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The New York Times has admitted the failures of Obamacare: loss of insurers in many marketplaces, high premium costs, the collapse of many co-ops, overreaching federal mandates, and more. The Times suggests that change is necessary in order to ensure Obamacare’s survival, but seems to endorse even more government participation, not less.
There is a renewed push for a public option. One of the more ridiculous justifications from the article comes from the charge that “private insurance companies could not be trusted to provide reliable coverage or control costs” and that “the shrinking number of health insurers is proof that these warnings were spot on.” To suggest that it is the collapse of many markets is the fault of the insurance companies themselves is absolutely ridiculous.
And another laughable observation on the structural and technical problems of Obamacare: “The subsidies were not generous enough. The penalties for not getting insurance were not stiff enough. And we don’t have enough young healthy people in the exchanges,” essentially blaming everyone else for the failures. The insurance companies didn’t offer cheaper enough plans. The taxpayer didn’t pay enough in penalties/fines/taxes. Too many sick people and too few healthy people enrolled. The solution: offer more government money, paid for by extracting more penalties/fines/taxes for those who chose not to purchase insurance, and spend more money trying to convince more healthy people to buy trust Obamacare and buy into the exchanges. You can’t make this up.
What’s more, many of the same champions of Obamacare are not calling for even more drastic, government-centered, expensive alternatives. “On Sept. 15, Senator Jeff Merkley, Democrat of Oregon, introduced a resolution calling for a public option. The measure now has 32 co-sponsors, including the top Senate Democrats: Harry Reid of Nevada, Chuck Schumer of New York and Richard J. Durbin of Illinois.”
The public option could take a couple of different forms. One would be a government sponsored health plan available as an option in every market. The other option would be that a single payer option, championed by Sanders, which would be essentially Medicare for all. Unfortunately, such ideas would only compound the problem, which, as its root, is money.
Any public option would drive up medical costs, and Obamacare now is financially unsustainable. A government sponsored plan “would have an unfair advantage if it both regulates and competes with private plans,” while a single-payer plan would be even more egregiously expensive as it would shoulder the costs for everything.
While completely repealing Obamacare is probably not a viable solution or possibility anymore, other changes such as making insurance portable across state lines, widening the use and availability of health savings account should also be explored, not shunned. Merely throwing more money after bad money will only worsen Obamacare for everyone.
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Yet another insurance regulator — this time in Minnesota — is sounding the alarm on the insurance market in their state, specifically describing it as “an emergency situation” with regard to rate increases next year and availability of competitive companies offering plans.
“Department of Commerce Commissioner Mike Rothman said Friday that the five companies offering plans through the state’s exchange or directly to consumers were prepared to leave the market for 2017. He said big rate increases were the tradeoff to convince all but one company to remain for now. Rate increases finalized this week range from a 50 percent average hike for HealthPartners plans to a 67 percent jump on average on UCare.”
We’ve seen the same scenario playing out in many states across the country companies have withdrawn from the marketplace exchange or from the state all together, leaving many citizens with little to no insurance option from which to choose and purchase a plan. Obamacare continues to collapse, leaving everyday taxpayers to bear the burden and cost of the reckless policies that have hurt, rather than help, the American people.
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This is an excellent editorial piece from the Wall Street Journal discussing the surprise announcement that Aetna, one of the leading insurers in this country, was withdrawing from the vast majority of Obamacare exchanges. But instead of sitting up and seriously considering this massive defection as a wake-up call (unlike all the previous failures), the Democrats want to blame Aetna itself in order to safeguard the narrative that Obamacare is working perfectly well. I have reproduced the piece in its entirety below; it’s worth the read.
“Democrats claimed for years that ObamaCare is working splendidly, though anybody acquainted with reality could see the entitlement is dysfunctional. Now as the law breaks down in an election year, they’ve decided to blame private insurers for their own failures.
Their target this week is Aetna, which has announced it is withdrawing two-thirds of its ObamaCare coverage, pulling out of 536 of 778 counties where it does business. The third-largest U.S. insurer has lost about $430 million on the exchanges since 2014, and this carnage is typical. More than 40 other companies are also fleeing ObamaCare.
