ObamaCare is failing – everyone who is not a Democratic politician or receiving government subsidies for their healthcare insurance knows that. Even many of those same Democratic politicians who deny the problems are pushing for ObamaCare’s replacement with a single-payer healthcare system.

ObamaCare Failing

ObamaCare average premiums for individual health insurance rose 105% in the first four years since it took effect in 2014 – from $232 to $476 a month on average. As you might expect, the number of people with individual policies continues to fall. Fewer people had individual policies in December 2017 than in December 2014. Also, the number of small firms offering health benefits to their workers dropped by 24% between 2012 and 2016.

The main reason for declining enrollment in ObamaCare is that it forces people to pay more for policies that restrict, rather than expand, their access to care. Networks are getting narrower, deductibles and copays can be prohibitively expensive, and access to doctors and hospitals is limited. Half of all those individuals purchasing coverage on the ObamaCare exchanges have only one “choice” of insurance to purchase. Yet, government spending continues to soar. The “bending of the cost curve down”, as promised by President Obama, never materialized. Just another broken ObamaCare promise.

What is the solution for the rest of us? Republicans failed to garner enough of their own votes and not a single Democratic vote for their repeal and replacement plans. That leaves the country with the same failing system and no present alternative. Single-payer healthcare is not the solution, as demonstrated in the failed systems of Canada, Great Britain, and Sweden. Worse yet, it is unaffordable. What else can we do?

The Health Policy Consensus Group is comprised of state health policy experts, national think tank leaders, and members and leaders of grassroots organizations across the country. They are committed to market-based policy recommendations that give people access to the health plans and doctors they choose at a price they can afford so that they can get the care they need. To achieve that goal they have a plan they call the Health Care Choices Proposal.

Their policy proposal promises to:

1. Improve choices and lower costs, while protecting vulnerable Americans
2. Give flexibility and resources to states to achieve those goals
3. Ensure people can opt into the private coverage of their choice

 

What would this proposal achieve?

• Empower consumers with more choices – Replace open-ended federal payments to insurance companies with grants to states, so they have resources as well as more flexibility to reinvigorate broken private individual and small group markets. This approach would empower patients, lower premiums, increase choices, and protect the vulnerable.
• Reduce costs by unwinding heavy federal mandates and allowing states to innovate – By eliminating ObamaCare’s mandates and pricing restrictions, they will empower people to access health insurance that is more affordable and widely available. States will have the resources to create innovative solutions and encourage more competition among insurers on choice and costs.
• Refocus subsidies on those who need them most – Direct block grants to the states would enable states to better target assistance to those in need.
• Provide security and protect high-cost patients – Today, ObamaCare’s subsidies provide coverage for the vulnerable but increase costs for everyone else. In contrast, this policy proposal would help people who need assistance in getting coverage, as well as dedicate a portion of the grant to offset the costs of the most-expensive patients, reducing premiums for everyone else.
• Ensure that all Americans can choose a private health plan – Instead of forcing millions of people into government-run Medicaid programs, this policy proposal would give them the option of using these support dollars to buy private coverage – which will provide them with higher-quality care.
• Protect life – Funding for these grants to the states would run through the existing Children’s Health Insurance Program (CHIP). Life protections are written into the CHIP statute, permanently prohibiting federal taxpayer dollars from being used to pay for abortions.
• Put federal spending on a real budget – Currently, federal spending rises dollar-for-dollar with premium increases. With this proposal of fixed grants to states and greater flexibility to reinvigorate private markets, spending can be controlled. By putting spending on a budget, states would have new incentives to ensure that taxpayers dollars are used wisely.

 

In Part II of this post we will discuss how this Health Care Choices Proposal really works.

 

Once again the California legislature has put politics above the people’s needs. If it’s not raising electric rates in a vain attempt to save the planet, or wasting precious water needed for crops to preserve tiny fish, it’s propping up a failed healthcare system, ObamaCare, instead of making it easier for Californians to get healthcare.

Trump Improvements to ObamaCare

Less than two weeks ago I wrote a post highlighting the ways the Trump administration had taken steps to alleviate some of the suffering caused by ObamaCare (Trump Improvements in ObamaCare Helping Millions). This listed four significant improvements that make it possible for Americans who can’t afford the expensive ObamaCare policies to find relief. Those four improvements were:

• Short-term, limited duration plans (STLD) – These plans are free from most ObamaCare regulations, lowering their costs by 50 – 80 percent.
• Renewable plans – These plans allow consumers to stay on their affordable coverage for up to 36 months and lock in low rates in their plans even if they get sick.
• Ending the Individual Mandate – President Trump has already signed the legislation that will eliminate the onerous Individual Mandate, that forced all Americans to purchase healthcare insurance or pay a tax penalty, beginning in 2019.
• Association Health Plans – The Trump administration Labor Department has made it easier for small businesses and self-employed Americans to band together to purchase more affordable insurance through these plans. (see earlier post ObamaCare Relief for Small Business)

 

California Rejects Relief

But now the California legislature, in an obvious attempt to push back against all things Trump, has rejected the STLD plans. This bill currently sits on Governor Jerry Brown’s desk awaiting his signature.

The Wall Street Journal editorial board says critics consider these STLD plans to be junk insurance because they aren’t required to provide all the ObamaCare mandated coverage, such as mental health services. Yet they still must be subject to California’s state benefit mandates and thus must cover treatments for diabetes and other commonly needed healthcare services.

