Thursday, August 20, 2009

5 Factual Errors In Obamacare & One Big Truth

President Obama asked All Americans yesterday to speak with their neighbors about Health Care Reform and to share the facts and since The New York Times cannot be trusted to even discern all the facts fit to print I will share just 5 of my favorite Facts.

"The tables included in the report summarize our preliminary assessment of the coverage provisions’ budgetary effects and their likely impact on rates and sources of insurance coverage for the nonelderly population. According to that assessment, enacting those provisions by themselves would result in a net increase in federal budget deficits of $1,042 billion over the 2010–2019 period. By 2019, CBO and the JCT staff estimate, the number of nonelderly people who are uninsured would be reduced by about 37 million, leaving about 17 million nonelderly residents uninsured (nearly half of whom would be unauthorized immigrants)."

So lets just say fact #2 is essentially that Americans already know they pay for illegal immigrants today and are mad as hell the supermajority is seeking to increase what they pay by a $trillion while the President and congressional democrats tell us we are uninformed and that any health care reform cannot add to our debt. In America we call that **&%#^%!!! Is it any wonder today's Rassussen Poll shows that 54% of all Americans who fear government will do too much is up ten points from 44% in January... BTW see all my uninsured posts here. Illegal aliens know how to access free health care and thus lack an incentive as well as the income frequently to purchase their own.

  • Fact #3 You can keep your coverage and no one will be forced into government run healthcare. Lets once again see what the CBO has to say on this whopper of a lie.

Under the proposal, nearly 90 percent of workers would be employed by firms that
would either have to offer qualified coverage and contribute a significant share
toward the premium or pay a tax equal to 8 percent of their total payroll. That “playor-
pay” penalty would constitute a substantial portion of the average cost of providing
insurance coverage, which has been estimated at about 12 percent of payroll currently
(but which would rise over time). In dollar terms, the penalty would obviously vary
depending on a firm’s payroll; for example, a firm with average wages of $40,000 per
year that did not offer qualified coverage would have to pay a penalty of $3,200 per
worker. Moreover, that penalty would make no direct contribution to those workers’
insurance costs; they would then need to obtain coverage from another source in
order to fulfill the individual mandate.

Its pretty clear to me and to most American's that in today's economic environment many businesses faced with a choice between an 8% payroll tax and a 12% cost for health insurance that would rise by 8% annually would drop health insurance in a heartbeat because as a nation we are simply not that bad at simple math. But it gets worse. recall that promise not to raise taxes except on the rich? lets again look at what CBO has to say on the matter of the tax impact of proposed health reform for the average worker.

Workers who get insurance through their employer receive a significant subsidy
because the cost of that insurance is not treated as taxable earnings for the worker and
thus avoids both income and payroll taxes. In most cases, that exclusion applies to the
portion of the premium that workers pay as well as the amount the employer
contributes. On average, that tax exclusion gives workers a subsidy of roughly
30 percent for purchasing insurance through their employer—a subsidy that would be forgone if the employer chose not to offer coverage and the workers instead obtained coverage in the new insurance exchanges.

Bottom line is that the lie that you can keep your present coverage is patently false on multiple levels.

  1. It does not account for the behavior rational employers will display faced with a tax or mandate to offer health coverage. Unintended consequences abound in politics.
  2. It does not account for the tax impact on workers who not only get to purchase their own heath care when their employer drops coverage but also lose the tax advantage CBO cites at 30% of the value of employer provided health care. I thought it was John McCain who wanted to tax American's on the value of their health care?
  3. Access to private insurers for individuals whose employers drop group coverage will be through an exchange created by the federal government which will be up running and ready to guide you in your coverage selection. Really? Sort of like Medicare.Gov does so well now?
  4. Self-funded plans will face mandates to cover items which they do not today and employers who have spent years investing in wellness and behavioral incentives to achieve a competitive advantage in their industry and have actually bent their own health care cost curve down will now face audits by the government who has no experience or expertise in achieving the same.

Fact #4 It is the Democratic Majority not Radical Republicans, Insurance companies, Doctors, pharmaceutical Companies and Fringe Elements Bearing False Witness who are obstructing Passage of Health Reform.

Rather than share my own thoughts on this matter let me quote Camille Paglia writing in Salon who very succinctly captures the state of our nation.

But who would have thought that the sober, deliberative Barack Obama would have nothing to propose but vague and slippery promises -- or that he would so easily cede the leadership clout of the executive branch to a chaotic, rapacious, solipsistic Congress? House Speaker Nancy Pelosi, whom I used to admire for her smooth aplomb under pressure, has clearly gone off the deep end with her bizarre rants about legitimate town-hall protests by American citizens. She is doing grievous damage to the party and should immediately step down.

There is plenty of blame to go around. Obama's aggressive endorsement of a healthcare plan that does not even exist yet, except in five competing, fluctuating drafts, makes Washington seem like Cloud Cuckoo Land. The president is promoting the most colossal, brazen bait-and-switch operation since the Bush administration snookered the country into invading Iraq with apocalyptic visions of mushroom clouds over American cities.

You can keep your doctor; you can keep your insurance, if you're happy with it, Obama keeps assuring us in soothing, lullaby tones. Oh, really? And what if my doctor is not the one appointed by the new government medical boards for ruling on my access to tests and specialists? And what if my insurance company goes belly up because of undercutting by its government-bankrolled competitor? Face it: Virtually all nationalized health systems, neither nourished nor updated by profit-driven private investment, eventually lead to rationing.

