…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.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.
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
In a few words it can be summed up by "deny funding".
Republicans will try to block money requested by the Obama administration to implement Democrats’ signature Wall Street and healthcare reforms in a stopgap spending measure expected to clear Congress next week. The GOP is seizing on the administration’s funding request as an opportunity to send a message to voters that it wants to reduce government spending and provide a check on President Obama.
Given they don’t have the votes to repeal it and override the presidential veto which is sure to follow any such attempt, this is about their only choice. How effective it would be – both politically and in reality – remain unknown. As one might imagine, the blowback potential is significant.
The first test – since Democrats haven’t passed a budget – is a continuing resolution (CR) necessary to keep government funded beyond Sept. 30, the end of the fiscal year. It is needed to prevent a government shutdown. Republicans are planning to target those parts of the spending request which apply to funding parts of the new legislation:
The Obama administration has asked appropriators crafting the CR to include roughly $20 billion in new spending, according to GOP appropriators.
That request includes $250 million for doctors, nurses, physician assistants and other primary-care health workers. In asking appropriators for the money, the administration said the increase in health workforce funding is needed to meet the demands of the newly insured under the Democrats’ healthcare act.
The administration also requested $14 million for the Treasury Department so it can carry out the new Wall Street reforms.
Says Sen. Lamar Alexander:
“If the question is whether to approve money to fund certain parts of the healthcare law, that’s certainly one way to try to limit its impact,” he said.
Indeed, without majorities or the White House, this is the only avenue that’s really open to the GOP.
Of course that’s brought the usual obstructionist charges from Democrats:
Sen. Patrick Leahy (D-Vt.) blamed Republicans for the need to resort to a stopgap spending measure in the first place.
“I’d much prefer doing individual bills, but with the Republicans blocking everything, that’s hard to do,” Leahy said.
Yeah, bi-partisanship is a bitch, huh Senator – especially when you can’t just ram things through with an filibuster proof majority as you once could. Someone get him a little cheese for that whine.
In the meantime this is the best way for the GOP to lessen the impact of the bad legislation this administration has passed, until they can gain the majorities and the White House and work toward repeal.
The “blame Bush” strategy for explaining the economy isn’t resonating with voters an LA Times story tells us. And I think the reason is summed up very nicely by a 68 year old woman from Columbus, OH:
But Peggy Swope, for one, isn’t so sure. There are plenty of reasons the economy tanked, says the 68-year-old independent, and it’s not like Obama has done such a great job turning things around. "He was so fixated doing what he thought he needed to do on healthcare that he let everything else go," said Swope, a Columbus retiree.
Now we obviously can get tied down in arguments of whether or not Bush had a hand in the downturn and whether or not Obama really could do all that much. But those arguments are going to fall on deaf ears because, as we’ve pointed out many, many times, in politics, perception is reality. And I think Ms. Swope’s perception of why we’re still in the economic shape we’re in is one that is shared by a large number of voters.
And most voters aren’t interested in what got us there – that’s history, and besides, even if you believe Bush to be at least partly at fault, he’s been gone for almost 2 years.
What they are interested in is why it got worse and most importantly, why it doesn’t seem to be getting any better in the economy. And blaming that on Bush is a hard sale – especially when Democrats spent all their time and effort on ramming health care through and essentially ignoring the economy as millions more Americans joined the unemployment line.
Though most Americans remain critical of Bush’s record on the economy — 71% in a recent USA Today-Gallup poll said he deserved a great deal or moderate amount of blame for the slow growth and high jobless rate — more than half of those polled were unhappy with Obama’s performance. More to the point, they hold him responsible for fixing the problem, regardless of who caused it.
Bottom line: blaming Bush is a loser and viewed as nothing more than the usual sniping that politicians do at this point. This economy now belongs to the Democrats and Obama. They chose health care over jobs. Now they get to pay the piper. Playing the blame game isn’t going to advance the Democrats chances anymore. That era is ended. They’re now stuck with the one they run. And the voters are in no mood for the games of 5 year olds when it comes to the economy.
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.
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.