Health Insurance Info for Colorado

news & commentary on health insurance and benefits

Enter the Colorado Single-Payor Amendment

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Senate Concurrent Resolution 13-002, a measure introduced by Sen. (Dr.) Irene Aguilar, D-Denver, will create a single-payer, government-run health care system in Colorado via the amendment process. Run by a health care “board”, the legislation, if allowed to become law as a constitutional amendment to the Colorado Constitution, would impose a capitated, single-payor health care system in Colorado. By capitated, we mean capping health care expenditures, and reducing, eliminating, or forgoing costs of care: in essence, rationing.

The measure builds on a bill, first proposed, and then shelved, by the Democrats in the run-up to Obamacare. The bill establishes a so-called non-governmental health care authority that on the surface is not part of the Colorado state government, but is in fact controlled by the political structure and funded by payroll tax dollars, estimated to cost around $16 billion yearly once the system is in effect.

The measure, 19 pages long, would provide the authority to seek waivers from the requirements of the Affordable Care Act and would replace it for all Colorado residents. According to a press release from Co-Operate Colorado, a single-issue advocacy group that appears to work closely with Sen. Aguilar on health care issues, the cooperative would “offer comprehensive and accessible health care, including dental, vision, and mental health services”.

The resolution prominently includes ACOs – Accountable Care Organizations – which are set up strictly as non-profit organizations and are viewed as a threat to the current system of reimbursement and private practice through independent physicians. The Obama Administration has aggressively pushed ACOs, even as reports mount that ACOs will be unable to provide the same quality of care as our current health care delivery system, or even deliver the savings they have promised.

For funding, the resolution imposes a 6 percent payroll tax increase on every business in the state; 3 percent payroll tax on every worker in the state;  9 percent payroll tax on every self-employed worker in the state. This would be on top of the $1 billion tax hike approved by the Democrat-controlled legislature but not yet approved by voters. [UPDATE: the tax hike was overwhelmingly defeated by Colorado voters in the fall of 2130 – ed.]

The article states that “nothing … prohibits private health insurers from conducting business in Colorado”. However, the tax burden imposed on Colorado residents, since it is a mandatory tax on payroll or self employment earnings, tilt the playing field so far in favor of the state cooperative that the private health insurance market would become unsustainable and economically impossible. Exit from the state insurance market would be swift.

The Colorado model appears to be based on the single-payor system enacted by Vermont, which had to quickly back-pedal in the face of rising costs and other issues. The fact remains that Colorado,  like Vermont, will face dozens of anti-market price controls and policy decisions which will impact the state, especially in the rural areas.

The resolution for the amendment to the Colorado State Constitution, known as the Health Care Cooperative, has been introduced in the Senate chamber, but has not yet been voted on.

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  • Published: Nov 28th, 2012
  • Category: Obamacare
  • Comments: Comments Off on New Obamacare taxes for 2013

New Obamacare taxes for 2013

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New taxes derived from the roll-out of Obamacare will impact Americans everywhere beginning January 1st, 2013. The increase, estimated to be in the range of  $268 billion, impact consumers, taxpayers, manufacturers, investors, and small-business owners:

  1. A 2.3% excise tax on gross sales of medical device manufacturers.
  2. A cap of $2,500 on Flexible Spending Accounts – many Americans use FSAs to pre-tax costs related to basic medical needs.
  3. A new, 3.8% surtax on investment income, in addition to tax increases on capital gains and dividends, for those with incomes of $250,00 or more (small business owners); for single filers, it’s $200,000.
  4. A tax increase on anyone who has deductible medical expenses, by increasing the threshold of adjusted gross income from 7.5% to 10% of AGI for claiming those expenses as a deduction.
  5. Wages or profits exceeding $200,000 single / $250,000 married couples will face a higher 3.8% Medicare payroll tax, up from 2.9%.

For more detailed information, see Americans For Tax Reform.

The Coming Disaster

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OK, there – I said it. It will be an unmitigated disaster. The relationship between The State and The Citizen has now been forever altered. I’m of course speaking of Obamacare, a.k.a. The Affordable Care Act. But, from now on, we’ll just call it Obamacare for short. Has such a great ring – after all, hasn’t The Prez himself now embraced it?

