunday's New York Times. That manipulation should disturb us.
But contrary to Rich, it is not the work of "corporatists" who have sprung
up to attack progressive reforms proposed by Obama and the Democratic
majority. Manipulation is what we got many years ago when we traded a more
or less free market for the "progressive" interventionist state. When
government is big, the well-connected always have an advantage over the rest
of us.
"Big Business for Health-Care Reform," by John Stossel,
ABC News,
August 11, 2009 ---
http://blogs.abcnews.com/johnstossel/2009/08/big-business-for-healthcare-reform.html
The Lie: President Obama
is promising that Obamacare will be so efficient that the cost of processing
government and private health claims will save billions of dollars each
year. The Congressional Budget Office is not buying his gross exaggerations
about such cost savings. It might be much more efficient if Obamacare were
equivalent to the Canada National Health Plan, but President Obama promises
to keep all the private health insurance companies in business at profitable
returns.
The Lie: President Obama
is promising that Obama care will be so efficient that it will not increase
the annual Federal spending deficit that that, without Obamacare, will in
2009 be about $2 trillion more outflow than inflow --- http://www.usdebtclock.org/
This is such a blatant lie it's almost laughable --- if it was not so
tragic!
The interest cost on the National Debt will soon be about a million dollars
a second.
The Lie: President Obama is promising that there will
be no new taxes on 98% of Americans to pay for Obamacare. However, he does
not say anything about the huge increases in the prices everybody will have
to pay at Wal-Mart, Safeway, Citgo, Exxon, Sears, Penneys, Burger King, KFC,
GM, Chrysler, Toyota, Honda, Deere, Kubota, etc. to pay for the added health care
insurance costs forced on employers due to Obamacare mandates.
The American Academy of Orthopaedic Surgeons (AAOS) is profoundly disappointed with President Obama's recent comments regarding the value of surgery and blurring the realities of physician reimbursements. The AAOS represents over 17,000 US board-certified orthopaedic surgeons who provide essential services to patients every day. As President Obama has said, "Where we do disagree, let's disagree over things that are real, not these wild misrepresentations that bear no resemblance to anything that's actually been proposed." In that spirit, we would like to bring some clarity to his comments and underscore the value that orthopaedic surgeons bring to Americans every day of every year.
First, surgeons are neither reimbursed by Medicare, nor any provider for that matter, for foot amputations at rates anywhere close to $50,000, $40,000 or even $30,000. Medicare reimbursements to physicians for foot amputations range from approximately $700 to $1200 which includes the follow up care the surgeon provides to the patient up to 90 days after the operation. Moreover, orthopaedic surgeons are actively involved in the preventive care he mentions. We are a specialty that focuses on limb preservation whenever possible and when it is in the best interests of the patient. Our approach to amputation follows the same careful, thoughtful approach, always with the patients best interest as the primary focus.
Continued in article
Click here: Fred Thompson: Interviews
Scroll down to Betsey MacCaughhey's audio (this is a bit too biased in tone
for my liking, but Betsey did take the time and trouble to read the July
2009 House Bill in detail.
Health Care Numbers Don't Add Up ---
http://www.mpnnow.com/lifestyle/x2141125428/Health-care-reform-numbers-don-t-add-up
President Barack Obama apparently came to believe
the myth of his messiahship and has accordingly abused and squandered his
good will and political capital and possibly self-sabotaged his socialized
medicine scheme. Of all the newsworthy aspects of this desperate "reform"
effort, none is more so than the robust democratic processes it has
reinvigorated in this nation. While Democrats insist the nationwide
grass-roots movement against his Draconian measure is contrived and
illusory, it is just the opposite. Nothing could be so real as the American
people, emboldened by their passion for liberty, standing up against a
callous, dishonest government trolling for its freedoms in exchange for
false promises.
David Limbaugh, "Obama's Forfeited
Credibility Sabotaging Obamacare," Townhall, August 14, 2009 ---
http://townhall.com/columnists/DavidLimbaugh/2009/08/14/obamas_forfeited_credibility_sabotaging_obamacare
Jensen Comment
The public just isn't buying into the lie that it's possible to widen the
scope of coverage of each person's health insurance and add 50 million
uninsured to the insurance plans without increasing the Federal deficit
and/or driving small companies out of business with requirements to pay
greatly increased premiums. The public recognizes that this is a job killer
--- their jobs.
Fact Check
Desktop Users
www.factcheck.org/politics/obamas_health_care_news_conference.html
Mobile Users
http://www.factcheck.org/mobile/article.php?id=997
Sampling Only
President Obama tried to sell his health care overhaul in prime time, mangling some facts in the process. He also strained to make the job sound easier to pay for than experts predict.
- Obama promised once again that a health care overhaul “will be paid for.” But congressional budget experts say the bills they've seen so far would add hundreds of billions of dollars to the deficit over the next decade.
- He said the plan "that I put forward" would cover at least 97 percent of all Americans. Actually, the plan he campaigned on would cover far less than that, and only one of the bills now being considered in Congress would do that.
- He said the "average American family is paying thousands" as part of their premiums to cover uncompensated care for the uninsured, implying that expanded coverage will slash insurance costs. But the nonpartisan Kaiser Family Foundation puts the cost per family figure at $200.
Note: This is a summary only. The full article with analysis, images and citations may be viewed on the above Fact Check Websites.
- Obama claimed his budget "reduced federal spending over the next 10 years by $2.2 trillion" compared with where it was headed before. Not true. Even figures from his own budget experts don't support that. The Congressional Budget Office projects a $2.7 trillion increase, not a $2.2 trillion cut.
- The president said that the United States spends $6,000 more on average than other countries on health care. Actually, U.S. per capita spending is about $2,500 more than the next highest-spending country. Obama's figure was a White House-calculated per-family estimate.
Updates on August 31, 2010
"Go To the Back of the CLASS," by
Ed Feulner, Townhall, August 17, 2010 ---
http://townhall.com/columnists/EdFeulner/2010/08/18/go_to_the_back_of_the_class
In Washington, politicians often give their bills clever names designed more to obscure than to reveal.
Consider the CLASS Act. It sounds like yet another federal attempt to meddle in local schools. Instead, it stands for “Community Living Assistance Services and Support.”
CLASS was a little-noticed part of the massive Obamacare bill that the president signed in March. It’s supposed to provide affordable long-term care insurance to American workers. In reality, it creates another entitlement likely to increase our exploding federal deficit.
Starting next year CLASS is scheduled to begin enrolling people and collecting premiums. If CLASS was a normal insurance program, it would invest these premiums to build reserves. These reserves would later be tapped to provide benefits for those individuals in need of long-term care services.
But CLASS doesn’t work that way.
Similar to Social Security, all premiums that CLASS collects will be spent immediately. Its trust fund will be filled with government IOUs. Since participants need to pay five years of premiums before they’re eligible to collect any benefits, a sizeable amount of short-term revenue will be raised from CLASS. This aspect was especially useful when lawmakers were trying to find tricks to reduce the projected cost of Obamacare. By including the revenues from CLASS, politicians were able to pretend they’d reduced the cost of the bill by $70 billion.
But even Uncle Sam can’t spend your money twice. It’s impossible to spend the money today on government programs and invest the money to fund eventual benefits.
Eventually 2017 will arrive. That’s when CLASS starts paying benefits. It’s difficult to predict how soon after that the program would dive into the red and pay out more in benefits than it collects in premiums. Actuaries at the Centers for Medicare & Medicaid Services estimate it could be as soon as 2025.
Continued in article
Updates on October 31, 2010
"Say NO to Government Subsidies For
Frivolous Litigation," by Lisa A. Ricard, Townhall, October 6, 2010
---
http://townhall.com/columnists/LisaARickard/2010/10/05/say_no_to_government_subsidies_for_frivolous_litigation
Taxes are a major topic of debate in Washington right now. Faced with a massive federal deficit, some politicians have proposed raising taxes on individuals and businesses, despite the obvious negative effects of tax increases on economic growth and job creation. Yet at the same time, some in Washington are actually considering the creation of a new special interest tax break that will hurt economic growth, increase the deficit and fuel increased civil litigation.
The plaintiffs' bar and its allies in Congress and the administration are pushing for the adoption of a nearly $1.6 billion tax deduction for trial lawyers who take contingency fee cases. This proposed deduction would essentially provide a U.S. government subsidy to plaintiffs' lawyers to increase the number of frivolous lawsuits.
For several years, the plaintiffs' bar has been attempting to push this proposed tax break through Congress. With Congress so far unwilling to act, plaintiffs' lawyers have decided on a new approach and are now aggressively lobbying the Treasury Department to bypass Congress and create the deduction through administrative action.
The tax deduction would impose direct costs on the federal government and American taxpayers. According to the Congressional Budget Office, this trial lawyer subsidy would cost nearly $1.6 billion over ten years, all during a time of record federal deficits.
But these direct costs represent just a fraction of the proposal's potential damage. The contingency fee tax break would, in effect, subsidize ever more costly, frivolous litigation against American businesses. By some estimates, the tax deduction could subsidize as much as 40 percent of the initial plaintiffs' expenses for certain cases. With the federal government paying for such a large percentage of the up-front costs of lawsuits, plaintiffs' lawyers will be emboldened to take on the most speculative and frivolous litigation.
And in these troubled economic times, the last thing America needs is more frivolous lawsuits. As a percentage of gross domestic product, the United States spends more than twice as much on litigation as any other industrialized nation, a cost that reached $254.7 billion in 2008 according to a report by Towers Perrin.
Continued in article
March 31. 2012
"5% of patients account for half of health care spending," by Kelly
Kennedy, USA Today, January 20, 2012 ---
http://www.usatoday.com/news/washington/story/2012-01-11/health-care-costs-11/52505562/1
"Will Employers Undermine Health Care Reform by Dumping Sick Employees?"
by Amy Monahan and Daniel Schwarcz, Virginia Law Review 125 (2011) ---
http://www.virginialawreview.org/articles.php?article=321
Thank you Paul Caron for the heads up.
This Article argues that federal health care reform may induce employers to redesign their health plans to encourage high-risk employees to opt out of employer-provided coverage and instead acquire coverage on the individual market. It shows that such a strategy can reduce employer health care expenditures without substantially harming either high-risk or low-risk employees. Although largely overlooked in public policy debates, employer dumping of high-risk employees may threaten the sustainability of health care reform. In particular, it potentially exposes individual insurance markets and insurance exchanges to adverse selection caused by the entrance of a disproportionately high-risk segment of the population. This risk, in turn, threatens to indirectly increase the cost to the federal government of subsidizing coverage for qualified individuals and to exempt more individuals from complying with the so-called individual mandate. The Article concludes by offering several potential solutions to the threat of employer dumping of high-risk employees.
Jensen Comment
Since it's illegal to dump sick employees without justifiable reasons, the
impact of Health Care Reform may be to both increase the number of law suits and
increase the number of hurdles that employees must surmount to obtain and keep
jobs. For example, factory employees and store clerks must be able to stand
without a break for x minutes, diabetic and epileptic bus and taxi drivers may
be dropped at the first episode of unconsciousness, drug testing may become more
common, Mental health patients may be particularly vulnerable to dismissal.
Then there is an even bigger risk that employers will drop health coverage of all employees
"No, You Can't Keep Your Health Insurance: A new study by McKinsey
suggests that as many as 78 million Americans could lose employer health
coverage," by Grace-Marie Turner, The Wall Street Journal, June 7,
2011 ---
http://online.wsj.com/article/SB10001424052702304432304576371252181401600.html?mod=djemEditorialPage_
"'The Flight to the Exchanges': The Wall Street Journal
writes that ObamaCare may cause small businesses to drop insurance coverage,"
The Wall Street Journal, July 25, 2011 ---
http://online.wsj.com/article/SB10001424053111903554904576462010405702984.html#mod=djemEditorialPage_t
McKinsey & Co. made itself the White House's public enemy number—well, we've lost count—after releasing a survey last month showing that nearly one in three businesses may drop insurance coverage as a result of the new health-care law. The real offense of the management consultants seems to be accurately portraying reality.
Consider a suggestive new survey to be released today by the National Federation of Independent Business, the trade group for small businesses. William Dennis, a senior research fellow who has conducted the study for 35 years, reports that 57% of a cross-section of companies that employ 50 or fewer workers and offer coverage may stop doing so. Look out below.
About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare's new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls "the flight to the exchanges."
Those would be the dispensaries of heavily subsidized insurance, and the NFIB finds that 26% of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31% of the 750 firms surveyed report they are "somewhat likely."
Small-business workers are eligible for exchange subsidies even if they can get job-based coverage. The incentive is for them to take it—given that the new government payments will be so generous, small-group coverage is generally costly and the insurance tax break for employers usually doesn't go very far when the employer is small.
