NEJM Study: ObamaCare’s Main Coverage Vehicle Makes Kids Wait for Care
The New York Times reports on a study published in today’s New England Journal of Medicine:
Children with Medicaid are far more likely than those with private insurance to be turned away by medical specialists or be made to wait more than a month for an appointment, even for serious medical problems, a new study finds…
Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance…
In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.
“It’s very disturbing,” [study author] Dr. [Karen V.] Rhodes said. “As a mother, if I had a kid who was having seizures or newly diagnosed juvenile diabetes, I would want to get them in right away.”…
Another physician not connected with the study…said: “It’s interesting to think you even need a study to prove that. It’s pretty much common knowledge.”…
This month, Dr. Rhodes and her colleagues had a similar study published in the journal Pediatrics, finding that dentists were far less likely to accept children with public insurance than those with private coverage, even for an urgent problem like a broken front tooth. Another study of hers uncovered patients’ difficulties in obtaining psychiatric care.
Here’s a graph from the study, showing how often kids with private insurance and Medicaid got appointments with various specialists:
Half of ObamaCare‘s projected coverage gains (16 million out of 32 million U.S. residents) comes from expanding the Medicaid program.
Obama Admin. Repeats Discredited Cost-Shifting Claim in Federal Court
Defending ObamaCare in federal court yesterday, the Obama administration’s acting solicitor general, Neal K. Katyal, peddled the widely discredited claim that the uninsured increase your and my health insurance premiums by $1,000:
“When people self-finance their health care,” Katyal contended, “that raises the cost of health care overall by $43 billion a year, and that raises the average family’s premiums by $1,000 a year. That will price untold numbers of people out of the market.”
That estimate comes from two left-wing groups, Families USA and the Center for American Progress Action Fund.
When President Obama himself made this claim, FactCheck.org reported:
[Obama] said ”the average family pays a thousand dollars in extra premiums to pay for people going to the emergency room who don’t have health insurance.” That’s from a recent report by Families USA, a group that lobbies for expanded government coverage. But another study for the authoritative Kaiser Family Foundation thinks that figure is far too high.
Serendipitously, the same day that Kaytal was repeating this discredited claim in federal court, USA Today reported:
Jack Hadley, senior health services researcher at George Mason University in Fairfax, Va…has found that privately insured individuals don’t end up paying higher premiums to make up for the uninsured because hospitals that serve lower-income families don’t have a lot of patients with insurance. He said the government pays about 75% of those unpaid hospital bills either by direct payment or through a disproportionate payment of Medicaid. (emphasis added)
Filed under: Cato Publications; General; Government and Politics; Health Care
ObamaCare Comes Up against the Constitution
Today POLITICO Arena askes:
How badly does today’s ObamaCare ruling set back the Democrat’s signature domestic achievement? Should Tenth Amendment enthusiasts take heart that other federal laws with which state officials disagree can be struck down?
My response:
A quick reading of Judge Henry Hudson’s opinion today striking the “individual mandate” provision of ObamaCare gives hope to those of us who have long urged, more broadly, for a restoration of limited constitutional government. As Judge Hudson put in granting summary judgment to Virginia, “the legislative process must still operate within constitutional bounds.”
The administration had argued that Congress had authority to enact and enforce the individual mandate to buy health insurance under its power to regulate interstate commerce. But Judge Hudson responded that “Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individual to involuntarily enter the stream of commerce by purchasing a commodity in the private market.” Indeed, he noted, the administration’s reasoning could apply to “transportation, housing, or nutritional decisions. This broad definition of economic activity [to include inactivity] subject to congressional regulation lacks logical limitation.” The federal government remains, in short, one of delegated, enumerated, and thus limited powers, notwithstanding the leviathan that surrounds us today.
This is a significant setback for the administration, not least because Judge Hudson cites to a similar argument set forth by federal district Judge Roger Vinson in Vinson’s October 14 opinion denying the administration’s motion to dismiss the ObamaCare suit brought against it by 21 states, with more to follow. There will be more litigation on these issues, of course, but for today, at least, the Tenth Amendment and the limited government it implies are alive and well.
Federal Court Declares ObamaCare’s Individual Mandate Unconstitutional
ObamaCare has always hung by an absurdity. ObamaCare supporters claim that the Constitution’s words “Congress shall have the Power…To regulate Commerce…among the several States” somehow give Congress the power to compel Americans to engage in commerce. This ruling exposes that absurdity, and exposes as desperate political spin the Obama administration’s claims that these lawsuits are frivolous.
This ruling’s shortcoming is that it did not overturn the entire law. Anyone familiar with ObamaCare knows that Congress would not have approved any of its major provisions absent the individual mandate. The compulsion contained in the individual mandate was the main reason that most Democrats voted in favor of the law. Yet the law still passed Congress by the narrowest of all margins — by one vote, in the dead of night, on Christmas Eve — and required Herculean legislative maneuvering to overcome nine months of solid public opposition. The fact that Congress did not provide for a “severability clause” indicates that lawmakers viewed the law as one measure.
