Obama Health Care Law Unraveling
The Obama Administration is desperate to explain why the President’s health care promises are not adding up. The latest explanation from HHS Secretary Sebelius just yesterday was that the slow roll-out of the law caused confusion, and that the Administration did not expect opposition to Obamacare to continue.
“Probably no one fully anticipated when you have a law that phases in over time, how much confusion that creates for a lot of people. So that has been difficult.” -- Kathleen Sebelius, Politico
It has been three years since Washington Democrats forced passage of their health care law on a party-line vote. The law remains unpopular among Americans, with recent polling showing 55 percent want to repeal the law entirely or at least some parts of it, while only 40 percent want to keep the law in place. Republicans continue to exercise oversight of the law’s negative effects on patients, providers, taxpayers, the economy, and states. Week after week hardworking taxpayers anxiously watch as independent policy experts and news media outlets confirm the President’s health care law costs too much and fails to work the way Democrats promised.
Important health policy happenings the past two weeks
- “Democrats Join Push to Dump Obamacare Tax”
- “Study: Health overhaul to raise claims cost 32 pct”
- “Obamacare Incompetence” -- Small Business Health Options Left Out
- You Can’t Keep Your Health Plan
- CMS Decides It Won’t Cut Medicare Advantage
- “Tens of thousands Obamacare ‘navigators’ to be hired”
- Bipartisan Support to Repeal FSA Restrictions
“Democrats Join Push to Dump Obamacare Tax”
“Thirty-four Senate Democrats joined Republicans on Thursday night in a nonbinding but overwhelming vote to repeal a key tax in President Barack Obama’s health reform law … it has huge political significance as momentum builds for bipartisan consensus to get rid of another piece of Obamacare … Democrats have slowly started to support the measure in larger numbers.”
-- Politico
Starting this year, the health care law levies a $30 billion tax on medical device manufacturers that develop and import products such as pacemakers, artificial joints, surgical tools, and ultrasound equipment. This 2.3 percent tax is applied to revenue, so companies must pay the federal tax even if they make no profit for the year. In some cases, many companies could pay more in federal taxes than they generate from day-to-day operations.
Both the CBO and the CMS Chief Actuary warned that the health care law’s taxes imposed on medical device manufacturers, drug manufacturers, and health insurance providers would largely be passed through to consumers in the form of higher premiums. Additional analysis concluded that medical device makers will: (1) face one of the highest effective corporate tax rates by any industry in the world; and (2) shrink their payrolls, costing American workers at least 43,000 high paying jobs.
During consideration of the fiscal year 2014 Budget Resolution, the Senate passed an amendment repealing the health care law’s medical device tax. Every Republican, alongside 34 Democrats, joined forces to pass the bipartisan amendment by a vote of 79 to 20.
“Study: Health overhaul to raise claims cost 32 pct”
“Obama has promised that the new law will bring costs down. That seems a stretch now. While the nation has been enjoying a lull in health care inflations the past few years, even some former administration advisers say a new round of cost-curbing legislation will be needed.”
Secretary Sebelius, the President’s top health care advisor, finally admitted that some people will see their premium costs go up because of the health care law. Sebelius told reporters, “These folks will be moving into a really fully insured product for the first time, and so there may be a higher cost associated with getting into that market.”
President Obama repeatedly promised: “If you’ve got health insurance, we’re going to work with you to lower your premiums by $2,500 per family per year. And we will not wait 20 years from now to do it or 10 years from now to do it. We will do it by the end of my first term as President of the United States of America.”
The truth is that families who have employer-sponsored health insurance have seen their premiums go up $3,065, on average, since President Obama took office. The evidence is overwhelming. More than 30 separate studies predict the health care law will cause health insurance premiums to rise.
The most recent example is from the non-partisan Society of Actuaries March 26 study warning that medical claims costs for individual health insurance policies could jump 32 percent per person. This is significant because medical bills are a key factor in calculating premiums.
“Obamacare Incompetence” -- Small Business Health Options Left Out
“The key incentive for small businesses to support Obamacare was that they would be able to shop for the best deals in health care super-stores – called exchanges. The Administration has had 3 years to set up these exchanges. It has failed to do so. This is a really bad sign.”
-- Joe Klein, Time
The President promised small businesses that his health care law would lower employer costs. In fact, the White House repeatedly touted the law’s Small Business Health Options Program (SHOP) as a tool employers would have at their disposal allowing them to offer affordable health insurance to their workers. According to The New York Times, the SHOP program “was portrayed as a major advantage of the new health care law, mentioned often by White House officials and Democratic leaders in Congress as they fought opponents of the legislation.”
Fast forward three years. The Administration announced plans to delay the SHOP program’s implementation citing operational challenges. The New York Times went on to say, “Unable to meet tight deadlines in the new health care law, the Obama administration is delaying parts of a program intended to provide affordable health insurance to small businesses and their employees – a major selling point for the health care legislation.”
Even though the Obama Administration had well over three years to prepare, it is finally admitting it can’t get the job done.