If enough workers split, in other words, private coverage will soon erode and cease to exist as an option. Meanwhile, start-ups are constantly entering and exiting the market, and the ones with fewer benefits and liabilities will gain a competitive advantage. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties. As Mr. Dennis put it in an interview, "Once you pull the string, everything may unravel."
ObamaCare's partisans claim none of this will happen because of the social norm theories of behavioral economics. Businesses offer insurance to attract workers, the thinking goes, and it's the right thing to do. But that assumes utter irrationality—that workers won't take a cheaper deal when they see it and businesses won't try to compete against their rivals.
Continued in article
Bob Jensen's threads on health care are at
http://www.trinity.edu/rjensen/Health.htm
"Guidance provided on electronic health record incentives," by Ken
Tysiac, Journal of Accountancy, January 6, 2012 ---
http://journalofaccountancy.com/Web/20124972.htm
"Health Reform Built to Fail How Medicare rigs competitive bidding and
hurts patients," The Wall Street Journal, February 6, 2012 ---
http://online.wsj.com/article/SB10001424052970204740904577193224024421442.html#mod=djemEditorialPage_t
Americans may not be familiar with the medical innovation called negative pressure wound therapy, though it has helped hundreds of thousands of patients with complex or chronic injuries like burns or diabetic ulcer complications that could never heal on their own. Now President Obama's Medicare team is about to severely damage this field, and many others too—all in the name of reforming how the entitlement pays for care.
Last week a Medicare competitive-bidding program went live in 91 metro regions—nearly all the U.S. population—for what's known as durable medical equipment. That bureaucratic jargon covers advanced devices like wound therapy, respiratory assist equipment for people who can't breathe, and feeding tube systems for people who can't eat. It also lumps in things like walkers, scooters and "support surfaces." Those would be beds.
The good intentions of this saga date to 2003, when Congress in a fit of sanity ended Medicare's price controls in favor of auctions. Both political parties soon rebelled when oxygen tank suppliers, scooter stores and such in their home districts started whining about being asked to compete on market prices, rather than plod along with the guaranteed revenue of the fee schedule. But the much deeper problem is that Medicare cooked up an auction process that defies all economic sense.
Normally when the government wants to buy something, it asks companies how much they can provide and to name their price. Winners are selected from the lowest bid up until the government has what it needs at the lowest possible cost, and thereby finds competitive equilibrium prices.
Under Medicare's highly unusual version of competitive bidding, it will pay the winners the median price of all the winning bids, rather than using the clearing price. Bids are also for some reason nonbinding.
This matters because it creates incentives for unscrupulous third-party companies to make low-ball "suicide bids." If the median price shakes out high enough, they automatically win the contract, buy the medical products from manufacturers and turn a profit. If it isn't, they can dump the contract since bidding involves no commitment.
Medicare will then offer the contract at the median price to the honest companies that have made bids aligned with their true costs, and they can take it or leave it. Medicare benefits because the median prices will be biased below the clearing price—in other words, the "auction" is merely another way of generating arbitrary below-cost price controls.
The Bush Administration road-tested this scheme in 2008 with pilot projects in nine cities. For illustration let's return to negative pressure wound therapy, a technique that involves a sealed dressing attached to a vacuum pump to prevent infection and improve recovery. Patients can recuperate at home but require 24/7 clinical and safety support, typically provided by the device's maker. Advanced wound treatment is far more complex than, say, a cane.
In 2008, only 17 of the 88 winning bidders bothered to supply wound therapy devices. Only 10 of them had any actual expertise in how the technology is used or in patient support. The supply crisis was so deep that for several weeks no Medicare patients in two of the cities could receive this treatment at home, and the government threw out the entire program and said it would retool competitive bidding.
Yet by one estimate, a 2011 reprise had roughly one-fifth of the bids going to companies that were on credit hold with device manufacturers—i.e., they couldn't buy if they wanted to. Medicare, meanwhile, boasts that it will reduce prices for durable medical equipment by 35% and "save" taxpayers $28 billion. All it is really doing is rewarding the fly-by-night operators while harming innovative companies and ultimately patients.
The current nationwide rollout has no substantive revisions from the failed pilots, despite the objections of 244 economists and auction scientists led by the University of Maryland's Peter Cramton. The consensus of basically everyone who knows anything about auctions is that the no-risk bids and median pricing are idiotic and designed for failure.
At a December meeting, a coalition of device makers and professional clinical groups even accepted these flaws but begged Medicare deputy administrator Jonathan Blum merely to accredit wound therapy bidders. He refused to apply any such basic quality control standards. The Administration does not care.
The larger tragedy is that market methods like auctions are the only way to rationalize the entitlement state. They're at the core of the reform ambitions of Paul Ryan and Ron Wyden—and they're already tough enough to achieve given the resistance of the providers that want more of Medicare's money. This fiasco turns on 1.4% of Medicare's annual spending, yet it risks discrediting competitive bidding for good.
Bob Jensen's threads on the health care mess ---
http://www.trinity.edu/rjensen/Health.htm
"Why Obamacare won't work:
Reason #4,566," Rick Moran, The American Thinker, January 13,
2012 ---
http://www.americanthinker.com/blog/2012/01/why_obamacare_wont_work_reason_4566.html
The crisis in health care is manageable - without the radical, extreme measures passed in the Affordable Care Act.
USA Today reports that just 5% of patients account for 50% of health care spending. And just 1% account for 22% of the spending.
That's about $90,000 per person, according to the Agency for Healthcare Research and Quality. U.S. residents spent $1.26 trillion that year on health care.
Five percent accounted for 50% of health care costs, about $36,000 each, the report said.
The report's findings can be used to predict which consumers are most likely to drive up health care costs and determine the best ways to save money, said Steven Cohen, the report's lead author.
While the report showed how a tiny segment of the population can drive health care spending, the findings included good news. In 1996, the top 1% of the population accounted for 28% of health care spending.
"The actual concentration has dropped," Cohen said. "That's a big change."
About one in five health care consumers remained in the top 1% of spenders for at least two consecutive years, the report showed. They tended to be white, non-Hispanic women in poor health; the elderly; and users of publicly funded health care.
Other studies have shown that most of this spending is on "end of life" care - that is, patients who have very little chance of recovery but who have numerous hospital stays and even surgeries that don't extend life, but deal with unrelated symptoms to their primary disease. Someone dying of heart disease getting a kidney transplant, for instance.
The question is how to manage our eventual demise in a compassionate, but reasonable manner? One thing for sure - government doesn't have the answer to that. Only families and their physicians should be involved in those decision.
Of course, insusrance companies will get involved and are likely to balk at paying for more and more treatments at this stage of life. But we can sue insurance companies if they refuse to pay for a necessary procedure. We can't sue the government.
In fact, the decisions of the government when it comes to Medicare spending will be above and beyond any legal review. Mona Charen:
All decisions about controlling Medicare costs will be decided by the Independent Payment Advisory Board (IPAB).
IPAB is a new thing in American government. Unlike most other boards and commissions, the panel's 15 members (appointed by the president and approved by the Senate) need not be bipartisan. Also unlike other boards, commissions, and federal agencies, the IPAB's decisions are virtually unreviewable. IPAB doesn't have to adhere to the notice and comment rules of federal agencies, which permit citizens to respond to proposed rule-makings. IPAB dictates automatically become law unless Congress itself intervenes. Ah, but they've thought of that and made it virtually impossible. The law prescribes that Congress has a limited period of time in which it can modify IPAB rulings and then it must do so by a three-fifths majority. Even ratifying treaties and proposing amendments to the Constitution require only two-thirds majorities. As for the courts, forget it. The judiciary is forbidden to review IPAB decisions.
The really bizarre part, reminiscent of the "I wouldn't do that, Dave" scene in 2001: A Space Odyssey, is that Congress can only repeal IPAB itself under strict conditions. Clint Bolick of the Goldwater Institute explains:
"Under the statute, any bill to repeal IPAB must be introduced within the one-month period between January 1 and February 1, 2017. If introduced, it must be enacted by a three-fifths super-majority no later than August 15, 2017. If passed, the IPAB repeal will not become effective until 2020 - leaving an out-of-control agency in operation for three years after Congress votes to abolish it."
December 31, 2011
Medicaid is America’s single biggest health
programme. This year roughly one in five Americans will be covered by Medicaid
for a month or more. It gobbles more federal and local money than any state
programme, other than education. Costs will rise even more when Barack Obama’s
health-care reform expands the programme by easing eligibility rules in 2014.
Congress’s “supercommittee” is already considering cuts. However, there are more
immediate pressures behind the present drive for change.
"Health Care: A new prescription for the poor: America is
developing a two-tier health system, one for those with private insurance, the
other for the less well-off," The Economist, October 8-14, 2011 ---
http://www.economist.com/node/21531491
“IT’S time for Dancing with the Stars!”, a woman announces enthusiastically. At this New York health centre, wedged between housing projects to the east and Chinatown to the west, “dancing with the stars” means dancing with a physical therapist. An old man stands up with a nurse and begins a determined samba.
Comprehensive Care Management (CCM), which runs this centre, tries to keep old people active. To do so, explains Joseph Healy, the chief operating officer, is in the company’s best interest. The government pays CCM a capped rate for the care of its members. If someone gets sick, his health costs rise and the company’s margin shrinks. Mr Healy argues that the system is the best way to provide good care at a low cost. Increasingly others seem to agree.
Medicaid, America’s health programme for the poor, is in the process of being transformed. Over the next three years, New York will move its entire Medicaid population into “managed care”, paying companies a set rate to tend to the poor, rather than paying a fee for each service. New York is not alone. States from California to Mississippi are expanding managed care. It is the culmination of a steady shift in the way most poor Americans receive their health-care treatment.
Medicaid is America’s single biggest health programme. This year roughly one in five Americans will be covered by Medicaid for a month or more. It gobbles more federal and local money than any state programme, other than education. Costs will rise even more when Barack Obama’s health-care reform expands the programme by easing eligibility rules in 2014. Congress’s “supercommittee” is already considering cuts. However, there are more immediate pressures behind the present drive for change.
Enrolment in Medicaid jumped during the downturn, from 42.7m in December 2007 to 50.3m in June 2010. Mr Obama’s stimulus bill helped to pay for some of this, but that money has dried up. Faced with gaping deficits, some desperate governors slashed payments to hospitals and doctors, or refused to pay for trips to the dentist or oculist. But much the most important result has been structural: the expansion of managed care.
States have dabbled in managed care for decades. The trend accelerated in the 1990s, with the share of Medicaid patients under this form of care reaching 72% by 2009. Now, however, there is a strong push for the remainder. States that did not have managed care, such as Louisiana, are introducing it. Other states are extending it to people previously deemed off limits: California and New York, for example, are moving the elderly and disabled into that system of care. Texas is targeting more than 400,000 Medicaid beneficiaries in the Rio Grande Valley. Local politicians had resisted the move, nervous that care might deteriorate. But the yawning deficit meant that they were overruled.
The result is a country with two distinct tiers of health care. Most Americans with private insurance are still horrified by thoughts of health-management organisations and prefer to pay fees for each medical service. For the poor, managed care is becoming the norm.
Advocates of managed care have high expectations. First, they hope that it will make costs more predictable. Second, they believe that the change will improve patients’ health. In managed care, a patient has a network of doctors and specialists. If the programme works properly, doctors can monitor all aspects of care, in contrast to the fragmented fee-for-service system. The contracts that states have with firms can set standards for quality. Texas, for instance, will cut 5% from a company’s payment if it does not meet what is required.
The next step is to integrate care for those eligible for both Medicaid and Medicare, the federal programme for the old. These “duals” account for almost 40% of Medicaid’s costs and just 15% of its population. “If managed care can really deliver better care than fee-for-service”, says Diane Rowland, chair of the commission that advises Congress on Medicaid, “this is the population that could prove it.”
But some, such as Norma Vescovo, are sceptical. As the head of the non-profit Independent Living Centre of Southern California (ILCSC), Ms Vescovo serves Medicaid patients with severe health problems. Over the years she has often sued California on policies that she thinks will hurt her vulnerable clients. On October 3rd her case moved to the Supreme Court.
The outcome of Douglas v Independent Living Centre will have profound implications for the future of Medicaid. Ms Vescovo’s suit concerns cuts to hospitals and doctors. But the case will also guide the course of managed care. If ILCSC and its co-plaintiffs win, private groups will continue to be able to challenge states on policies they think violate federal Medicaid law. Ms Vescovo, who argues that California’s payment cuts would eviscerate her clients’ access to services, worries that under managed care the disabled might not be able to see the specialists they need.