It will not be our place, going forward, to rail against the excesses of the great unwashed masses who really did vote for “stuff”, including “free” health care, such that it is. Rather, it will be our  pleasure to point out all of the unintended (really – unintended? but I jest) consequences of the greatest piece of social engineering that has ever hit a nation, short of the Russian Revolution. Stay tuned, as this is going to get really entertaining – or, perhaps not, depending on your viewpoint (you small business owners, who have just been reclassified as a “large business” – you know what I’m talking about).

Obviously, I’m no fan of this legislation (thankfully, having an opinion isn’t a hangin’ offense – yet). Obamacare is, of course, the opening gambit in the final throes of a complete government takeover of the health care sector – whether five years or twenty years from now. In spite of the near-complete abdication by the media of their responsibility to report what is factual and accurate about Obamacare, some truths have filtered out. So, one of our responsibilities will be to elaborate on these “truths”, in spite of the near-total blackout you’ll get from most in the media, so that you, my dear readers, can begin to understand the enormity of what one-party rule and flagrant “gifting” to minority coalitions can create. Havoc, in other words.

(My sympathies in advance of those who will look back fondly on these pre-Obamacare days of full-time employment – meaning, forty hours a week, that is. Working two part-time jobs is really going to be stimulating!)

Beyond that, there will be numerous changes (hell, I might as well say it – changes in the thousands!) to health insurance, health insurance regulation, health insurance markets, health insurance policies, health insurance coverage, health insurance taxes – you get the idea – over the coming five years, as we rush headlong into the full implementation of Obamacare, which doesn’t fully  land on everyones doorstep until 2018. We will be here, barring some unforeseen event, giving you all of the gruesome details, so that you can watch the unfolding train-wreck with us. Get the popcorn. Lock the door.

By the way, as of this writing, SCOTUS has decided that the Liberty University lawsuit, essentially about religious liberty and the new contraceptive mandates, should be heard, and apparently will be tracked to eventually wind up with the Justices. This may or may not be a side-show: it may give the Court a second bite of the apple when it comes to the constitutionality  of Obamacare. Yawn. I don’t think this is going to change much – I mean, what are we now 0 for 3? – not counting an election. I feel somewhat better about the Courts’ recent decision (9-0) regarding religious liberty, but beyond that, I don’t see this impacting the roll-out of Obamacare except in certain narrow ways – and this Administration will just do what it wants anyway. And besides – who ever said that Obama wants religious groups, such as the Catholic Church, delivering health care anyway? Better to turn it over to non-profit and completely controllable Accountable Care Organizations. They’re easier to unionize, anyway.

Next week I’ll talk about the new federal health plan option for states that have decided to back-hand the feds and refuse to start their own exchanges. Yes, we finally now have a “public option”. Stay tuned…

 

 

 

Change in Direction

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With the upholding (well, not so much: let’s say someone decided to be creative in using the words “tax” and “penalty”) of Obamacare, the focus, for me anyway, now shifts from a priority of writing about health insurance and Colorado, and more on writing on health care in the age of Obama and how that will impact Colorado residents (or, more bluntly: how federal regulation will adversely affect Colorado residents, along with the other 49 states). This, obviously, opens things up, as I am no fan of Obamacare, and even less of a fan of how the executive branch, while eschewing the term “imperialist”, crafts regulations that are completely at odds with Congressional intent and actual law (you know, the stuff they actually voted on specifically).

 

A case in point: this marvelous article from Cato that speaks to the way Obamacare is being implemented with nary a thought as to the actual, constructive language in the Act. And you thought we lived in a Republic. Seems that the IRS will become only slightly less powerful that Health and Human Services. But, you already knew that, right?

The Roberts Court and Obamacare

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Well, I can’t pick horses, either.

With the stunning decision by the Supreme Court of the United States this morning, Chief Justice John Roberts reminded me of the history surrounding another Chief Justice, Earl Warren, appointed by President Dwight D. Eisenhower. Eisenhower, when asked, made the point that many may make about Roberts in the not-too-distant future – that it was, after all, a bad decision to elevate this juror to the Supreme Court, given his now-apparent political unreliability and left-leaning nature. Roberts has now proven, in at least two decisions this year, to be at least as politically unreliable as Justice Warren, and has firmly relabeled the Supreme Court as “the Roberts Court” rather than “the Kennedy Court”, since Justice Kennedy sided with the minority, all conservative, in the dissent to the bizarre and unsupported decision concerning the Affordable Care Act. Chief Justice Roberts, flatly, sided with the liberals on the Court in upholding the constitutionality of The Affordable Care Act.

