You remember the organization that became one of the biggest shills for the impending health care legislation now known as "Obamacare"? Reason brings us the story that AARP is now notifying its employees that thanks to their support for this monstrosity they have the privilege of paying 8 to 13% higher health care premiums next year:
In an e-mail to employees, AARP says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs.
And AARP adds that it’s changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. Aerospace giant Boeing also has cited the tax in asking its workers to pay more. Shifting costs to employees lowers the value of a health care plan and acts like an escape hatch from the tax.
AARP said that its support of the law was based in the fact that “health care costs are growing too fast for everyone.” Now AARP’s employees will have the opportunity to experience that first hand – after the law the group supported to prevent such cost growth is in effect.
I don’t want this one to slip by, because it is significant. It is yet another study that shows the numbers attributed to the cost of ObamaCare were so much nonsense. The interesting thing is it comes from an organization friendly to ObamaCare (via HotAir):
Families USA commissioned The Lewin Group to use its economic models to estimate how many individuals would benefit from the new premium tax credits in 2014 and the value of the dollars going to help pay for insurance (see the Methodology on page 12 for more details). We found that an estimated 28.6 million Americans will be eligible for the tax credits in 2014, and that the total value of the tax credits that year will be $110.1 billion.
Where’s the disconnect? Well the Congressional/CBO estimate for this particular cost was almost 600% lower than the Lewin Group study. Ed Morrissey lays it out:
In his presentation to Congress, CBO director Douglas Elmendorf predicted a cost of only $20 billion on health-exchange subsidies and associated costs. The Lewin Group, which conducted the study for Families USA, shows that four times as many people will become eligible for subsidies in 2014 than the CBO predicted in March and that the cost will be 550% higher as a result (page 4 of the linked study).
How did the CBO arrive at those numbers with which to calculate the cost of ObamaCare? Well when Morgen at Verum Serum pointed out the discrepancy to Families USA, they had a peculiar answer:
Morgen also contacted Families USA to get an explanation of the difference, and was told that he made an “apples to oranges” comparison. Why? This survey, they explained, showed how many people would be eligible, while the CBO predicted how many people would actually take advantage of their eligibility for tax credits. This is an odd distinction to make, since the entire idea of the subsidies is to encourage uninsured Americans to buy health insurance through both mandates and generous subsidies.
How likely will it be that people will pass on the notion of getting big tax credits to subsidize must-issue health insurance? And if the success rate in applying mandates, higher taxes, and more government authority to the 270 million Americans who are already insured is only 20-25% in getting the other 30 million insured, how is that at all successful?
The deficit projection given by Democrats was apparently based on 75% failure rates to get people into the system; their advocates are busy touting the massive amounts of subsidies in the program that will tip ObamaCare into a deficit exploder in Year 2.
75% failure rates? In other words, 75% of those eligible for a generous subsidy through tax credits won’t take advantage of them?
Really? I guess this is one of those “benefits” Bill Clinton was talking about that hasn’t quite made an impression yet – exploding costs well above the nonsense the Democrats used to “justify” the abysmal ObamaCare bill.
Talk about being sold a pig in a poke.
As the monstrosity that is ObamaCare is gradually phased in, expect to see more and more companies saying this:
"The newly enacted health care reform legislation, while intended to expand access to care for millions of uninsured Americans, is also adding cost pressure as requirements of the new law are phased in over the next several years," wrote Rick Stephens, Boeing’s senior vice president for human resources.
And with that, Boeing has informed its workers that their premiums will be going up. Why? Well they have a “Cadillac” plan apparently:
Spokeswoman Karen Forte said the Boeing plan is more generous than what its closest competitors offer, and the company was concerned it would get hit with a new tax under the law.
The tax on so-called "Cadillac" health plans doesn’t take effect until 2018, but employers are already beginning to assess their exposure because it is hefty: at 40 percent of the value above $10,200 for individual coverage and $27,500 for a family plan.
Of course, that’s just not “fair”, is it?
One has to wonder, though, if Boeing may not be playing a little politics here, following McDonald’s example – make this visible and see if the administration won’t do for them what it did for McDonalds … issue them a waiver.
After all the administration that arbitrarily enforces the law in other areas certainly would trade a waiver for better PR as they did with Mickey D’s, wouldn’t they.