The question is how to supervise the experiments with managed care that are being carried out in various states. To date, Medicaid beneficiaries have been able to challenge the states in court. However, if the Supreme Court rules against ILCSC, that avenue will be closed. The Centres for Medicare and Medicaid Services (CMS) technically can intervene if states do not provide proper access to care. In reality, CMS has few tools to do so.
Continued in article
Jensen Comment
Actually various nations like Germany have a two-tier health system where those
who can afford it supplement the national health care program with private
insurance.
February 8, 2010 message from a friend in Germany
Hello Bob and Erika,
as it is Super Bowl Sunday I am sitting here reminiscing about my time in the US, and, of course, thinking about the people that I met. So I’m sending you an email as I am waiting for the Super Bowl to come on in about an hour. Once again they will show the big game on German TV. I have to take the rest of my vacation time from last year until the end of March of this year, so I decided to take tomorrow off to get rid of some of the vacation time (I have done this almost every year since I came back from the US, and two years ago I was even so lucky to be in the US for the Patriots-Giants Super Bowl, the greatest Super Bowl I have seen). So I am still quite busy at work, and still enjoy what I do very much. Since I am in an energy-related field, I am so to speak ‘part of’ this huge ‘push’ (for lack of a better word) that is going on towards renewable energy right now. Even though superconducting power cables are not a renewable energy source but rather one form of transmitting energy , there is a lot of interest in the technology right now. Taking a day off tomorrow turned out to be a good choice, as all public transportation workers in the city of . . . will be on strike, so I would have had to take the car to get to work.
I hope you are doing well in the mountains of New Hampshire, which I assume didn’t get hammered by the snowstorm the last few days, but are covered in snow anyway. I am reading Bob’s emails with great interest, especially regarding the banking situation and the health insurance situation. These are also two significant issues over here (you could actually argue that the strike tomorrow has a little to do with the bank bailout, see below….).
The new German government is trying to reform our health care system. Medical care in Germany is probably among the best in the world, and costs are quite high (so I guess it’s quite similar to the US in these manners…). We have this system of public option insurance, which covers ~ 80% of the population, and private insurance, which covers almost everyone else (except for the few percent that fall through the cracks). In any case, the underlying idea of the system is not so bad, but the administration is so complex that a) only the Germans could come up with it and b) only the Germans can run it without going nuts. What is interesting is that Germany is one of only a few countries in Europe that has this private insurance option, most have only the public option (or so I read in an article recently, I am not the expert on health insurance). The public option insurance had to curtail what they reimburse quite a bit in recent years to cut costs, so more and more people try to get into private insurance. This, however, is not so easy: You have to earn a certain amount of money, and the insurance companies can deny coverage or exclude certain pre-existing conditions. (I have pre-existing conditions, so for me private insurance would be almost useless, as they would exclude these conditions, or rack up my premiums, or both). Plus, my wife (while she is not working, when she is working she will be covered herself again, and have to pay the premium (percentage of income))) and kid are covered with no additional premium in the public option, so it is always a safe bet, despite the fact that it may not pay for all the treatments the private insurance pays for (they generally pay for everything that is medically necessary though, even quite complex and costly procedures). So in any case, if you are interested I can tell you a bit more about health insurance in Germany. (There is actually another similarity between Germany and the US: With Germany being the biggest economy in Europe, medication costs a lot more here than in neighboring countries (or so I’ve read), which to me seems similar to the US/Canada medication cost issue).
As I said before, there will be a strike here in . . . tomorrow as the greedy public works employees (part of which are the transportation workers) show little solidarity to all the poor bankers bailed out by government funds. Since German governments (state and federal) had to fund the solidarity fund for starving bankers to keep them from bankruptcy and local governments have lower tax receipts due to the economic crisis, there is very little money for pay raises for public works employees, which, of course, should be happy to have a job and be able to collect a paycheck. (But thanks to the banks and the great work the bankers do, they all have jobs (except for the ones that got laid off, of course, but hey, if we laid off some bankers or let their banks go belly up, more people doing real work would be sure to get laid off too, because it’s a trickle-down economy, as we all know)). Collecting a paycheck is obviously something the greedy workers couldn’t do if it wasn’t for banks having money (and handing it out via ATMs, and central banks printing as much of it as is necessary, or maybe even more), which goes to show that there is a true lack of solidarity from the general public towards the poor starving bankers bailed out by government funds.
So the poor bankers will have a hard time driving their BMWs and Mercedes to work tomorrow, as the roads will be clogged up by the cheap and smelly cars of people that would otherwise take public transportation to work (I assume that everyone that can take the day off will do so, just like I do. People were actually advised to take the day off if they can). Maybe I should check the newspaper again to make sure there isn’t an impromptu bank holiday tomorrow, after all, when bankers do so much good for us year-round they shouldn’t have to suffer through such a rough commute to work because of some greedy workers going on strike.
In any case, I would normally ride my bike to work if it wasn’t for this rather rough winter, which for me is the latest piece of evidence that global warming is maybe not all it’s cracked up to be. It’s pretty reasonable to assume that human activity has an influence on climate, obviously, but when almost every seasonal forecast is dead wrong, it’s hard to se how the source can be believed to be correct in forecasts over many decades. In any case, I hope to be able to live to see, and wouldn’t be surprised if indeed it gets warmer, but I wouldn’t be shocked if it gets colder or stays the same either). Nonetheless, energy efficiency and renewable energy development is a reasonable thing to shoot for anyway, whether there is global warming or not…
http://network.nationalpost.com/np/blogs/fpcomment/archive/2010/01/17/lawrence-solomon-bbc-drops-top-ipcc-source-for-climate-change-data.aspxSo the Hadley center in Britain predicted a winter with mild temperatures, but this may end up being the coldest winter in central-northern Europe in 30 years. We’ve had snow on the ground since mid-December, and the 15 day forecast right now has not a single day with a daytime high above freezing… (nonetheless, every now and then we have a day that is slightly above freezing, which usually leads to some melting of the snow and ice on the ground, and subsequently even more treacherous road conditions). The local governments were woefully unprepared for this winter, which is certainly not surprising when you are being told to expect a milder than normal winter. The road crews didn’t clear the roads properly in mid-December (probably assuming, like everyone else, including me, that this was going to melt rather quickly), and so we’ve had a mess on the ground ever since. I haven’t ridden my bike in 8 weeks now.
I am still traveling to Norway quite a bit, and I thoroughly enjoy these trips. I also travel to the US, but only maybe once or twice a year; I was in Tucson last June. I really enjoy these trips also, I am quite lucky that I get to go on business trips to the US as I really enjoy spending time there. Business trips to places you’d like to visit anyway are not such a bad thing. (Of course, at work I am trying to not let on that I enjoy business trips, but I think they have me figured out anyway…. Luckily my wife puts up with it too). Whenever I travel to the US, I wonder how my life would be had I stayed there six years ago. In any case, now I am a happily married man with a house and a kid, which you can see in the attached pictures.
Second Message on February 15, 2010 from my friend in Germany
Hi Bob,
the longer I am living in Germany again the stranger Germans seem to me. In any case, to understand the German attitude to health insurance I think it is important to bear in mind Bismarck's social legislation ( http://en.wikipedia.org/wiki/Otto_von_Bismarck#Bismarck.27s_social_legislation )
and the German mind in general. Germans are a rather risk-averse bunch that believes that things are likely to get worse rather than better.I have recently come across a few articles on health insurance in Germany that essentially say that the private insurance is facing problems, or rather private insurance is jacking up the rates for two reasons: Private insurers pay more for the same services than the public insurance option (except for their basic tariffs) does: there is a so-called multiplier which says what you can charge for a given procedure when charged to private insurance. I have seen the factor of 2.3 used, but the way doctors can charge for their services in Germany is rather difficult to grasp for me so this factor of 2.3 may or may not be the multiple of what a public option insured person is charged. The higher pay for the same services is one of the reasons privately insured people have shorter waiting times in doctor's offices.
The second reason for higher rates seems to be that privately insured patients do not care how much a procedure costs, as soon as they are above the co-pay limit (often there is a co-pay limit of a few hundred euros or so a year, above that there is no co-payment anymore for privately insured people). (There is an upper limit on how much a doctor can spend on average for publicly insured people, but I am not sure how much of a deterrent this is for a doctor to prescribe what is necessary).
In any case, recently it has been argued that the medical doctors are now charging private insurance patients more to make up for what they do not get from the publicly insured people.
So the issue of public health insurance in Germany remains an interesting one, and, as everywhere else, rates are likely to rise.....
Regards,
XXXXX
Health Insurance in Germany ---
http://www.toytowngermany.com/wiki/Health_insurance
Note that pre-existing conditions drive up the private insurance rates for
individuals.
Private insurance often leads to preferential treatment from physicians and
hospitals.
My friend also tells me that having private insurance is somewhat of a status
symbol in Germany.
"Research Roundup: Improving Intelligence Forecasts, Vertically Integrated
Health Care, and 'Worrisome' Health Care Costs," Knowledge@wharton,
December 20, 2011 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2917
How can intelligence agencies improve accountability and forecasting accuracy? Can hospitals become more efficient through vertical integration with home health agencies and nursing homes? Do taxpayers fully understand how the expansion of health care will be financed? Wharton professors Philip Tetlock and Barbara Mellers; Guy David and Evan Rawley; and Mark Pauly, respectively, examine these issues -- and what they mean for business -- in recent research articles.
Helping Intelligence Agencies -- and Companies -- Avoid the Blame Game
When business leaders fail to make accurate forecasts, profitability is at risk. When intelligence agencies miss the mark on their predictions, however, the results can be far worse. In a new analysis of behavior in the intelligence community, with implications for business managers, Wharton management professor Philip E. Tetlock and Wharton marketing professor Barbara A. Mellers present a framework to improve accountability and forecasting accuracy, particularly in a politically polarized climate.
In their article, "Intelligent Management of Intelligence Agencies: Beyond Accountability Ping-Pong," published in the September 2011 edition of American Psychologist, the authors note that forecasts by intelligence organizations frequently are open to harsh criticism for either underreporting potential danger or overreacting to threats that never materialize. A clear recent example of underreporting would be the September 11, 2011, terrorist attacks on the United States, Tetlock says. At the other extreme, he points to reports -- which later proved to be unfounded -- that Iraq had developed weapons of mass destruction.
"The intelligence community is often whipsawed between these conflicting criticisms," says Tetlock. "The question is: Is it possible in this kind of political environment to learn anything beyond avoiding the last mistake?" The authors propose three steps to end the "blame game" in intelligence predictions and improve accountability and intelligence forecasting.
First, the authors argue that intelligence agencies and constituents in government and throughout society need to come together and agree to put an end to bitter, often ideologically driven, assignment of blame. Tetlock suggests that "thoughtful moderates" with a long-term view of policy will need to drive this part of the process, especially during periods of deep division.
Next, intelligence agencies need to step up and agree to have their forecasting assessed on clear metrics. Tetlock says that meaningful forecasts could result from reports that put a hard number on predictions. For example, analysts could be required to put specific percentage odds on the likelihood that a coup, or uprising in a given country, would occur in a certain period of time. Agencies would amass large databases of predictions that could, over time, be reviewed to assess which were accurate and why.
Finally, in the authors' view, intelligence groups and their overseers should acknowledge that ideology plays a part in forecasting. "If you want ... the left and right to hold back their fire on unfair criticism, the best way to do that is to reassure people on the left and the right that their points of view are at least being used in the prediction process," Tetlock notes.
Continued in article
The Wall Street Journal, in an investigational piece
(December 20, 2010), reported that five spine surgeons at Norton Hospital in
Louisville, Kentucky, who performed the third-most spinal fusions of Medicare
patients in the country, had received more than $7 million in “royalties” from
Medtronic, the nation’s biggest manufacturer of spinal implants.
"Physician Payment Sunshine Act Signals New Dawn for Compliance," by
Joseph J. Feltes, MD News, November 14, 2011 ---
http://www.mdnews.com/news/2011_11/05737_novdec2011_physician-payment-sunshine
Once upon a time, physicians and their families used to be able to enjoy exotic cruises sponsored by pharmaceutical companies where their only obligation, it seems, was to sign in briefly at sparsely attended meetings before embarking on offshore adventures. It’s been awhile since the sun slowly set on the wake of the last ship’s sybaritic junket.
Today, the Federal Physician Payment Sunshine Act — part of national healthcare reform — signals a new dawn of transparency, compliance obligations, and regulatory scrutiny. Beginning January 1, 2012, manufacturers of drugs, devices, biologicals or medical supplies, covered by Medicare, Medicaid or other federal healthcare program, must report to the Department of Health and Human Services all payments or transfers of value they make to physicians or teaching hospitals.