It’s not as if the Court hasn’t previously made law out of whole cloth: but what’s interesting about this decision is that Mr. Roberts has essentially told the Obama Administration, and the country, that, while the individual mandate exceeds the Commerce Clause authority, the mandate can and will be considered a tax, something that the Administration itself argued wasn’t the case, until it had to be argued, and then promptly reversed itself, again, during oral arguments before the Justices. Chief Justice Roberts in essence said, yes, I think this is a tax, notwithstanding the Solicitor Generals’ previous denial, and as such you can proceed. He did what all Constitutionalists fear: he warped reality and invented law, conveniently, to advance an ideological position, from the bench.

The Affordable Care Act now becomes the biggest issue of this Presidential election, or perhaps any election since 1936. While Republicans have always espoused “repeal and replace” as the ultimate solution, in light of the devastation wrought by this decision, Republicans will be galvanized (or should be!) like never before to do just that, as, given the breathtaking depth and breadth of the societal changes wrought by Obamacare, they face the prospect of permanent isolation in the wilderness of politics, or, alternatively, complete disintegration as a political organization, if Mr. Obama is handed another four years to build a permanent majority of government-dependent voters who will fully embrace a government-dominated socialist society that promises them everything at the expense of the producers who, flatly, create the bounty we now enjoy. With this election, and this enormous landmark legislation now seemingly upheld, voters will be handed a stark contrast, one that favors liberty and individual freedom and one that favors “equality” and government intrusion. It is not inconceivable that, if Mr. Obama is re-elected, a permanent Democratic majority will come into power for decades, based only on the power of a newly created “dependency class” to continue voting to receive government largesse. And the bottom line is that, if you want to see the outcome of such a majority, take a good look at Europe today.

“That sound you hear is the marching of libertarians into Camp Romney, with noses held, knowing that the libertarian and conservative coalitions must unite to defeat Obama and Obamacare.” – Eric Erickson, Redstate.com

The Supreme Court decides

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Media reports suggest that today (or, at, least, this week) the Supreme Court will hand down its decision on The Affordable Care Act. To briefly recap, dozens of states sued the federal government to overturn the act; the reasons for that suit are varied, such as the individual mandate, but include such issues as Medicaid funding requirements, which is a huge unfunded liability for states.

I’ve resisted the urge to handicap the forthcoming possibilities, but I do have an opinion. Right or wrong, I’m going to publish it today; one way or the other, the debates between Mr. Obama and Mr. Romney about health care in the upcoming general election will be fascinating to discuss in light of what the SCOTUS decides.

There are four possible outcomes: to do nothing and leave the entire Act standing; to narrowly strike down just the mandate provisions; to strike down the mandate and two other major provisions (which is the position that the Obama Administration said should happen if the Supremes conclude that the individual mandate is unconstitutional), and the fourth: declaring the entire Affordable Care Act unconstitutional.

I have no idea what the “Vegas line” is on this decision, so, I will take my shot-in-the-dark and lay odds:

Do nothing: 12 to 1. Not likely.

Strike down just the individual mandate: 6 to 1. Too narrow, and creates a bigger problem.

Strike down the mandate and the provisions relating to it (the position argued by the Administration if the mandate is unconstitutional): 4 to 1. The Administration wins, and the remaining Act becomes a rallying cry for progressives who always wanted the single-payor option (and this decision almost guarantees it).

Strike down the entire Act: 3 to 1. The most sensible solution of all.

My reasons for giving the best odds for striking the entire Act lay in the unprecedented suit brought by a coalition (frankly, a majority) of states against the federal government. I’m unaware of any action brought against the government by so many states, and this alone should prompt an unprecedented examination of the role of the federal governments’ power to pass legislation that intrudes on the right of the states to govern themselves. It also bears pointing out that the federal government is, technically,  a government of limited powers (the term “states rights” is not a pejorative for discrimination, despite what liberals have always said) with the remaining powers reserved exclusively to the states. With the individual mandate exceeding any rational understanding of the purpose and use, even in liberal hands, of the Commerce Clause, the demand by the states to be relieved of a burden they clearly feel is unconstitutional has to be carefully considered. The strange manner in which the Act was passed, the lack of ANY bipartisanship (or, of that matter, any input from anyone except the Progressive Caucus in the bills ultimate form) the distorted cost projections, not to mention the majority view of the Act across the nation by voters – all of these things must be taken into account by the Justices. Never mind that they are legal scholars who pass judgment on constitutional issues at the highest level; there is and always will be a political element to every controversial Supreme Court decision. Couple this with the lack of a severability clause, and my opinion is that the Supremes err, not on the side of caution, but on the side of good sense: telling Congress that this legislation is so flawed and so intrusive that it would be best to just start over.