Despite that shortcoming, this ruling threatens not just the individual mandate, but the entire edifice of ObamaCare. The centerpiece of ObamaCare is a three-legged stool, comprised of the individual mandate, the government price controls that compress health insurance premiums, and the massive new subsidies to help Americans comply with the mandate. Knock out any of those three legs, and whole endeavor falls.
Moreover, the individual mandate is not the law’s only unconstitutional provision.
These lawsuits and the continuing legislative debate over ObamaCare are about more than health care. They are about whether the United States has a government of specifically enumerated powers, or whether the Constitution grants the federal government the power to do whatever the politicians please, subject only to a few specifically enumerated restraints. This ruling has pulled America back from that precipice.
Filed under: Cato Publications; General; Government and Politics; Health Care
ObamaCare’s ‘Medical Loss Ratio’ Regs Encourage Fraud, Unnecessary Medical Services
Yesterday, the U.S. Department of Health and Human Services issued regulations implementing ObamaCare‘s rule mandating that health insurers maintain minimum “medical loss ratios.”
Opponents of private health insurance have made a fetish of MLRs – a statistic that insurers developed to show investors the share of premiums they spend on claims. (“See? They call it a ‘loss’ when they pay for medical care — that proves they’re evil!”) So the opponents of private health insurance who crafted ObamaCare included a rule requiring carriers to spend at least 80 percent of premium revenue (large employers must spend 85 percent) on “your health care.” What could possibly go wrong?
The folly and false compassion of ObamaCare are on full display in the MLR regs, where government bureaucrats have evidently determined that unnecessary and harmful medical services, and even insurance fraud, are in fact good for patients. Okay, HHS bureaucrats don’t actually think that. But ObamaCare’s MLR regs include fraud prevention and utilization review among the administrative expenses on which carriers may spend no more than 20 percent of revenue (15 percent for large employers). That will effectively discourage insurers from policing fraud and conducting utilization reviews that protect patients from the expense and risks of unnecessary medical tests and procedures.
ObamaCare’s fatal conceit is that government bureaucrats can determine and deliver what is good for patients. Consumers will continue to feel the pain – costs will continue to rise and more insurers will flee the marketplace – until Congress gives up that conceit and repeals this law.
Filed under: Cato Publications; General; Government and Politics; Health Care
More Proof ObamaCare Is a Sop to Industry
Reuters has helpfully published another article demonstrating that ObamaCare‘s biggest cheerleaders are the insurance and drug industries. That’s because, barring repeal and despite the Obama administration’s fatuous rhetoric about standing up to the special interests, ObamaCare will shower those industries with massive subsidies. Excerpts follow.
Health Overhaul Should Press Ahead: Industry
By Susan HeaveyThu Nov 11, 2010 1:39pm EST
NEW YORK (Reuters) – Repeal reform? No thanks, say health insurers, drugmakers and others looking for a clearer picture of the U.S. healthcare market after the bruising passage of the controversial overhaul law…
The new healthcare law created “a stable, predictable environment, however painful it has been in the short term,” GlaxoSmithKline Plc’s (GSK.L) Chief Strategy Officer David Redfern said at the summit in New York.
“When you are running a business, the hardest thing is changing policy and a changing environment because it is very difficult to plan, predict and ultimately invest in that sort of scenario,” he said, echoing other speakers.
True enough. How’s a firm supposed to develop a business plan around uncertain taxpayer subsidies?
Health officials must still hammer out how to implement the law and finalize hundreds of new rules and regulations. Many such details are key, as the sector looks to adjust its business for 2011 and beyond.
Wait, I thought the law created a “stable, predictable environment” and repeal would create uncertainty. Hmmmm.
“Anti-reform made good talking points before the election,” said the Department of Health and Human Services’ Liz Fowler, adding that people “will find more to like than to dislike” in the law once it is more in place.
Boy, they just won’t let go of that chestnut, will they? Remember: voters need re-education, not the Obama administration.
Even insurers, which were vilified by Democrats in passing the reforms, said they don’t want a repeal, even as they push for clarity on forthcoming rules and seek additional changes.
Cigna Corp CEO David Cordani and Aetna Inc President Mark Bertolini both urged the nation to move forward on the overhaul.
Even the insurance industry is against repeal? The folks whose products the law will force 200 million Americans to purchase? Never saw that coming.
Since the start of 2009, the Morgan Stanley Health Care Payor index has risen 75 percent, outperforming a roughly 35 percent rise for the broader Standard & Poor’s 500 index.
You don’t say.
