A Hard Sell

Members of Congress are returning to Washington wondering what happened to President Obama’s promise that he could convince a very skeptical public that his health-overhaul plan is a good thing after all.

Many members who voted for the legislation had to hide out from their constituents over the Easter recess to avoid scathing criticism. Public animosity toward Obamacare is getting worse, not better, with Rasmussen showing that 58 percent now want it repealed. Fox reported last week that only 12 percent want the legislation to be implemented as is.

People are not buying into the president’s sugarcoating because they can see for themselves the destructive path ahead. Every day more facts emerge about the legislation Congress slammed through on a hyper-partisan vote:

1. Doctor shortages loom: Experts warn there won’t be enough doctors to treat the millions of people newly insured under the law. At current graduation and training rates, the U.S. faces a shortage of up to 150,000 physicians in the next 15 years, according to a report by the Association of American Medical Colleges.

2. Costs continue to soar: Massachusetts governor Deval Patrick is in a knock-down, drag-out battle with health insurers. He is refusing to allow them to raise their rates to cover the added costs they are incurring as a result of the state’s three-year-old universal coverage law. The companies lost a first-round court battle yesterday. They say they will lose hundreds of millions of dollars and could go out of business if they can’t raise their rates to at least cover their costs.

Sen. Dianne Feinstein (D., Calif.) is reportedly shocked that the new law does not give federal regulators the power to block double-digit health-insurance-premium increases. In a preview of battles to come, Sen. Feinstein and Rep. Jan Schakowsky (D., Ill.) are pushing legislation to expand federal and state authority to prevent insurance companies from boosting rates excessively. This is a direct path to a single-payer, government-run health system.

3. Where’s my free health care? eHealthInsurance, the online broker for health insurance, says it has been flooded with calls from people asking, “Where do we get the free Obamacare, and how do I sign up for that?” Would-be customers had expected the overhaul law to translate into instant, affordable coverage.

Are people happy when they find out that the subsidized coverage doesn’t begin for four years and that even then, only a fraction of people will qualify? What about when they learn that most Americans will be required to buy expensive, government-mandated policies? Or that new taxes start right away but still won’t make a dent in the tsunami of red ink the law creates?

4. Five little words: States and physicians have a new concern: Tucked away in the 2,700-page health overhaul law are five words that states fear will open the floodgates for lawsuits.

Until now, states participating in Medicaid have been required to provide payments to physicians. But on page 466 of the new law, states now will be liable for ensuring provision of “the care and services themselves.”

That means states are legally required not only to ensure that services are paid for, but that Medicaid recipients are seen by a doctor. Alan Levine, Louisiana’s health secretary, says this “leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service.” He says the added cost would be incalculable.

5. Ninety days to get going: The clock is ticking on the 90 days that HHS Secretary Sebelius has to get programs established in the states to provide coverage for uninsured people with high health risks. It is the tip of the iceberg in a mountain of regulations that must be written to get Obamacare up and running.

Demonstrating growing state rebellion against Obamacare, Georgia announced yesterday it isn’t going to participate in the new high-risk pools.

6. Constitutional challenges continue: Virginia attorney general Ken Cuccinelli argues that there is no constitutional authority for Congress to regulate commerce when citizens just want to do nothing — for instance, not buy insurance. He also argues that Medicare and Social Security are based upon constitutional taxing authority. But he says that a mandate to buy private insurance is not a tax; the tax is a penalty for not buying a product from a private company — an unprecedented demand from the federal government.

And finally, Cuccinelli says the legislation did not include a “severability” clause, which means that if one provision is declared unconstitutional, the whole law can be thrown out.

Officials are facing the growing realization that the legislation is very poorly drafted. The Senate bill never was intended to go into law as is; leaders believed they would be able to merge the House and Senate measures into a cleaned-up and final version of the bill. It was primarily a vehicle to cobble together 60 votes in the pre–Scott Brown Senate.

But after Democrats lost their filibuster-proof majority, the only choice was to pass the dreaded Senate bill as is. Now they have a poorly-drafted bill that exacerbates already overwhelming implementation challenges.

In a bit of justice, it turns out that the law creates significant confusion about whether or not members of Congress actually still have health insurance. The bill was amended in the Senate to make sure members and staff are in the system they created for the rest of us and must get their insurance through the new exchanges. But now there is confusion about whether or not they have coverage until the new exchanges actually start in 2014. A 13-page, single-spaced memo from the Congressional Research Service reaches no conclusion.