And that is what I think the Supremes will do. If they don’t, they will be performing a major disservice to the country, by leaving in place a huge entitlement program that completely remakes the social contract between the government and its citizens (or should they now be called subjects?) without any rational means to pay for it (assuming that the Commerce Clause doesn’t allow the government to tell you what you must buy), while dooming a portion of the insurance industry to almost-certain extinction or, worse, outright nationalization or regulation as a monopolistic utility, with the government calling ALL the shots, while re-distributing massive tax increases to pay for it.

Whatever they decide – it’s going to be interesting. And don’t forget that, in the absence of any new federal legislation, states, including Colorado, will be in a position to craft their own solutions, which is how it should be in the first place. The fact is that Colorado state Republicans control the House by a slim one vote margin – and history shows that in the early 90’s, Colorado’s Governor Roy Romer (D) threatened to pass a single payor system unless “health reform” was enacted, which set us upon the very path we now walk.

Let the games begin! Quoting Rep. Michele Bachmann: ““The decision on Obamacare goes well beyond health care,” she wrote. It “will determine whether or not the court believes the government has a right to mandate that Americans buy a product or service, a direct impact on our freedom and liberty.”

 

 

 

Disability Insurance Coverage: Coming Up Short?

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Disability, whether short or long term, can happen to anyone at any time. While that’s bad enough, most people find out – usually at the most inopportune time – that their benefits aren’t nearly as generous as they believed. Not because of the terms of their group policy, however, but because of taxes!

Not too many years ago, most employers offered group long-term disability coverage, with employees purchasing short term coverage outside of the company environment, or going without. Nowadays, its more the norm for an employer to offer both short and long term coverage for all employees. Many employees think this is a great deal; the reality is that it may not be. When they become disabled, the IRS steps in and determines who paid the premium – and if the premium was paid with dollars from the employer, the employee must then report the disability benefits as wages, subject to taxes.

Depending on the different types of policies, the tax rules can vary as well. For instance, short term disability payments generated by employer premiums are subject to Social Security tax, in addition to taxation as ordinary income. Employers might be liable for this tax, as well.

Long-term disability premiums paid for by the employer will not incur Social Security taxes, due to the longer waiting period for benefits to start. However, they are subject to taxes as ordinary income by the federal government.

Most employees would prefer to receive their disability benefits on a tax-free basis, especially since it is common for expenses to go up, not down, in the event of a disability. By guaranteeing that premiums for disability coverage’s are paid with taxed dollars, employers’ preserve the benefits their employees expect.

The simplest way for an employer to do this is to set up a plan properly in the beginning, with good employee communication, and a clear understanding of the risks inherent in relying upon employer-paid disability plans. Often, employees will opt for an employee-paid plan, even if the coverage is mandatory, once the risks are explained. Employee salaries can be adjusted to compensate for the after-tax payment of disability coverage, for instance.

For executives, individual list-bill disability policies can be bonused for costs plus taxes, thereby giving the employer a tax deduction while preserving the tax-free advantage of individually-owned disability plans.

P O P (Premium Only Plan) for employees – money saver for you

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“P O P” isn’t fizzy, but is does save you money. What is it? P O P stands for “Premium Only Plan”, a slimmed down version of a Section 125 plan, casually called a “cafeteria” plan or Flexible Savings Account (FSA). And it is one of the most under-utilized employee benefits around – one that any employer who has a contributory welfare benefit plan sorely needs. This concept can be an incredible way to enhance your benefits package, while simultaneously boosting your profits.

Background: Why is this known as a Section 125 plan? Because the IRS Code Section 125 is the legal authority and basis for such a  welfare benefit plan – which must meet non-discriminatory requirements, as well as other reporting requirements, especially to your employees.

Why is this concept under-utilized? Because Section 125 FSAs can be a costly to set up and operate, most employers with less than 10 employees assume that they will never make it pay for itself. especially since owners are often exempted from them. But these plans include three “modules” – premium only, flexible spending, and dependent care accounts. Since much of the cost of administration (not to mention the headache of account losses due to utilization rules that favor the unscrupulous employee) are in the flexible spending accounts, the premium only module is cheap, easy to set up, and provides immediate tax relief to both employee and employer, without the headaches or administration costs of a full blown FSA. It is the simplest type of Section 125 plan and requires little or no maintenance once it’s been set up.

