Broken Promises Highlight ObamaCare Intentions

 

(Author’s note: The following blog was posted on 2/11/15, just five years after the passage of the new healthcare bill called the Affordable Care Act, which we now know as ObamaCare. In the last post, I reviewed the current status of ObamaCare. Today I let you review what I said about it seven years ago. You can see that things have gone from bad to worse.)

 

The Republican-controlled House of Representatives recently passed a bill to repeal ObamaCare. President Obama responded in his usual way – he doubled-down on his failed healthcare legislation. He said, “This is working not just as intended, but better than intended.”

There is a theory about prevarication that asserts that if you tell a lie often enough, many people will begin to believe it. Therefore it’s worth remembering all of the previous promises of President Obama concerning his signature healthcare law.

Broken Promises Review

Chris Conover, healthcare analyst for Forbes, recently reviewed the five most significant promises made by President Obama:

Promise #1: Universal Coverage

Obama: (6/23/07) – “I will sign a universal health care bill into law by the end of my first term as president that will cover every American.”

Excluding the illegal aliens never intended to be covered by ObamaCare, the latest Congressional Budget Office (CBO) projections (April 2014) expect that by 2017, ObamaCare will cover 92% of the nonelderly population. (Nearly everyone over 65 is already covered by Medicare.) Sounds good – until you realize that 84.7% were already covered in March 2009 before the law was passed.

Therefore, even if the CBO projections are accurate (and they usually overestimate), ObamaCare will only increase the rolls of the insured by 48% of the deficit. In other words, ObamaCare will insure less than half of those it was intended to insure. How can Obama claim the law is working “better than intended?”

Promise #2: No New Taxes on the Middle Class

Obama: (9/12/08) – “I can make a firm pledge under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

The CBO and the Joint Committee on Taxation projects ObamaCare will increase federal revenues by $1.058 Trillion between 2013 and 2022. Only 30% of that will be raised from taxes exclusively targeting households earning more than $200,000 (individuals) or $250,000 (married).

That leaves 70% of the taxes to be imposed on all income levels. Many of these taxes will be levied directly upon health insurers, medical device manufacturers, drug companies, etc. – and later passed on to consumers. Even if you assume that such households will only bear a similar share of the burden as they do to all federal taxes, this still leaves at least 35% to be borne by families at or below middle-class incomes. That’s not what Obama promised.

Promise #3: Annual Premium Savings of $2,500

Obama: (6/5/08) – “We’ll lower premiums by up to $2,500 for a typical family per year. . . . We’ll do it by the end of my first term.”

This promise was repeated many times, the most recent on 7/16/12 (after the law was passed). Some have argued this was actually meant to convey that total health spending would decline by that amount. Conover suggests allowing the president this adjusted promise – and also allowing him 12 years rather than four to accomplish his goal.

Even by these relaxed standards, his promise doesn’t hold up. According to figures from the left-leaning Kaiser Family Foundation/Health Research & Educational Trust annual Employer Health Benefits surveys, there has been no evidence of declining growth in health insurance premiums. The graph below makes this clear.

Once again, ObamaCare’s outcomes fall short of Obama’s intentions.

Promise #4: No Increase in the Deficit

Obama: (9/9/09) – “I will not sign a plan that adds one dime to our deficits.”

Rep. Paul Ryan pointed out in February 2010 that Obama’s claims used “gimmicks and smoke-and-mirrors” economics to make this claim. The CBO was forced by the White House to use 10 years of revenues but only 6 years of spending to achieve the desired projections.

Since then, several other more accurate assessments have drawn similar conclusions as Ryan. In June 2010, former CBO director Douglas Holtz-Eakin concluded, “the new reform law will raise the deficit by more than $500 Billion during the first 10 years and by nearly $1.5 Trillion in the following decade.”

In April 2012, Medicare public trustee Charles Blahous concluded ObamaCare would add at least $340 Billion to the deficit between 2012 and 2021 but possibly as high as $530 Billion. In February 2013, the Government Accountability Office (GAO) projected that ObamaCare could add $6.2 Trillion (2011 dollars) to the deficit over the next 75 years. That’s a lot of dimes added to the deficit, Mr. President.

Promise #5: You Can Keep Your Plan If You Like It

Obama: (6/15/09) – “If you like your health care plan, you’ll be able to keep your healthcare plan, period. No one will take it away, no matter what.”

This promise was originally made in a speech to the American Medical Association in an effort to reassure doctors and patients that little would change for them. Nothing could have been farther from the truth. In fact, this promise earned President Obama the Politifact “Lie of the Year” award for 2013.

In 2013, after the opening of the ObamaCare exchanges in October, over 6 million Americans received cancellation notices from their healthcare insurers because their old policies were non-compliant with the new law. The RAND Corporation projects that of 17.7 million who would have had non-group coverage in 2016 absent ObamaCare, only 0.2 million will retain that coverage.