Over the coming months and years, those who voted for health overhaul will find themselves perpetually on the defense in explaining the cascade of problems it creates, and opponents surely will not hesitate to point out its failings and who is responsible.

The uninsured rolls will continue to swell, the huge tax increases will kill jobs and depress economic growth, seniors will start facing the consequences of Medicare Advantage cuts, deficits will continue to soar, and the quality of care will steadily get worse as doctors and hospitals become more responsive to bureaucrats than to patients. Obamacare will be blamed.

Published in National Review Online: Critical Condition, April 13, 2010.

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President Obama has been barnstorming the country trying to convince a very skeptical public that his health overhaul plan is a good thing after all.

But public animosity toward ObamaCare is not budging, with Rasmussen showing that 55% still want it repealed. It shows the incredible difficulty of changing minds that are set against this government takeover of our health sector. People are not buying into the president’s sugarcoating because they understand this new law represents a fundamental change in the relationship between citizens and government.

And the president's job is getting harder, not easier, as actual facts about the legislation continue to emerge:

  • Where’s my free health care? eHealthInsurance, the online broker for health insurance, says it has been flooded with calls from people asking, “Where do we get the free Obama care, and how do I sign up for that?”

    McClatchy reports the eHealthInsurance “call center had been inundated by uninsured consumers who were hoping that the overhaul would translate into instant, affordable coverage. That widespread misconception may have originated in part from distorted rhetoric about the legislation bubbling up from the hyper-partisan debate about it in Washington.”

    Are people happy when they find out that the coverage doesn’t begin for four years and that even then, only a fraction of Americans will qualify for subsidies? What about when they learn that most Americans will be required to buy expensive government-mandated policies?

  • Company write-downs: Add one more company to the list of those announcing projected earnings reductions as a direct result of ObamaCare, with US Steel taking a $27 million charge. As we wrote in the Chicago Tribune on Friday, the New York-based consulting firm Towers Watson conducted a study that found the tax change impacting retiree drug benefits will cost companies $14 billion in future years. It's estimated that 6.3 million retirees currently receive drug benefits from their former employer's health plan. As a result of ObamaCare, many companies are expected to curtail or end these benefits and instead push them onto Medicare's drug program, where taxpayers will foot the bill.

  • Unconstitutionality: I joined a conference call with Virginia Attorney General Ken Cuccinelli last week who outlined arguments for his state’s suit against the federal health overhaul law.

    He argues, among other things, that there is no constitutional authority for Congress to regulate commerce when citizens just want to do nothing — as in not buying insurance. He also argues that Medicare and Social Security are based upon constitutional taxing authority. But he says that a mandate to buy private insurance is not a tax; the tax is a penalty for not buying a product from a private company. And finally, Cuccinelli says the legislation did not include a “severability” clause, which means that if one provision is declared unconstitutional, the whole law can be thrown out.

  • Five little words: States and physicians have raised a new concern: tucked away in the 2,700-page health overhaul law are five words that states fear will open the floodgates for lawsuits.

    Until now, states participating in Medicaid have been required to provide payments to physicians. But on page 466 of the new law, states now will be liable for ensuring provision of “the care and services themselves.”

    That means states are legally required not only to ensure that services are paid for, but that Medicaid recipients are seen by a doctor. Alan Levine, Louisiana’s health secretary, says this “leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service.” He says the added cost would be incalculable.

  • Massachusetts: Gov. Deval Patrick is in a knock-down drag-out battle with health insurers. He is refusing to allow them to raise their rates to cover the added costs they are incurring as a result of the state’s three-year-old universal coverage law. The companies have gone to court to protest. They say they will lose millions of dollars and go out of business unless they can raise their rates to at least cover their costs.

    Two companies have backed down and agreed to comply, but the money-losing scenario is clearly an unsustainable business model. And it is a forecast of things to come at the federal level.

  • Trying the sell: Members of Congress are sending out email messages to constituents touting the benefits of ObamaCare to their states and districts. But few members who supported the law seem willing to actually face the voters — voters eager to give them an earful about why they so object to this legislation.

  • 90 days to get going: The clock is ticking on the 90 days that HHS Secretary Sebelius has to get programs established in the states to provide coverage for uninsured people with high health risks. It is the tip of the iceberg in a mountain of regulations that must be written to get ObamaCare up and running.

    And officials face the growing realization that the legislation is very poorly drafted. The Senate bill never was intended to go into law as is; leaders believed they would be able to merge the House and Senate measures into a final bill. But Sen. Scott Brown put a stop to that and now they have a poorly-drafted bill that presents even greater implementation challenges.

  • The best chart: The New York Times has belatedly realized that maybe the financing of this legislation is based upon quicksand. It shows the cost of the bill, the spending, and the timelines in one quick read.

On the defense: Members of Congress who voted for this bill, boasting of its benefits, will find themselves perpetually on the defense in explaining the cascade of problems it creates, and opponents surely will not hesitate to point out its failings and who is responsible.

The uninsured rolls will continue to swell, the huge tax increases will kill jobs and depress economic growth, seniors will start facing the consequences of Medicare Advantage cuts, deficits will continue to soar, and the quality of care will steadily get worse as doctors and hospitals become more responsive to bureaucrats than to patients. ObamaCare will be blamed.

Finally, the president really needs to remember that he is the one politician in the country who is elected to represent all the people. But his rhetoric in these townhall meetings is combative and insulting to those who object to his plan, taunting those who want to repeal and start over to “Go for it.”

We are not terrorists. We are concerned citizens. Decorum and grace are required if he really is going to change any minds. All he is doing is further polarizing the electorate and hardening our opposition.

CLIP OF THE WEEK

Grace-Marie Turner Talks "Repeal and Replace" with Jim Blasingame

In this week's "Clip of the Week," Galen President Grace-Marie Turner outlines the impact of ObamaCare on small businesses and possible scenarios for repeal and reform in a two-part interview with Jim Blasingame, host of "The Small Business Advocate Show."

Clips may take a few moments to load:
Part one
Part two

As a reminder, audio and video clips from the Galen Institute's "Intelligent Health" conference, held March 25, 2010 in Washington, can be found on the Health Reform Hub.

GALEN IN THE NEWS

ObamaCare's Job-Killing Impact Is Just Getting Started

Grace-Marie Turner, Galen Institute
Chicago Tribune, 04/01/10

It didn’t take long for businesses — especially in Illinois — to start feeling ObamaCare’s job-killing punch, Turner writes. In the last week, four major Illinois-based companies — Boeing, Caterpillar, Deere & Co. and Illinois Tool Works — have announced they will take charges of $150 million, $100 million, $150 million and $22 million, respectively, because of one provision in the new law. In order to pay for the plan’s estimated $924 billion cost, the tax deduction for companies providing their retirees with drug benefits has been reduced. While this looked good on paper, the consulting firm Towers Watson conducted a study that found this tax change will cost companies $14 billion in future years. We soon may begin to see the negative impacts of just this one provision in the health reform plan: jobs may dry up as businesses lose value, millions of seniors will lose the drug coverage they currently enjoy, and the burden on taxpayers will increase due to more people on Medicare Part D.
Read More »

HEALTH REFORM

The White House and the Writedowns

James A. Klein, American Benefits Council
The Wall Street Journal, 04/06/10

The real story here — and one that is getting little attention — is that the new health overhaul law will likely result in a change of drug coverage for 1.5 million to two million retirees as they are moved from their employer-sponsored plans, Klein writes. Reasonable people can differ as to whether shifting retirees to the Medicare drug program is good or bad policy. But two things are certain. First, it will cost the federal government more money. Second, employers will be excoriated when that happens. When an administration is unwilling to accept criticism of two sentences in a 2,700 page law there is a problem. Short of admitting that they were repeatedly warned this would happen, the administration and the Democratic leadership in Congress might at least stop accusing companies of hype and inflated rhetoric.
Read More »

ObamaCare and the Constitution

The Wall Street Journal, 04/02/10

The legal challenges to ObamaCare are serious and carry enormous implications for the future of American liberty, The Wall Street Journal writes. The most important legal challenge turns on the “individual mandate” — the new requirement that almost every U.S. citizen must buy government-approved health insurance. Florida Attorney General Bill McCollum and 13 other state AGs claim this is an unprecedented exercise of state power. Never before has Congress required people to buy a private product to qualify as a law-abiding citizen. All human activity arguably has some economic footprint. So if Congress can force Americans to buy a product, the question is what remains of the government of limited and enumerated powers, as provided in Article I of the Constitution. If the insurance mandate stands, then why can’t Congress insist that Americans buy GM cars, or that obese Americans eat their vegetables or pay a fat tax penalty?
Read More »