I just don't get it. Why the insane rush to pass a bill, any bill, in three weeks? And why such an abject failure by the Obama administration to present the issues to the public in a rational, detailed, informational way? The U.S. is gigantic; many of our states are bigger than whole European nations. The bureaucracy required to institute and manage a nationalized health system here would be Byzantine beyond belief and would vampirically absorb whatever savings Obama thinks could be made. And the transition period would be a nightmare of red tape and mammoth screw-ups, which we can ill afford with a faltering economy.

As with the massive boondoggle of the stimulus package, which Obama foolishly let Congress turn into a pork rut, too much has been attempted all at once; focused, targeted initiatives would, instead, have won wide public support. How is it possible that Democrats, through their own clumsiness and arrogance, have sabotaged healthcare reform yet again? Blaming obstructionist Republicans is nonsensical, because Democrats control the White House and both Houses of Congress. It isn't conservative rumors or lies that are stopping healthcare legislation; it's the justifiable alarm of an electorate that has been cut out of the loop and is watching its representatives construct a tangled labyrinth for others but not for themselves. No, the airheads of Congress will keep their own plush healthcare plan -- it's the rest of us guinea pigs who will be thrown to the wolves.

Fact # 5 Health Reform Will Raise Not Lower The Cost of Health Care For The Average American It Will raise Costs

Under the proposed exchanges being considered the government will mandate all benefits which must be offered by either public or private plans and will audit self funded plans. Larger employers who self fund have frequently achieved lower health care costs than insured plans. Thats what happens when you invest in wellness since as I have posted here about 70% of health care costs are attributable to behaviors that we control namely not exercising, smoking, drinking, not eating correctly and all the other things your Mom warned you about. Where I ask in the health reform proposals are the sections which specify the wellness incentives necessary to change the behaviors which drive 70% of the cost? They do not exist today but wait for the regualtions to show up by bureaucratic edict in 5 years along with the junk food taxes,soda taxes, higher alcohol taxes, couch potato tax and BMI tax.

There is an excellent summary here of why health insurance costs so much.

Recently I was listening to a radio program in which the host explained that in a few states health insurance policies issued by Blue Cross/Blue Shield were available at extremely reasonable prices, about $100 a month. The very first caller into the program demanded to know exactly what the annual deductible was in plans like this. When the host said $3,000 to $5,000 the caller responded, that isn't health insurance but catastrophic insurance. It's too expensive and that's why we need health care reform from Washington, he continued.

And there lies one of the problems with the health insurance reform debate. State government mandates and favorable tax treatment in Washington have so distorted the market for health insurance that a generation of Americans now look on medical coverage as something very different from other kinds of insurance that we buy. While we will pay several hundred bucks out of our own pockets to have a plumber come repair a leaky pipe, we'll balk at deductibles and a $50 co-pay for a doctor's visit. We've been schooled in this attitude by politicians who have mandated that health insurance do things that we'd never expect from other kinds of insurance, and by consumer advocates who will demand our legislators do something about a health insurance company that doesn't cover some optional procedure that has nothing to do with life and death.

What effect do you think imposing congresses vision of an appropriate health benefit package including every special interest mandate imaginable on America's largest self-funded employers would have on America's ability to compete in a global economy?

About 20% of the cost of health care for working Americans can be attributed to Prescription Drugs. While the average American does not go to the doctor or hospital each month they do use their health plan for presciption drugs each month on average. The White house proudly announced they had secured $8B in cost reductions annually from the pharmaceutical industry for the next 10 years. In contrast, Medicare spends $800B annually on prescription drugs but the white house deal leaves intact an agreement with pharmaceutical companies and the PBM's that handle Medicare not to negotiate prescription drug prices. This is madness. This is insane. It is incompetence. And one might reasonably question the ethics and judgement of an administration which cuts a deal on pharmaceuticals with parties that are now funding tv ads in support of health reform through an ad agency formerly owned by a current advisor to the president David Axlerod. But I digress, he point not negotiating over drug prices raises costs for Medicare and Senior citizens and makes American companies less competitive

One Big Truth

So why is health reform so urgent now? It's simply a matter of convenience. There is the fiscal crisis followed by the bailouts and the stimulus that all require new taxation. Obama's agenda is Education, Energy and Health Care. On the health care front reform was supposed to bend the cost of Medicare/Medicaid and reduce the deficit but since he cannot overtly mention his intention to tax the hell out of the middle class along with the rich he is going to do so under the guise of cap and trade and health care reform. You see the way health insurance works is that young healthy people subsidize generally older and sicker people. Medicare has a $38T deficit and Part D is just getting rolling. By requiring all Ameicans to purchase insurance through a government exchange including mandated benefits you do not want or need you eliminate the private insurance markets while simultaneously generating all the excess revenue you need to continue the enormous ponzi scheme we all know Medicare to be at its core. Once the insurer's are gone Uncle Sugar can dictate terms while using exploding costs to achieve the holy grail of single payer when the rationing can begin.Madoff gets prosecuted and Obama gets re-elected and the Democrats get to run in 2010 having delivered health insurance reform. Yet Obama and congressional leaders are discovering American's are on to the scam and we are sick of the lies and fingerpointing.

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