Premium only plans allow employees who contribute premium dollars. out of their wages, for employer-sponsored health and welfare benefit plans the ability to withhold a portion of their salary tax-free to pay for their premium contributions. Because these benefits are viewed as tax-free under the IRS Code, an employee’s taxable income is reduced. Employers win because pre-tax benefits aren’t subject to FICA, FUTA, or work comp premiums on these wages. Simply put, every dollar through a P O P reduces an employer’s payroll, reducing the employers’ costs, which immediately drop revenue to the bottom line.

Since your employees are already paying for these expenses out of pocket, a P O P gives them a great way to save money by lowering their taxes, which increases the percentage of their take home pay. With taxes likely to rise in the future, this is a ‘gimme’ for any small business employer.

Misleading the Supreme Court on Obamacare

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As I’ve written before, one of  the central defenses for the Affordable Care Act, as put forth by the Administration and echoed by all of it’s supporters, is the case for uncompensated care. Briefly stated, the Administration argued that uninsured patients drive up the costs of the delivery of health care sharply, and that cost is borne by all who are insured – hence, the primary reason for Obamacare.

I’ve also stated that this is, in fact, a canard – the total cost of uncompensated care is a scant fraction of the cost of Obamacare, now estimated by the Congressional Budget Office at somewhere around $1.76T for the first ten years (and this figure will rise, probably rise to more than $2T within the next year or so, unless the entire statute is declared unconstitutional or repealed). Spending the functional equivalent of $2T to fix a problem of less than $100B is not efficient – it’s one that only the federal government would develop, support, and champion.

The data that was used to make much of the argument around uncompensated care comes from a study done by FamiliesUSA, an ultra-left wing group that is on record as supporting a single-payor system. In that study, published in 2009, the cost of uncompensated care was estimated at $43 billion, the figure used by the Obamacare lawyers in it’s brief before the Supreme Court.

But as it turns out, there are major flaws in that study, and it should come as no surprise to anyone who follows how the left uses suspect statistics and shady reasoning to advance an agenda, the flaws inflate the costs to arrive at a foregone conclusion. David Hogberg, writing for Investors Business Daily Online, details the specifics here.

Researchers, led by Jack Hadley at the Urban Institute, examined uncompensated care and arrived at a different conclusion in the Kaiser Commission on Medicaid and the Uninsured: that uncompensated care was “most likely about $8 billion. Given that total private health insurance expenditures in 2008 are estimated to be $829.9 billion (from NHEA projections), the amount potentially associated with cost-shifting represents less than one percent of private health insurance costs.” Documented here.

If the feds were really serious about “uncompensated care”, they’d look no further than their own under-compensated reimbursement scheme for Medicare, which dictates what Washington pays for its care under Medicare and other social welfare medical programs – which is in fact a far greater cost-shift to the private market than the care that is delivered to the uninsured. The accounting gimmick used – price fixing by Medicare through the HHS – transfers billions in costs directly to every American with a health insurance policy, and dwarfs any amount spent for uncompensated care that the Administration is touting as its primary reason for Obamacare.

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  • Published: Mar 28th, 2012
  • Category: Uncategorized
  • Comments: Comments Off on Ignoring the 800 pound gorilla AKA Medicare/Medicaid

Ignoring the 800 pound gorilla AKA Medicare/Medicaid

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Today, as the Supreme Court continues to hear arguments, and asks pointed questions about the legality of Obamacare, it is interesting to note a salient fact that the left conveniently ignores, and in fact pivots away from, and much of the right, unfortunately, doesn’t seem to want to address, probably for political reasons: federal government spending on health care is the prime reason we have a health care crisis in this country.

And on this point, heads will explode: Medicare is a program that is best left to the private market to deliver. And Medicaid is intended for the financially indigent, and should be strengthened, not by forcing billions in expanded “unfunded mandates” down the states’ throats, which is, in my opinion, one of the main driving forces behind the lawsuit brought by 26 states against the federal government over Obamacare. It should be strengthened via block grants from the federal government to the states, so that states may craft their own solutions for the truly poor and financially indigent, rather than the micro-managed and politically inflamed rules from Washington. Note the use of the term “truly poor”. And it should not be a vehicle for the feds to use to jam millions of otherwise insured folks into Medicaid, rather than stay with private insurance, precisely what Obamacare will do. Welcome to the new “dependency class”.