…for as long as your health care plan exists, anyway. Which, for retirees of the 3M corporation, it no longer will. It seems that the passage of Obamacare has prompted 3M to join the rush for the door in terms of providing health care coverage.
As we’ve noted repeatedly here, the claims that you could keep your health care plan and physician could not possibly be true, as the “reform” package set up perverse incentives. What we are seeing is precisely what we predicted. Corporations and insurers are responding to Obamacare’s incentives by getting out of the health insurance business. Because that’s what the law’s incentives urge them to do.
It really is one of the most basic principles of economics: people respond to incentives.
Got a huge chuckle out of Steven Levitt’s opening sentence at the Freakanomics blog:
Many economists view the health-care bill passed in the U.S. earlier this year as falling somewhere between “a complete waste of time” and “actually making the situation worse.”
Indeed. In fact, I’d have to go with the “actually making the situation worse” determination, given what we’ve seen this past couple of weeks as more and more companies react to the impact of the legislation.
The context of Levitt’s remark is a story by Delia Lloyd talking about the UK going in precisely the opposite way. Yes, a country which has had socialized medicine for over 60 years is looking at taking steps for a more market-based health care system, with the belief it will improve the British system.
Markets? Pricing signals? Competition?
Nah, our Congress just rejected all of that – couldn’t be a good thing.
Why are we always 60 years late and a dollar short?
Rationing? Never. “Death panels?” No such thing! When government runs your health care they won’t act like those evil insurance companies that deny you treatment. Wasn’t that the promise?
A controversial new policy by the Arizona Health Care Cost Containment System depriving hepatitis C patients coverage for liver transplants is effectively a death sentence that, left unchecked, could have far-reaching consequences for millions of Americans afflicted with chronic viral hepatitis, the National Viral Hepatitis Roundtable (NVHR) said today.
The new coverage exclusion governing liver transplants took effect Friday as part of broader Medicaid coverage changes made by the state of Arizona in response to budgetary pressures.
I’m not here to call for unlimited spending or every procedure to be okayed. I understand budget constraints.
However, critics have said that the sort of rationing and denial of care that is demonstrated above was an inevitable outcome of government taking over health care. Those that referred to this type rationing as “death panels” were denigrated and demonized.
Now I understand that while Medicaid is a government run program, it is a state run program that is subsidized by the Federal government to some extent.
But ObamaCare has pushed new mandates down on the states by expanding coverage and the states are faced with making literal life and death decisions concerning the affordability of care for those in their system. This is only one of many “death panel” decisions that are going to eventually effect the lives of millions.
All foretold and inevitable.
In other ObamaCare news more of the foretold and inevitable:
3M Co., citing new federal health laws, said Monday it won’t cover retirees with its corporate health-insurance plan starting in 2013.
Instead, the company will direct retirees to Medicare-backed insurance programs, and will provide reimbursement for that coverage. It’ll also reimburse retirees who are too young for Medicare; the company didn’t provide further details.
Apparently after reviewing the law 3M concluded that even with a subsidy offered in the legislation, it was more costly to keep the coverage than abandon it:
Maplewood-based 3M (NYSE: MMM) is one of the first large companies to indicate that it won’t tap a large federal-government reimbursement program created by Congress as part of the health insurance reform package, The Wall Street Journal reported. The rebate program was meant to encourage employers to keep in place their health-insurance plans for retirees.
Obviously, by 3M’s reading of the law, the “federal-government reimbursement program” didn’t offset the cost of keeping retirees in the system. As you see more and more of these stories pop up – and you will – you have to begin to wonder if this isn’t a deficiency by ignorance or design – a bug or a feature.
As this goes on, you can’t help but feel it is more the latter than the former as such actions by companies move us closer and closer to a single payer system. And when that inevitably happens, it will be characterized as the fault of greedy corporations and, of course, “market failure”.
(HT: Rod F)
In the middle of last week the buzz was all about McDonalds possibly dropping its health care coverage for its employees because of a requirement called the “medical loss ratio” which mandates that insurance companies spend 80 to 85% of the premium on health care. Because of the McDonalds business model, that’s not possible.
Not to worry we’re told, the administration will work it out with McDonalds. No word on how those businesses in the same boat but that don’t enjoy the political heft of McDonalds will fare.
Earlier in the week we were alerted to the fact that Harvard Pilgrim Health Care will be dropping coverage on about 22,000 senior citizens in the Northeast. Again, thanks to ObamaCare, the promise that if you liked your insurance, “you could keep it” was clobbered by the reality of the law.