The Sunshine Act applies to payments or transfers of value covering a broad array of activities, including: consulting fees; compensation for services other than consulting; honoraria; gifts; entertainment; food; travel (including specified destinations); education and research; charitable contributions; royalties or licenses; current or prospective ownership or investment interests (other than through publicly traded securities or mutual funds); direct compensation for serving as faculty or as a speaker for medical education programs; grants; or falling within the catchall “any other nature of payment or other transfer of value as defined by the Secretary of HHS.” Additionally, if the payment or transfer of value relates to marketing, education, or research which pertains to a covered drug, biological, device or supply, that also must be reported, along with the name of the covered product.
Remaining outside the aura are certain excluded items that need not have to be reported, such as the transfer of items having a value of less than $10 (unless the items exceed an annual aggregate of $100); product samples for patient use not intended to be sold; educational materials that directly benefit patients or are intended for patient use; the loan of a covered device for 90 days or less for evaluation purposes; items or services provided under a contractual warranty; certain discounts and rebates; and in-kind items used to provide charity care, to name a few.
Covered manufacturers must disclose to the Secretary in electronic form the name of the physician (or teaching hospital); the physician’s business address, specialty and National Provider Identifier; the amount of payment or value of transfer; the dates on which payments or transfers are made; a description of whether payment or transfer was made in cash or cash equivalents, in-kind items or services, or stocks or stock options. This information will be stored in a database.
While the burden of reporting rests with covered manufacturers, access to and use of the electronic information stored in the database can be accessed by the media, consumers, the Office for Inspector General, and by prosecutors. That could pose potential liability risk to physicians for non-compliance with federal Anti-Kickback (illegal remuneration), the Stark laws (financial interest), or the False Claims Act (ill-gotten gain). It also could create potential reputational damage — fairly or unfairly — if it were to appear that research was flawed or a physician’s choice of drug was influenced by payments or other transfers of value.
The Wall Street Journal, in an investigational piece (December 20, 2010), reported that five spine surgeons at Norton Hospital in Louisville, Kentucky, who performed the third-most spinal fusions of Medicare patients in the country, had received more than $7 million in “royalties” from Medtronic, the nation’s biggest manufacturer of spinal implants.
The WSJ indicated that it had “mined” certain Medicare databases as the source of its exposé. The new Sunshine Act likely will eliminate the need to dig deeply, since the information will be collected in one database, there for the picking. Critics of the law, including Thomas Peter Stossel, MD, Professor of Medicine at Harvard Medical School, objects that the term “Sunshine” carries with it the “implicit aura of corruption,” which indeed is unfortunate.
Continued in article
Bob Jensen's Fraud Updates are at
http://www.trinity.edu/rjensen/FraudUpdates.htm
Bob Jensen's healthcare news threads are at
http://www.trinity.edu/rjensen/Health.htm
"ObamaCare Starts to Unravel: The real story behind the Class
program failure, and what to do now," The Wall Street Journal,
October 17, 2011 ---
http://online.wsj.com/article/SB10001424052970204479504576635200446357240.html?mod=djemEditorialPage_t
Now that one of ObamaCare's major new benefit programs has been scrapped, liberals are trying to make stone soup by claiming that the Obama Administration merely committed an act of "good government." They claim that when this long-term care insurance program proved to be unworkable, the Administration conceded as much, and now it's gone. So let's review the evidence, not least because it so perfectly illustrates the recklessness that produced the Affordable Care Act.
When Democrats were pasting it together in 2009 and 2010, the immediate attraction of the program known by the acronym Class was that its finances could be gamed to create the illusion that a new entitlement would reduce the deficit. Ending the complicated Class budget gimmick erases the better part of ObamaCare's purported "savings," but it's also worth focusing on the program's long-run political goals.
For decades Democrats have been trying to put government on the hook for middle-class costs like home health services ($1,800 a month on average) and nursing homes ($70,000 to $80,000 per year). On paper, Class was supposed to be like normal insurance, funding benefits through premiums with no subsidy. But since the budget gimmick and the program's larger structure meant that premiums could never cover benefits, Democrats were trying to force a future Congress to prevent a Class bankruptcy using taxpayer dollars.
As the costs to the federal fisc continued to climb, the Democratic gambit was that Class would gradually morph into another part of Medicare. Insurance depends on younger, healthier people signing up to cross-subsidize the older and sicker, but under the Class program as written almost all of its enrollees would soon also be beneficiaries.
So to fix this "adverse selection," the plan was for Congress to eventually make participation mandatory, with the so-called premiums converted into another payroll tax and the benefits into another entitlement. Former White House budget director Peter Orszag has been writing that the long-term care insurance market can't function without a mandate, while HHS Secretary Kathleen Sebelius declined to rule one out at a Senate hearing in February. Now they tell us.
The only reason the Health and Human Services Department pre-emptively called off this scheme is that former New Hampshire Senator Judd Gregg succeeded in inserting a proviso that required the Class program's reality to match Democratic promises as a matter of law. If HHS couldn't provide "an actuarial analysis of the 75-year costs of the program that ensures solvency throughout such 75-year period," it couldn't be legally implemented.
In other words, HHS had to prove that the Class program wouldn't go broke the way it was designed to—and actuarial analysis is a matter of math, not politics. In a 48-page report that HHS submitted to Congress Friday, the department concedes that it is literally impossible to create any kind of long-term care program under the law's statutory text in which revenues match expenditures. Such a plan would cost as much as $3,000 per month, which no one would ever buy.
The HHS gnomes even considered "features deviating from or going beyond a plain reading of the statutory language" that its lawyers didn't think could pass legal muster, and they still couldn't avoid violating the known laws of mathematics despite 19 months of trying. HHS lawyers also said the government would have to warn enrollees that the promised benefits weren't contracts and could be abrogated to "dispel any claims that the Class program had misled the public or had encouraged reliance on its programs under false pretenses."
Continued in article
Updates for September 30, 2011
"GOP lawmakers seek answers from Sebelius regarding CLASS Act," by
Tina Korbe, Hot Air, September 22, 2011 ---
http://hotair.com/archives/2011/09/22/gop-lawmakers-seek-answers-from-sebelius-regarding-class-act/
Last week, a report from a Republican working group revealed that administration officials, in the rush to pass Obamacare, ignored internal warnings from government experts about the fiscal sustainability of a long-term care insurance entitlement program included in the health reform law. Throughout the health care debate, officials within the Centers for Medicare and Medicaid Services, as well as the Health and Human Services Department, repeatedly warned that the CLASS Act would be a fiscal disaster. Yet, the final version of Obamacare not only included the CLASS Act; it even counted CLASS as a cost-saving measure.
Now, the Republicans behind the report want to know how high the warnings reached: Was HHS Secretary Kathleen Sebelius, for example, aware of the concerns about CLASS even before Obamacare passed? Amid rumors the administration might reassign CLASS personnel or close the CLASS office entirely, they also want to know what the administration plans to do moving forward to ensure — if the CLASS program is, in fact, implemented — that the program is sustainable.
To that end, House Oversight Committee Chairman Darrell Issa (R-Calif.) and House Energy and Commerce Committee Chairman Fred Upton (R-Mich.), along with key drivers Sens. Jeff Sessions (R-Ala.), John Thune (R-S.D.) and others, today sent a letter to Sebelius asking her to clarify how many people have been reassigned or asked to leave the CLASS office, to put forward a plan to make CLASS sustainable if the program is going to be implemented and to divulge when concerns about CLASS were first made known to her and what steps she took to address them.
. . .
As Sessions explained in a statement, the central question is “whether a deliberate effort was made by administration officials to conceal CLASS’s true cost in order to advance the president’s agenda. Accountability goes to the top. Lawmakers and the American people deserve to know when internal concerns over CLASS were first communicated to Secretary Sebelius and what, if any, actions she took to address them. Out of control government spending is threatening our nation’s future, making a prompt and thorough explanation all the more imperative.”
Thune said it appears the administration sought to uphold its own agenda with the inclusion of the CLASS Act in the PPACA.
“Our recent Congressional investigation revealed that the Obama Administration ignored repeated warnings about the fiscal insolvency of the CLASS Act in the effort to score a political win with the passage of the new health care law,” he said. “The time is long overdue for Secretary Sebelius to come forward with more details on what the administration knew about the insolvency of the program, when they knew about it, and how they propose to remedy this fiscal disaster for taxpayers. The American people deserve to know more about this massive new entitlement program.”
In the meantime, you can bet that, if Sebelius doesn’t provide adequate answers, the calls for a CLASS Act repeal will grow ever louder. In fact, the Senate Appropriations Committee has already decided not to fund implementation of the Act.
Update: Because of a scheduling error, this post appeared briefly on the HotAir.com homepage at around 11:25 a.m. ET today. At the time, the letter had not yet been sent to Secretary Sebelius. The post above is essentially unchanged, but the second and third paragraphs have been updated to include information that recently emerged that the administration might shuffle CLASS personnel.
"The Preferential Treatment of Employer-Provided Health Care," by Paul
Caron, TaxProf Blog, September 17, 2011 ---
http://taxprof.typepad.com/
Benjamin D. Gehlbach (J.D. 2011, Catholic), Note, The Preferential Treatment of Employer-Provided Health Care: Time for a Change?, 27 J. Contemp. Health L. & Pol'y:
This Note argues that the current treatment of employer-provided health insurance is inequitable and needs reform in order to drive down overall health care costs and to provide revenue for other provisions of the ACA (or for a replacement, should repeal be successful), or alternatively, to help bring down the budget deficit. Part II examines the history and scope of the exclusion, as well as the rationales advanced prior to its adoption. Part III studies criticisms of the exclusion to understand better the weaknesses of the current system, including job lock, excess insurance, and loss of revenue. Part IV evaluates some of the proposals for changing the current exclusion, including those proposed by members of Congress and by outside policy groups. Some of these proposals include repealing the exclusion, capping the exclusion based on income or value of the insurance policy, and providing new tax incentives altogether. Part V argues that the best option for reforming this flawed system is to cap the exclusion based on income and the cost of the insurance plan. A cap on the exclusion would accomplish the dual objectives of bringing overall health care costs down and providing necessary revenue to finance other provisions of the ACA or its replacement, or alternatively, to reduce the deficit. In addition, a cap would not create some of the drawbacks of the other proposals
"Mystery Diagnosis: An Era of Uncertainty for the Health Care Sector,"
Knowledge@Wharton, September 14, 2011 ---
http://knowledge.wharton.upenn.edu/article.cfm?articleid=2847
The U.S. health care sector is experiencing a time of enormous change and uncertainty. Although President Obama's health care reform plan was signed into law last year, several legal challenges to the legislation are working their way through the courts. Questions also remain about whether the law will deliver on its promises of greater access to care and stricter containment of soaring health care costs.
Meanwhile, the pharmaceutical industry is also dealing with a period of insecurity, with generic markets soon opening up for some of the world's best-selling drugs. And although the health care sector is one of the few employment bright spots in a stagnant job market, questions arise as to whether it is in danger of becoming too bloated. Wharton health care management professors Arnold Rosoff, Patricia Danzon, Lawton Burns and Mark Pauly discussed their research on these issues and others during a recent presentation to incoming health care MBA students.
Politics over Policy?
After decades of debate over national health care reform, Wharton legal studies and health care management professor Arnold Rosoff warned that struggles over the Affordable Care Act (ACA), signed into law by President Obama in March 2010, may be far from over. It is uncertain whether the reform legislation, which was passed in a greatly compromised form after years of "partisan wrangling," can deliver on its promises of cost containment and expanded access to health care for the uninsured, Rosoff noted. "But before we get to that, we have to ask, 'Will ACA even stay on the books?'"
Continued in article
"When Health Insurance is Free," by John C. Goodman, Townhall,
September 10, 2011 ---
http://townhall.com/columnists/johncgoodman/2011/09/10/when_health_insurance_is_free
Did you know that an estimated one of every three uninsured people in this country is eligible for a government program (mainly Medicaid or a state children’s health insurance plan), but has not signed up?
Either they haven’t bothered to sign up or they did bother and found the task too daunting. It’s probably some combination of the two, and if that doesn’t knock your socks off, you must not have been paying attention to the health policy debate over the past year or so.
Put aside everything you’ve heard about Obama Care and focus on this bottom line point: going all the way back to the Democratic presidential primary, Obama Care was always first and foremost about insuring the uninsured. Yet at the end of the day, the new health law is only going to insure about 32 million more people out of more than 50 million uninsured. Half that goal will be achieved by new enrollment in Medicaid. But if you believe the Census Bureau surveys, we could enroll just as many people in Medicaid by merely signing up those who are already eligible!
