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One Hundred Days Later: The Best Way Forward with Obamacare is to End It

Posted By Kathryn Nix On July 8, 2010 @ 11:00 am In Obamacare | Comments Disabled

AT&T announces billion dollar health care costs [1]

Exactly one hundred days ago today, President Obama signed the Patient Protection and Affordable Care Act into law.  The President promised that the law would extend access to high quality care to the millions of uninsured Americans, while at the same reducing costs and overall health spending.

Forget it. It’s not going to happen. It is clear that none of these promises will come true; instead, the legislation is likely, even certain in some cases, to make existing problems worse. To mark the 100 day anniversary of the health care bill, Senators Tom Coburn (R-OK) and John Barrasso (R-WY), both physicians, released a study [2] compiling the mounting evidence of the real impact of the new health law. Based on a summary of the evidence thus far, Sens. Coburn and Barrasso show that Obamacare will:

Cause health costs to skyrocket. Sens. Coburn and Barrasso write that “[t]he new health law is not effective at reigning in climbing premium costs because it fails to address the underlying driver of health insurance costs – the cost of medical care.”  Premiums continue to rise because of the disconnect [3] between consumers and the prices of the services they consume.  Obamacare does absolutely nothing to alter these economic dynamics. Subsidies will increase insurance affordability for 7 percent of Americans—for the rest of the country, the bill will increase costs.

Taxes on medical devices and pharmaceuticals will be passed down to consumers.  Age rating of insurance premiums will increase rates for young adults [4], encouraging them to forego insurance and pay the penalty associated with the individual mandate instead.

Finally, increasing dependence on federal programs will increase costs for the privately insured [5], since the government pays doctors and other medical professionals significantly less—the cost of which is shifted to the privately insured so they are able to break even and keep the clinic doors open.

And all of this just addresses increases in health costs—this is to say nothing of the additional cost to taxpayers [6] of the new law.

Cause millions of Americans to lose their current coverage. “Americans were repeatedly promised the new health law would allow anyone who wanted to keep their current health plan to do so.”

This is not going to happen. Insurers have already begun to pull out of the individual and small group markets, leaving those they insured with no coverage.  Some insurers are even going out of business [7] as a result of the new law.

Moreover, Obamacare will cause Americans to lose their current coverage due to the incentives it creates for employers to dump the insurance they currently provide.  Medicare’s Chief Actuary predicts that 14 million Americans with employer-sponsored coverage will lose it by 2019, and other sources [8] peg this number even higher.  Even for those whose employers don’t drop their current plan, due to the stringent regulations on grandfathered plans [9], more than half of Americans with employer coverage will see some changes to their current plan. The President’s repeated promises that if one liked one’s plan one could keep it turn out to be empty.

Finally, cuts to Medicare Advantage are expected to reduce senior enrollment in this popular alternative to traditional Medicare by roughly half.

Force millions into Medicaid. Sens. Coburn and Barrasso write, “every low-income American meeting certain eligibility criteria will be essentially locked into Medicaid – the worst delivery system in America.”  This includes 16 million Americans.

Not only will these citizens be reliant on a low quality program with poor access to physicians and necessary care, but expanding Medicaid will further strain state budgets, which are already facing serious trouble [10].  This will inevitably result in cuts to state-funded programs, such as education.

Fail to adequately address pre-existing conditions. One of the main arguments that Congressional leaders advanced for the law was that it would make it possible for those with pre-existing conditions to get affordable coverage. This is a real problem.  But Obamacare doesn’t solve this problem in any permanent fashion until 2014.

In the meantime, those with pre-existing conditions are supposed to get coverage in temporary federal high-risk pools [11].  But these pools are severely under-funded, such that only 200,000 of the 5 to 7 million eligible Americans would be able to be covered.

The negative side effects [12] of Obamacare – some intended, some unintended- make the next Congressional step in real health care reform clear: stop the madness, repeal this flawed legislation, and start over and get it right. That is not going to happen overnight. But it can happen. Heritage health policy specialist Robert Moffit explains in a recent paper that it is increasingly plausible:  “The experience of the Medicare Catastrophic Coverage Act of 1988 demonstrates that full-scale repeal is not politically unrealistic. Indeed, for conservatives in Congress, repeal is a priority, and it is clearly what the majority of their fellow citizens want them to do.”  To read more, click here [13].


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/07/08/one-hundred-days-later-the-best-way-forward-with-obamacare-is-to-end-it/

URLs in this post:

[1] Image: http://www.foundry.org/wp-content/uploads/Obama-healthcare-signing-10.jpg

[2] a study: http://coburn.senate.gov/public/index.cfm?a=Files.Serve&File_id=722faf8b-a5be-40fd-a52b-9a98826c1592

[3] the disconnect: http://www.heritage.org/Research/Reports/2010/02/Bending-the-Curve-What-Really-Drives-Health-Care-Spending

[4] increase rates for young adults: http://www.foundry.org/2010/03/30/side-effects-young-to-pay-higher-health-insurance-premiums

[5] increase costs for the privately insured: http://www.foundry.org/2010/07/06/side-effects-obamacare-shifts-costs-to-the-privately-insured

[6] additional cost to taxpayers: http://www.foundry.org/2010/05/25/obamacares-cooked-books-and-the-doc-fix

[7] going out of business: http://www.foundry.org/2010/06/09/side-effects-like-your-hsa-enjoy-it-while-you-can

[8] other sources: http://www.foundry.org/2010/06/02/side-effects-obamacare-creates-a-costly-drop-in-employer-health-coverage

[9] regulations on grandfathered plans: http://www.foundry.org/2010/06/16/side-effects-regulatory-pillow-to-smother-grandfathered-plans

[10] serious trouble: http://www.foundry.org/2010/07/07/side-effects-obamacares-exploding-medicaid-costs

[11] federal high-risk pools: http://www.foundry.org/2010/04/22/side-effects-the-catch-22-of-obamacare-risk-pools

[12] side effects: http://www.foundry.org/tag/side-effects

[13] click here: http://www.heritage.org/Research/Reports/2010/06/The-Prospects-for-Ending-Obamacare-Learning-from-Health-Policy-History

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