Unlike insurers[!], drugmakers have escaped largely unscathed under the law, although there is still incentive to shape it.
Filed under: Cato Publications; General; Government and Politics; Health Care
ObamaCare = A Bailout for Private Insurance Companies
This Reuters headline says it all: “Cigna CEO: Don’t repeal U.S. health law.”
Cost-Slashing? No, Cost-Shifting.
Here’s a poor, unsuccessful letter I sent to the editor of the Los Angeles Times:
Three and a half million Californians may become eligible for subsidized private health insurance in 2014 under ObamaCare [“3.5 million Californians would be eligible for healthcare tax credits, study finds,” October 6], but those subsidies will not “slash the cost” of their health insurance. As ObamaCare causes health insurance premiums to rise by as much as 30 percent, the private-insurance subsidies will shift those costs to taxpayers. A bipartisan majority of Americans opposes ObamaCare in part because such shell games increase costs rather than reduce them.
Washington State Regulator Can’t Prevent ObamaCare from Destroying Child-Only Market
ObamaCare has touched off a battle between Regence Blue Cross Blue Shield and Washington State Insurance Commissioner Mike Kreidler. From the commissioner’s press release:
Kreidler orders Regence BlueShield to cover children
OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler ordered Regence BlueShield this morning to stop illegally denying insurance to children, effective immediately.
“Regence is in clear violation of state law that prohibits insurers from denying insurance to people on the basis of age,” said Kreidler. “I was shocked and deeply disappointed when Regence announced its decision last week to stop selling insurance to kids.”
The Affordable Care Act requires all health plans to cover kids with pre-existing conditions…
Regence Blue Shield, the largest health insurer in the individual market, notified Kreidler on Sept. 27 that, effective Oct. 1, it would no longer sell individual health insurance policies to kids.
From Regence’s press release:
We were shocked by the Commissioner’s action and press statement this morning. This gross politicization of such a complex regulatory problem does not help address the very real economic challenges of providing coverage to Washingtonians seeking individual insurance policies, especially children.
Over the past several months, we have had at least five separate conversations with the Commissioner and his staff regarding planned changes to how we would cover children under age 19. Our goal in those discussions was and continues to be a solution that would allow us to serve all of our individual members – including children – without exacerbating costs and increasing coverage risks for the entire pool. Never once did the Commissioner or his staff express any concern that these changes might violate state law. We’re disappointed that the Commissioner appears to have suddenly changed his perspective…
We’ve been very clear that we will insure kids during open enrollment periods when the child is not the sole subscriber — and we will do so regardless of health status. Dozens of carriers across the country have found it necessary to adopt similar policies.
We disagree with the Commissioner’s action today and will consider how it might impact our ability to offer coverage to all individuals across the state. While more than ten carriers have deserted Washington’s individual market — leaving three today — Regence has continued to insure these members despite losses of more than $33 million in the last three years. While we remain committed to our individual members, we simply cannot expose our broader membership to greater risk. Therefore, we believe the changes we made are in the best interest of the nearly one million Washingtonians we serve today.
Washingtonians want and need an equitable, stable insurance market that people can afford. We want to avoid the mistakes of the 1990′s when a small minority was allowed to game the insurance system by purchasing insurance only when they were sick, which led to rate spikes and the collapse of the individual market.
Either way, the child-only market is toast.
Filed under: Cato Publications; General; Government and Politics; Health Care
A Less-Than-Rigorous ObamaCare Fact Check
Kaiser Health News and The Washington Post have posted a piece titled “Campaign Claims: Health Law Myths And Facts,” which examines these common criticisms of ObamaCare:
- “The law amounts to a ‘government takeover’ of health insurance and health care.” The article’s conclusion: “it falls far short of a government takeover.” That conclusion rests largely on the fact that “Medical care will be provided by private hospitals and doctors.” But as I explain in this study, “it is irrelevant whether we describe medical resources (e.g., hospitals, employees) as ‘public’ or ‘private.’ What matters—what determines real as opposed to nominal ownership—is who controls the resources.” Obama health official Jeanne Lambrew acknowledges as much: “the government role in socialized medicine systems [can include] public financing of private insurance and providers.” And as I concluded in this study, “Compulsory ‘private’ health insurance would give government as much control over the nation’s health care sector as a compulsory government program.” I wonder if the article’s authors spoke to anyone who raised this perspective.
- “The law will gut Medicare by cutting more than $500 billion from the program over 10 years; seniors will lose benefits and won’t be able to keep their doctors.” Conclusion: “The gutting of Medicare claim goes too far…What this means for seniors is a bit murkier.” True enough: even if ObamaCare’s implausible Medicare cuts take effect, they clearly would not “gut” Medicare. (BTW, click here or here for a politically sustainable way to restrain Medicare spending.) The authors also note that Medicare Advantage enrollees would lose some benefits. But when the article claims that ObamaCare will not eliminate any “basic” Medicare benefits, it neglects to mention that Medicare’s chief actuary estimates that the law could cause 15 percent of hospitals, home health agencies, and other providers to stop accepting Medicare patients. If your hospital no longer accepts your Medicare coverage, is that not a benefit cut?
