Tuesday, August 25, 2009

ObamaCare: The Good, the Bad, the Ugly, and the Ignored – Part 2

In Part 1 of this series I listed things in the house version of ObamaCare (H.R.3200) that I think are worthwhile in concept if not in their implementation. I also presented elements of the proposed legislation I considered bad in concept. Part 2 highlights some things in H.R.3200 that are downright ugly.

Some have said there is no bill simply because nothing has yet been passed. In response, I point out that H.R.3200, as posted on the Internet prior to the Congress’ August recess, is the bill President Obama, Nancy Pelosi, and Harry Reid pushed to pass and sign into law BEFORE leaving Washington for the recess.

H.R.3200 may be modified after Congress returns in September, but the version dated July 14, 2009, is the version they want.

The Ugly -
1. Losing Your Current Insurance: - Section 102 allows current health insurance plans to be “grandfathered” so “you can keep your current insurance if you like it”. However, paragraph (a) (2) reads as follows:

“Limitation on Changes in Terms or Conditions – Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.”

This paragraph seems to require conversion to a “qualified” plan if anything changes in your current health insurance. If you have insurance through a private employer you are aware that health insurance coverage is renegotiated annually. So unless your employer elects to keep the current plan literally forever you will be forced into a “qualified” plan – probably as early as the year following enactment of ObamaCare (Y1).

2. Squeezing Insurance Companies: - Sections 141, 142 and 161 combined turn health insurance into a true commodity. Section 141 establishes a “Health Choices Administration”. Section 142 requires that the “Health Choices Administration create a standard benefits package that defines a “Qualified” plan or QHBP. And Section 161 establishes a limit on how profitable a health insurance company can be by requiring rebates to policy holders when profitability exceeds a predefined level. Insurance companies would effectively become “mutual insurance companies” and stock holders will need to find other investments. Capital will become a problem and a couple of years with higher than expected claims may force companies out of business.

3. Insurance for Illegal Aliens: - Section 301 theoretically precludes illegal aliens from getting taxpayer-paid public option health insurance. It does not preclude them from buying public option health insurance that will almost certainly be subsidized for all. It will also be entirely moot if President Obama and the Democrat Congress are able to push through their desired “comprehensive immigration reform”. Once passed the illegals would be illegal no more and hence eligible for taxpayer-paid public option health insurance after all.

There’s plenty more ugly to report in future posts.

Links to Other Topics in the Special Report: Universal Health Care

Monday, August 17, 2009

ObamaCare: The Good, the Bad, the Ugly, and the Ignored – Part 1

Most people acknowledge that reform of our health insurance system is needed but they do not agree on the nature and scope of reform.

The version of President Obama’s health care bill now before the House of Representative is H.R.3200 titled “America's Affordable Health Choices Act of 2009”. It is, of course, very controversial. The link in the previous sentence will take you to an on-line copy of the 1,017 page bill with hyperlinks to each section. You can also download the entire bill in PDF format. Be warned, it is very difficult reading. Representative John Conyers spoke the truth when he said he would need two days with two lawyers to interpret what the bill means.

Representative Conyers used that as an excuse for why he hasn’t read the bill. But, the fact that Congressmen are willing to vote for and pass a piece of legislation they not only have not read but are unable to understand is sufficient reason to show them the door. If the Congress that writes and votes for a bill cannot understand its own work – who can – who will? The logical implication is that the courts will decide what the bill means since no one else knows.

Still, many people have now read the bill and interpreted what is in it - and what is not - as best they can. Below, I have summarized the most important findings – the good, the bad, the ugly, and the ignored.

The Good
Availability and Renewability: Section 112 requires insurers to make insurance available and renewable except for non-payment of premiums and Section 111 prohibits exclusion of coverage for pre-existing conditions.
Covering those Who Cannot Afford Insurance: Section 242 provides coverage for people who are not eligible for Medicaid but earn less than 400% of the official poverty level.
Covering Pre-existing Conditions when Switching Insurance: Section 111 prohibits exclusion of coverage for pre-existing conditions.

