It just keeps coming.
Challenges grow: Seven more states signed on this week to Florida's lawsuit challenging ObamaCare, bringing the total to 20. Significantly, the National Federation of Independent Business joined the suit today on behalf of its 350,000 members.
Members are outraged over the individual mandate, the 1099 reporting requirements, taxes that will drive up premium costs, and tax credits for small businesses that it says "will do little to make purchasing insurance more affordable for small firms."
Others are likely to join the suit as people begin to see the harm to businesses large and small across the country and the impact of new taxes, fees, and regulations that will raise health costs.
Jobs, anyone? As evidence, an analysis conducted by officials of the White Castle restaurant chain and released by House Republican Leader John Boehner said that just one provision of ObamaCare will effectively cut the chain's net income in half and reduce future jobs creation.
White Castle Vice President Jamie Richardson explained: "We've been working on this internally from a number of different perspectives. One that has [us] the most concerned is the $3,000 penalty that kicks in when an employee's portion of a premium exceeds 9.5% of household income …
"In present form, this provision alone would lead to approximate increased costs equal to over 55% of what we earn annually in net income … Effectively cutting our net income in half would have [a] devastating impact on the business — cutting future expansion and more job creation at least in half. Sadly, it makes it difficult to justify growing where jobs are needed most — in lower income areas."
Higher costs: The Congressional Budget Office updated its estimates of the cost of ObamaCare by $115 billion this week, bringing the total estimate to $1 trillion. And as we know, $1 trillion already is a fictional number based upon unrealistically high assumptions about spending cuts to Medicare and unrealistically low assumptions about the cost of the program.
Agents under attack? I traveled to Salt Lake City this week for a speech to the annual meeting of the Utah Association of Health Underwriters, at the request of incoming president Rob Perry. I worry that insurance agents are in the sights of ObamaCare.
Agents and brokers are on the front lines of navigating between health insurers, business owners, patients and health professionals, and the value they bring to the health sector is highly under-appreciated. Most of their clients are small and medium-sized businesses, and the agents basically serve as external human resources departments for them. They work hard to find policies to meet companies' needs (and budgets), hold seminars to brief employees on the benefit plans, and serve as intermediaries to make sure claims are paid and even help employees find physicians and the best hospitals.
The new health law indirectly acknowledges the value of agents by creating a new profession called "Navigators" for the new state health exchanges. But they won't be paid through the commissions that agents earn today. Instead, the Navigators will get government "grants" to help people select policies. The Navigators will, of course, more likely be beholden to politicians for their jobs than their clients. And once someone has a problem with a claim, good luck in getting them to help.
I am painfully reminded of the quote from then First Lady Hillary Clinton in The Wall Street Journal on November 17, 1993, reporting on a town hall meeting about the Clinton health plan.
"As a health insurance agent, Lori Proctor was naturally curious about how the Clinton health-care plan would affect her job, [and] she put the question about her future directly to Hillary Rodham Clinton," the Journal reported.
And what was the First Lady's response? "I'm assuming anyone as obviously brilliant as you could find something else to market," she replied. Is this White House any less arrogant today?
Predictions: So what do I think is going to happen with ObamaCare? Here's my scenario:
The health overhaul law will continue to be challenged on a number of fronts. Businesses, health care professionals, taxpayers, and virtually everyone affected by the law will learn more of the details about its impact. Health costs and outrage will grow. People are seeing through the sugarcoating to the core of the legislation and its damaging impact on our health sector and economy.
Lawsuits will continue to make their way through the courts. The more judges see the opposition grow, the more seriously they will consider the challenges.
States will assert their opposition and their rights. Indiana released a study this week showing that ObamaCare could cost the state an additional $3.6 billion over 10 years — money Hoosiers don't have and don't want to spend on a federal takeover of the health sector.
Louisiana is the latest to pass legislation saying that the federal government cannot tell its citizens they must purchase health insurance. Other ballot initiatives, constitutional amendments, and state legislation challenging ObamaCare will give angry citizens a way to speak out.
And with 19 states so far telling Washington they won't serve as contractors to run its new high-risk pools, we see state resistance growing to Washington's plans to force them to "take the blame for anything that goes wrong, handle any unfunded hidden implementation costs, and fall into line as branch offices for HHS," as AEI's Tom Miller observes.
Many of the states that are going along so far are led by governors who will be long gone before the state faces the consequences of the short-sighted decisions they are making now to endorse ObamaCare, such as California Gov. Arnold Schwarzenegger. Governors elected this fall will have a much longer-term view and will likely be even more resistant to acting as servants to HHS.
Funding. There are two federal elections before the most onerous parts of ObamaCare take effect in 2014. If one or the other house of Congress should change hands in November, it will be very difficult for President Obama to get approval for funding for this hugely unpopular law. That will slow implementation and give voters a chance to speak out in 2012 about the future of the legislation.
