Why Should Bill Have All The Fun?

Thursday, June 9, 2011

Paging Mr. Barnum

We haven’t visited with our favorite sucker hunter in a while, but that doesn’t mean I’ve forgotten about him. When we last left P.T., the AMGA had tossed ObamaCare over the rail and San Francisco businesses received a whole bunch of waivers.

Well, now some businesses have been surveyed about their plans due to the health care law changes. The results are in, and they’re not good (free registration required).

The Congressional Budget Office has estimated that only about 7 percent of employees currently covered by employer-sponsored insurance (ESI) will have to switch to subsidized-exchange policies in 2014. However, our early-2011 survey of more than 1,300 employers across industries, geographies, and employer sizes, as well as other proprietary research, found that reform will provoke a much greater response.

  • Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.
  • Among employers with a high awareness of reform, this proportion increases to more than 50 percent, and upward of 60 percent will pursue some alternative to traditional ESI.
  • At least 30 percent of employers would gain economically from dropping coverage even if they completely compensated employees for the change through other benefit offerings or higher salaries.

You think that’s bad? The news doesn’t get any better (emphasis mine).

As we have seen, a Congressional Budget Office report estimated that only 9 million to 10 million people, or about 7 percent of employees, currently covered by ESI would have to switch to subsidized exchange policies in 2014. Most surveys of employers likewise show relatively low interest in shifting employees from traditional ESI.

Our survey found, however, that 45 to 50 percent of employers say they will definitely or probably pursue alternatives to ESI in the years after 2014. Those alternatives include dropping coverage, offering it through a defined-contribution model, or in effect offering it only to certain employees. More than 30 percent of employers overall, and 28 percent of large ones, say they will definitely or probably drop coverage after 2014.

Remember when President Barack Obama (D-USA) said this?

[N]o matter how we reform health care, we will keep this promise: If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what. My view is that health care reform should be guided by a simple principle: fix what’s broken and build on what works.

It wasn’t even a year ago. Well, that promise is past its expiration date, apparently. Time to throw it out before it starts to smell. As you can see from the quotes above, over 1/4 of the business surveyed expect to drop their coverage after 2014. Up to another 1/4 said that they will have to look at alternatives. Almost 1/3 gain economically by doing so. So much for Obama’s statement that “no matter what” that wouldn’t happen.

The important thing to remember about ObamaCare is this. Everything you’ve been told by the Democrats about it is a lie. The Democrats pretended from the moment they started down this path that they weren’t trying to reinvent health care in the United States. They lied. This was a power grab of unprecedented proportions. And they never cared about the results, other than to get to a socialized state of medicine with government control over everything.

Don’t believe me? What were the stated goals of The Patient Protection and Affordable Care act?

  • Increasing availability of coverage
  • Bending the cost curve down while not increasing the cost of government
  • Increasing quality of service
  • Decreasing Medicare fraud

As I’ve shown repeatedly on this blog, the law fails at its very first step. Employers are dropping coverage like flies. That’s what all the waivers have been about, and that’s shown again in this very post.

It doesn’t come close to bending the cost curve down. Surprisingly, this isn’t something I’ve blogged extensively about, but you can read a summary here.

In 2009, the report reads, national health-care spending, public and private, totaled $2.5 trillion and accounted for 17.3 percent of the economy. The report predicts that health-care spending will rise to $4.6 trillion and account for 19.6 percent of the economy in 2019. By contrast, in February — before the passage of ObamaCare — the same team of government experts, using the same economic and demographic assumptions, predicted that national health-care spending would reach $4.5 trillion, or 19.3 percent of the gross domestic product, in 2019. The report also anticipates a big increase in health-care spending in 2014, when major provisions of the new law, including a requirement for most Americans to have insurance, take effect. From 2013 to 2014, for example, overall health-care spending is expected to increase by 9.2 percent, which is significantly more than the 6.6 percent increase predicted before ObamaCare became law.

And both of those models assume that the Medicare reductions built in to the law will take place. They won’t. Bet what’s left of your retirement savings on it. If you get rid of those, the cost curve gets even steeper.

The law certainly doesn’t increase the quality of service either. First, there’s IPAB, which will decide what treatments are acceptable and who gets them. You may remember IPAB. It was formerly called a “death panel”. But, IPAB isn’t the only problem. The new law makes medical research considerably more expensive and time consuming, resulting in not only higher costs, but significantly longer time to market, and even longer before the new treatments will be accepted by IPAB (since they will certainly cost more). So, those fancy new diabetes treatments you’ve been reading about and hoping for? Forget it. You’ll be getting the foot amputation instead.

As CER becomes more entrenched, it will increase the costs of bringing new technology to market by increasing the size and cost of clinical trials, delaying the time it takes to bring a new product to market and decreasing the rate of diffusion of new technologies.

The result will be increased uncertainty and risk of investment in medical and pharmaceutical research. Reduced investment in medical innovation could lead to large reductions in health and longevity and a less productive workforce, which would harm the economy.

There’s only one item on the list where the law appears that it may be somewhat successful, and that’ sin eliminating Medicare fraud. However, let me remind you once again, of this picture.

If you really believe that there’s no increased fraud potential in that, then you are a sucker.

And don’t ever forget that the worst thing about ObamaCare might not even be listed above, and that’s what it’s doing to our economy. Businesses aren’t hiring because of the cost of the new regulations and the cost of covering their employees. Add the stifling increases to our public debt load and you have the recipe for economic stagnation. At best.

The result? More expensive healthcare that’s lower quality and loss of my insurance at work combined with a floundering economy. What’s not to like?

Now, P.T. can rest comfortably again, knowing that he’s found a few more suckers.

If you want more details on these items, I suggest you look at this entire thread, or even the very first post in it, which is now somewhat dated. I’ve tried to generally include things that have already happened or are already causing businesses to make changes. So, there’s very little of “opinion” in these posts. They’re just about as fact based as I can make them. And the simple fact is that this law is a disaster. If you think otherwise, you haven’t been paying attention. No sane person who understands the law at all could call this law a success at it’s stated goals.

0 comments: