Re-education Camp

What a bizarre week it has been, with oil still gushing into the Gulf, growing global political and economic instability, and virtually no private-sector jobs being created in our still-struggling economy. And the president spends yet another week talking about health reform?!

Clearly, he knows this massively unpopular law is causing political trouble for Democrats or he wouldn't be trying so hard to re-educate the American people about what's in it. But the sugar-coated message about the early benefits just isn't selling.

About four million — or less than 10 percent — of seniors are expected to get $250 checks after hitting the doughnut hole in their Medicare drug plans. Yet all seniors are going to be facing the $575 billion in cuts to Medicare, leading to a loss of Medicare Advantage benefits and growing difficulty getting the care they need. It's an insult to believe seniors can be bought off with this one-time payoff.

  • The Wall Street Journal holds no punches in an editorial today, entitled "Farewell, Medicare Advantage" about the president's plan to re-sell ObamaCare — backed by a $125 million campaign funded by labor unions and other interest groups:

    "Seniors in particular should curb their enthusiasm. 'First and foremost,' President Obama told seniors on Tuesday in Wheaton, Maryland, 'what you need to know is that the guaranteed Medicare benefits that you've earned will not change, regardless of whether you receive them through Medicare or Medicare Advantage.' First and foremost, nothing about that sentence is true," the editors write.

    "Advantage gives almost one of four seniors private insurance options, and Democrats are about to cut its funding by some $136 billion over the next decade even as health costs rise. The Congressional Budget Office says these cuts will cause enrollment to drop by 35%, the Administration's own Medicare actuaries predict 50%, and both outfits take for granted that benefits will also decline. The President knows this, so he and his fellow Democrats are gearing up to blame these cuts on … insurers, rather than on their own policies," they write.

  • Early trouble in Vermont: Vermont is demanding that lower-income seniors return their $250 checks to the state because its state program already has covered their doughnut hole drug costs. This latest "benefit" of ObamaCare sets up brouhaha between the feds and the states, pitting money against politics. No doubt, similar battles will come as cash-strapped states look under every rock for money.

    This is just one small example of the lack of coordination between the states and the federal government in writing the legislation and the incredible difficulties that it will present in implementation.


Employer shock: Employer reps are in shock over a draft copy of regulations circulating in Washington that address the circumstances under which existing employer health insurance plans will be required to meet all the expensive and onerous new mandates in the health overhaul law. Most employers believed (hoped?) their plans would be grandfathered since the president promised people so very often that "if you like your health plan, you will be able to keep it."

Apparently not. The reg writers estimate that more than half of all employer plans will fail to meet the test. The mid-range assumption is that two-thirds of employees of small businesses, and half of those in large employer plans will lose their grandfathered status by 2013 and will then have to comply with all the new federal rules.

This is going to be very, very unpopular. Deloitte released a survey yesterday showing that 82% of those surveyed consider themselves "well" or "adequately" insured, and that virtually all of them (96%) are "very satisfied" or "somewhat satisfied" with their insurance company's performance. Since most Americans like the coverage they have, they are going to wonder what happened to the president's promise that they can keep their current coverage.

And the more that employers are forced to change their plans to comply with the federal edicts, the more likely they are to drop coverage altogether and opt for the much cheaper fine for not providing coverage.

These are the facts. This legislation will have serious adverse effects on our economy, our health sector, on patients, doctors, taxpayers, and the future of medical innovation — with health insurance costs accelerating, job losses coming inside and outside the health sector, outrage over the coming federal health insurance mandates impacting individuals and business, medical infrastructure being swamped with 16 million more Medicaid patients, and doctors leaving practice or closing practices to Medicare patients.

We've been warning about the impact of ObamaCare. Economic reality, which seems hard for many on the left to grasp, will ultimately prevail.


Physicians speak: Our friend, former AMA president Donald Palmisano reports from the American Medical Association annual meeting in Chicago about a survey in the June 10 issue of The New England Journal of Medicine showing only a slim minority of doctors — just 13% — agreed with the position the AMA took to endorse ObamaCare.

Yet enough members of Congress were convinced by the AMA endorsement to vote Yes on the legislation to put the bill over the top.

The study, by Salomeh Keyhani, MD, MPH, from the James J. Peters Veterans Affairs Medical Center, and Alex Federman, MD, MPH, from the Mount Sinai School of Medicine in New York, surveyed more than 5,000 physicians and found that while the AMA was probably the most vocal doctors' group during the healthcare reform debate, it did not represent the majority of physicians' views during that contentious legislative process.

Wanna rethink that vote now?


And you will want to check out the new ObamaCare Watch website. Our friend and colleague Jim Capretta writes: "We have launched this web site to set the record straight. pulls together all of the best evidence and analysis about the legislation, as well as relevant news items and commentary, in an accessible and searchable format for anyone to use as they need to. Our aim is to provide Americans with the facts so that they can hold those who sponsored and passed ObamaCare accountable for what they have done."

And don't forget to also bookmark our website for reports, updated many times daily, with all of the latest developments on the health policy front.


Governor Mitch Daniels on Indiana's Use of Health Savings Accounts

On Tuesday, Indiana Governor Mitch Daniels spoke to the Congressional Health Caucus on his state's use of health savings accounts (HSAs) for state employees and for low-income residents not eligible for Medicaid. He also spoke about the broader impact of ObamaCare, and offered his solutions for consumer-centered reform.
Watch now >>


Health Reform: Only
a Cease-Fire in a Political Hundred Years' War

Thomas P. Miller, American Enterprise Institute
Health Affairs, 06/10

Four dominant political forces drove the process and product of national health reform during the past two years: federal budget constraints; public concerns about the size and reach of the federal government; the time pressure of the congressional calendar; and the political parties' high-stakes, all-or-nothing bets on what became President Barack Obama's defining policy priority. Republican congressional leaders saw little advantage in offering more detailed alternatives, while Congressional Democrats calculated that they had even more to lose politically by abandoning health reform legislation than by pushing it through Congress. Miller argues that passage of the health overhaul law merely represents a cease-fire in a long-standing war and that more battles between forces for "implementation" and those for "repeal and replace" are to come.
Read More »

Health Care Reform: Looming Fears Mask Unprecedented Employer Opportunities to Mitigate Costs, Risks and Reset Total Rewards

Towers Watson, 05/10

An overwhelming majority of employers (90%) believe health reform will increase their organization's health care benefit costs, according to a survey of benefit professionals from the New York-based consulting firm Towers Watson. A mere 14% of survey respondents think health reform will help contain costs and just 25% think health reform will encourage healthier lifestyles. Only 20% believe health reform will improve the quality of care. The survey also finds that 58% of employers believe health reform will drive large employers to adopt replacement consumer-driven health plans for their active employees and 48% say the health overhaul law will increase the number of large employers offering wellness programs and support.
Read More »

Report on the Benjamin Rush Society Debates at Baylor and Stanford Medical Schools

Benjamin Rush Society, 06/07/10

In May, the student chapters of the Benjamin Rush Society at the Baylor College of Medicine and Stanford University hosted debates on national health care issues or policy at their respective campuses. The Benjamin Rush Society aims to unite medical students, residents, fellows, and doctors across the political spectrum — as well as members of the general public — who believe that the profession of medicine calls its practitioners to serve their patients, rather than the government. Dr. Beau Briese, a Stanford resident and founder of the BRS Stanford Chapter said, "People who attended the [Stanford] debate could not stop talking about it, nor about the ideas of the right and the left in contrast. At Stanford, people are rarely exposed to a diversity of political ideas, to the detriment of their wisdom and future leadership. This is now changing."
Read More »

America's Most Powerful Woman (As the Overseer of ObamaCare)

Merrill Matthews, Institute for Policy Innovation
Investor's Business Daily, 06/08/10

HHS Secretary Kathleen Sebelius is the most powerful woman in the country, exercising enormous control over the life of every American, Matthews writes. Democrats gave this former head of the Kansas trial lawyers association the statutory power to remake the U.S. health care system. Throughout the Patient Protection and Affordable Care Act, we see "the Secretary shall establish"; "the Secretary shall promulgate regulations"; the Secretary may develop and impose appropriate penalties"; and "the Secretary has the authority." And within a few years virtually every health related decision individuals make — with regard to insurance, premiums and co-pays, picking a doctor (if you can find one), treatment and drug options, etc. — will have her stamp on it.
Read More »

One in Four Employers Expect Health Reform's 2011 Requirements to Add 3% or More to Next Year's Cost

Mercer, 05/20/10

Many employers are bracing for higher health care costs resulting from compliance with health reform mandates that take effect with the 2011 plan year. According to a survey of nearly 800 employers by the consulting firm Mercer, the cost impact will range from moderate to severe, depending on the employer's circumstances. One-fourth of respondents said that compliance with the first round of mandates from the health overhaul law will add at least another 3% to their projected 2011 plan costs, with about one in ten expecting an additional 5% or more. The survey also finds that the excise tax on high-cost plans emerged as the top concern for employers, despite the fact that it is the last provision to be implemented.
Read More »


Average Personal Affordability of Prescription Drug Spending in Canada and the United States

Brett J. Skinner, Ph.D. and Mark Rovere
Fraser Institute, 06/10/10

Government intervention in prescription drug markets in Canada produces no overall cost savings for consumers, compared to relatively more free-market based policy in the U.S., according to the Vancouver-based Fraser Institute. In both Canada and the U.S., per capita spending on prescription drugs was 1.7% of per capita GDP. The findings are largely explained by three facts: 1) in absolute terms, brand name drugs in Canada are about 53% less expensive on average than in the U.S., but generic drugs are about 112% more expensive; 2) Americans also substitute lower cost versions of drugs for relatively more expensive brands more often than Canadians; and 3) per capita incomes are higher in the U.S. than in Canada.
Read More »


Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006 – 2009

Paul Fronstin
Employee Benefit Research Institute, 06/10

In 2009, $7.1 billion was invested in account-based health plans, which include health savings accounts (HSAs) and health reimbursement arrangements (HRAs), spread across 5 million accounts. This is up from 2006, when there were 1.2 million accounts with $835.4 million in assets, and 2008, when 4.2 million accounts held $5.7 billion in assets. While total assets in the accounts have increased each year, increases in average account balances appear to have leveled off. In 2006, account balances averaged $696. This increased to $1,320 in 2007, and then averaged $1,356 in 2008 and $1,419 in 2009. [Editor's note: This could be that people are managing their accounts to have balances that are equal or nearly so to their health insurance deductibles — further evidence that people are very careful at managing money when given the chance.]
Read More »


The Massachusetts Medical Society 2009 Physician Practice Environment Index Report

Massachusetts Medical Society, 05/10

There is a prolonged decline in Massachusetts' physician practice environment and continuing concerns among physicians that are likely to affect the delive
ry of care to patients, according to an annual Index conducted by the Massachusetts Medical Society. Of the four main factors causing the decline, the Medical Society called the increasing professional liability rates and the rise in emergency department use by patients the most troublesome. It should be recalled that one of the goals of the 2006 health reform law was to shift patient care away from emergency departments to primary care physicians. The data and the analysis show clearly that this has not been the result. Emergency department utilization in Massachusetts actually increased in 2009, even after passage of health reform. This should cause considerable concern about the increased pressures that the implementation of universal health care coverage in Massachusetts and the nation will have on already stressed emergency departments.
Read More »


Institute on Business and Government Affairs Evening Forum
The Fund for American Studies Event
Monday, June 14, 2010
7:30pm – 9:00pm
Washington, DC
Michael Cannon of Cato will join a panel speaking to students about current health care legislation and how it will affect the health care industry.

Health Care Reform: An Initial Checkup
American Enterprise Institute Event
Tuesday, June 15, 2010
9:00am – 1:30pm
Featuring a keynote address by Indiana Governor Mitchell E. Daniels Jr.

The Role of Health Information Technology in Quality Improvement
National Quality Forum Webinar
Thursday, June 17, 2010
1:00pm – 2:00pm Eastern

How Will ObamaCare Affect Young Adults?
Galen Institute and Cato Institute Student Forum
Thursday, June 24, 2010
Washington, DC
Grace-Marie Turner will join other panelists to discuss the impact of the new health overhaul law on young adults at this special forum for students and interns.