- “The law will cause 87 million Americans to lose their current coverage.” Conclusion: “How true is it? Partly, at best. But evidence is limited.” The House Republicans’ Pledge to America claims that ObamaCare “will force some 87 million Americans to drop their current coverage.” The word drop is a bit strong; it’s more accurate to say that many Americans will have to switch to another plan, even if it’s just a more-expensive version of their current plan. Indeed, HHS estimates that 69 percent of employer plans will have to do so by 2013. Yet some people are being dropped from their current health insurance. When Principal Financial Group leaves the market, its nearly 1 million enrollees will lose their current health plan. Industry analysts expect more such departures. Why no mention of that?
- “The law is driving up costs and premiums and will continue to do so over the next several years.” Conclusion: “There may be very small increases initially.” Here the article is kinder to ObamaCare than even ObamaCare’s supporters are. May be? Even ObamaCare’s supporters admit the law will increase premiums for some people. Very small increases? Even HHS estimates that the requirement that consumers purchase unlimited annual coverage could increase premiums for some by 7 percent. (There’s no mention of Blue Cross and Blue Shield of Connecticut, which says ObamaCare will increase premiums for some of its customers by nearly 30 percent.) And why only initially? Do the authors expect that there will be no premium increases when HHS eventually stops issuing waivers? Or when HHS sets a minimum level of coverage that Americans must purchase in 2014? Or that ObamaCare has solved the tragedy of the commons? For support, the article claims, “the Obama administration, citing [various] estimates…says the law isn’t responsible for any increase greater than 1 to 2 percent.” Actually, that’s not what the administration says — it’s what they want you to think they’re saying. Read this letter and other administration utterances carefully. They say “1-2 percent” when speaking of ObamaCare’s average effect on premiums, and “minimal” when speaking of anything other than the average effect. (The administration’s threshold for “minimal” is presumably somewhere north of 7 percent.)
- “The law’s expansion of Medicaid will put massive pressure on state budgets at a time when many are already in crisis.” Conclusion: “The impact will probably be small, but it’s hard to say for sure.” The article only cites figures generated by supporters of the law, who say the impact will be small. Why just mention that there are figures from the other side? Why not include them?
- “The new law uses tax dollars to pay for abortions.” Conclusion: “Open to interpretation.” This was a missed opportunity to examine two crucial questions. First, would federal insurance subsidies truly be segregated from the separate premiums that consumers in ObamaCare’s exchanges would have to pay for elective-abortion coverage? Or would this just be an accounting gimmick? What would happen, for example, if there were more abortions than an insurer anticipated, and those separate premiums proved insufficient to pay for them? How would you keep one side of the ledger from spilling over into the other? Second, would the availability of federal subsidies for health insurance plans that make elective-abortion coverage available as a rider increase enrollment in those plans? If so, wouldn’t that implicitly subsidize elective abortions? Rather than examine those questions, the article punted.
On the whole, I’d say this fact check may have been very kind to the new law.
A Hidden Cost of ObamaCare
Today at the Cato Institute, Duke University Prof. Chris Conover presented his estimates of the economic losses that will be created by the taxes necessary to fund ObamaCare. This chart is taken from his presentation:
The Excess Burden of ObamaCare
Here’s Conover’s full presentation (with comments by former Congressional Budget Office director Douglas Holtz-Eakin), as well as his Cato Policy Analysis, and his op-ed.
Pelosi Had to Pass ObamaCare So She Could Find out What’s In It
Bloomberg’s Caroline Baum has a great column on ObamaCare. It leads off with House Speaker Nancy Pelosi’s oft-repeated remark, “We have to pass the bill so that you can find out what is in it.”
Truer words were never spoken. Heck, ObamaCare gives HHS Secretary Kathleen Sebelius so much arbitrary power to reshape the health care sector that Congress had to pass the law so that Pelosi could find out what is in it.
Baum explains why such discretionary power is dangerous:
Discretion may be the better part of valor, but it’s not something businesses can rely on for planning purposes. Corporations are already hunkered down because of (take your pick) weak demand, hurt feelings as a result of presidential persecution, or uncertainty over future health-care costs and tax rates. It won’t help business confidence to learn the HHS secretary can make and break rules on a case-by-case basis.
“The secretary can decide what you have to purchase, but if you are in a presidential swing state, the secretary has the authority to undo everything she just did,” Cannon says.
Wait, how’d that last sentence get in there? Anyway, read the whole thing.
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