Free Markets, Free People

ObamaCare

Wow – how “unexpected”

OK, not really.  After all as our Speaker of the House said, “we have to pass the bill so we can find out what’s in it”, or words to that effect.  And sure enough, as we actually read the result of rushed monstrosity called ObamaCare, we keep finding more and more goodies hidden within.

For instance:

Colleges and universities say that some rules in the new health law could keep them from offering low-cost, limited-benefit student insurance policies, and they’re seeking federal authority to continue offering them.

Their request drew immediate fire from critics, however, who say that student health plans should be held to the same standards that other insurance is.

Among other things, the colleges want clarification that they won’t have to offer the policies to non-students.

Without a number of changes, it may be impossible to continue to offer student health plans, says a letter that the American Council on Education sent Aug. 12 to Health and Human Services Secretary Kathleen Sebelius, signed by 12 other trade associations that represent colleges.

I can certainly understand the point of the critics, can’t you?  “If we make an exception for those guys … etc”.  Heh.  My guess is this piece of garbage will add another 2500 pages of “exceptions” before this is all said and done.  And somewhere in there our lawmakers will find a way to exempt themselves as well.

Meanwhile the rush to sign up for ObamaCare has been incredible:

Just two people in New Jersey will begin receiving coverage Monday under new plans created by federal health care reforms.

NJ Protect plans are available to those who have been without insurance for at least six months and submit evidence of pre-existing health conditions.

Yup, just busting down the doors:

Vincz says more than 600 applications were downloaded and 268 information kits were sent out following the program’s announcement on Aug. 1.

~McQ

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Prepare for the new ObamaCare messaging

Ben Smith at POLITICO reports that Democrats are switching their messaging strategy when it comes to the ObamaCare legislation (and I’d guess one of the strategies is not to call it “ObamaCare”).  Seems they’ve conceded the argument that it will lower the deficit and cost less.  Facts are stubborn things and few have bought into the claims given the justification for them given by Democratic leaders.

So now they’ll go more nebulous instead.  Call it the medical care “hope and change” approach.  Now instead of lower deficits and less cost, they’re going to tout the law as a way to “improve” health care.

As one slide in the presentation – available here – says, “Many don’t believe health care reform will help the economy.”  That’s absolutely correct.  And, unlike Washington DC, most in flyover country passed their "Common Sense 101” course years ago while holding a job or running a business, raising a family and managing a household.  Most of them can spot a scam fairly easily and this was always in that category given the machinations necessary to make it “bend the cost curve down”.  Immediate taxes and delayed benefits were the first sign some game was afoot.  “Doc fixes” and half a trillion Medicare cuts that would never happen plus some double counting used to claim deficit reduction were the second.  And a new and extensive bureaucracy promised health care would be much more complicated and expensive.  Of course everyone loved the new individual mandate as well, not to mention the billions of dollars in mandates shifted to the states.

So this is the pig they’re trying to sell as “improved” as in “this law improves health care”.

How?

One slide says, “Tap into individual responsibility to blunt opposition to the mandate to have individual insurance.”  It then says, “Those who choose not to have insurance and use the emergency room for routine care are increasing the cost for the rest of us who have insurance.”

Interesting slide for the group most singularly responsible for attempting to make more and more people dependent on government throughout it’s history.  Suddenly it’s about “individual responsibility” while defending one of the biggest government takeovers of an industry in our history.

Oh, and, as pointed out with MassCare – ObamaCare’s little brother – the use of emergency room facilities went up with their mandated insurance law:

When the Bay State passed its health-reform law in 2006, 9 percent of non-elderly adults lacked insurance; that’s now down to 5 percent. The law didn’t reduce expensive emergency-room use as predicted. Instead, emergency-room visits have climbed by 9 percent, or about 3 million visits, from 2004 to 2008.

And, of course, so have costs with health care now consuming 35% of the state’s budget as compared to 22% before the law’s passage.  All predicted (back to Common Sense 101) and all coming true as expected.