In 2017 the average short-term plan sold in California by online broker eHealth cost $184 a month compared to $426 for a midlevel plan on the ObamaCare exchanges. An estimated 600,000 Californians would select a STLD plan next year if given the choice.

But the California legislature doesn’t want to give them that choice. In a classic example of “ruling class” thinking, they don’t believe the people should be allowed to make their own choices. The bill’s sponsor, Democratic state Senator Ed Hernandez, says that STLD plans offer a “false sense of security.” But the Trump rule requires that insurers inform customers in a prominent place that the insurance isn’t as comprehensive as ObamaCare plans.

Alex M. Azar, II, the new Secretary of Health and Human Services (HHS), says opinions on ObamaCare fall into two categories: those who receive generous government subsidies and therefore love ObamaCare; and those who pay the full brunt of these expensive plans and therefore can’t afford ObamaCare. These STLD plans were designed to give the second group an affordable alternative.

Democrats in other states, like Illinois, have also tried to prohibit renewability guarantees to clamp down on STLD options. But Republican Governor Bruce Rauner vetoed that bill. Wisconsin Democrat Tammy Baldwin is pushing a resolution under the Congressional Review Act to reject the Administration’s short-term rule.

These misguided attempts to resist changes to ObamaCare by the Trump administration are blatant efforts to oppose Trump – at the expense of those citizens of their state they were elected to represent. This is a sad example of how politics has become more important than people.

 

Today we continue an explanation of the proposed legislation of socialist Senator Bernie Sanders entitled Medicare For All. Healthcare economist John C. Goodman gives us ten fundamentals you need to understand about Medicare and what it means if it were the only healthcare system available to everyone, as Senator Sanders promotes. InPart I we looked at the first seven and today we pick up again with number eight.

8. The real cost of Medicare includes hidden costs imposed on doctors and taxpayers.

 

In number seven, we learned that Medicare For All would be costly. Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years – and probably more thereafter. Blahous also estimates that the administrative cost of private insurance is 13%, more than twice the 6% it costs to administer Medicare.

Single-payer advocates often use this administrative cost comparison to argue that universal Medicare would reduce healthcare costs. But this estimate ignores the hidden costs Medicare shifts to the providers of care, doctors and hospitals, including the enormous amount of paperwork required in order to get paid.

The Obama administration forced doctors and hospitals to implement electronic medical record system – a costly change that appears to have failed to deliver promised increases in quality or reduction in costs or medical errors. In fact, it has made it easier for doctors to “up code” and bill the government for more money. Also to be considered are the costs of collecting more taxes to fund Medicare. Some estimates put these costs as high as 25 cents on every dollar.

A Milliman & Robertson study estimates that when all these costs are included, Medicare and Medicaid spend two-thirds more on administration than private insurance spends. Using the most conservative estimate of the social cost of collecting taxes, economist Benjamin Zycher calculates that the excess burden of a universal Medicare program would be twice as high as the administrative costs of universal private coverage.

9. Not a single problem in ObamaCare would go away under Medicare For All.

 

All of the difficult questions posed by ObamaCare would remain. Who would pay what? Would the premiums be actuarially fair? Would there be subsidies? Would the premiums vary by age? By health status? By income level? By health living choices?

How would employers be affected? Economists tell us that employee benefits are substitutes for wages and are therefore “paid for” by the employees. Under Medicare For All, would employers get off scot free?

Would there be an exchange? There is one now for Medicare – that’s how people enroll in Medicare Advantage plans. Like the ObamaCare exchanges, the Medicare Advantage exchange has subsidies for private insurance, mandated benefits, annual open enrollment and no discrimination based on health status.

The ObamaCare exchanges, by contrast, have been a disaster. Premiums and deductibles are skyrocketing, there are higher charges for chronic patients who need specialty drugs, and plans exclude more and more of the best doctors and hospitals. Expect more of the same with Medicare For All.

10. Medicare is already on a path to healthcare rationing.

 

Medicare is already in trouble. It is already on an unsustainable path with future promises made that far exceed expected revenues. When the Affordable Care Act (ObamaCare) was passed in 2010, the Medicare Trustees estimated the unfunded liability at $89 Trillion! Yet at the next trustees’ report that figure had dropped to $37 Trillion. How could that happen?

Passage of the ACA theoretically put the government’s healthcare spending on a budget. Goodman says that for the past 40 years, per capita healthcare spending has been growing at twice the rate of growth of real per capita income. At that rate it won’t take long to run out of money.

The Obama administration tried to “solve” this problem by creating an enforcement mechanism to control spending It was called the Independent Payment Advisory Board (IPAB). It was to be tasked with reducing fees for doctors and hospitals to cap spending. This unelected and unaccountable board would be able to restrict what treatments your doctor could provide with the stroke of a pen! Fortunately, IPAB was abolished this year in a bipartisan budget deal.

Goodman says expect Medicare fees to providers to continue to fall behind private sector fees in the future. This means one of two things must happen:

• Providers will respond to lower fees by providing less care to seniors
• Providers will shift costs to non-seniors in the form of higher fees, higher insurance premiums and higher state and local taxes.

 

The first of these options means Medicare will become more like Medicaid. Doctors will restrict access by offering fewer appointment options for Medicare patients just like they currently do for Medicaid patients. Hospitals may respond by reverting to the use of open wards instead of providing private rooms. Expensive treatments will be unavailable as cost-reducing takes precedence over patient care.

Medicare For All is socialized medicine and similar healthcare systems in other parts of the world, including Canada, Great Britain and Sweden always are plagued by restricted access and declining quality of care. Expect the same in this country.