Delays in enforcement of the Employer Mandate have delayed the pain of more cancelled insurance policies. Estimates of how many will lose their employer-provided insurance are widespread. The CBO estimates 11 million, the Medicare actuary estimates 14 million, the Lewin Group says 17.2 million, and the American Action Forum estimates as high as 35 million.

Reality

Much like his view of the problem of Islamic extremism, President Obama’s view of his healthcare law seems delusional. In the face of all these failed promises, it is inconceivable that he would argue, “This is working not just as intended, but better than intended.” The American people deserve a better healthcare system – and a president who sees the world as it really exists.

ObamaCare Update 2022 – How Well is it Doing?

Recently, President Biden invited former President Obama to the White House for a celebration of ObamaCare and to push for expansion of its rolls. It has now been 12 years since the passage of this new healthcare legislation in 2010 and now seems a good time to review just how well the Affordable Care Act – ACA (ObamaCare)has lived up to its hype.

John C. Goodman, healthcare economist helps us remember the promises made by Barack Obama when he ran for president the first time in 2008. He pledged the following:

  • Insure the uninsured with private coverage
  • Bring down healthcare costs, with savings of $2500 a year for every family
  • Give people with inadequate insurance better insurance
  • Protect people with good coverage – “If you like your doctor, you can keep your doctor.”
  • End discrimination against people with pre-existing conditions

 

Now let’s look at the actual record.

Expanding Medicaid

Despite all the hype about increasing the rolls of the insured, nearly all of the gains made in that area are due to increased Medicaid enrollment. In fact, some have referred to the ACA as the “Medicaid Expansion Act.” Millions were intentionally newly enrolled in Medicaid by expanding the eligibility requirements, but millions more were illegally enrolled because of lax governance – leading to billions of dollars of improper payments.

This is not what voters were promised. Medicaid pays the lowest rates to providers, so many doctors won’t see Medicaid patients. Those that do will usually have limited numbers of appointments in their schedule for these patients. That leads to poor access to healthcare for Medicaid enrollees and that leads to overcrowding in emergency rooms for primary care. The result is poor quality healthcare.

How poor you say? The Oregon Health Insurance Experiment is an ongoing study begun in 2007, which has already revealed significant information. Thus far, researchers have learned that having Medicaid does not improve health, at least in standard measurements of blood pressure, blood sugar, and cholesterol. Medicaid reduced observed rates of depression by 30% but increased the probability of being diagnosed with depression. Medicaid significantly increased the probability of being diagnosed with diabetes and the use of diabetes medication, but did not have the expected impact of lowering blood sugar.

Goodman has said that having Medicaid may actually be worse than having no insurance at all. This statement is supported by the fact that Medicaid enrollees are 40% more likely to use the Emergency Room than the uninsured. Therefore, expanding Medicaid, rather than relieve the overcrowding of emergency rooms, has probably made it worse. Moreover, the influx of mainly healthy people onto the Medicaid rolls has apparently siphoned money away from developmentally disabled children on the state Medicaid waiting lists. Thousands of these children die every year, according to Goodman, who might have survived with proper care.

Wasting Taxpayer Dollars

Meanwhile, most of the money spent on private coverage has accomplished very little. Despite spending more than $50 billion a year on ObamaCare subsidies in the individual health insurance market, the increase in coverage prior to the pandemic was anemic. Goodman calculates we spent about $25,000 of subsidy every year for every newly insured individual, or $100,000 for a family of four. Moreover, if we consider the offsetting reduction in employer-provided coverage over the same period (partly as a result of ObamaCare), you could argue that the entire $50 billion was money down the drain.

Making Insurance Unaffordable

The name of this healthcare reform bill, the Affordable Care Act, would seem to be a misnomer. Between 2013 and 2019, premiums in the individual market more than doubled and deductibles skyrocketed. Combining the average premium with the average deductible, last year a family of four not receiving a subsidy had to pay $25,000 out of pocket before receiving any benefits at all from their health plan!

Then consider low-wage workers employed by fast food chains and others. Under the law, employers are required to offer coverage and charge their employees no more than 9.6 percent of the employee’s annual salary. However, these plans can have a deductible of $8,700 and the employee must pay the full premium to cover any dependents. This has been referred to as the “family glitch.” (see Biden’s Fix of the ObamaCare Glitch) Most workers turn these offers down and then they are not entitled to any subsidies.

Throwing Good Money after Bad

The declining attractiveness of ObamaCare insurance, if unsubsidized, has left many healthy people without coverage. To patch this leak in the dyke, Congress created new subsidies for families above 400 percent of the Federal Poverty Level (FPL) with the American Rescue Plan – passed without a single Republican vote just like ObamaCare. Goodman says not only are these subsidies regressive, they are also very wasteful – since they go manly to people who are already insured elsewhere. On net, the new subsidy is costing an estimated $17,000 a year for every newly insured person, or $68,000 for a family of four.