The Bad
Higher Federal Deficits: The Congressional Budget Office estimates that the bill will add $1.6 trillion to the Federal debt burden over the next ten years.
Higher Payroll Taxes: Sections 312 and 313 require all employers with payrolls exceeding $250,000 per year to contribute to the health insurance of their employees directly or indirectly through a sliding scale of additional payroll taxes. This means that employers that do not currently provide health insurance for their employees will be forced to do so one way or the other. Marginally profitable businesses will go out of business or layoff workers because of this increased expense.
Citizen Coercion – Section 401 imposes an income tax penalty of 2.5% of adjusted gross income upon anyone who is not covered by a qualified health insurance plan. This penalty will be enforced by the Internal Revenue Service.

The Ugly and The Ignored still to come.

Links to Other Topics in the Special Report: Universal Health Care

Tuesday, August 11, 2009

Death by Rationing

The various health care bills before Congress this summer, if enacted, will kill your mother. Regardless of what President Obama, Nancy Pelosi, Harry Reid, or the other Democrat leaders say, their legislation will ration health care.


  • They say there are 47 million uninsured Americans. If true, and if they are all covered by the new universal health care program then 47 million people will soon consume much more health care than they consume now. Demand for health care nationally should increase by more than 20% but the number of doctors, nurses, clinics, and hospital beds will remain roughly constant.
  • The program makes no secret of its intention to squeeze doctor’s pay in the name of efficiency and eliminating abuse. But if a job pays less then less people want the job. Less pay will result in fewer doctors.

    These situations will produce higher demand for a shrinking supply of service. Normally, prices would go up but, under universal heath care, prices will be controlled. This will produce lines of people waiting for service; like the lines at gas pumps when the price of gas was controlled in 1973; like the lines at controlled price Soviet food stores when a rumor circulated that the store had fresh fruit.

    It will result in months-long waits for certain tests and treatments; kind of like the waits in Canada and the United Kingdom under their current universal health care administrations.

    People will die waiting for treatment.

  • The bills would establish a “Federal Health Board” empowered to approve procedures & medications based on their cost and typical effectiveness. Health care providers would be prohibited from administering disapproved treatments. Your doctor, your mother’s doctor, would not be allowed to prescribe the treatment he believes is necessary or best in your mother’s individual case. He would be constrained to prescribe only the treatments allowed by the “Federal Health Board”.
  • It is said that 90% of health care expenses are incurred in the last 6 months of life. That could be understood to mean 90% of the cost of your personal medical care under today’s circumstances is, on average, expended in the last six months of your life.
  • The program diverts $200 billion net from Medicare to help fund the currently uninsured. Proponents say the cuts will extend the life of the Medicare “trust fund” by five years.
  • Elderly people will be required by the program to undergo periodic “End of Life Counseling” encouraging death (hospice or assisted suicide) instead of treatment.
  • Proponents of “universal health care” describe calculating a value of expected remaining quality life - for use in treatment approval decisions for elderly or terminal patients.

    These thoughts imply a predilection toward estimating the remaining life of the patient if effective treatment is administered; when the estimate is six months or less then treatment would be cut off. As President Obama put it, “you might be better off just taking a pain pill”.

    Depending on exactly how the calculation of a “value of expected remaining quality life” works, that six month cut off time for treatment could be much longer. After all, once they chop off the last six months of your mother’s life they will quickly find that 90% of the remaining health care costs are incurred in the last six months of your mother’s new and shorter life. And so they will be tempted to chop off another six months, and another, and another?

    Health care cost can indeed be controlled. Demand can be brought back in balance with supply.

    All that is needed is death by rationing.

Links to Other Topics in the Special Report: Universal Health Care

Tuesday, August 4, 2009

Any of Us Would be Angry

President Obama said in his 7/22/2009 press conference that “any of us would be angry” if, like his friend Henry Gates, the police knocked on our door investigating a “break-in in progress” at our home.

In the event, Mr. Gates apparently did break into his own home and was seen doing so by a neighbor who called the police. Mr. Gates became belligerent when the police officer asked for identification. He was arrested for “disorderly conduct” and the charges were later dropped.

One aspect of the incident that’s received little attention is the President’s assertion that “anyone would be angry”.

If I broke into my own house, and I have, I most assuredly would NOT be angry if the police came to investigate a reported break-in.

I would be careful to make certain that the police knew who I was and that I was not a threat. I would be thankful that my neighbor noticed the “break-in” and that the police responded to the report. I would feel just a bit more confident in the competence and reliability of my local police department.

It seems to me that only someone with a huge chip on his shoulder would get angry in this situation. Perhaps that describes both Mr. Gates and President Obama.

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