Meanwhile, American business and the health sector have no choice but to continue to press on and comply with the new law, restructuring around the volumes of yet-to-be-written regulations telling them how the law will work and how they must be subservient to Washington's growing power.
HSA news: We are expecting good news next week when America's Health Insurance Plans releases its annual estimates of the number of people enrolled in Health Savings Accounts and other consumer-directed health plans.
Companies understand the value of these plans that engage employees as partners in managing health care and health costs. They are a big reason that businesses have been able to hold health costs down over the last five years and continue to provide health benefits, as this chart depicts.
Click here to enlarge.
9;s National Survey of Employer-Sponsored Health Plans; Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April) 1990-2009; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey (April to April) 1990-2009.
CLIP OF THE WEEK
Grace-Marie Turner on ObamaCare's Perverse Provision Rewarding Employers for Dropping Coverage
For this week's Clip of the Week, we have two videos featuring Grace-Marie Turner discussing an ObamaCare provision making it financially advantageous for companies to drop employee health care coverage. The first is from Grace-Marie's appearance on FOX Business, while the second is a Galen Institute original video.
GALEN IN THE NEWS
The Amazing Carelessness of ObamaCare
Grace-Marie Turner, Galen Institute
Investor's Business Daily, 05/10/10
As more details emerge about the massive 2,700-page health overhaul law, even those who supported its passage are shocked by its sweeping implications and reach into every corner of our lives and society. Small business owners are telling members of Congress they are terrified about the risks the law presents to their ability to keep and hire workers — imperiling the nation's already fragile economic recovery. Companies big and small face tax hits, fines, and huge risks associated with the health overhaul law. And they dread the avalanche of new paperwork requirements, including the 1099 reporting requirement.
Read More »
ObamaCare Means Millions Could Lose Coverage
Grace-Marie Turner, Galen Institute
National Review Online: Critical Condition, 05/10/10
Major companies are beginning to recognize the extraordinary risk of continuing to provide health benefits for their workers under ObamaCare, Turner writes. The health overhaul law gives companies every incentive to drop coverage, sending fear into the hearts of working Americans who have been promised over and over that if they like their current coverage, they can keep their insurance. The costs of the health overhaul law would skyrocket if tens of millions of Americans lose their job-based plans and instead get taxpayer-subsidized coverage in the publicly operated state exchanges or Medicaid.
Read More »
Patients as Partners in Preventive Care
Grace-Marie Turner, Galen Institute
National Journal Expert Blogs: Health Care, 05/12/10
There is no question that preventive care, wellness programs, and early diagnosis and treatment are valuable, but the health overhaul law could curtail many of these programs that are already showing positive results, Turner writes. The law will lead employers to focus more on following the rules set by Washington than in continuing to develop and enhance programs with demonstrated success in coordinated and integrated care, including prevention. Just tacking screening tests onto an insurance policy will not get us to the goal of a more efficient health sector. Preventive care is most likely to save money and be successful when it is integrated into coordinated care programs that engage patients as partners in their health spending and health care.
Read More »
ObamaCare's Phony Medicaid 'Deal'
Richard A. Epstein, Hoover Institution
The Wall Street Journal, 05/10/10
The new health overhaul law gives states frontline responsibility for setting up an untried system of "exchanges" through which individuals will purchase health care insurance, Epstein writes. States receive partial federal support for running the exchanges up to 2015, after which they run them at their own expense. States can opt out of organizing these exchanges — but only if they extend Medicaid coverage to more of their residents, including all uninsured persons whose incomes are 133% to 200% of the poverty level. States may leave Medicaid, but the Medicaid taxes their citizens pay will support the program in other states. The state's option to leave Medicaid would be real only if the federal government refunded its citizens' Medicaid taxes or paid them into the state treasury. Under the Constitution, the states are not wards of the federal government. Clever federal tax and spending statutes must not be allowed to reduce states to a servile status that allows the federal government to force massive wealth shifts among them.
Read More »
Poll Shows Current Medicare Payment Policies Have a Negative Impact on Access to Health Care
American Osteopathic Association, 05/12/10
An alarming number of physicians will stop seeing Medicare beneficiaries if current payment policies are not reformed, according to an independent poll conducted on behalf of the American Osteopathic Association. When physicians who have at least some say in what kind of insurance they accept in their practices were asked about the pending 21.3% cut in Medicare payments, only 42% said they would definitely or probably continue seeing their current Medicare patients if the cut were to occur. Another 33% were undecided as to whether or not they would continue to see their current Medicare patients. Twenty-four percent said they probably or definitely would not. Furthermore, only 30% of those currently accepting new Medicare patients said they would continue to do so if the cuts were to be implemented.
Read More »
Obamacare: Impact on Doctors
Robert E. Moffit, Ph.D.