The mass exodus will leave consumers consigned to the exchanges with surging premiums and fewer options, but don’t mention these victims to Democrats. They’re trying to change the subject by claiming Aetna is retaliating because the Justice Department is trying to block Aetna’s $37 billion acquisition of Humana.
The 2010 ObamaCare law makes it nearly impossible for non-mega insurers to operate, and a tide of regulations has encouraged consolidation. Aetna says the Humana tie-up will create economies of scale that could sustain the money-losing exchange policies.
But Massachusetts Senator Elizabeth Warren is now emoting on Facebook that “The health of the American people should not be used as bargaining chips to force the government to bend to one giant company’s will.” This week the Administration also released a July 5 letter from Aetna in response to a Freedom of Information Act request. Democrats claim the document shows CEO Mark Bertolini conditioning Aetna’s ObamaCare cooperation on merger approval.
This is some gall. Aetna was answering a June 28 “civil investigative demand,” in which Justice’s antitrust division specifically asked how blocking the merger would “affect Aetna’s business strategy and operations, including Aetna’s participation of the public exchanges related to the Affordable Care Act.”
Soliciting sensitive internal information that Aetna is legally compelled to provide—and then making it public to sandbag the company—is the behavior of political plumbers, not allegedly impartial technocrats. If police tried this, it’d be entrapment.
Mr. Bertolini had merely replied that the legal costs of an antitrust suit would strain Aetna’s performance. The insurer would have “no choice but to take actions to steward its financial health” and “face market realities,” such as reducing unprofitable business. Public companies have a responsibility to shareholders, and the wonder is that any insurer is still part of the exchanges.
ObamaCare’s troubles aren’t the result of any business decision. The entire industry is caught in the law’s structural undertow. Despite subsidies, overall enrollment is flat, there’s too much monthly churn, and the exchanges aren’t attracting enough healthy people to make the economics work.
Blame the law’s architects, not Mr. Bertolini, who must wonder what happened to the political goodwill he has tried to bank over the years. Aetna was inclined to accept the exchanges as loss leaders to support ObamaCare’s mission of universal coverage. The company led ObamaCare’s industry pep squad in 2009 and 2010.
The calculation then was that subsidies would open a new market, and consumers would be mandated to buy their products. But in the final frenzy to pass the law, Democrats decided that insurers made too much money and they imposed price controls on profit margins. Now insurers are accused of declining to throw away more money.
The ObamaCare implosion means that about a quarter of U.S. counties will have only one or two plans, and in some zero. Areas in Arizona, North Carolina, Pennsylvania and Texas seem to be hardest hit, though the extent of the damage is still emerging.
Democrats figure they have insurers over a barrel because a Hillary Clinton Presidency is coming. She’s running on higher subsidies for beneficiaries, a taxpayer bailout for the industry, and a “public option” akin to Medicare for the middle class. In health care the solution to a problem caused by government is always more government, which will create new problems and beget more government.
Republicans have no obligation to participate. They had no hand in creating this mess and they’ve been mocked by Democrats and the media for years for warning about ObamaCare’s flaws and trying to repeal and replace the law. Assuming the GOP holds at least the House, they should insist that any “fixes”—which are fast becoming inevitable—create a rational health-care market. Democrats deserve to be held accountable for the collapse of their ideas.”
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Aetna’s decision to withdraw from 11 out of 15 state exchanges is a big deal; it follows the paths of UnitedHealth Group and Humana, both large insurance companies who have also chosen to cut ties with Obamacare. (Incidentally, the DoJ is trying to block a Aetna-Humana merger; are they worried about competition?)
A short analysis by Market Watch provides some insight into the decision and the current state of Obamacare:
**Aetna explained the decision as a way to “limit our financial exposure moving forward,” after pretax losses of $200 million in the second quarter and losses totaling $430 million on individual products since January 2014. The company did not specify what portion of the losses was attributable to individual public plan offerings.