Last, but certainly not least, Democrats will use a little class warfare to "please” voters, one assumes:

image

Obviously anyone with the cognitive ability to open a box of crayons knows that the rich can’t pay for all of this by any stretch.  Another in a long line of lies about “paying for” this monstrosity.  The second part of the slide is just a flat out lie.  Remember, ObamaCare is based on the primary care physician.  And that’s a medical care area that has a shortage now and that shortage is going to get worse:

The number of U.S. medical school students going into primary care has dropped 51.8% since 1997, according to the American Academy of Family Physicians (AAFP).

That’s right, dropped 51.8% since 1997.  So tell me again about that “unprecedented number of new healthcare providers” being trained?  Because I don’t know who they are, but they aren’t the supposed foundational specialty on which ObamaCare is based according to the AAFP.

And those doctors who are in primary care are cutting their hours.  Why?

Payment issues may have played more of a role. The overall decrease in hours coincided with a 25% decline in pay for doctors’ services, adjusted for inflation. And when the researchers looked closely at U.S. cities with the lowest and highest doctor fees, they found doctors working shorter hours in the low-fee cities and longer hours in the high-fee cities.

Yup, no pending crisis at all – aided and abetted by a government that has decided it will “lower costs” even though it is no longer going to emphasize that point to the proles.

And what about nurses?

In the July/August 2009 Health Affairs, Dr. Peter Buerhaus and coauthors found that despite the current easing of the nursing shortage due to the recession, the U.S. nursing shortage is projected to grow to 260,000 registered nurses by 2025.  A shortage of this magnitude would be twice as large as any nursing shortage experienced in this country since the mid-1960s.

Amazing what they try to put past you, isn’t it?  Which brings us to the irony of the day:

image

Yup – keep those claims “small and credible” like the lies about more health care providers – and for heaven sake “don’t over promise or ‘spin’ what the law delivers’ – like lower cost, the ability to keep your plan and your doctor and, of course, control over your own health care.

Because we wouldn’t want to see this new and “improved” law repealed or neutered, would we?

~McQ

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MassCare best previews life under ObamaCare

And it isn’t a pretty picture. It also emphasizes how wrong many of the claims that have been made for ObamaCare are. For instance, remember the claim made that when everyone has insurance it will cut the use of the emergency room dramatically.

When the Bay State passed its health-reform law in 2006, 9 percent of non-elderly adults lacked insurance; that’s now down to 5 percent. The law didn’t reduce expensive emergency-room use as predicted. Instead, emergency-room visits have climbed by 9 percent, or about 3 million visits, from 2004 to 2008.

Or, how about the claim that it would significantly lower the cost of medical care – to the patient and the government:

Health care now consumes 35 percent of the state budget, up from 22 percent in 2000. Patrick recently asked Washington for $473 million to help make the Massachusetts reform work — on top of the $1.2 billion in support the feds have already kicked in over three years, more than $3,000 per person in the state.

And physicians? Why they’ll be competing for your business as government cuts payments to hospitals and doctors:

Reimbursements are already so low under the state-subsidized plans (most of whose 152,000 enrollees pay nothing) that doctors are already refusing to accept new patients with that "coverage."

Oh, and if you like your doctor and your plan, you can keep both – guaranteed:

Yet small businesses are clearly finding it necessary to dump their employees on the public health plans. The Boston Globe recently reported on a broker who helps firms do just that; his practice is booming. He’s seen about 90 business owners terminate their plans since April.

MassCare is almost identical to ObamaCare – many of the same people who authored it were instrumental in putting the federal monstrosity together.  Reviewing the above 4 items, I’d say they’re 0 for 4 in their promises.  The sad thing is we had this example at a state level there to study and as usual, the media wasn’t able to manage the comparison during the weeks of hype surrounding the bill before its passage.

This is you life on ObamaCare.  More money, fewer choices, less care.

That’s what happens when the gullible buy into the “something for nothing” political promises of a pack of charlatans and snake oil salesmen.

~McQ

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Missouri says "no" to ObamaCare

In the most telling poll of all – a vote – the citizens of Missouri overwhelmingly voted not to participate in ObamaCare. 71% voted for Proposition C which prohibits Missouri from compelling people to pay a penalty or fine if they fail to carry health coverage.

Of course that obviously doesn’t mean that percentage isn’t going to or doesn’t carry health coverage. Instead it is a grassroots rejection of the premise that the federal government has either the power or authority to make them. And they’ve just prohibited their state from enforcing such a law.

 However:

The Missouri vote is likely to have little immediate practical effect because the mandate doesn’t take effect until 2014. If federal courts uphold the federal law as constitutional, it would take precedence over any state law that contradicts it.

And, of course, I loved this:

Opponents included the Missouri Hospital Association, which said that if the mandate isn’t enforced some who can afford insurance will get a free ride and pass the costs on to those who are insured.

Really? You mean like what is done now under Medicare and Medicaid?

But I think this Missouri state senator may have the best point:

“This really wasn’t an effort to poke the president in the eye,” said State Senator Jim Lembke, a Republican. “First and foremost, this was about defining the role of state government and the role of federal government. Whether it’s here in Missouri with health care or in Arizona with illegal immigration, the states are going to get together on this now.”

States have been getting the short end of the mandate stick for decades.  Yet many of them work under two constraints the federal government doesn’t.  One, most of them are required by law to have a balanced budget.  Unfunded mandates of the sort imposed by ObamaCare take a wrecking ball to that sort of requirement.  Secondly, the states can’t print money at their whim.  Therefore they must borrow any money to fulfill the mandates.

This and the Arizona law may be the first shots in a long war that sees the states again asserting their rights.  It will mostly be fought out in the courts and its outcome is going to be critical to the America we are a part of in the future. 

If the courts side with the Obama administration, then there’s just about nothing the federal government can’t do or  which it can’t involve itself.   And as we’ve seen in the last 18 months, it doesn’t take long, if the circumstances are right, for it to intrude to levels never before seen.

But regardless of the outcome in court, the Missouri vote is important.  The “Show Me” state is a rather purple state, so I think most expected the vote to be somewhat close with those rejecting ObamaCare winning out.  Instead, we see a huge margin rejecting the premise.

It should send a signal to both parties, and it should certainly have Democrats quaking in their boots about November.

Whether or not the parties will heed the message remains to be seen, but the voters of Missouri have pretty much voiced what I think the majority of this country feels – “thanks, but no thanks”.  Back off, downsize and cut spending.  And stay out of our lives and our health care.

~McQ

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Charting health care’s demise and government’s growth

Rep. Kevin Brady (R-TX) had his staff do a study of the ObamaCare bill after its passage to assess exactly what Democrats had blindly passed into law. He also asked his staff to put a chart together to represent the health care system under that law.

The result is mind-boggling and troubling. And if you figured the Secretary of Health and Human Services was the new defacto health care czar, backed by the IRS, you’re correct.

Below is a thumbnail of the chart to give you a flavor of its complexity. Brady admits only represents a third of what is in the bill after which it got too crowded. Said Brady, "it’s actually worse than this."

obama_chart

You can see a full size representation of the chart here.  As you peruse it read the legend carefully.  You’ll notice 3 areas color coded – “new government”, “expanded government” and “private”.  It also charts “new relationships”, such as regulations, requirements and mandates, reporting requirements, oversight and money flow.

Evident to anyone with the IQ of a mushroom is the incredible complexity of what our masters in Congress cobbled together in haste and passed before anyone could actually read the thing through and study the probable consequences.  The chart includes:

  • $569 billion in higher taxes;

  • $529 billion in cuts to Medicare;

  • Swelling of the ranks of Medicaid by 16 million;

  • 17 major insurance mandates; and

  • The creation of two new bureaucracies with powers to impose future rationing: the Patient-Centered Outcomes Research Institute and the Independent Payments Advisory Board.

As might be expected, ObamaCare fulfills almost all the promises of the critics – top driven, bureaucratic, complex, expensive and set up to ration health care.

The chart gives visual evidence of the type monstrosity that has been foisted upon the American public by Democrats.  Says Kevin Hassett:

This clearly is a candidate for most disorganized organizational chart ever. It shows that the health system is complex, yes, but also ornate. The new law creates 68 grant programs, 47 bureaucratic entities, 29 demonstration or pilot programs, six regulatory systems, six compliance standards and two entitlements.

Yes friends, the DMV teaming up with the Post Office, have now “organized” your health care and promise it will be “better and less expensive”.

And don’t forget – your new health care czar has the power to make judgments about health care that, by law, cannot be challenged either through an administrative process or the courts.  So you are stuck with whatever the Sec HHS decides.  That means:

A sprawling, complex bureaucracy has been set up that will have almost absolute power to dictate terms for participating in the health-care system. That’s what the law does to government. What it does to you is worse.

Based on the administration’s own numbers, as many as 117 million people might have to change their health plans by 2013 as their employer-provided coverage loses its grandfathered status and becomes subject to the new Obamacare mandates.

Those mandates also might make your health care more expensive. The Congressional Budget Office predicts that premiums for a small number of families who buy their insurance privately will rise by as much as $2,100.

Finally, and as noted above, there is to be a huge expansion in Medicaid “paid for” by cutting care to the elderly:

To pay for this expansion, the bill takes $529 billion from Medicare, with roughly 39 percent of the cut coming from the Medicare Advantage program. This represents a large transfer of resources, sacrificing the care of the elderly in order to increase the Medicaid rolls.

Another revenue source are the “Cadillac plans” – for those who have them and pay for them, the gig’s up:

Front and center among the new taxes is the 40 percent excise tax on those lucky people with so-called Cadillac health plans. The higher insurance costs that are driven by the government mandates will push many more ordinary plans into Cadillac territory.

As we’ve discussed, the bill relies on a constant revenue stream from these insurance plans from now on, assuming everyone will pay the 40% increased cost to keep their plans.  That’s not likely at all, and cutting these plans will effect millions – many of whom bought in lock, stock and barrel, to the promise “if you like your doctor and you like your plan, you can keep both”.

Look at this chart and tell me how you do that.

Yesterday a federal judge in VA ruled that the state of Virginia had “standing” to sue the federal government over the law.  That, of course, means nothing more than the lawsuit moves forward, but it is an important first step in repealing this monstrosity or at least the more intrusive and odious parts of it.  Obviously it doesn’t ensure success in that endeavor and the White House typically believes it is on the side of angels and the Constitution when it comes to running our lives.

We’ll see.  But clearly Nancy Pelosi was right when she said “we have to pass the bill to see what’s in the bill”.  Now that we have this chart, we know what’s in the bill – the largest power grab by the federal government since the income tax.

“Change” you can believe in, huh?

~McQ

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Promises, promises, promises …

Randall Hoven, over at American Thinker, provides us with one of the most succinct and powerful posts I’ve seen is quite a while.

Remember this quote?

“If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined.  Put simply, our health care problem is our deficit problem.President Obama, September 2009.

That was the “promise” that Obama made – pass health care reform and pass deficit reduction.  Except, as usual with this man, it appears the opposite is actually true.  And that is to be found in a CBO graph.

So the projection shown in the graph is that if we were to spend on those programs at the March 2010 baseline (as the law reads now) from now till 2020 we’d spend about 400 billion, but with the new and improved ObamaCare, that goes to over 600 billion?  Yup, real “deficit reduction” in that package, huh?

We’re also seeing the stirrings of a move from the left to dramatically and drastically cut military spending.  Already the war in Afghanistan has gone from the “good and necessary war” per Democrats to one they don’t want to fund anymore.  Apparently the military is the area of choice within which the Democrats want to “cut spending”.    Again, Hoven, looking at CBO numbers, provides some context to the debate:

Hoven’s Index for July 26, 2010

Medicare and Medicaid spending as percent of GDP:

1970:  0.7%

2007:  4.0%

2020:  5.9%

Defense spending as percent of GDP:

1970:  8.1%

2007:  3.9%

2020:  3.6%

Source:  CBO.

The bottom line is, of course, that ObamaCare is the biggest “deficit reduction” hoax foisted upon the citzenry of the US since the debate about income tax which claimed it would never rise above 2%. And, in fact, it is the rise of entitlement spending – not military spending – where our problem lies.

And for those of you who bought into the monstrosity of ObamaCare under the “deficit reduction” premise – shame on you. Why is it you demonstrate common sense when email scammers from Nigeria try to get your bank account number, but you fall right into the largest legislative scam in recent history based on vague and nonsensical promises that most 5th graders could see through?

Of course you’re most likely among the same people who bought into the hype surrounding this empty suit we now have as a president, so I shouldn’t be that suprised I suppose.

~McQ

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Health insurance mandate – Obama administration now arguing it is a tax

Having made it up as they go, the Obama administration is now arguing that the mandate to buy insurance coverage under Obamacare is a perfectly legal tax.

That, of course, after the President denied it was a tax in order to sell it:

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase,” the president said last September, in a spirited exchange with George Stephanopoulos on the ABC News program “This Week.”

When Mr. Stephanopoulos said the penalty appeared to fit the dictionary definition of a tax, Mr. Obama replied, “I absolutely reject that notion.”

You can tell he was a constitutional expert when he taught, can’t you?

So much so that the Department of Justice, in a brief defending the law, claims it to be a "valid exercise of the Congressional power to impose taxes:

Congress can use its taxing power “even for purposes that would exceed its powers under other provisions” of the Constitution, the department said. For more than a century, it added, the Supreme Court has held that Congress can tax activities that it could not reach by using its power to regulate commerce.

Except Congress doesn’t argue that at all.  Instead it relies on the Commerce Clause as its justification for the mandate:

Congress anticipated a constitutional challenge to the individual mandate. Accordingly, the law includes 10 detailed findings meant to show that the mandate regulates commercial activity important to the nation’s economy. Nowhere does Congress cite its taxing power as a source of authority.

And then, per the White House, if any additional authority is needed – other than the power to define and then levy taxes (Congress) or the commerce clause, why just consult the General Welfare Clause.  They have more Constitutional ways to make you buy something you may not want than you can imagine:

“The Commerce Clause supplies sufficient authority for the shared-responsibility requirements in the new health reform law,” Mr. Pfeiffer said. “To the extent that there is any question of additional authority — and we don’t believe there is — it would be available through the General Welfare Clause.”

One has to assume they just plan on overwhelming the Court with as many “viable alternatives” as it takes to get their way.

One Yale professor says the tax argument – the one Mr. Obama denied – is the strongest argument:

Jack M. Balkin, a professor at Yale Law School who supports the new law, said, “The tax argument is the strongest argument for upholding” the individual-coverage requirement.

Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”

Nice.

Smoke, mirrors, deceit and debt.  That’s what you get for trusting a snake-oil salesman with your health care.  Oh and this:

“This is the first time that Congress has ever ordered Americans to use their own money to purchase a particular good or service,” said Senator Orrin G. Hatch, Republican of Utah.

If this survives the court challenge, it won’t be the last – trust me on that.

The irony, of course, is the Constitution was written to limit government and keep it off our back.  Instead it is now being used to expand government and intrude more and more deeply in our lives.

~McQ

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Like your health insurance? Too bad …

Because internal White House documents estimate that 51% of employers are likely to have to give up their current health care coverage due to ObamaCare. And that’s the conservative estimate. Worst case, the percentage goes to 69% of all employers and 80% of smaller firms.

Why? Well, ObamaCare states that existing insurance plans will be “granfathered in” (i.e. you can “keep your plan”) if they meet certain criteria. Main among them is employers may not make any changes to their existing insurance plan after March 23rd of this year until the ObamaCare implementation of this provision on Jan. 1st, 2014. Those changes an employer might make that would bar it from being grandfathered in include:

• It eliminates benefits related to diagnosis or treatment of a particular condition.

• It increases the percentage of a cost-sharing requirement (such as co-insurance) above its level as of March 23, 2010.

• It increases the fixed amount of cost-sharing such as deductibles or out-of-pocket limits by a total percentage measured from March 23, 2010, that is more than the sum of medical inflation plus 15 percentage points.

• It increases co-payments from March 23, 2010, by an amount that is the greater of: medical inflation plus 15 percentage points or medical inflation plus $5.

• The employer’s share of the premium decreases more than 5 percentage points below what the share was on March 23, 2010.

Most of us who have and have had insurance for any amount of time know that those are fairly routine changes driven by cost increases, benefit changes, and the like. However, any of those puts the plan outside the “grandfathered” status and the ObamaCare law requires the firm to either adopot a new plan or drop coverage and pay a penalty.

How likely is it employers won’t make those sorts of changes in the next 3 years? Not very:

Analyzing data on employer-provided plans from 2008 and 2009, the report stated: “Many employers who made changes between 2008 and 2009 that would have caused them to relinquish grandfather status did so based on exceeding one of the cost-sharing limits.”

In total, 66% of small businesses and 47% of large businesses made a change in their health care plans last year that would have forfeited their grandfathered status.

. Essentially government has taken away the ability of employers to manage their plans and will, by force of law, force any of them that do so within the criteria above to drop that plan for another or drop coverage altogether and pay a penalty.

The document in which this information was found is a draft HHS, Labor and IRS joint study of the impact of the bill. When asked about it, a White House spokesman said:

“This is a draft document, and we will be releasing the final regulation when it is complete. The president made a promise to the American people that if they liked their health care plan, they can keep it. The regulation, when finalized, will uphold that promise.”

That, of course, is the official talking point position, aka spin, or if you prefer, smoke and mirrors. The same official then conceded:

“It is difficult to predict how plans and employers will behave in the coming years, but if plans make changes that negatively impact consumers, then they will lose their grandfather status.”

That is the unspun or “it’s exactly as you said it” version. And of course the government will waste no time blaming the loss of the insurance “you like” on your employer.

Because, as we’ve witnessed for 16 months – that’s what this administration does best – blame-shifting. Simple fact: no law, no loss of the “insurance you like”.

End of story.

~McQ

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Canada healthcare – the future of the US?

Guess what folks, Canada’s moon pony and unicorn “what’s wrong with you Americans, you’re so uncivilized to not have national health care” health care system is in serious financial trouble. And, unbelievably, for the very same reason critics of the recent US health care law said would inevitably happen here. I know, I know – just hard to believe, isn’t it?

Go figure.

The crux of the problem? Well lack of money, what else?

Pressured by an aging population and the need to rein in budget deficits, Canada’s provinces are taking tough measures to curb healthcare costs, a trend that could erode the principles of the popular state-funded system.

[…]

“There’s got to be some change to the status quo whether it happens in three years or 10 years,” said Derek Burleton, senior economist at Toronto-Dominion Bank.

“We can’t continually see health spending growing above and beyond the growth rate in the economy because, at some point, it means crowding out of all the other government services.

“At some stage we’re going to hit a breaking point.”

They’re kidding, right? Weren’t we told that once government got involved this stuff would be affordable and would go on forever?

Their first target, of course, is pharmaceutical companies. They want them to slash prices. But at some point, pharma is going to say it can’t anymore. Because pharma isn’t the problem. Central control of health care delivery is. It has no flexibility, or at least not to a level that it can adapt to changes in the market with any nimbleness. That means it continues to hemorrhage money. Health care spending rises at 6% a year by plan. But it is going to, as mentioned above, begin to crowd out all other government services unless the Canadian government gets a handle on it and does so fairly quickly. Anyone know what that means?

But that deal ends in 2013, and the federal government is unlikely to be as generous in future, especially for one-off projects.

“As Ottawa looks to repair its budget balance … one could see these one-time allocations to specific health projects might be curtailed,” said Mary Webb, senior economist at Scotia Capital.

My guess is more than “one-time allocations” might be curtailed. Consider Ontario:

Ontario says healthcare could eat up 70 percent of its budget in 12 years, if all these costs are left unchecked.

“Our objective is to preserve the quality healthcare system we have and indeed to enhance it. But there are difficult decisions ahead and we will continue to make them,” Ontario Finance Minister Dwight Duncan told Reuters.

That’s bureaucratise for “we’re going to have to ration this stuff and do it pretty darn radically” – unless, of course, Ontario would prefer to spend 70% of its budget on health care costs.

I doubt that’s the case.

Here again we have the end game (or at least the results of the game at this point headed to its inevitable end) of where we’re headed.

My favorite line in the story:

Scotia Capital’s Webb said one cost-saving idea may be to make patients aware of how much it costs each time they visit a healthcare professional. “(The public) will use the services more wisely if they know how much it’s costing,” she said.

“If it’s absolutely free with no information on the cost and the information of an alternative that would be have been more practical, then how can we expect the public to wisely use the service?”

No – she really said that. And that’s the type of person who first embraced the moon pony and unicorn promises that were made for the system.

The problem with all of this “reality” suddenly descending on the system? It is pretty apparent to anyone who has studied a welfare state (and the same place we’re now headed):

But change may come slowly. Universal healthcare is central to Canada’s national identity, and decisions are made as much on politics as economics.

“It’s an area that Canadians don’t want to see touched,” said TD’s Burleton. “Essentially it boils down the wishes of the population.

And so it goes, another chapter in the inevitable end of all such programs – over used, broke and headed toward strict rationing. And the moon pony crowd thinks that if they just tell Canadians how much it really costs when they see a doctor, they’ll do it less and save the system.

Heh, yeah, good luck with that.

~McQ

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More good news vis a vis ObamaCare – Small business’s won’t grow (update)

Or at least they won’t be given much of an incentive to do so if they provide health care:

A study by the National Center for Policy Analysis shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions.

The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll.

The NCPA study finds the reduction in tax relief to be a cost concern for companies looking to hire additional workers, but operate on slim profit margin yet still provide employee health coverage.

A couple of points – A) the tax credit is temporary (until 2016), and, only covers a small part of the cost of hiring an employee. However, B) it is a available to all small companies with 25 employees or less already offering health insurance. The stated purpose of the tax credit is to encourage those small businesses who fit the template (10 or fewer workers averaging about $25k a year, up to 25) to continue to provide health care and encourage those who aren’t to do so. But it provides the tax credit on a sliding scale, and that scale discourages hiring at the scale breaks:

Using insurance premium cost projections supplied by the nonpartisan Congressional Budget Office (CBO), the study states that the credit reaches its optimal point at 13 workers, with relief peaking at $36,400 for qualifying business.

After the 13th worker the economics surrounding the credit change, the study says.

For employers with 15 workers, taking on an additional hire will reduce the credit by $1,400. For a company looking to expand from 20 to 21 workers, the credit will shrink by $3,733. And businesses will take a $5,600 reduction on the credit when hiring the 25th worker.

The credit phases out for companies with at least 26 employees.

If the company is already at 13, it most likely won’t hire 14, or 15. If it is at 20, it’s most likely not going to hire 21. And 26 is most likely out of the question.

Bill Rys, tax counsel at the National Federation of Independent Businesses, told The Hill that while demand is the primary driver for hiring decisions, costs related to new hires is a key factor.

“To the extent that a tax credit is related to the benefits that you’re paying your employees, it is going to be a factor in determining what is the cost of the employee,” he said. “The fact that you’re losing a portion of the credit because you brought in a new employee is going to have to factor into the cost of who you’re hiring.”

So there is a negative incentive – at least as long as the tax credit exists – to hire people if it will lessen the tax credit. Instead:

“If a business can make a decision to substitute capital for labor – say, contract the procedure out or automate it – I believe [losing the tax credit] will play an important part in the reluctance to hire,” Villarreal said, adding, “It’s puzzling that we have this perverse incentive not to have businesses grow by not encouraging them to hire additional workers.”

Brilliant.

UPDATE: Even more good news as companies read through the legislation and discover little hidden nuggets of penalty and cost.  For instance:

About one-third of employers subject to major requirements of the new health care law may face tax penalties because they offer health insurance that could be considered unaffordable to some employees, a new study says.

It seems the law deems insurance that is unaffordable by a family to be an insurance cost that is more than 9.5% of their household income. Of course, few if any companies know the “household income” of their employees. That’s because, mostly, it’s none of their business. But also because it may be comprised of a second or third income, dividend, disability or even retirement income.

But, if it is over 9.5% of that household income, companies can be fined up to $3,000 per employee. Of course they won’t know that until and unless the employee files for a federal tax credit because he or she has determined their insurance cost is over 9.5% of their household income (is that gross or AGI?):

If an employer’s health plan is deemed unaffordable, the worker may qualify for a federal tax credit, or subsidy, to buy coverage in a new state-based marketplace known as an insurance exchange. A person claiming a credit must disclose income information to the exchange. The exchange will then notify employers if any of their workers qualify for subsidies.

Along with notifying the employer of this info, I suppose the “exchange” will also notify the appropriate government agency that is responsible for levying the fine.

Wow – no incentive there to just drop coverage for everyone, is there?

What a monstrosity the Democrats have brought upon us.

~McQ

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