What brought this to mind was a series of editorials by Paul Krugman and Health Affairs blog and at my blog) asserting that government is so much more efficient than private insurers. Can you imagine Aetna or UnitedHealth Care leaving one-third of its customers without a sale, just because they couldn’t fill out the paperwork properly? Well that’s what Medicaid does, day in and day out.
Put differently, half of everything Obama Care is trying to do is necessary only because the Medicaid bureaucracy does such a poor job — not of selling insurance, but of giving it away for free!
Writing in Health Affairs the other day, health policy guru Alain Enthoven and health care executive Leonard Schaeffer revealed some of the gory details of what people encounter when they do try to sign up for free health insurance from Medi-Cal (California Medicaid) in the San Diego office:
Continued in article
The Big Idea: How to Solve the Cost Crisis in Health Care
"What Health Care Really Costs," Harvard Business Review Blog, August 18, 2011
---
Click Here
http://blogs.hbr.org/ideacast/2011/08/what-health-care-really-costs.html?referral=00563&cm_mmc=email-_-newsletter-_-daily_alert-_-alert_date&utm_source=newsletter_daily_alert&utm_medium=email&utm_campaign=alert_date
Featured Podcast Interview Guest: Robert S. Kaplan, Harvard Business School professor and
coauthor of the HBR article How to Solve the Cost Crisis in Health Care.
"The Big Idea: How to Solve the Cost Crisis in Health Care," by Robert S.
Kaplan and Michael E. Porter, Harvard Business Review, August 2011 ---
http://hbr.org/2011/09/how-to-solve-the-cost-crisis-in-health-care/ar/1?referral=00134
. . .
Fortunately, we can change this state of affairs. And the remedy does not require medical science breakthroughs or top-down governmental regulation. It simply requires a new way to accurately measure costs and compare them with outcomes. Our approach makes patients and their conditions—not departmental units, procedures, or services—the fundamental unit of analysis for measuring costs and outcomes. The experiences of several major institutions currently implementing the new approach—the Head and Neck Center at MD Anderson Cancer Center in Houston, the Cleft Lip and Palate Program at Children’s Hospital in Boston, and units performing knee replacements at Schön Klinik in Germany and Brigham & Women’s Hospital in Boston—confirm our belief that bringing accurate cost and value measurement practices into health care delivery can have a transformative impact.
Continued in article (for a fee)
Jensen Comment
The article does not address all aspects of the cost of healthcare, including
the enormous cost of fraud in all aspects of healthcare from the funding of
unneeded medical procedures to phony medical equipment invoices to substandard
medications to medical services for people not eligible for funding of such
services such as undocumented aliens who enter this country for the purpose of
free obstetrics and other types of medical services.
There is also the cost of malpractice insurance which is often ten times what it is in Canada because of differences between how malpractice claims are processed in Canada versus the United States (where 80% of the world's lawyers practice).
"'The Flight to the Exchanges': The Wall Street Journal
writes that ObamaCare may cause small businesses to drop insurance coverage,"
The Wall Street Journal, July 25, 2011 ---
http://online.wsj.com/article/SB10001424053111903554904576462010405702984.html#mod=djemEditorialPage_t
McKinsey & Co. made itself the White House's public enemy number—well, we've lost count—after releasing a survey last month showing that nearly one in three businesses may drop insurance coverage as a result of the new health-care law. The real offense of the management consultants seems to be accurately portraying reality.
Consider a suggestive new survey to be released today by the National Federation of Independent Business, the trade group for small businesses. William Dennis, a senior research fellow who has conducted the study for 35 years, reports that 57% of a cross-section of companies that employ 50 or fewer workers and offer coverage may stop doing so. Look out below.
About two of five small companies sponsor insurance—a share that, according to NFIB, has on net held mostly stable or declined very slightly since the passage of the Affordable Care Act. Yet 12% of these companies—one of eight—have either had their plans cancelled or have been told that they will be in the future. This churn in the private small-group market is a direct result of ObamaCare's new rules and mandates—but a far larger destabilization could be in the offing, what Mr. Dennis calls "the flight to the exchanges."
Those would be the dispensaries of heavily subsidized insurance, and the NFIB finds that 26% of small businesses today sponsoring insurance are "very likely" to drop it should their employees start to flood government coverage. Another 31% of the 750 firms surveyed report they are "somewhat likely."
Small-business workers are eligible for exchange subsidies even if they can get job-based coverage. The incentive is for them to take it—given that the new government payments will be so generous, small-group coverage is generally costly and the insurance tax break for employers usually doesn't go very far when the employer is small.
If enough workers split, in other words, private coverage will soon erode and cease to exist as an option. Meanwhile, start-ups are constantly entering and exiting the market, and the ones with fewer benefits and liabilities will gain a competitive advantage. Businesses with fewer than 50 employees also aren't subject to any "play or pay" penalties. As Mr. Dennis put it in an interview, "Once you pull the string, everything may unravel."
ObamaCare's partisans claim none of this will happen because of the social norm theories of behavioral economics. Businesses offer insurance to attract workers, the thinking goes, and it's the right thing to do. But that assumes utter irrationality—that workers won't take a cheaper deal when they see it and businesses won't try to compete against their rivals.
Continued in article
College Financial Officers Contemplate Dropping Health Insurance Coverage
"Health Care Costs Up Again," by Kevin Kiley, Inside Higher Ed,
July 25, 2011 ---
http://www.insidehighered.com/news/2011/07/25/surveys_highlight_health_care_questions_on_the_horizon_for_hr_administrators
. . .
Because of these challenges, college administrators, like employers in other fields, are weighing the advantages and disadvantages of dropping coverage for some or all employees once several provisions of the Patient Protection and Affordable Care Act, the health care overhaul legislation passed by Congress in 2010, goes into effect in 2014.
"I don't think we're going to be able to provide that lifetime security like we used to," said Brad Kimler, executive vice president of benefits consulting at Fidelity Investments, during a presentation at the annual conference of the National Association of College and University Business Officers. "And I don't think it's realistic to expect that."
A recent Inside Higher Ed survey of business officers found that a large percentage of business officers, particularly at private universities and public baccalaureate institutions, listed health care liability as one of the most significant challenges of the next two to three years. Despite that concern, the question of how to manage these costs seems often to be going unaddressed. The CUPA-HR survey found that only a quarter of responding institutions had developed a strategy for what their health care benefits should be in three years.
The major question that hangs over administrators about upcoming health benefits decisions involves the components of the health care overhaul law that go into effect in 2014, notably the requirement that companies offer a reasonable level of health care benefits to their employees. Companies with more than 50 employees that don't offer health benefits will have to pay a penalty of $2,000 per worker. Individuals who do not not receive health benefits from their employers will receive income-indexed premium and out-of-pocket cost-sharing subsidies, enabling them to obtain private coverage they would not be able to afford on the current market. These options will be available in state or regional health care "exchanges."
It might be cheaper for employers, including colleges and universities, to pay the penalties and forgo whatever tax breaks come with offering employer-supported health benefits than to continue to provide benefits. "As a result, whether to offer ESI [employer-sponsored insurance] after 2014 becomes mostly a business decision," states a much-discussed survey conducted by McKinsey and Company, a management consulting firm. "Employers will have to balance the need to remain attractive to talented workers with the net economics of providing benefits -- taking into consideration all the penalties and tax advantages of offering or not offering any given level of coverage," the report states.
That survey found that 30 percent of employers will definitely or probably stop offering employer-sponsored coverage, a significantly higher percentage than the 7 percent of employers that the Congressional Budget Office predicted. Among employers who are well-versed in the law, the proportion increases to 50 percent, and 60 percent said they would pursue alternatives, the McKinsey survey found.
The report did not break down respondents by field, but did note it would be unlikely for only one company in a given field to dramatically alter its plans. Higher education institutions, on average, tend to be more generous with benefits than other types of employers, so the sector as a whole might see few shifts after the new provisions go into effect.
Getting out of the employer-supported health benefit game could be economically viable for some employers, but it could also be beneficial to employees. The McKinsey study notes that "because of the subsidies, many low-income employees will be able to obtain better health coverage, for less out of pocket, on an exchange than from their employer."
Aside from the economic decision, colleges and universities are also going to have weigh the cost of health benefits as a recruiting and retention tool. Kyle Cavanaugh, vice president for human resources at Duke University, said his institution would be hard-pressed to abandon its plan for that reason. "Faculty and staff tell us that one of the most significant things they value in working here is the health care plan we provide," he said. "The plan is highly valued, and because of that, we would have to very seriously weigh the cost of continuing to provide that."
But he noted that it is too early in the process to know what the exchange system will look like and therefore to actually make a judgment on that front. Most states have not even begun to design the health care exchanges (some have even said outright that they will not create them). A lot of politics remain between now and 2014, administrators say, including major deals regarding national spending and a presidential election.
Because so many factors will go into a college or university's decision on whether to abandon or modify its plans in three years, Cavanaugh stressed that institutions should be gathering and analyzing their data now. "Health care benefits have to, now more than ever, be managed in a strategic way," he said. "The combination of costs, faculty and staff expectations, and the ongoing evolution of national health care reform drive the need to be looking at this from a strategic standpoint."
Doing so could also show returns in the short term, if colleges find ways to drive down costs and measure the effectiveness of different programs. Cavanaugh said his college has found savings by increasing the use of generic drugs. By tracking conditions associated with avoidable and repeat hospital admissions, the university has also been able to work with providers to lower admissions. While Duke's costs have still gone up, Cavanaugh said they have been below the national average for the past few years.
CUPA's survey did find some notable widespread efforts to contain health care costs. More than 60 percent of colleges in CUPA-HR's survey said they offered wellness programs, but participation of employees at colleges was less than 20 percent at many institutions.
The survey also found the highest percentage of respondents providing same-sex domestic partner benefits -- 56 percent -- since the survey began. That is a significant increase from the 37 percent of respondents who reported offering same-sex benefits in 2005.
"A Federal Jump-start for Health IT: White House aide leads push to
improve health-care IT with billions in stimulus funds," by David Talbot,
MIT's Technology Review, September 6, 2011 ---
http://www.technologyreview.com/business/38475/?nlid=nldly&nld=2011-09-06
In a landmark government effort to drive American health care into the information age, the February 2009 stimulus bill earmarked about $30 billion in incentives for doctors and hospitals who install electronic medical records—paying up to $63,750 to individual physician and millions to hospitals.
Now comes the tough part: implementing "EMRs" and proving they really can reduce medical errors or get doctors to keep better track of chronically ill people. As National Coordinator for Health IT, Farzad Mostashari coordinates federal efforts to promote adoption of EMRs and to prod reluctant hospitals to share patient data.
Mostashari was recruited to take over the federal effort in February, after leading a patient-records initiative as an assistant health commissioner in New York City. He spoke with Technology Review's chief correspondent, David Talbot, about when we'll start seeing evidence that the technology is working.
TR: What problems are we attacking with this huge medical IT outlay?
Mostashari: Start with "First, do no harm." Right now we do harm to patients through health care. The estimates, conservatively, are 100,000 to 200,000 people killed each year by things like hospital-acquired infections and adverse drug events. Electronic medical records provide an opportunity to create standardized protocols, to provide decision-support and reminders for doctors, and to tell them about the patient's medications and drug allergies, as well as any dangerous drug interactions, at the point of care. Those are all proven interventions.
What else can software do besides cut back on accidental hospital deaths?
All too often, people come into the doctor's office with high blood pressure which will kill them from stroke or heart attack, but the patient is complaining about something else. Doctors can get distracted and not pay attention to the most important thing—which might be that the patient's blood pressure is out of control, or the flu shot that hasn't been given. Electronic records can make it easy to provide these reminders. It can also make a list of patients who have not come in, who have high blood pressure or diabetes, and must be seen.
Why is the health care industry so far behind other industries?
Unfortunately, the business case often has not been strong enough to support adoption and use of electronic records. But we have now reached a point where the incentives are turning the other way—with greater emphasis on paying for outcomes and value rather than volume.
Bring us up to date since February 2009, when the bill passed. What is the progress to date on getting the IT installed?
The ice has broken after decades of talk. Back in 2009, only 10 percent of hospitals and 20 percent of primary care providers used basic EMRs. Within a year, the doctors went from 20 percent to 30 percent. I expect it to get to 40 percent this year. We have about 10,000 new providers a month registering for incentives. About $400 million has gone out in payments already, and is expected to hit the $1 billion mark by early 2012.
But this is more than installing software—it's about a concept called "meaningful use." The health IT incentive payments are predicated on very specific criteria. For example, the electronic health record must contain blood pressure readings, height and weight, lab data, the patient's problem list, and allergies; the patients' preferred language will be recorded; and the system must have a whole series of functionalities around sharing information with] patients and public health agencies.