**The company criticized the ACA’s “inadequate” risk-adjustment mechanism, which is meant to limit insurers’ losses as they start covering sicker individuals. It’s a common criticism from health insurers, which have long said that the risk-pool program isn’t working the way it’s supposed to, though others say big insurance companies should instead change their model to keep costs down.
**Of Aetna’s exchange membership this year, more than half is new, with those needing expensive care making up “an even larger share” in the second quarter, the company said.
**Coupled with the risk pool, this makes premiums costlier and “creates significant sustainability concerns,” the company said.
The affect of these withdrawls means fewer insurers and fewer choices for consumers than when the law first began several years ago. That’s not good. The law needs some reform. MarketWatch notes, “The Centers for Medicare and Medicaid Services has indicated a willingness to make changes to the risk-pool mechanism, although it’s unclear whether legislation to that end would be passed.
Any fixes will also depend on strong enrollment figures. Premiums have increased for 2017, but the financial penalty for not having health insurance has also increased. Whether that penalty, an average of $969 per household, according to a Kaiser analysis, will prompt increased enrollment is a “big wild card,” according to a co-author of the Kaiser report. A rise in premium costs “suggests additional enrollment growth is not a given,” said Riggs, having potential negative implications for hospital and managed care, along with investors in those spaces.”
Will this have an impact on the 2016 election? It will be interesting to see — especially since the open enrollment period is slated to begin on November 1, just days before the 2016 election. The cost of premiums, especially if they are substantially higher, may affect people’s voting decisions. Of course, don’t put it past the Administration to delay open enrollment until Nov 15 and shift everything by two weeks, in order to avoid a “November surprise”. The only thing that’s not a surprise at this point is that the law continues to founder considerably, at the expense and disruption of everyday citizens.
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I just read a recent Letter to the Editor in the Wall Street Journal from a Francis X. Cavanaugh, “founding chief executive of the Federal Retirement Thrift Investment Board.” I guess his title allows him the ability to be an ignorant elitist, mocking the alarm of the ordinary American with the current amount of crushing US debt.
Mr. Cavanaugh writes that the “concern that ‘we have borrowed so heavily from future generations’ is baseless.” Baseless. Really Mr. Cavanaugh? As if anyone concerned with debt is a poor, uneducated, silly, misunderstood citizen, and all the smart federal people know and understand that the debt will never be paid off, never needs to be paid off, and therefore is a non-issue. How utterly wrong.
In his economic ignorance, Mr. Cavanaugh must be assuming that, as with major corporations and other organizations with indefinite lives, debt can be a part of a permanent capital structure, so there is no need to actually pay it off. But in order for the debt to be rational, it needed to be incurred to acquire something with ongoing benefit – such as land or equipment whose ongoing use will justify the ongoing debt service to pay for it.
That is the difference between the federal government and other entities that will maintain “permanent “ debt. Corporate permanent debt has funded capital improvements that will provide benefits into the future. They would never use debt to fund current operations, because this would burden future activities with having to pay back unproductive debt. In contrast, federal debt is funding only operating deficits – paying for more vote-buying crony-building current goodies than our tax receipts could provide – and which will need to be paid back by our children and grandchildren who will have received none of the goodies.And the cumulative effect of piling operating deficits on top of operating deficits is catastrophic.
Mr. Cavanaugh does not believe that the debt needs to be paid? What needs to be paid — at minimum — is the interest and the capacity to roll over the debt coming due; however, when the amount of debt explodes such as it has in the past 8 years, the interest explodes too, especially when interest incurred at historically low rates will need to be refinanced at rates much higher. Likewise, those creditors funding the debt will certainly take pause or stop funding all together. Subsequently, the interest liabilities become a debt for future generations paying for the debt service and the unfunded liabilities of the past generations’ profligate spending.
The attitude of Mr. Francis X. Cavanaugh is thoroughly repulsive — but what do you expect from a bureaucrat whose sole job was to oversee, protect, and administer the retirement savings and investment plans for Federal employees?
