Obamacare Disaster: The Emperor Has No Clue
When President Obama hawks the wonders of the misnamed Patient Protection and Affordable Care Act, I’m reminded of those “As Seen on TV” products.
True believers ridiculed critics of the Independent Payment Advisory Board and its unchecked power to ration health care. They were impressed by the $575 billion cut to Medicare, although lower payments lead physicians to accept fewer Medicare patients. They cheered because 11 million Americans will be added to the Medicaid rolls over the next ten years. While Medicaid looks like is a good deal with its low co-pays, provider payments are so low that only one-third of physicians accept new Medicaid patients.
True believers scoffed at claims of loss of privacy. After the NSA snooping revelations, a Pew survey revealed that 70 percent of Americans believe the government is using data for purposes other than fighting terrorism. Not only could unethical employees misuse health and financial information, the health “Data Hub” can be shared among seven federal agencies for ill-defined “routine uses.” According to a former HHS general counsel, the federal government’s computer program for insurance exchanges lacks privacy safeguards and could expose applicants to identity theft.
President Obama has repeatedly promised that “if you like your health care plan, you can keep it.” Even his Praetorian Guard has now defected. The National Treasury Employees Union—which represents the IRS folks who are ultimately in charge of ObamaCare—does not want its members to be “pushed out” of the Federal Employees Health Benefits Program and into the insurance exchanges.
Candidate Obama promised: “If you already have health insurance, the only thing that will change for you under this plan is that you will spend less on premiums.” Au contraire. Insurance premiums have risen an average of 30 percent since ObamaCare’s enactment. In Orange County, California, premiums for a 25-year-old in good health will rise by 95 percent.
Insurance will cost less for the lucky 26 million Americans who are eligible for health insurance exchange subsidies that can pay more than half the cost of policies. Subsidies—paid directly to insurance companies—are available for those with incomes from 138% ($15,415 for individuals; $29,326 for a family of four) to 400% ($45,960 for individuals; $94,200 for a family of four) of the poverty level. The ACA was to have employers report whether they were offering employees “affordable” care. Now with the employer mandate delayed, exchanges may accept applicants’ statements that they qualify for subsidies without further verification.
Another wrinkle in the program could limit access to care. If enrollees pay one month’s premium, exchanges must provide a grace period of three consecutive months during which coverage cannot be terminated. However, insurers are only required to pay claims during the first 30 days of the grace period.
Thus, patients with valid insurance cards in hand can seek treatment at a doctor’s office on day 31 through 90 of the grace period. When the physician in good faith submits a claim to the insurer, the claim can be denied. Although the physician can bill the patient, realistically, many patients simply will not pay. Chalk up another win for the insurance industry, which has off-loaded two-thirds of the risk of nonpayment onto physicians.
ObamaCare ignores human nature. Despite the claimed efforts to have patients adopt behaviors that help control costs, two recent studies in the journal Health Affairs demonstrate that people do not change merely because you tell them to. Uninsured and Medicaid patients reported that they preferred care in an emergency room to a doctor’s office. For Medicaid patients the financial cost of an ER visit and the physician’s office were similar, but the ER was more convenient. The uninsured reported the cost of office care was higher because of additional testing or specialist visits.
Another study revealed that a majority of patients didn’t want costs to enter into their medical decisions. Some participants even chose expensive care “out of spite” because of antagonism toward their insurance company.
Hucksterism cannot overcome reality. Government efforts at mass control are doomed. Successful reform requires innovation, maximization of personal engagement with medical treatment, and minimization of third party involvement. ObamaCare does the opposite.