Continued in article
Bob Jensen's health care threads are at
http://www.trinity.edu/rjensen/Health.htm
Updates for June 30, 2011
"The Deficit Is Worse Than We Think: Normal interest rates would
raise debt-service costs by $4.9 trillion over 10 years, dwarfing the savings
from any currently contemplated budget deal," by Lawrence B. Lindsey, The
Wall Street Journal, June 28, 2011 ---
http://online.wsj.com/article/SB10001424052702304657804576401883172498352.html?mod=djemEditorialPage_t
Washington is struggling to make a deal that will couple an increase in the debt ceiling with a long-term reduction in spending. There is no reason for the players to make their task seem even more Herculean than it already is. But we should be prepared for upward revisions in official deficit projections in the years ahead—even if a deal is struck. There are at least three major reasons for concern.
First, a normalization of interest rates would upend any budgetary deal if and when one should occur. At present, the average cost of Treasury borrowing is 2.5%. The average over the last two decades was 5.7%. Should we ramp up to the higher number, annual interest expenses would be roughly $420 billion higher in 2014 and $700 billion higher in 2020.
The 10-year rise in interest expense would be $4.9 trillion higher under "normalized" rates than under the current cost of borrowing. Compare that to the $2 trillion estimate of what the current talks about long-term deficit reduction may produce, and it becomes obvious that the gains from the current deficit-reduction efforts could be wiped out by normalization in the bond market.
To some extent this is a controllable risk. The Federal Reserve could act aggressively by purchasing even more bonds, or targeting rates further out on the yield curve, to slow any rise in the cost of Treasury borrowing. Of course, this carries its own set of risks, not the least among them an adverse reaction by our lenders. Suffice it to say, though, that given all that is at stake, Fed interest-rate policy will increasingly have to factor in the effects of any rate hike on the fiscal position of the Treasury.
The second reason for concern is that official growth forecasts are much higher than what the academic consensus believes we should expect after a financial crisis. That consensus holds that economies tend to return to trend growth of about 2.5%, without ever recapturing what was lost in the downturn.
But the president's budget of February 2011 projects economic growth of 4% in 2012, 4.5% in 2013, and 4.2% in 2014. That budget also estimates that the 10-year budget cost of missing the growth estimate by just one point for one year is $750 billion. So, if we just grow at trend those three years, we will miss the president's forecast by a cumulative 5.2 percentage points and—using the numbers provided in his budget—incur additional debt of $4 trillion. That is the equivalent of all of the 10-year savings in Congressman Paul Ryan's budget, passed by the House in April, or in the Bowles-Simpson budget plan.
Third, it is increasingly clear that the long-run cost estimates of ObamaCare were well short of the mark because of the incentive that employers will have under that plan to end private coverage and put employees on the public system. Health and Human Services Secretary Kathleen Sebelius has already issued 1,400 waivers from the act's regulations for employers as large as McDonald's to stop them from dumping their employees' coverage.
But a recent McKinsey survey, for example, found that 30% of employers with plans will likely take advantage of the system, with half of the more knowledgeable ones planning to do so. If this survey proves correct, the extra bill for taxpayers would be roughly $74 billion in 2014 rising to $85 billion in 2019, thanks to the subsidies provided to individuals and families purchasing coverage in the government's insurance exchanges.
Underestimating the long-term budget situation is an old game in Washington. But never have the numbers been this large.
There is no way to raise taxes enough to cover these problems. The tax-the-rich proposals of the Obama administration raise about $700 billion, less than a fifth of the budgetary consequences of the excess economic growth projected in their forecast. The whole $700 billion collected over 10 years would not even cover the difference in interest costs in any one year at the end of the decade between current rates and the average cost of Treasury borrowing over the last 20 years.
Continued in article
"Shutting Up McKinsey: The White House vilifies a company for
reporting health-care reality," The Wall Street Journal, June 29,
2011 ---
http://online.wsj.com/article/SB10001424052702304070104576400004065859190.html#mod=djemEditorialPage_t
The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else. The management consultants attempted to find out how U.S. business will respond to the government restructuring of 17.3% of the economy, Democrats don't like the results, and so McKinsey must pay with its reputation.
The firm's sin was to canvass some 1,300 companies and report that nearly a third will "definitely" or "probably" stop offering insurance to employees after 2014, dumping them instead into ObamaCare's subsidized exchanges. McKinsey conducted the survey as part of its routine market research.
Democrats immediately blasted the results, attacked McKinsey's integrity and demanded that it release its methodology and full responses. Nancy-Ann DeParle, the deputy chief of staff who is running ObamaCare from the White House, was withering. Senate Finance Chairman Max Baucus chimed in with questions like "Who are your biggest clients? Do you expect McKinsey & Co. to benefit financially from the results of this survey?"
So this week McKinsey opened its books, and what do you know, the survey was rigorous. Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.
Ms. DeParle and others claimed vindication because McKinsey conceded it was not a "predictive economic analysis," while forecasters like the Congressional Budget Office think the law will have little effect on employer coverage. In other words, an analysis of business attitudes in the real world is less credible than CBO's macroeconomic models that depend on undisclosed assumptions. These are the same models that claim the stimulus "created or saved" millions of jobs.
The furor says less about McKinsey than about the politically damaging reality of the new law. As the McKinsey survey shows in detail, many businesses may be better off if they drop coverage and pay workers slightly more to compensate for fewer benefits, along with paying the new penalty for not providing insurance. Many workers earning up to $102,000 may also be better off because the ObamaCare subsidies are so much larger than the current tax break for employer coverage.
As more people partake of "free" health care, taxpayer costs will explode. Consumers will gradually lose the choice and quality of private insurance for the politically mandated policies that will be offered in most exchanges. Increasing the share of the insurance market operating under Washington command and control will increase costs and distortions in the health markets.
McKinsey's study merely echoes what economist Doug Holz-Eakin has also been shouting from the rafters about ObamaCare's impact on private coverage. Ditto for Eugene Steuerle of the Urban Institute. Is that left-leaning outfit now a GOP mouthpiece too? McKinsey isn't known for its partisan sympathies, and most top-drawer consulting firms deliberately avoid the political fray. Clients want intelligence, not controversy.
The White House method is nonetheless to assail even disinterested analysts as dishonest or motivated by bad faith, and the habit is especially pronounced against businesses that have something to lose. Think of the public trashing of the insurers WellPoint and Humana for accurately describing how costs will soar under the new entitlement, or the companies like AT&T and Verizon that ObamaCare forced to take huge writedowns last year.
The fact that the White House feels it must vilify businesses for telling the truth about ObamaCare shows just how destructive the law really is.
"Shutting Up McKinsey: The White House vilifies a company for
reporting health-care reality," The Wall Street Journal, June 29,
2011 ---
http://online.wsj.com/article/SB10001424052702304070104576400004065859190.html#mod=djemEditorialPage_t
The White House routinely tries to intimidate its health-care critics, but the campaign against McKinsey & Co. is something else. The management consultants attempted to find out how U.S. business will respond to the government restructuring of 17.3% of the economy, Democrats don't like the results, and so McKinsey must pay with its reputation.
The firm's sin was to canvass some 1,300 companies and report that nearly a third will "definitely" or "probably" stop offering insurance to employees after 2014, dumping them instead into ObamaCare's subsidized exchanges. McKinsey conducted the survey as part of its routine market research.
Democrats immediately blasted the results, attacked McKinsey's integrity and demanded that it release its methodology and full responses. Nancy-Ann DeParle, the deputy chief of staff who is running ObamaCare from the White House, was withering. Senate Finance Chairman Max Baucus chimed in with questions like "Who are your biggest clients? Do you expect McKinsey & Co. to benefit financially from the results of this survey?"
So this week McKinsey opened its books, and what do you know, the survey was rigorous. Respondents were a representative cross-section of businesses of many sizes and across industries and regions, and the questions were impartial.
Ms. DeParle and others claimed vindication because McKinsey conceded it was not a "predictive economic analysis," while forecasters like the Congressional Budget Office think the law will have little effect on employer coverage. In other words, an analysis of business attitudes in the real world is less credible than CBO's macroeconomic models that depend on undisclosed assumptions. These are the same models that claim the stimulus "created or saved" millions of jobs.
The furor says less about McKinsey than about the politically damaging reality of the new law. As the McKinsey survey shows in detail, many businesses may be better off if they drop coverage and pay workers slightly more to compensate for fewer benefits, along with paying the new penalty for not providing insurance. Many workers earning up to $102,000 may also be better off because the ObamaCare subsidies are so much larger than the current tax break for employer coverage.
As more people partake of "free" health care, taxpayer costs will explode. Consumers will gradually lose the choice and quality of private insurance for the politically mandated policies that will be offered in most exchanges. Increasing the share of the insurance market operating under Washington command and control will increase costs and distortions in the health markets.
McKinsey's study merely echoes what economist Doug Holz-Eakin has also been shouting from the rafters about ObamaCare's impact on private coverage. Ditto for Eugene Steuerle of the Urban Institute. Is that left-leaning outfit now a GOP mouthpiece too? McKinsey isn't known for its partisan sympathies, and most top-drawer consulting firms deliberately avoid the political fray. Clients want intelligence, not controversy.
The White House method is nonetheless to assail even disinterested analysts as dishonest or motivated by bad faith, and the habit is especially pronounced against businesses that have something to lose. Think of the public trashing of the insurers WellPoint and Humana for accurately describing how costs will soar under the new entitlement, or the companies like AT&T and Verizon that ObamaCare forced to take huge writedowns last year.
The fact that the White House feels it must vilify businesses for telling the truth about ObamaCare shows just how destructive the law really is.
"No, You Can't Keep Your Health Insurance: A new study by McKinsey
suggests that as many as 78 million Americans could lose employer health
coverage," by Grace-Marie Turner, The Wall Street Journal, June 7,
2011 ---
http://online.wsj.com/article/SB10001424052702304432304576371252181401600.html?mod=djemEditorialPage_t
ObamaCare will lead to a dramatic decline in employer-provided health insurance—with as many as 78 million Americans forced to find other sources of coverage.
This disturbing finding is based on my calculations from a survey by McKinsey & Company. The survey, published this week in the McKinsey Quarterly, found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014. An estimated 156 million non-elderly Americans get their coverage at work, according to the Employee Benefit Research Institute.
Before the health law passed, the Congressional Budget Office estimated that only nine million to 10 million people, or about 7% of employees who currently get health insurance at work, would switch to government-subsidized insurance. But the McKinsey survey of 1,300 employers across industries, geographies and employer sizes found "that reform will provoke a much greater response" and concludes that the health overhaul law will lead to a "radical restructuring" of job-based health coverage.
Another McKinsey analyst, Alissa Meade, told a meeting of health-insurance executives last November that "something in the range of 80 million to 100 million individuals are going to change coverage categories in the two years" after the insurance mandates take effect in 2014.
Many employees who will need to seek another source of coverage will take advantage of the health-insurance subsidies for families making as much as $88,000 a year. This will drive up the cost of ObamaCare.
In a study last year, Douglas Holtz-Eakin, a former director of the Congressional Budget Office, estimated that an additional 35 million workers would be moved out of employer plans and into subsidized coverage, and that this would add about $1 trillion to the total cost of the president's health law over the next decade. McKinsey's survey implies that the cost to taxpayers could be significantly more.
The McKinsey study, "How US health care reform will affect employee benefits," predicts that employers will either drop coverage altogether, offer defined contributions for insurance, or offer coverage only to certain employees. The study concludes that 30% of employers overall will definitely or probably stop offering health insurance to their workers. However, among employers with a high awareness of the health-reform law, this proportion increases to more than 50%.
The employer incentives to alter or cease coverage under the health-reform law are strong. According to the study, at least 30% of employers would gain economically from dropping coverage, even if they completely compensated employees for the change through other benefit offerings or higher salaries. That's because they no longer would be tethered to health-insurance costs that consistently rise faster than inflation.
Employers should think twice if they believe the fine for not offering coverage will stay unchanged at $2,000 per worker. "If many companies drop health insurance coverage, the government could increase the employer penalty or raise taxes," according to the new study, authored by McKinsey consultants Shubham Singhal, Jeris Stueland and Drew Ungerman.
Continued in article
"The Accountable Care Fiasco Even the models for health reform hate the
new HHS rule," The Wall Street Journal, June 20, 2011 ---
http://online.wsj.com/article/SB10001424052702304520804576343410729769144.html?mod=djemEditorialPage_t
The Obama Administration is handing out waivers far and wide for its health-care bill, but behind the scenes the bureaucracy is grinding ahead writing new regulations. The latest example is the rule for Accountable Care Organizations that are supposed to be the crown jewel of cost-saving reform. One problem: The draft rule is so awful that even the models for it say they won't participate. ***
The theory for ACOs, as they're known, is that hospitals, primary-care doctors and specialists will work more efficiently in teams, like at the Mayo Clinic and other top U.S. hospitals. ACOs are meant to fix health care's too-many-cooks predicament. The average senior on Medicare sees two physicians and five specialists, 13 on average for those with chronic illnesses. Most likely, those doctors aren't coordinating patient care.
This fragmentation is largely an artifact of Medicare's price control regime: The classic case study is Duke University Hospital, which cut the costs of treating congestive heart failure by 40% but then dumped the integration program because it lost money under Medicare's fee schedule.
Intelligent liberals now concede this reality but claim that the government merely needs to devise better price controls. By changing the way it pays, Medicare under the ACO rule is effectively mandating a new business model for practicing medicine. The vague cost-control hope is that ACOs will run pilot programs like Duke's and the successful ones will become best practices. While the program is voluntary for now, the government's intention is to make it mandatory in the coming years.
But what if they had an ACO revolution and no one showed up? The American Medical Group Association, a trade association of multispeciality practice groups and other integrated providers, calls the rule recently drafted by the Department of Health and Human Services "overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve." In a survey of its members, 93% said they won't enroll.
The Administration wrote its rule based on an ACO pilot program that started in 2005 among 10 high-performing physician groups, including Geisinger Health System and Dartmouth-Hitchcock. All 10 say they have "serious reservations" about the new rule and that without major revisions "we will be unable to participate." In other words, the providers that are already closest to being an ACO have rejected the Administration's handiwork.
And no wonder, since the 429-page rule is a classic of top-down micromanagement. ACOs will need to comply with a kitchen sink of 65 clinical measures that are meant to produce efficiencies, like reducing infections or ensuring that patients take their medications after hospital discharge. If care at an ACO costs less than Medicare predicts it will cost under the status quo, then the ACO will receive a share of the savings as a bonus payment. The rule also includes financial penalties if an ACO misses its targets.
Incredibly, the ACO teams won't know in advance which patients they're supposed to manage. Seniors will be "retrospectively assigned" to an ACO at the end of every year, based on an arbitrary algorithm, for the purposes of calculating costs.
Continued in article
"Vermont Gives the 'Public Option' a Clinical Trial The governor claims it
is 'all about containing costs.' The evidence is not encouraging," by David
Gratzer, The Wall Street Journal, May 21, 2011 ---
http://online.wsj.com/article/SB10001424052748703655404576293020190881258.html?mod=djemEditorialPage_t
In America's courtrooms, ObamaCare is on trial. A majority of states have filed lawsuits arguing that its mandate requiring individuals to purchase health insurance is unconstitutional. But in Vermont, ObamaCare is about to get a trial of a different sort—a clinical one.
This coming Thursday, Gov. Peter Shumlin will sign a bill doing what President Obama and his allies have hoped to do all along: sell a public insurance option alongside competing private insurance as a first step toward a single-payer, government-run system. Unlike the president, Mr. Shumlin has been up-front in his support for single-payer care, even on the campaign trail last fall. At least he can say he has a mandate from voters to do what he's doing.
The last time Vermont's health system gained national attention was in 2004, when Howard Dean, then governor of the state, ran for president. As governor, Mr. Dean expanded public insurance eligibility, struggling to get as close to single-payer health care as he legally could. New regulations pushed out private insurers, reducing competition. Vermont imposed a guaranteed-issue mandate, which requires insurers to sell to any applicant, and forced insurers to use community rating, which requires them to offer the same price to everyone, regardless of age and health. Both measures also appeared in the final ObamaCare law.
The result? The number of uninsured Vermonters barely budged. But costs sure moved—in the wrong direction. From 1991 to 2004, according to the Kaiser Foundation, Vermont's health costs grew by 7.6% annually. Across the U.S. comparable costs grew only 5.5% on average. From 2005 to 2008, in data cited by Dr. William Hsaio, a Harvard consultant studying this for the state, growth in Vermont's health costs grew 8.2%, against a national average of 5.7%.
The current governor says his plan is "all about containing costs," echoing Mr. Obama's absurd claim that increased health spending would mean lower deficits. Mr. Shumlin can talk about government health care and savings in the same breath because millions of Americans still believe the myth that socialized health-care models are immune from cost inflation.
Yet data from the Organization for Economic Cooperation and Development show that U.S. health inflation rates are roughly identical to those seen in European and Canadian systems. From 1990 to 2006, U.S. health costs grew an average of 1.66% faster than the economy vs. 1.62% for OECD nations.
Socialized medicine advocates say the point is moot because government-run systems start from a cheaper baseline. That's true, but that advantage is eroding quickly. A recent paper projected that Canadian health-care costs were growing so fast that they should consume 19% of GDP by 2031. The chief author of the paper is David Dodge, Canada's former deputy minister of health and a former governor of the Bank of Canada.
Single-payer countries also keep costs below U.S. levels by rationing care, not by being more efficient. Several weeks ago, the government-run, government-appointed health authority in the Canadian city where I was born admitted that a dozen patients died in the last three years while waiting for routine cardiac surgery. None was classified as an emergency case. In Canada's system, that made them "elective" surgery patients, triggering wait times that can delay treatment for weeks or even months. Yet single-payer activists persistently claim that "death by rationing" is a myth invented by insurance lobbyists.
In the U.S., Medicare hasn't seen much rationing yet, because it can rely on a privately funded reserve of resources to meet surges in demand. Whenever Congress flirts with serious cuts to Medicare fees, doctors push back. Then, Congress flinches—a sign that the program is more dependent on the private-sector than its champions admit.
Now Vermont is on course to repeat others' mistakes. For American liberals, there's no better place to test-run a public option. But if the new plan doesn't work, Vermont is so small that government-care supporters can pretend it's the state's fault and not a flaw in the concept. Darcie Johnston of Vermonters for Health Care Freedom fears the worst: "the largest tax hike in Vermont history" and a dysfunctional system.
It's a pity, because Vermont is an ideal place to run a very different experiment. Health-care policy thinkers are shifting focus to the potential benefits of a true wellness policy. Your health is as important to health outcomes as your health insurance, after all. Europeans have better life expectancy than Americans because they take better care of themselves on average, not because they get better care in their hospitals.
Through their own lifestyle choices, Vermont residents already have lower than average obesity levels and below-median smoking rates. With a more patient-centered insurance market, Vermont residents could receive, for example, cash incentives to prevent diseases caused by obesity, tobacco, and other lifestyle choices, all at a fraction of the cost of future treatments.
Continued in article
Jensen Comment
In this experiment Vermont suffers from a relatively small population over which
to spread health insurance costs for very expensive treatments such as AIDs
medications, organ transplants, premature baby care, and the costs of dying
(especially extended intensive care unit confinements while dying) for patients
not on Medicare. Medical cost In the 2010 census, Vermont only had 630,337
people, many of whom are children and elderly that will not pay medical
insurance premiums in Vermont's public plan ---
http://en.wikipedia.org/wiki/Vermont
Vermont residents also rely heavily on out--of-state medical providers such as physicians and hospitals in bordering states of New Hampshire (especially the Dartmouth-Hitchcock Medical Center), Massachusetts (especially in the metropolitan area of Boston), and Canada. This greatly limits cost containment initiatives that accompany Vermont's public medical insurance plans.
Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by
Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/
In a new working paper called “Technology Growth and Expenditure Growth in Health Care” (abstract here, PDF here), Amitabh Chandra and Jonathan S. Skinner offer an explanation:
"Look who's getting out of ObamaCare," by Michelle Malkin, New York
Post, May 19, 2011 ---
Click Here
http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_getting_out_of_obamacare_m4OxnfKVajFAfgKRCazP3H?CMP=OTC-rss&FEEDNAME=
Hear that? It's the escalating cry of American employers and workers trying to hold on to their health-care benefits in the age of stifling Obama health-insurance mandates: Gangway! Gangway! Save me! Waive me!
ObamaCare refugees first began beating down the exit doors last October. Waiver-mania started with McDonald's and Jack in the Box; spread to Dish Networks, hair-salon chain Regis Corp and resort giant Universal Orlando; took hold among major Big Labor outfits from the AFL-CIO to the CWA to the SEIU; roped in the nationalized health-care promoters at the Robert Wood Johnson Foundation; and is now gripping entire states
The latest to catch the waive? West Coast liberals.
Yes, amid House Democratic Leader Nancy Pelosi's congressional district, a cluster of San Francisco small businesses is among the latest waiver recipients. At least two dozen Bay Area companies -- including bars, restaurants, hotels, tourist shops, real-estate and auto firms -- have secured temporary, one-year reprieves from the federal law.
Another noteworthy waiver winner: Seattle-based REI. The trendy outdoor-equipment retailer's progressive CEO, Sally Jewell, appeared with President Obama in 2009 to tout White House health-care-reform initiatives. Two years later, REI snagged a waiver to protect the health benefits of a whopping 1,180 workers from the big-government bureaucrats that Jewell embraced at Obama's roundtable.
To date, the Health and Human Services Department has granted health-care-law exemptions to more than 3 million workers covered by more than 1,300 unions, companies and insurers who'd voluntarily offered low-cost health plans with annual benefits limits.
ObamaCare architects outlawed those private plans (nicknamed "mini med" plans) in the name of "patients' rights." Without waivers, the escapees would have had to hike premiums or drop insurance coverage for mostly low-wage, seasonal and part-time workers.
Among the most recent union affiliates to secure pardons:
* Teamsters Local 485 Health and Welfare Fund in Brooklyn
* Detroit and Vicinity Trowel Trades Health and Welfare Fund
* Communications Workers of America Local 1182 Security Benefits Fund
* CWA Local 1183 Health and Welfare Fund
* Bakers Union and Food Employees Labor Relations Association Health and Welfare Fund
* SEIU Healthcare Illinois Home Care and Child Care Fund
* United Food and Commercial Workers San Diego Employers Health and Welfare Trust
* Welfare Fund of the International Union of Operating Engineers Local 15, 15A, 15C, 15D AFL-CIO
* United Steelworkers Local 1-0318 Health and Welfare Trust Fund
* United Association of Journeymen and Apprentices Local 198 AFL-CIO Health and Welfare Trust
* Teamsters Local 617 Welfare Fund in Ridgefield, NJ
* Plumbers and Steamfitters Local 60 Health and Welfare Fund
* New York State Nurses Welfare Plan for New York City Employed Registered Professional Nurses
Pelosi and the Golden Ticket Administrators in Washington deny preferential treatment for waiver beneficiaries. But the stench of waivers-for-favors won't be dispelled until and unless the Obama administration releases a full list not only of those who won exemptions, but also of those who applied and were denied.
With San Francisco businesses caught with their hands in the waiver jar, Pelosi's office could do nothing else but pout: "It is pathetic," said Pelosi spokesman Drew Hammill, "that there are those who would be cheering for Americans to lose their minimum health coverage or see their premiums increase for political purposes."
It is far more pathetic to have cheered, as Pelosi did on the one-year anniversary of ObamaCare, the law's onerous benefits limits from which thousands of her own constituents have now been exempted.
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"Liberal Washington State Tries to Kiss Medicaid Goodbye: The
governor and the legislature unanimously back a block-grant model similar to
welfare reform," by Nansen Malin, The Wall Street Journal, June 4,
2011 ---
http://online.wsj.com/article/SB10001424052702303657404576363812467438234.html#mod=djemEditorialPage_t
Medicaid has plunged Washington state into fiscal crisis. This fact was recognized by legislators from both sides of the aisle during a contentious special session that concluded last week. The result was Senate Bill 5596, a Medicaid block-grant bill.
The block-grant concept was remarkably nonpartisan: The bill, requiring the state to apply to the federal Department of Health and Human Services (HHS) for a waiver that would replace its current Medicaid program with a block grant, passed with unanimous support. On Tuesday, Gov. Christine Gregoire, previously an opponent of block grants, signed the bill. Now the waiver request will go to HHS Secretary Kathleen Sebelius.
A block grant would free state and local officials from being de facto appendages of the faraway federal government. Just the latest in the long line of unnecessary federal strings are the costly "maintenance of effort" requirements imposed by the federal stimulus bill and ObamaCare. This requirement will add an estimated 176,000 people to our state's Medicaid rolls by 2013 and prohibit the state from modifying eligibility rules without risking a loss of all Medicaid funding.