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Here’s another ridiculous article by “economist” Grep Ip, wondering aloud once again why the economy isn’t doing any better, and why low interest rates haven’t helped. Either he’s truly incompetent as an economist not to see the detrimental effects of government policies on businesses and the economy, or he’s playing dumb to give cover to the Obama Administration by pretending their policies aren’t harmful and looking the other way in his analysis.
Ip writes, “One of the great mysteries of the recovery is why low interest rates have done so little to lift business investment. After all, that is supposed to be one of the ways monetary policy works: A lower cost of capital makes any project more viable. But what if lower interest rates are actually hurting investment by encouraging companies to pay dividends or buyback stock instead?”
This is exactly what is happening — it’s no mystery. But he draws no substantial conclusions. If he would just come down from his ivory tower of what is “supposed to happen” under Keynesian economics, and actually observe what is happening, he might actually learn something. The fact of the matter is, Obama’s policies are destroying our business environment and eliminating the opportunity.
The burden of over-regulation, the increases in taxes, the litigation-friendly environment, the overreaching government agencies, Obamacare, unprecedented debt and more — all of these factors cause businesses to essentially pause their business strategy. Who in their right mind really would consider substantial investment in an environment that is hostile to workers, and an economy that is now seeing more businesses close instead of open? The risk is often too great. Sitting it out is a safer bet.
Not only is it not a mystery as to why low interest rates haven’t spurred growth, it’s a no-brainer. To ignore the government’s effect on business and the economy is unprofessional and incompetent. “It’s the government, stupid!”
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A few weeks ago, the Feds trotted out a statistic aimed to bolster support for the fledgling Obamacare legislation amid steep premium hikes and costly non-compliance fines. While the Obama Administration celebrated the fact that the uninsured rate was finally below 10%, in reality, this same statistic actually represents the most colossal failure of any government program in the history of this country.
In 2010, we had nearly 307 million people living in the United States, with a 16.3% uninsured rate — or a record number of 49.9 million uninsured, according to the Census Bureau. On March 20, Nancy Pelosi presented a letter to the House of Representatives showing the yearly effects of Obamacare on insurance coverage — which included estimates on the number of uninsured each year. Obamacare passed three days later.
Looking at the data that was used to persuade passage of Obamacare, the number of estimated uninsured in 2016 was projected to be less -30 million and a 95% insured rate. That means the government predicted that by now, the uninsured rate would have dropped from 16.3 down to 5% — not 9.1% which is the current statistic. Going from 16.3% to 9.1% (instead of 5% by now) means that the government hit only 63% of the projected number of uninsured. (For the sake of also considering population increases, let’s say that the government only hit about ⅔ of its target).
This is a big deal. Congress and the public were told that the intended effects of getting the number of uninsured Americans down to a low number were worth it in the long run even if it meant that rest of the population — some 257 million people who currently HAD insurance at the time — would experience some sort of disruption with their health insurance. Most of these 257 million people were relatively happy with their plans and prices but the government decided that mucking with the system for all, for the reduction of some uninsured, was worth it.
And yet, only ⅔ of the projected uninsured has gotten insurance. 28.6 million people in the population remains uninsured, when it was projected that about 20 million (down from 50 million) would be uninsured by this time. How is this a success? It’s not, of course. Financially too, this program is derelict.
Celebrating an “under 10% uninsured number” is a hollow victory, a gimmick, a ruse to hide the truth about Obamacare. This statistic is an unmitigated disaster, an admission of utter failure of a program that has encroached into the lives of every American and arguably the biggest government program failure this country has had to contend with.
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Congressman Dave Brat wrote a stunning Op-ed in the Richmond Times Dispatch (“Immigration is killing Americans’ job prospects“) in which he blames immigrants — both legal and illegal — for the current anemic economy. Rightly citing “meager job growth” and “stagnant wages” as symptoms, he then makes a crass and erroneous conclusion that the problem is immigration.
Immigration is not killing Americans’ job prospects — government policy is. We all know that. Why does Congressman Brat ignore the elephant in the room? Brat talks about statistics and “jobs availability” as if the economy was a zero-sum endeavor and there is a finite amount of jobs available to go around, from which outsiders are taking more than their fair share. That’s absurd.
The reality is that job creation and growth by businesses — signs of a healthy economy — have slowed to a crawl because of 1) excessive and onerous regulations unleashed in the last several years; 2) increased taxes, and the high corporate tax rate; 3) overreaching agencies such as the NLRB and EPA; 4) Obamacare; and so forth.
These are all aggressive, anti-business policies that small and large businesses have had to increasingly contend with in our country. They are the reasons why more businesses are closing than opening and investment has declined. Businesses can’t afford to stay in business, comply with government diktats, and create new jobs.
To go after legal and illegal immigration while simultaneously ignoring the government’s culpability is disingenuous at best and pandering at worst. With a diatribe that strenuously complains about “the presence and availability of immigrants — whether legal or illegal, permanent or temporary — in the job market,” Congressman Brat sounds like he may be setting us up for a Trump endorsement down the road; such a line of ridiculous thinking is more compatible with Trump’s “Make America Great Again” slogan than any rational, logical economist — which is what Brat purports to be.
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A few weeks ago, the Feds trotted out a statistic aimed to bolster support for the fledgling Obamacare legislation. While many Obamacare exchange groups have discontinued coverage or announced double-digit premium rate hikes, federal officials announced that the uninsured rate is now below 10% in the first time in history.
What the Obama Administration failed to announce and Wall Street Journal writer Louise Radnofsky did not know or mention, is that a reduction from 16% to 9.1% falls below what the predicted success claims were supposed to be. Obamacare was written and executed on the premise that the uninsured would fall to 5%, which was supposed to be justification for implementing such an onerous, convoluted, expansive law.
Now, six years later, we can add the 9.1% statistic to the pile of other Obamacare stats that missed their targets repeatedly; By this time, “the Congressional Budget Office (CBO) projected that President Obama’s centerpiece legislation would result in an average of 201 million people having private health insurance in any given month of 2016. Now that 2016 is here, the CBO says that just 177 million people, on average, will have private health insurance in any given month of this year—a shortfall of 24 million people.
Additionally, the CBO has significantly altered its estimates for what 2016 would have looked like if Obamacare had never been passed. In 2013, the CBO projected that, in the absence of Obamacare, 186 million people would have had private health insurance in 2016, and 34 million people would have been on Medicaid or CHIP. The CBO now maintains that, in the absence of Obamacare, only 168 million people would have had private health insurance in 2016 (a reduction of 18 million people from its 2013 projection), while 55 million people would have been on Medicaid or CHIP (an increase of 21 million people from its 2013 projection). Somehow the hypothetical non-Obamacare world has changed between 2013 and 2016 projections. (The CBO doesn’t explain how this could have happened.)”
We don’t need to be celebrating these hollow victories. We need to be relentlessly reminding the electorate that this monstrosity, crafted and voted on by our Democrat Senators, has been one enormous failure after another — administratively and financially.
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Elizabeth Warren attempted to address the rise of the gig economy this week, but completely missed the extenuating circumstances contributing to its growing influence. “Gig economy” is the catchphrase for the portion of the economy made up of freelancers and independent consultants. It’s estimated that 1 in 3 workers now, about 53 million, fall into this category.
The gig economy has the potential to be a wonderful thing. What Warren fails to acknowledge is that the ever-increasing government regulations — especially over the last few years –have made it utterly difficult to become a business or stay in business. Couple that with a continuously weak economy and crushing legislation such as Obamacare, and it’s certainly no wonder that businesses are seeking alternative forms of employer-employee relationships. Yet, Warren seems to blame the rich for the economic situation, and then calls for more regulation for how workers are classified.
Of course, the reality is that small businesses have been single-handedly ruined by Obama’s failed policies and overreach. More than a year ago, I pointed out how more businesses are now closing than opening, and this trend has not improved. On the other hand, the rising “gig economy” is how many people are now making ends meet, and how many businesses are now able to stay afloat. The last thing we need is more government interference in the economy.
