Commentary Magazine


Topic: health care costs

ObamaCare Horror Stories Aren’t Lies

Last Thursday, President Obama used the announcement that there were now eight million people signed up for ObamaCare as the excuse for yet another touchdown dance celebrating what he touted as the success of his signature health-care law. The president’s boasts were as unfounded as the numbers are bogus. As I wrote then, not only are the figures for enrollment untrustworthy because so many of those being counted have not paid for their insurance, but they also include many Americans who lost their insurance because of the law and are now saddled with higher costs and coverage that doesn’t suit their needs. These ObamaCare losers may well equal or outnumber the number of those who have actually benefitted from it. Even more to the point, the administration’s delays of many of the provisions of the law have put off the negative impact it will have on jobs and the economy until after the midterm elections.

Americans are bracing for massive health-care cost increases next year. Stories about the hardships faced by many individuals and companies as a result of ObamaCare have been cited by the law’s critics. But the president has denounced them, and other Democratic apologists such as Senate Majority Leader Harry Reid have claimed they are falsehoods or outright inventions cooked up by the Koch brothers and other conservatives. The truth, however, is not hard to discover. After reading the piece I wrote last week about the president’s claims, one Connecticut businessman (who wishes to remain anonymous) whom I know wrote to me to tell the story of his company’s experience with the law and the way his representatives in Washington had responded to his complaints. Here is his story:

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Last Thursday, President Obama used the announcement that there were now eight million people signed up for ObamaCare as the excuse for yet another touchdown dance celebrating what he touted as the success of his signature health-care law. The president’s boasts were as unfounded as the numbers are bogus. As I wrote then, not only are the figures for enrollment untrustworthy because so many of those being counted have not paid for their insurance, but they also include many Americans who lost their insurance because of the law and are now saddled with higher costs and coverage that doesn’t suit their needs. These ObamaCare losers may well equal or outnumber the number of those who have actually benefitted from it. Even more to the point, the administration’s delays of many of the provisions of the law have put off the negative impact it will have on jobs and the economy until after the midterm elections.

Americans are bracing for massive health-care cost increases next year. Stories about the hardships faced by many individuals and companies as a result of ObamaCare have been cited by the law’s critics. But the president has denounced them, and other Democratic apologists such as Senate Majority Leader Harry Reid have claimed they are falsehoods or outright inventions cooked up by the Koch brothers and other conservatives. The truth, however, is not hard to discover. After reading the piece I wrote last week about the president’s claims, one Connecticut businessman (who wishes to remain anonymous) whom I know wrote to me to tell the story of his company’s experience with the law and the way his representatives in Washington had responded to his complaints. Here is his story:

As usual, your column regarding President Obama and the Affordable Care Act was insightful and on target. Here’s a real world example of the future negative effects on businesses and individuals we aren’t likely to hear from the White House.

In November of last year, I met with our health insurance broker and learned that the renewal of our policy for our company’s employees would result in a 53 percent increase in premiums – largely due to increased mandates and other nuances of the Affordable Care Act. We developed a short-term solution by renewing our current policy (pre-ACA) for another year and moving its effective date from January 1, 2014 to December 1, 2013. This adjustment allowed us to avoid the effect of the new ACA requirements that took effect on January 1, 2014. Our premiums under this alternate plan increased, but only by 9%. I realize we’re a small company and this is but a single case. However, our broker indicated this scenario is likely to play out in many organizations next year.

In early January, we sent a letter describing this situation to our Governor, Congressman, and Senators. Finally, last week Senator Chris Murphy responded with what was essentially a staff-drafted form letter. No responses from our other elected officials have been received to date. Sen. Murphy’s letter completely ignored our message — specifically that our premiums were about to increase by 53 percent. Instead, the letter claimed, “research indicated the ACA should stabilize and possibly decrease health care premiums for small businesses and individuals.”

Silly me, I guess the emperor really does have clothes after all.

As I mentioned, the large increase resulted, in part, from certain mandates not previously covered. However, Connecticut already had a lot of mandated benefits in place (thanks primarily to our state’s kind-hearted special interest advocates). The large increase also resulted from a change in the way coverage for dependents will now be rated and priced. Previously, dependents were treated similarly across all age cohorts. Under the ACA, dependent coverage is and will be rated and priced separately for each age – with costs significantly increasing among the 18-26 year age cohorts. So, for people with kids of college age and a few years older, premiums are likely to increase significantly.

The “blame” for this spike can probably be placed more on the insurance industry than specifically the Congressional staffers who drafted the ACA. However, my understanding is the insurance industry was heavily involved with developing the legislation and, of course, the industry was an advocate for the enactment of the ACA. What a surprise that insurers will benefit from the new law.

By backdating its policy, this company saved itself from a devastating increase in 2014. But that won’t be possible in 2015 when it and innumerable other small, mid-sized, and large companies will be faced with the enforcement of more ObamaCare mandates. The impact of these increases on the ability of businesses to maintain their level of employment and benefits will be considerable. So, too, will the effect of this massive federal power grab on the economy. Thus, in addition to the millions of individual ObamaCare losers that lost their coverage, in 2015 we will have countless others who will suffer from the law.

All this means that, contrary to the president’s claims and demands that critics shut up and do as he says, the debate over ObamaCare is far from over. If anything, as this one businessman seems to be telling us, in 2015 it will just be getting started. 

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No Mention of Rising Costs in O’s ACA Blitz

While the administration’s less-than-stellar performance in recent foreign crises have called into question President Obama’s stature as a commander in chief, there’s never been any doubt about his zeal to play salesman in chief with regard to his signature health-care law. The president has been ubiquitous throughout the media, seizing any chance to promote ObamaCare enrollment. From the offbeat Between Two Ferns satire show to sports shows to mainstream entertainment like the Ellen DeGeneres Show, the president has shown no reticence about flogging the health-care law.

The marketing strategy is clear. Though many of those who would truly benefit from signing up for ObamaCare are older, the presidential appearances are geared toward young demographics. On all of these shows the president has touted the need for young and healthy persons to get health insurance. The message is seemingly noncontroversial, even anodyne in nature. But there are some things that he is leaving out of the sales pitch. One is that the whole point of trying to attract young people to ObamaCare is because the assumption is that most of them won’t actually need it. Their premiums are intended to pay for the services that will be doled out to the elderly, the sick, and those with pre-existing conditions. The other and even more important point that will be missing from the president’s exhortations is that the already above average cost of the premiums for the misnamed Affordable Care Act will be skyrocketing later this year.

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While the administration’s less-than-stellar performance in recent foreign crises have called into question President Obama’s stature as a commander in chief, there’s never been any doubt about his zeal to play salesman in chief with regard to his signature health-care law. The president has been ubiquitous throughout the media, seizing any chance to promote ObamaCare enrollment. From the offbeat Between Two Ferns satire show to sports shows to mainstream entertainment like the Ellen DeGeneres Show, the president has shown no reticence about flogging the health-care law.

The marketing strategy is clear. Though many of those who would truly benefit from signing up for ObamaCare are older, the presidential appearances are geared toward young demographics. On all of these shows the president has touted the need for young and healthy persons to get health insurance. The message is seemingly noncontroversial, even anodyne in nature. But there are some things that he is leaving out of the sales pitch. One is that the whole point of trying to attract young people to ObamaCare is because the assumption is that most of them won’t actually need it. Their premiums are intended to pay for the services that will be doled out to the elderly, the sick, and those with pre-existing conditions. The other and even more important point that will be missing from the president’s exhortations is that the already above average cost of the premiums for the misnamed Affordable Care Act will be skyrocketing later this year.

As The Hill reports:

Health industry officials say ObamaCare-related premiums will double in some parts of the country, countering claims recently made by the administration. The expected rate hikes will be announced in the coming months amid an intense election year, when control of the Senate is up for grabs. The sticker shock would likely bolster the GOP’s prospects in November and hamper ObamaCare insurance enrollment efforts in 2015.

The industry complaints come less than a week after Health and Human Services (HHS) Secretary Kathleen Sebelius sought to downplay concerns about rising premiums in the healthcare sector. She told lawmakers rates would increase in 2015 but grow more slowly than in the past. … Her comment baffled insurance officials, who said it runs counter to the industry’s consensus about next year. 

“It’s pretty shortsighted because I think everybody knows that the way the exchange has rolled out … is going to lead to higher costs,” said one senior insurance executive who requested anonymity. The insurance official, who hails from a populous swing state, said his company expects to triple its rates next year on the ObamaCare exchange. 

The prospect of rising premiums makes the attempt to sell ObamaCare to the young doubly duplicitous.

On the one hand, the president and his supporters are not telling their intended audience that what he is attempting to orchestrate is a massive generational wealth transfer from the young to the elderly. ObamaCare’s benefits for those who had not previously been able to get or afford insurance are real. But the young and the healthy are paying for it. They are currently being cajoled by the administration to sign up for their own good. Later, persuasion will turn to coercion, as fines will be imposed for those who don’t do as they are told.