Outlawing Insurance that Meets Family Needs

We all know by now that Obama’s promise that “if you like your doctor you can keep your doctor” was false. Obama tries to defend this broken promise by insisting his program substituted better insurance for “junk insurance.” This statement is also false.

A popular alternative to ObamaCare is short-term, limited duration insurance (STLD). These plans get around the onerous and expensive “essential health benefits” of ObamaCare that make it unnecessarily expensive. Yet Obama restricted such plans. President Trump rescinded this decision, making more of these plans available. Naturally, Biden intends to reverse Trump’s decision.

Making Things Worse for Patients with Pre-existing Conditions

Perhaps the most popular provision of ObamaCare is eliminating pre-existing conditions as a cause of disqualification. Yet, the reality is that problem affected few people due to federal risk pools that allowed those with pre-existing conditions to still get affordable coverage. Only about 100,000 people ever used these pools in a given year.

Today, due to the escalating cost of insurance coverage, everyone who comes to the individual market faces sky-high premiums and deductibles and narrow networks that exclude the best doctors and hospitals. ObamaCare insurance is not accepted at the most prestigious medical centers and most popular doctors’ offices throughout the country.

Broken promises and escalating costs are the legacy of ObamaCare today.

Prolonging the Pandemic

After more than two years, the Covid pandemic is finally winding down. Hospitalizations and deaths are declining rapidly, although the number of new cases is difficult to quantify due to the availability of home test kits. But clearly the emergency situation is abating – except in the eyes of the government.

Health and Human Services Secretary Xavier Becerra recently extended the national public-health emergency for another 90 days. Why would he do that? The Wall Street Journal editorial board says because a permanent crisis means more dependence on government.

The Trump administration first invoked the emergency under the Public Health Service Act on January 31,2020 to reduce red tape for healthcare providers. Congress then linked an expansion of Medicaid and food stamps to the declaration. Progressives liked that and now they don’t want the emergency to end.

How did the emergency declaration change the situation?

The Families First Coronavirus Response Act of March, 2020, suspended food-stamp work requirements for able-bodied adults without dependents during the emergency. These individuals normally can’t receive benefits for more than three months over a three-year period unless they work or participate in a work-training program. Congress also boosted benefits, so the average monthly payment is now double ($240 per person) what it was in 2019.

Suspending work requirements was intended to help workers laid off during lockdowns when few jobs were available. But once lockdowns eased, businesses were desperate to hire. The sweetened food stamps and suspended work-requirements – on top of enhanced unemployment benefits and other transfer payments – reduced the incentive to work. Now you know why the service has slowed down at your local fast-food restaurants!

The Biden Administration is bragging about the low unemployment rate of 3.6% in the latest jobs report. But the reason for this is the low labor participation rate of 62% – people just don’t want to work. There are currently 1.8 job openings for every unemployed worker. Why work when the government is making it easy not to work? As of January, there were nearly 2.5 million more households receiving food stamps than in 2019 and 500,000 more than in April 2020.

Democrats like this situation because they count on the unemployed to vote Democratic. They’re happy to extend these benefits at least until after the November mid-term elections. States may end the supplemental food stamps before the public-health emergency is lifted, but only a dozen or so have done so. Even Republican governors struggle to resist free federal money, and they worry about being attacked for refusing extra benefits amid rising food costs, even if beneficiaries aren’t poor.

What has been the impact of the pandemic on Medicaid enrollment?

Congress increased Medicaid funding for states during the emergency on the condition they don’t remove beneficiaries from their rolls, even if they earn too much to qualify. As a result, Medicaid enrollment has swelled by more than 14.6 million (20%) since February 2020 – more than the increase in ObamaCare enrollment since President Biden took office.

A recent JAMA study found that Wisconsin Medicaid enrollment increased 11.1 percent more than would be expected based on economic factors during the first seven months of the emergency, mostly because ineligible beneficiaries weren’t kicked off. Some states now want to prune their rolls but can’t without losing federal funds. Congress has hooked states on federal transfer payments, and Democrats want them to stay hooked. (Never let a crisis go to waste!)

Have there been any benefits from these emergency rules?

Yes. These emergency rules have let Medicare cover telehealth services and waived a Medicare requirement that beneficiaries be hospitalized for three days before the cost of nursing-home care is covered. These are benefits that should be made permanent. It has long been anathema that the federal government insisted people stay in hospital a full three days before paying nursing home benefits. Why waste money on unnecessary hospital charges when you can save money by getting people into a nursing home sooner?