“Affordable” Health Care?
Oregon and Other States to Pay Dearly for “Affordable” Health Care
…Oregon Catalyst — July 23, 2015…
by Senator Doug Whitsett…
We are now more than six years into the presidency of Barack Obama. The products of his signature redistribution-of-wealth programs are becoming all too apparent, with devastating consequences for states like Oregon that rushed to be among the first in the nation to implement them.
President Obama promoted the 2010 federal Patient Protection and Affordable Care Act to the public as a critically needed program to provide health care insurance to the poor. He claimed that its execution would reduce the cost of delivering medical care; thereby, making it affordable for every American.
So how is that working?
Obama said last week that “the law is working better than we expected and actually ended up costing less than people expected.” Incredibly, he made those comments in the state of Tennessee, where three of the largest insurers are requesting insurance premium increases next year. Those increases will be 36.3 percent for BlueCross BlueShield, 18 percent for United Healthcare and 11 percent for Cigna Humana. Community Health Alliance Mutual is requesting a 32.8 percent increase for one line of insurance and Time Insurance Company is requesting a 46.9 percent increase for another.
This recent Associated Press article discusses the impacts of the Medicaid expansion included in the Affordable Care Act on the future budgets of several states.
Kentucky, for example, revised its Medicaid cost estimate from $33 million to $74 million for the 2017 fiscal year. That cost could climb to as high as $363 million by 2021.This more than ten-fold cost increase appears to be anything but affordable for anyone.
The article also states, that starting in 2017, Oregon will have spent the nearly $2 billion it received in federal aid to serve as an Obamacare pilot program. It quotes the Senate co-chair of the budget-writing Ways and Means Committee as stating that Oregon’s share of the Medicaid budget may cost an additional $500 million between 2017 and 2019.
That sharp cost increase has two primary causes. According to Oregon Health Authority officials, Medicaid enrollment has already increased by about 200,000 more than was predicted in the fall of 2014. Further, the federal government only agreed to cover the costs of the Medicaid expansion until 2017. The State’s share of the Medicaid budget is likely to rise from 6.2 to 10 percent by the year 2020. Decreasing the federal contribution to 90 percent will increase the Oregon contribution share by nearly two-thirds.
Those escalating costs to Oregon taxpayers were covered in another article.
Oregon officials originally estimated that 222,700 people would sign up for coverage as part of the Medicaid expansion. The official figure is now estimated to be 386,000. Even that figure continues to escalate and may be based on the flawed 2014 estimate.
A 2013 report assumed that the expansion would cost the state $217 million in 2017-19, substantially less than the $369 million it is now projected to cost. That change in assumptions represents a 70 percent cost increase. The Senate Co-chair’s estimate represents a potential 130 percent cost increase.
Obamacare’s prices continue to surge elsewhere across the country. This year, health insurance premiums averaged double-digit increases. Projected cost escalation is even higher for next year. Nearly every state has multiple insurance plans that are requesting rate increases of 10 percent of more, according to information posted on www.healthcare.gov.
For instance, premiums for Health Management Organizations (HMOs) are predicted to be 19 percent more expensive. The premiums for Exclusive Provider Plans are expected to increase by 20 percent. The average premium in 2016, for all health insurance plans, is estimated to skyrocket by 14 percent!
At least part of the enormous escalation in premium costs is caused by the anticipated termination of two Obamacare tax subsidies provided to health insurance companies. Currently, taxpayers are bearing the cost of “risk corridors” for patients who spend more on health care than providers predicted. Taxpayers are also heavily subsidizing the most costly patients through a “reinsurance” program. According to the Center for Medicare and Medicaid Services, these two subsidies artificially lowered Obamacare health insurance premiums between 10 and 15 percent last year. Consumers will be responsible for the full premiums when these two subsidy programs end at the end of 2016.
People who are not covered through a job, a spouse or another government-funded program are eligible to purchase insurance through an Obamacare exchange. About three-fourths of those who are eligible for the full income tax subsidy that provides essentially free health care insurance have enrolled in the program. However, among those who are not eligible for fully tax-subsidized insurance premiums, the percentage of individuals and families participating nosedives.
Sign-up for Obamacare exchanges falls to only 41 percent among those whose income is between 151 and 200 percent of the federal poverty line. Participation continues to plummet to 30 percent as earnings increase between 201 and 250 percent of the poverty level, to 20 percent for those earning between 251 and 300 percent of the poverty level, and to 16 percent for those earning more than 301 percent of the federal poverty level.
People are choosing to absorb the significant tax penalties for not purchasing insurance, rather than to pay the exorbitant cost of insurance through the Obamacare exchanges. In fact, according to the federal Health and Human Services agency, only about one-third of the eligible people are currently participating.
In short, those who allegedly cannot afford health insurance are receiving free coverage, while most of the rest are going without insurance, because they cannot afford the premiums.
Moreover, the Obamacare model is based on an incorrect assumption of monumental proportions. It assumes that younger people will pay more for health insurance premiums in order to subsidize older people who generally use more medical care. But the fastest growing segment of Obamacare enrollees is the lower-income younger generation. Instead of paying in an excess of funding, that cohort is taking money out of the system by accessing essentially free medical insurance. The scheme is fiscally unsustainable.
Obama took office just as the deep economic recession was officially ending. According to the Congressional Budget Office, since that time our nation is experiencing the slowest economic recovery in more than a century. In my opinion, Obama’s vigorous anti-capitalism and redistribution of wealth polices have been a major factor in curtailing the recovery in the United States.
In contrast, during the same period, the global spread of free-market capitalism has lifted tens of millions of families out of poverty in other nations.
Obamacare is at the heart of his anti-capitalism agenda. It is designed to nationalize more than 40 percent of our free market economy by ultimately creating a single-pay medical care system funded by American taxpayers. The sad truth is, his agenda is working.
Its provisions are forcing the rapid consolidation of health care insurers and providers into mega-corporations willing and able to bend to federal decrees. Subsequent steps will include folding the entire health insurance sector under the control of federal agencies, as he has already accomplished with student loans and with home mortgages through Fannie Mae and Freddie Mac.
The final step will be to complete the unionization of the entire medical care provider workforce. In the end, the federal government will have total control of the 40 percent of our economy that is currently providing health care, as well as employing that entire workforce as public employees who are required to belong to public employee unions.
To me, the message is clear!
A free society owes every citizen the chance to work, to compete, to innovate and the opportunity to succeed. The Obama administration’s redistribution of wealth earned by others, ultimately, benefits no one.
Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls