The Latest Three Calamities From Obama Care

For a while back in June, it seemed like every week brought another unforeseen calamity in the making from Obama Care. One week we found out that the law, as written, mistaken made about 3 million non-needy and non-poor Americans eligible for free Medicaid health insurance, funded by the taxpayer. The next week we found out that the law, as written, discriminated against working Americans vs. comparable Americans who were on Social Security by making the working American group pay 50% more for insurance in Obama Care’s insurance exchanges than those that were not working.

These disasters were combined with several other Obama Care disasters that have already been exposed:

  • The law forces Americans to purchase a service, health care insurance, that they may not want, may not afford, or may not need, making them criminals if they decide to disobey the law.
  • Major American companies including MacDonald’s, AT&T, Verizon, John Deere, and Caterpillar are on record stating that they could easily see themselves dropping health care insurance for their employees and retirees since Obama Care changes to the tax code makes it cheaper for them not to offer health care insurance than to continue to offer it. This scenario would likely cause tens of millions of Americas to lose their health care coverage as a result of Obama Care, the exact opposite of what the legislation was supposed to do.
  • The legislation does not address the main culprits of high health care costs in this country, namely that Americans eat too much, they eat too much of the wrong kind of food, they smoke too much, they do not exercise enough and the population is getting older. By not properly addressing these root causes, this legislation has virtually no chance of being successful.
  • Within one year after it was passed, over 1,000 waivers to the law have already been issued, indicating that that this is a bad law if you have to waive its provisions more than four times a day in the first year of its existence.
  • The legislation did not address a primary driver of high health care costs, namely the need for tort reform in this industry, reform that has significantly reduced health care costs in several states that made such reforms.
  • The original costs estimate of the law stated that it would reduce the Federal deficit by $125 billion over ten years. However, many of the factors above, along with the fact that the original cost saving estimate did not include all of the legislation’s costs, has now turned that meager deficit reduction estimate into a substantial deficit addition estimate.

We could go on and on but it is pretty obvious that this is one sorry, dangerous piece of legislation. However, it gets worse, as this week we have come across not one more Obama Care calamity but three.

Let’s start with a new study done by researchers at the Beacon Hill Institute at Suffolk University in Boston. This research analysis examined the effects of the state wide health care reform law that was implemented in 2006 in Massachusetts. That state-based health care reform effort was very, very similar to Obama Care. The law forced all state residents to purchase health care insurance, it placed health care insurance mandates on all businesses in the state with more than 10 employees, it expanded Medicaid coverage, it created a pool of money to subsidy the purchase of health care insurance, and it created health insurance exchanges for those less fortunate people who could not afford insurance company policies. All of these components exist in one way or another in Obama Care.

So, five years after its implementation, what has happened to the health care situation in Massachusetts:

  • State health care expenditures went up over $400 million.
  • Private health care insurance costs have gone up $4.31 billion.
  • The Federal government’s tab in Massachusetts has required it to spend an additional $2.412 billion on Medicaid in Massachusetts.
  • Medicare costs went up by $1.42 billion.
  • These four components added $8.5 billion to the state government’s and state and national taxpayers’ costs of health care in Massachusetts.
  • Thus, a major objective of the Massachusetts legislation, cost containment, was not close to being attained.
  • The number of emergency room visits, which was supposed to go down as a result of the state legislation, went from 2.351 million visits in 2006 to 2.521 visits in 2009, an increase of 7.2%.
  • Not only did emergency room visits go up, the cost of emergency room visits went up 36%, $943 million, the exact opposite effect that the Obama Care-like legislation was supposed to do.
  • The study found that the state legislation did not anticipate the fact that with more, newly insured residents, demands on the existing health care provider network would go up substantially along with health care costs, a simple economic truth: increase demand, keep the supply unchanged and costs have to go up, the exact opposite intent of the legislation.
  • The study concluded that Obama Care, would suffer the same consequences as the very similar Massachusetts law: higher costs for the taxpayer, increased cost of health care services, more use of emergency rooms, etc., all the exact opposites of what Obama Care is falsely supposed to do.

Great, rather than learn and adjust an existing model, the political class in Washington went down almost the same road of disaster as Massachusetts. Einstein once said something to the effect that the definition of stupidity is doing the same thing over and over and expecting different results. When comparing the Massachusetts health care reform effort to Obama Care we can now see that Einstein was right.

The second calamity comes from a survey of small businesses that was conducted by the National Federation Of Independent Business (NFIB) that addressed the opinions of small business owners:

  • Since Obama Care was passed, about 12% of small businesses in the survey have either had their health care insurance plans dropped or were told they would be dropped in the near future. Since Willliam Dennis, a senior research fellow at NFIB has publicly stated, “We are not aware of any data suggesting we’ve had turnover anywhere near this level in the past,” it could be deduced that this dropping of insurance coverage in the past year was due to Obama Care.
  • By a very large margin, those surveyed did not think that Obama Care would reduce their health care insurance program costs, will not reduce the administrative costs of their health care plans, and will add to the Federal deficit.
  • 20% of those small businesses that currently offer health care insurance to their employees expect to change what those programs offer the next time they renew their insurance plans, with most stating that they will reduce the benefits of their coverage for their employees.
  • Businesses with a lot of lower wage employees may see those employees go to the lower costs Federal government insurance exchanges. If that should happen, 26% of small businesses say they are very likely to drop health care insurance for all their employees and 31% say they are somewhat likely to drop their insurance. This behavior, if enacted, would significantly increase the health care costs of the Federal government, adding to an already obscene national debt.

Same type of results to what happened in Massachusetts. Currently covered small business employees are already losing health care coverage just one year after Obama Care was passed. The cost to the Federal government is likely to be substantially higher than expected as 1) low wage employees go to the heavily subsidized exchanges for coverage and 2) small businesses drop health care coverage for their remaining employees who do not leave for exchange coverage, resulting in more Americans without coverage, the exact opposite effect that Obama Care was supposed to prevent.

The third calamity comes from a new report out of Cornell University by economist Richard Burkhauser and others. The findings from the Cornell analysis found involves how the government originally interpreted the law (family plan thresholds vs. individual plan thresholds) and estimated how many people would opt out of their employers’ insurance program and go to the government subsidized insurance exchanges.

Given what is likely to happen, which is not the way the cost of Obama Care was figured, the Cornell analysis estimates that many more workers will end up in the exchanges than was expected, adding an additional $50 billion a year to the national deficit and national debt. If their assumptions and calculations are correct, over a ten year period, about half a TRILLION dollars would be added to the national debt as a result of Obama Care. Thus, whatever dream/hope/fantasy the political class had of reducing the national debt over the next tens years as a result of this legislation is pretty much gone by now.

Even worse, the researchers think this may be the best case. Obama Care has made it so attractive for employers to shift workers out of their own programs into the exchange programs, they may find it advantageous to shift ALL of their workers out of their health care plans, shutting them down, and forcing all employees to get insurance exchange coverage. If that happens, then it is likely that a full TRILLION dollars would be added to the national debt in the next ten years.

Three different analyses, three different approaches, three different organizations, all coming up with the same conclusion: Obama Care will be detrimental to those that already have health care insurance, will significantly increase the national debt, will not reduce overall health care costs, will likely result in tens of millions of Americans losing their current health care insurance coverage, and will be an administrative nightmare to manage.

Outside of these three new calamities, and the numerous others we have discussed, is there any doubt that this piece of garbage needs to be taken off of life support and put to permanent rest? Time to start over before the legislation kills us all.

Can hardly wait to see what calamities await us next week. Stay tuned.