STATE INITIATIVES

Short-Term Customers Boosting Health Costs

Kay Lazar
The Boston Globe, 04/04/10

Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses, The Boston Globe reports. In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion. The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month. Other insurers could not produce such detailed information for short-term customers but said they have witnessed a similar pattern. And, they said, the phenomenon is likely to be repeated on a grander scale when the new national health care law begins requiring most people to have insurance in 2014, unless federal regulators craft regulations to avoid the pitfall.
Read More »

Bluegrass Bummer

Stephen Spruiell
National Review Online, 04/05/10

Kentucky’s experience with health insurance overregulation holds lessons for repealing ObamaCare, Spruiell writes. In the mid-1990s, Kentucky was one of eight state governments that boldly went where the rest of the country refused to go: The commonwealth imposed ClintonCare’s restrictions on its insurance companies, even though ClintonCare had been vanquished from the national stage. In Kentucky and the other seven states, insurance premiums skyrocketed, healthy people stopped buying insurance, and insurance companies exited the market in droves. For example, average premiums in Kentucky increased between 36% and 165% in the wake of reforms and within four years, more than 40 insurance companies had stopped offering individual insurance coverage. Only three of the eight states were able to untangle themselves from the harmful provisions; only one, Kentucky, was able to pull off a full repeal.
Read More »

2010 State Legislators Guide to Health Insurance Solutions

American Legislative Exchange Council and Council for Affordable Health Insurance, 04/10

While Congress debates federal health reform, some states have already begun implementing their own health reform initiatives — and these “reforms” should serve as a cautionary tale for federal and state policymakers alike. Lessons learned from Massachusetts, Maine, New Jersey and other states demonstrate that federal health “reform” will lead to high health costs, worsening patient care, and crippling tax hikes or state budget cuts. But other states, like Arizona, Florida, and Utah, can lead the way in providing common-sense health policy solutions. This guide helps policymakers examine the demographics of the uninsured population and what to do about it, explore vital consumer protections that also preserve the private insurance market, analyze the “hot topics” in health policy and discover related patient-centered reforms, learn common health insurance industry terms and definitions, and access model legislation from ALEC.
Read More »

CONSUMERISM

The Use of Health Savings Accounts for Health Care in Retirement

Employee Benefit Research Institute, 04/10

EBRI evaluates the use of HSAs to generate savings needed to cover health insurance premiums and out-of-pocket expenses for health care services in retirement, using both estimated Medicare payments and earlier EBRI research on retiree health costs. Based on current interest rates, if an individual age 55 in 2009 were to contribute $3,000 to his or her HSA and also
contribute the $1,000 catch-up contribution each year for 10 years, a total of $48,300 would be in the account after 10 years at a 2% interest rate. And if the interest rate was 5%, $55,100 would be accumulated at the end of 10 years.
Read More »

Health Reform Provisions that Could Impact Consumer-Driven Health Plans

Roy Ramthun
HSA Consulting Services, 3/29/10

The health overhaul legislation will likely have a modest impact on consumer-driven health plans and their associated health care accounts (FSAs, HRAs, HSAs), Ramthun writes. Earlier proposals that would have eliminated some of these options, particularly FSAs and HRAs, did not survive the legislative process. Ramthun provides a brief description of the provisions that were included in the final legislation.
Read More »

Events

MASA 2010 Annual Session
Medical Association of the State of Alabama Event
April 9-10, 2010
Huntsville, AL
Grace-Marie Turner will speak about impact of national health policy on medical practices at 2:00pm on Friday, April 9.

APEE 35th International Conference
Association of Private Enterprise Education Event
April 11-13, 2010
Las Vegas, NV
Grace-Marie Turner will speak about “What Is Next for Health Reform” at 9:30am on Monday, April 12. On Tuesday, April 13, Grace-Marie will host a panel on "Taxes, Health Insurance, and the Labor Market: Missed Opportunity for Reform."

7th Annual World Health Care Congress
April 12-14, 2010
Washington, DC

What's in There? An Ask-the-Experts Overview of the Health Reform Law
Alliance for Health Reform Briefing
Friday, April 16, 2010
12:30pm – 2:30pm
Washington, DC

How Will Health Care Reform Impact Asian American, Native Hawaiian, and Pacific Islander Communities?
Asian & Pacific Islander American Health Forum Webinar
Thursday, April 22, 2010
3:00pm – 4:00pm EDT

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