Last Friday, two new developments foretold by the critics came to pass.
The first is that the Principal Financial Group has made the decision to stop offering health care insurance as a direct result of the new law:
At the Principal Financial Group, the company’s decision reflected its assessment of its ability to compete in the environment created by the new law. “Now scale really matters,” said Daniel J. Houston, a senior executive at Principal, which is headquartered in Des Moines. “We don’t have a significant concentration in any one market.”
The decision will affect approximately 840,000 Americans. Principal’s insurance product was mostly offered through employers. It’s assessment of the law and what it would cost the company gave it no choice but to quite offering the product.
“If you like your insurance, you can keep it.”
Finally, another problem that critics of the sweeping health care law said was as inevitable as Principal’s decision. A report today says ObamaCare will worsen the doctor shortage:
The U.S. healthcare reform law will worsen a shortage of physicians as millions of newly insured patients seek care, the Association of American Medical Colleges said on Thursday.
The group’s Center for Workforce Studies released new estimates that showed shortages would be 50 percent worse in 2015 than forecast.
"While previous projections showed a baseline shortage of 39,600 doctors in 2015, current estimates bring that number closer to 63,000, with a worsening of shortages through 2025," the group said in a statement.
Legislation passed by Congress is always criticized by some faction or another. Rarely, however, is it ever 100% correct. But in the case of ObamaCare, that may change. Thus far almost every criticism and warning leveled by the opposition to this monstrosity has been shown to be true. Unfortunately we’re just now beginning to see its impact.
Stay tuned for more and more of the critics arguments to be proven right as we wend our way into this almighty mess created by Congress and the President. Today’s news is reason enough to jettison the entire mess as soon as the numbers line up correctly in Congress and the right person is in the White House. Hopefully we’ll only have to wait a couple of years for that all to be in place.
In this podcast, Bruce, Michael, and Dale discuss the Meg Whitman controvery in California, public pensions, and Obamacare.
The direct link to the podcast can be found here.
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Principal Financial exits the health insurance business due to Obamacare. “You can absolutely keep your health insurance plan!”
Right. For as long as it exists.
Remember this promise (it begins at about the 1:10 mark):
Harvard Pilgrim Health Care has notified customers that it will drop its Medicare Advantage health insurance program at the end of the year, forcing 22,000 senior citizens in Massachusetts, New Hampshire, and Maine to seek alternative supplemental coverage.
Under Medicare Advantage plans, the federal government pays private health insurers to sell customers over 65 years old enhanced policies, many of which offer prescription drug coverage not covered by standard Medicare. But the US Centers for Medicare and Medicaid Services has been seeking to reduce the amount it pays to private insurers for such programs.
Medicare told Harvard Pilgrim to notify customers that its Medicare Advantage program, known as First Seniority Freedom, was being canceled. In a mailing, the insurer was required to list alternative Medicare Advantage plans, including those offered by its competitors.
It will be “slightly more expensive’’ than the Medicare Advantage plans, but competitive with supplemental insurance plans offered by rivals such as Blue Cross Blue Shield of Massachusetts, the state’s largest health insurer, Bowman said.
Now I assume anyone who has read this blog for more than a day knows I’m not trying to argue for subsidized health insurance here.
Far from it. What I’m pointing out is the basic dishonesty that was rampant in the President’s promises about health care. An integral part of the plan to "pay for it" involved cutting out Medicare Advantage – an insurance supplemental plan that many seniors had and wanted to keep.
As you hear in the video, the promise wasn’t ambiguous or couched in rhetoric that gave a lot of wiggle room. Obama flat out says "if you like your insurance you can keep it. Nothing changes", or words to that effect.
A pure and unadulterated lie that he still tends to throw out there when trying to hype this white elephant Congress rammed through.
The simple fact – something anyone who took to understand where the Democrats were headed with this turkey – is that there was no way everyone could keep their insurance because the law was written to change the way insurance was delivered. And on the table, from the beginning, were cuts in Medicare that focused on eliminating what? An insurance program called Medicare Advantage.
It is one thing to watch a politician shade the truth a bit. It is quite another to watch one tell a bald faced lie (and I mean “lie” in the truest sense of the word, not how some tend to use it today). This one fits the latter category.
HT: Arley Ward