But the prospect of huge price increases later this year turns the president’s pitch into a massive bait and switch con game. Once the “affordable” ObamaCare insurance is put into place, the fact that enrollment figures are millions below where they need to be in order to make the scheme viable will force prices up through the roof. Indeed, when one factors into the equation that hundreds of thousands of those who are now being counted as enrolled have not yet—and may never—pay their premiums means the costs may go even higher than insurance industry experts are predicting.

This is the sort of scam that would draw the attention of law enforcement officials or at least the Better Business Bureau were the hucksters for this plan not federal officials. But since the scammers in question are the president of the United States and his minions, they will not only get away with it, but will be given the kind of free publicity that no ordinary confidence men could dream of getting. It remains to journalists to spread the message to American youth that while it is never a bad idea to take precautions for unexpected circumstances, “buyer beware” is the best advice any potential ObamaCare customer can receive.

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It’s Not About the Price of Pizza

Yesterday, Jonathan wrote about the increased price of pizza for customers of Papa John’s in light of the Affordable Care Act, showcasing a very real-world and imminent example of how the healthcare law will increase costs not just for taxpayers, but also for consumers. Many of our respondents held this view:

It is shocking that the CEO of Papa John’s and this magazine commentator would begrduge the near-poor workers of that company health insurance — and better healthcare for a few cents per pie!! Our country is based on the premise that we all pay a little more to help those less fortunate — the key here is “a little more.” Does anyone really object to that??

What this person and other liberals have wrong is this: It’s not about the price of pizza. If it were actually possible to improve healthcare for millions of Americans and insure millions more, conservatives would be on board. The basis of conservative opposition to ObamaCare is this: We do not think it will help the majority of Americans. The bill is titled the “Affordable Care Act,” but does nothing to make healthcare more affordable, nor will it improve health care. In reality, it provides a worse standard of care at a higher cost.

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Yesterday, Jonathan wrote about the increased price of pizza for customers of Papa John’s in light of the Affordable Care Act, showcasing a very real-world and imminent example of how the healthcare law will increase costs not just for taxpayers, but also for consumers. Many of our respondents held this view:

It is shocking that the CEO of Papa John’s and this magazine commentator would begrduge the near-poor workers of that company health insurance — and better healthcare for a few cents per pie!! Our country is based on the premise that we all pay a little more to help those less fortunate — the key here is “a little more.” Does anyone really object to that??

What this person and other liberals have wrong is this: It’s not about the price of pizza. If it were actually possible to improve healthcare for millions of Americans and insure millions more, conservatives would be on board. The basis of conservative opposition to ObamaCare is this: We do not think it will help the majority of Americans. The bill is titled the “Affordable Care Act,” but does nothing to make healthcare more affordable, nor will it improve health care. In reality, it provides a worse standard of care at a higher cost.

Under ObamaCare, 17 million Americans will be added to Medicaid’s rolls in order to move some Americans from the uninsured to the insured column. Are they actually better off? In National Review, Avik Roy demonstrates why they are not. He explains:

In July 2010, at National Review Online’s Critical Condition blog, I wrote about a University of Virginia study, published in Annals of Surgery, finding that surgical patients on Medicaid endured a 97 percent higher likelihood of in-hospital death than patients with private insurance, and a 13 percent greater chance of death than those with no insurance at all. I noted several other clinical studies that showed similar results.

Roy is an expert on the perils of Medicaid and recently published a heartbreaking story about a young boy on Medicaid who died from a simple tooth abscess. This story is heartbreaking not only because it was entirely preventable, but also because this is the broken system that millions of vulnerable Americans are subjected to and millions more are about to experience. Two years ago, before I was with COMMENTARY, and before I even worked in the conservative movement, I wrote a post on my personal blog about growing up on Medicaid. This young boy’s story about dying from a tooth abscess could have been my own; it almost was. I could not find a reputable dentist that would accept my insurance and when I was finally able to get an appointment with a dentist that accepted Medicaid I experienced nothing but fraud and incompetence. I also could not find a reliable oral surgeon for a simple wisdom tooth extraction. The one I ended up with charged Medicaid for general anesthesia which he did not administer — I was wide awake for my entire surgery. My experience was far from unique, and this is the system that we’re now set to expand under ObamaCare.

There are many more costly provisions on deck for ObamaCare before we see the full effect of the healthcare law. Jonathan’s post about the increased cost of pizza was just the tip of the iceberg. Not only will we see more costs ahead (in the form of increased goods and services, taxes and healthcare premiums), but we will also see a marked decline in the quality of our healthcare with fewer doctors to administer it.

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