The Heritage Foundation, 05/11/10
No class of American professionals will be more negatively impacted by the health overhaul law than physicians, Moffit writes. Third-party payment arrangements already compromise the independence and integrity of the medical profession; ObamaCare will reinforce the worst of these features. Specifically, physicians will be subject to more government regulation and oversight and will be increasingly dependent on unreliable government reimbursement for medical services. Doctors, already under tremendous pressure, will only see their jobs become more difficult.
Read More »
Critical Employer Issues in the Patient Protection and Affordable Care Act
Joel White, JC White Consulting
U.S. Chamber of Commerce, 05/10
This white paper serves as a handbook for the business community on compliance with the new legislation. Employers need to be aware of several taxes and penalties that can be levied against them if they are unable to provide minimum health care coverage levels that have yet to be determined. The primer includes sections on the employer mandate, status of grandfathered plans, health insurance exchanges, the small employer tax credit, tax provisions, changes to retiree health, and IRS reporting requirements.
Read More »
DOJ Joins Massachusetts Health-Care Debate
National Review Online: Critical Condition, 05/02/10
The U.S. Department of Justice has opened an investigation into "anticompetitive behavior" by Partners HealthCare, the most powerful hospital organization in Massachusetts and the state's largest private employer, Roy writes. Partners was formed in 1993 from the merger of two eminent Boston hospitals and went on to acquire a half-dozen other major community hospitals around Massachusetts. In 2000, the investigation alleges, Partners got Blue Cross Blue Shield of Massachusetts to agree to pay them more money, in exchange for Partners' promise that they would demand the same rate increases from everyone else. Ever since, individual insurance rates have grown at 8.9% a year in Massachusetts, twice the previous rate. Roy, a health care analyst, writes that consolidation can sometimes be the most effective way to resolve inefficiencies in the system, but not so in the case of Partners, where the merged behemoth used its market power to preserve its redundancies and build massive, billion-dollar additions to its already extensive facilities.
Read More »
Indiana Faces Potential $3.6B Health Reform Bill
The Times of Northwest Indiana, 05/13/10
Indiana could be on the hook for at least $3.6 billion in added health care costs over the next decade due to the new health overhaul law, Carden writes. Up to a half-million more Hoosiers will be eligible for Medicaid services under the new law, but the state will receive less money from the federal government than it currently does in Medicaid payments for each patient, said Robert Damler of Milliman, Inc., the state's actuary. He estimated that one in four Hoosiers will be eligible for Medicaid starting in 2014, up from the one in six currently enrolled. It's also likely about 250,000 Hoosiers will drop their current individual or employer health insurance plans to join Medicaid, which has far lower patient fees, Damler said. As a result, Indiana will have to come up with billions in new funds to pay the state's share of the new costs.
Read More »
INTERNATIONAL HEALTH SYSTEMS
Euro-Canada Health Consumer Index 2010
Frontier Centre for Public Policy and Health Consumer Powerhouse, 05/10/10
Despite high levels of government spending, health care in Canada is markedly less responsive to consumers' needs than most European countries, according to the third annual Euro-Canada Health Consumer Index. The study compares Canada to 33 European countries across five different sub-disciplines: patient rights and access to information, wait times, patient outcomes, range and reach of services, and access to pharmaceuticals. Canada ranks 25th out of the countries indexed. Key findings:
- The greatest weakness of Canadian health care remains long wait times.
- Bureaucratic obstacles and long waits often make it difficult for Canadians to access a second opinion about their own medical status.
- It takes an average of 314 days for newly approved medicines to be entered in to provincial subsidy systems in Canada, compared to less than 150 days in countries like Ireland and Germany.
"It's Complicated": Marrying the Evidence on Health Spending to Health Policy Reform
American Enterprise Institute Event
Tuesday, May 18, 2010
1:30pm – 3:30pm
The Federal Government or Free Market: Which Can Offer the Most Compassionate and Effective Health-Care Plan for America?
Benjamin Rush Society Debate
Thursday, May 20, 2010
Engaging Consumers in Health Care
Center for Advancing Health Briefing
Thursday, May 20, 2010
8:30am – 10:30am
U.S. Health reform: What have they done and what will change?
Stockholm Network Event
Monday, May 24, 2010
Grace-Marie Turner will provide an overview of the health overhaul legislation that has been enacted and that will make sweeping changes to one-sixth of the economy.
Regional Extension Centers: Service Offerings and Sustainability
eHealth Initiative Webinar
Wednesday, May 26, 2010
3:00pm – 4:30pm Eastern
Ready for Data Breaches under the HITECH Act?
Institute for Health Technology Transformation Webinar
Thursday, May 27, 2010
1:00pm – 2:00pm Eastern
1st European Congress of Private Hospitals
European Union of Private Hospitals Conference
May 27-28, 2010
Grace-Marie Turner will give the lecture opening the Congress on Thursday, May 27, on "Evolution of the health system in the United-States: Towards a convergence with Europe?"