In contrast, SB 5596's authors explain that the block grant would "allow the state to operate as a laboratory of innovation for bending the cost curve, preserving the safety net, and improving the management of care for low-income populations." Rhode Island has had success under a similar waiver granted in 2009, saving $100 million within the first 18 months. With a block grant, state legislators will have the ability to alter eligibility and benefits to best serve the unique needs of their constituents without having to opt out of Medicaid entirely.
Continued in article
Bob Jensen's threads on health care reform are at
http://www.trinity.edu/rjensen/Health.htm
"Mediscare: The Surprising Truth
Republicans are being portrayed as Medicare Grinches, but ObamaCare already has
seniors' health care slated for draconian cuts," by Thomas Saving and John C.
Goodman, The Wall Street Journal, May 28, 2011 ---
http://online.wsj.com/article/SB10001424052702304066504576345732775990392.html?mod=djemEditorialPage_t
The Obama administration has repeatedly claimed that the health-reform bill it passed last year improved Medicare's finances. Although you'd never know it from the current state of the Medicare debate—with the Republicans being portrayed as the Medicare Grinches—the claim is true only because ObamaCare explicitly commits to cutting health-care spending for the elderly and the disabled in future years.
Yet almost no one familiar with the numbers thinks that the planned brute-force cuts in Medicare spending are politically feasible. Last August, the Office of the Medicare Actuary predicted that Medicare will be paying doctors less than what Medicaid pays by the end of this decade and, by then, one in seven hospitals will have to leave the Medicare system.
But suppose the law is implemented just as it's written. In that case, according to the Medicare Trustees, Medicare's long-term unfunded liability fell by $53 trillion on the day ObamaCare was signed.
But at what cost to the elderly? Consider people reaching the age of 65 this year. Under the new law, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today's prices. That sum of money is equivalent to about three years of benefits. For 55-year-olds, the spending decrease is about $62,000—or the equivalent of six years of benefits. For 45-year-olds, the loss is more than $105,000, or nine years of benefits.
In terms of the sheer dollars involved, the law's reduction in future Medicare payments is the equivalent of raising the eligibility age for Medicare to age 68 for today's 65-year-olds, to age 71 for 55-year-olds and to age 74 for 45-year-olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.
What does this mean in terms of access to health care? No one knows for sure, but it almost certainly means that seniors will have difficulty finding doctors who will see them and hospitals who will admit them. Once admitted, they will enjoy fewer amenities such as private rooms and probably a lower quality of care as well.
Are there better ways of solving the problem? The graph nearby shows three proposals, including the new law, and compares them to the current system. For the past 40 years, real Medicare spending per capita has been growing about two percentage points faster than real gross domestic product (GDP) per capita. Since real GDP per capita grows at just about 2%, that means Medicare is growing at twice the rate of our economy—and is clearly unsustainable. If nothing is done, we'll see a doubling of the Medicare tax burden in less than 20 years.
There are currently an array of proposals to slow Medicare spending to a rate of GDP growth plus 1%. These include a proposal by President Obama's debt commission, chaired by Bill Clinton's former chief of staff, Erskine Bowles, and former Sen. Alan Simpson; one by former Clinton budget director Alice Rivlin and Rep. Paul Ryan (R., Wis.); and another by former Sen. Pete Domenici and Ms. Rivlin. Unlike the Medicare Trustees, the Congressional Budget Office (CBO) also scores ObamaCare at GDP plus 1%.
Of greater political interest is the House Republican budget proposal, sponsored by Mr. Ryan. This proposal largely matches the new law's Medicare cuts for the next 10 years and then provides new enrollees with a sum of money to apply to private insurance (premium support). Even though the CBO assumed premium support would increase with consumer prices (price indexing), the resolution that House Republicans actually voted for contains no specific escalation formula. A natural alternative is letting premium support payments grow at the annual rate of increase in per-capita GDP (GDP indexing).
In light of the heated rhetoric of recent days, it is worth noting that for everyone over the age of 55, there is no difference between the amount of money the House Republicans voted to spend on Medicare and the amount that the Democrats who support the health-reform law voted to spend. Even for younger people, the amounts are virtually identical with GDP indexing.
The law's spending path depends on making providers pay for all the future Medicare shortfalls. But since no one can force health-care providers to show up for work, short of a health-care provider draft this reform ultimately cannot succeed. The House Republican path, on the other hand, would make a sum of money available to each senior to choose among competing private plans—much the way Medicare Advantage provides insurance today for about one out of every four Medicare beneficiaries.
That's a good starting point. But we believe that a truly successful overhaul of Medicare will require at least three additional elements.
Continued in article
"How Medicare Was Saved What a future us will say about the Great Entitlement
Fight of 2011m" by Holman Jenkins Jr. The Wall Street Journal, May 27, 2011 ---
http://online.wsj.com/article/SB10001424052702304520804576349223226233288.html#mod=djemEditorialPage_t
News item dated May 28, 2041 at BataviaOnlineNow!, a news site devoted to Western New York: As they have for the past 30 years, the Democratic faithful in the 26th congressional district turned last night's Jefferson-Jackson Dinner into an opportunity also to commemorate Medicare-As-We-Knew-It Salvation Day. Last night's celebration was extra special, thanks to the presence of Barack Obama. "I just came for the wings," quipped the former president. (Nearby Buffalo, N.Y., of course, is the birthplace of the chicken wing.) On a serious note, Mr. Obama, 79, recalled the watershed Democratic special election victory of 2011 as a turning .point in his battle to save Medicare, the health-care program for seniors.
Earlier, dignitaries had visited the Hamburg Regional Medicare Center, specially unlocked by a janitor for the occasion. Normally the center is open between noon and 2 p.m. on Saturday to help a trickle of financially struggling local seniors apply for Medicaid.
The delegation also visited the Greater Hamburg Medical Megalopolis, adjacent to the Jack Kemp Retirement Community and Country Club. Many older residents, stopping in for discount knee adjustments or massage therapy, said they vividly recalled the 2011 congressional election. A high point was the visit of "Bowzer," of the singing group Sha Na Na, to campaign for the Democratic winner.
Historians say the race was a nationally watched referendum on the so-called Ryan Plan, which some critics likened to a plan to solve Medicare's then-pending bankruptcy by wheeling an elderly woman off a cliff.
"At the time, Medicare's fiscal shortfalls were very, very serious," says SUNY Geneseo Prof. DeWayne Wise Srinivasan. "But after NY-26, it was clear there would be no political will in Washington to address the problem. The senior lobby and other interest groups were too powerful."
However, that was not the end of the story. After the upset Democratic win in the 26th, both parties turned to the more politically palatable job of meeting a clamor from younger workers for tax-law changes to help them save for their own retirements.
Politicians had inadvertently tapped into a principle known as Ricardian Equivalence, says Prof. Srinivasan. "Polls showed nobody under 40 believed that Medicare and Social Security would be around to support them in retirement. So these younger workers were determined to increase their own savings to help pay for the long, healthy, active retirements they envisioned for themselves."
The result was the Tax Reform Act of 2013, which greatly reduced the burden of taxation on savings, investment and business profits. One upshot was what economists now call The Long Boom II, a period of unparalleled prosperity that continues to this day.
Not present for this week's festivities was the victor in that long-ago congressional race, former Erie County Clerk Kathy Hochul
"The Trouble with ObamaCare Counting the problems with the president's
health care plan," by David Harsanyi, Reason Magazine, June 8, 2011
---
http://reason.com/archives/2011/06/08/the-trouble-with-obamacare
Democrats will often get irritable when some clingy philistine refers to ObamaCare as "socialized medicine." It's simply not a precise phrase for the Patient Protection and Affordable Care Act. In any event, it's not socialized yet, you ignoramuses! Progress doesn't happen overnight. No worries, though, recent signs portend that ObamaCare will give us the state-run plan we proles deserve.
A new study published in McKinsey Quarterly claims that in 2014, the provisions of ObamaCare will induce 3 in 10 employers to "definitely or probably" stop offering health coverage to their employees. And we can only assume the companies have had the good sense not to read the legislation.
Sure, the president promised we could keep our insurance if we liked it. But why would you want to be mixed up with pitiless corporations that focus on profits, anyway? ObamaCare courageously forces states to implement concocted "exchanges" so that someone much smarter than you can pick participants, regulate prices and keep an eye on things. Sounds like a vigorous marketplace. It's only a wonder that more Americans aren't clamoring for government-run supermarkets, smartphones, and dating exchanges, as well.
You'll also recall that the un-socialized system allowed 20, 30, 40 million (please feel free to come up with any number you'd like; The New York Times won't care) people to go uninsured. Medicare's chief actuary estimated that 400,000 would sign up for these high-risk pools before ObamaCare kicked in. The Congressional Budget Office estimated that the budget would be able to handle 200,000, and others claimed that the program would need eight times the funding to meet demand. This was the driving reason for ObamaCare. But as Megan McArdle of The Atlantic points out, just as with the exchanges, folks have been standoffish, with only about 18,000 people signing up.
Victory, right? The success of a government handout is always measured by how little Americans need to use it, right? Well, judging from the food stamp administration's actions, that would be a big no. What this probably calls out for is more public service announcements or a wider net. Hey, we'll just get some toffee-nosed yacht jockeys to offset the cost.
That's not to say there aren't people out there who really need support. The president has generously handed out nearly 1,400 ObamaCare waivers to the neediest among us. About 20 percent of them have been awarded to an upmarket district in San Francisco that, by pure chance, is represented by Nancy Pelosi. Others, such as the AARP and local unions, had demanded we pass ObamaCare so they could not take part in it immediately.
We'll also soon be hearing more about the lawsuits challenging ObamaCare's individual mandate. Randy Barnett, a professor of constitutional law at Georgetown University Law Center, recently asked, "If Congress can impose this economic mandate on the people, what can't it mandate the people to buy?" Everything and nothing. And that's the beauty of it.
And let's not forget it was Obama, the newfound holy savior of Medicare, who pinned the key cost control component of health care reform on Medicare through his Independent Payment Advisory Board, or what bitter righties call a rationing board.
Continued in article
"The ObamaCare Bad News Continues: Projected costs escalate and tens
of millions will lose their current coverage," by Karl Rove, The Wall
Street Journal, June 16, 2011 ---
http://online.wsj.com/article/SB10001424052702304319804576387542318531626.html#mod=djemEditorialPage_t
A kerfuffle was stirred up last week by a devastating McKinsey & Company study that concluded up to 78 million Americans would lose their current health coverage as employers stopped offering insurance because of President Obama's Patient Protection and Affordable Care Act.
The report contradicted Mr. Obama's frequent pledge that under his reform, "if you like your health-care plan, you can keep your health-care plan." And McKinsey's was at least the fourth such analysis calling the president's promise into question.
In May 2010, former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin concluded that employers would drop coverage for about 35 million Americans because of ObamaCare. A month later, in June 2010, the National Center for Policy Analysis (NCPA) pegged the number between 87 million to 117 million. And last November, Allisa Meade, a McKinsey analyst, told health-insurance company executives that 80 million to 100 million people might lose their employer-provided health insurance.
Simple economics is the reason. According to the Kaiser Family Foundation's Employer Health Benefits 2010 Annual Survey, the annual premium for an average policy last year was $5,049 for a single worker, with the company picking up roughly $4,150 and the employee the rest. For a family of four, the total cost was $13,770, with the company picking up $9,773.
Yet under ObamaCare, businesses can stop providing health-care coverage, paying a $2,000 per-worker fine instead. For small businesses, the trade-off is even more attractive: They are given a pass on the first 50 workers.
Workers losing coverage will be moved into the "exchange," a government-run marketplace to buy health plans. Those whose insurance costs were more than a specified share of their income (9.5% in 2014) could get subsidies. The exchange starts in 2014 and is fully operational by 2016.
Perversely, ObamaCare both drives up the cost of insurance with mandates and rules while making it attractive for companies to dump the increasingly more expensive coverage and pay a lesser fine. There will be huge ramifications for the country's finances if more workers lose coverage than was estimated.
When Mr. Obama's health-care bill passed in March 2010, the CBO and the congressional Joint Committee on Taxation predicted that 24 million workers would be covered by the exchange. Of these, nine million to 11 million would lose their employer-provided coverage, offset by six million to seven million who would be getting employer-provided insurance, for a net of three million workers losing company-sponsored coverage. The CBO said the exchanges would cost $511 billion over ObamaCare's first decade.
But what if more people are dumped into the exchange than originally estimated? Costs from the increased subsidies will explode.
Continued in article
Freakonomics
"Here’s Why Health Care Costs Are Outpacing Health Care Efficacy," by
Stephen J. Dubner, Freakonomics.com, April 18, 2011 ---
http://www.freakonomics.com/2011/04/18/heres-why-health-care-costs-are-outpacing-health-care-efficacy/
In a new working paper called “Technology Growth and Expenditure Growth