You Can’t Keep Your Health Plan
“Just over half of the individual plans currently on the market do not meet the standards to be sold next year, when many key provisions of President Obama’s Affordable Care Act kick in, according to a University of Chicago study … So what happens to the plans that don’t meet the new minimum standards? They will likely disappear.”
-- “Most individual health insurance isn't good enough for Obamacare,” CNN Money
President Obama pledged: “If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”
Once again, the American people are learning that the President’s words ring hollow. Statute actually limits the number of pre-health care law insurance plans that can continue to be offered without change. The CNN article makes two key points:
- A majority of health care plans will have to change in order to meet the law’s onerous new benefit mandates: “That’s because the law sets new minimums for the basic coverage every individual health care plan must provide.”
- Health insurance plans failing to meet the law’s new benefit mandates will likely disappear: “A handful of existing plans will be grandfathered in, but the qualifying criteria for that is hard to meet: Members have to have been enrolled in the plan before the ACA passed in 2010, and the plan has to have maintained fairly steady co-pay, deductible and coverage rates until now.”
Americans may quickly discover that the President’s health care law not only hurts people who buy insurance on their own, but also the people who get coverage through their employer. Although some uninsured people will gain coverage in the new exchanges, CBO estimates eight million people will lose the coverage they have today. These people and their families will be forced to enter an exchange to buy a government mandated and approved insurance plan.
CMS Decides It Won’t Cut Medicare Advantage
Medicare Advantage (MA) is a health insurance coverage choice seniors and the disabled have as a part of the Medicare program. While private insurance companies do compete to offer MA plans to eligible patients, the coverage is approved by Medicare. More than 14 million people – roughly 28 percent of all Medicare patients – are enrolled in an MA plan. These plans allow patients comprehensive access to traditional inpatient and outpatient services, but also extra benefits such as vision, dental, hearing, and wellness care.
In February 2013, CMS proposed reducing MA plan payments by 2.2 percent – the largest cut in the program’s history. It is important to note that CMS calculates the MA rate adjustments every year. The estimates help CMS project how much it will cost to insure patients during the year. Annual rate adjustments happen on top of the deep $308 billion MA cut contained in the President’s health care law.
More than 120 members of Congress sent separate, bipartisan letters to CMS warning the payment cut would limit patient access to MA plans. Stakeholders focused on the CMS assumption (required by law) that cuts to physician payments under Medicare’s Sustainable Growth Rate (SGR) formula would take effect in 2014. Congress has routinely blocked the cut, but CMS assumed it would go into effect – leading to lower MA payment projections. Then, last month, the Congressional Research Service issued a report confirming that agency regulators could assume the Medicare “doc fix” would occur this year.
On April 1, 2013, CMS announced that, for the first time, the agency would remove the highly charged SGR assumption from its MA rate calculation. As a result, CMS plans to increase MA annual payment rates by 3.3 percent next year.
“Tens of thousands Obamacare ‘navigators’ to be hired”
“Tens of thousands of health care professionals, union workers and community activists [will be] hired as ‘navigators’ to help Americans choose Obamacare options starting Oct. 1 … The proposed rules … suggest an estimated pay of $20-$48 an hour.”
Last week, the Centers for Medicare and Medicaid Services (CMS) issued proposed regulations outlining the health care law’s Patient Navigator Program standards. As originally envisioned, the health law’s navigator program gives grants to various public, private, and non-profit organizations. Eligible grantees include unions, health care providers, and community action groups. Organizations must use the dollars to offer fair, impartial, and accurate information to consumers and employers about the law’s new federal and state based insurance exchanges.
The role of a navigator is simple: help consumers and employers understand their health insurance options and facilitate enrollment. Navigators cannot be compensated by insurance companies. They also do not have to be licensed as agents or brokers. This raises concerns that unqualified navigators may recommend insurance products to consumers that do not meet the purchaser’s specific needs.
The Administration’s proposed rule estimates health care law navigators could earn an annual salary ranging between $40,000 and $96,000. As the Examiner noted: “It is still not clear how many navigators will be required. California, however, provides a hint. It wants 21,000. That could be an expensive proposition.”
Bipartisan Support to Repeal FSA Restrictions
“The Senate passed by voice vote a measure to repeal the law’s $2,500 cap on flexible spending accounts and eliminate the requirement that consumers get a doctor’s prescription before using FSA or health savings account money on over-the-counter prescriptions.”
-- “An Obamacare rerun: Senators target health law in 'vote-a-rama',” Politico
Section 9003 of the health care law prohibits individuals from using money in their health savings accounts to buy over-the-counter (OTC) medications without a prescription. As a result, patients started requesting OTC prescriptions from their doctors. This created an unworkable paperwork burden on both doctors and their patients.
Additionally, Section 9005 of the health care law imposed a $2,500 cap on the amount of money a person can contribute to his or her flexible spending account (FSA) each year. An estimated 19 million Americans rely on employer or personal FSA contributions to pay for health care services and other needs. The cap hits certain FSA users much harder than others. As Americans for Tax Reform pointed out, “There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education.”
During the Budget Resolution debate, the Senate passed a bipartisan amendment repealing the health care law’s restrictions on FSAs.
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