I’ve always been struck by the Democrat’s premise that Medicare is cast in stone and real change is inconceivable. It’s a testament to their allies in the media just how brilliantly they’ve managed to frame the debate strictly within the narrow confines of the status quo, secretly knowing that the status quo is a) in large part responsible for the undoing of the health insurance market (what little of it truly exists, anyway) and b) absolutely essential to restrain, restrict and ultimately collapse any solid attempt at true Medicare reform, which must include the federal government’s dissolution of Medicare as it now stands.

Now, the Obamacare premise goes like this: “that 40 million Americans are distorting the health-care market by shifting costs of free emergency-room care to taxpayers and insurance rate-payers”, as stated in todays’ Wall Street Journal, “Health Law Faces Constitutional Test”.

(An aside: the real fallacy of this idea is this: it doesn’t cost anywhere near $1T, assuming you accept the original CBO-scoring of the costs of Obamacare [which I don’t, and no thinking person not under the influence of a lobbyist should] to provide health care, even at the inflated costs one typically finds in a hospital ER, to the uninsured in America, even if you want to accept the 40 million figure, which any number of studies have pointedly derided as wrong, and artificially inflated.)

Let me chart the path of the reasoning: the federal government is blaming people without health insurance for the catastrophic rise in the cost of health insurance premiums, and advances the notion that the “market” is ‘broken” and they must ride to the rescue.

Except that the market is “broken” because of a lack of market-friendly ideas and execution, including costly mandates, lack of tort reform, and – wait for it, here comes the gorilla – cost-shifting and price fixing by the federal government in Medicare reimbursement and, to a lesser extent, the unfunded mandates driven by Medicaid onto state budgets. The people-in-charge, the one’s riding to the rescue, and in fact the reason we have a problem in the first place.

The arguments in the Supreme Court over Obamacare are admittedly not on this little-known fact, and they shouldn’t be – the constitutional challenge to the law will suffice, for now, and Medicare’s role in our health care system isn’t a legal issue, per se, but rather a political one. But the premise behind Obamacare should be open to vigorous, even rancorous, debate, even if that debate is revolutionary: Medicare is ill-served in the federal government’s hands, and should be abolished and returned to the private market, albeit with adequate safeguards and regulatory framework to allow it to work as a free-market vehicle which delivers health care to the elderly without rationing or capitation. Assuming, as I do, that the nation’s seniors need, even require, a strong health care delivery system, Obamacare, with it’s IPAB function serving as a rationing board over a capitated health care delivery system, is not the answer, even if it’s deemed constitutional. It’s intent, really, is  to accelerate the drive to a single, Medicare-style system for all – the dreaded government option – only it won’t be an option, it will be all you have.

Obamacare is a dismal failure, not only because of its inherent unconstitutionality, as anyone who understands the limited power of  the federal government must see, but because it’s a canard to believe that the feds are acting in good faith to “fix” what they have broken: a free-market derived health care delivery system that rewards efficiency, is innovative, and more importantly doesn’t come between a doctor and his patient. Broadly, Medicare pays only about 85% of the cost of delivery of health care and, given that the feds buy almost half of all health care delivered in the U.S. yearly, this is a huge cost-shift to the private sector, a form of taxation which goes unanswered and ignored by those on the left, and makes the health care costs associated with the uninsured pale in comparison.

Of course, as everyone knows, whenever Medicare is discussed in the public realm, Democrats portray Republicans as “pushing Granny off the cliff”, while secretly watching their own minions do exactly that – while Republicans, powerless to stop them, get the blame. After all, it was Democrats who crafted the $500 million Medicare cut that brought the costs of Obamacare “below” $1T. Only it didn’t.

No discussion of how to fix the health care system in this country can exclude the federal government’s price-fixing in health care pricing, or the effect of this cost-shift, labeled as the “hydraulics of health care”, on the private sector. To do otherwise is equivalent to re-arranging the deck chairs on the Titanic. And Obamacare certainly isn’t the vehicle to do that, as it completes the disaster Democrats have been secretly hoping for. The Supreme Court challenge to Obamacare, while absolutely necessary, is a sideshow to what the real problem is. And continued chaos favors the Democrats anyway: all the more reason why Republicans need control of the House, the Senate AND the White House.

Lastly, Paul Ryans’ proposals on Medicare are interesting and informative, but I d0n’t think they go far enough – either in terms of building a true market-based health care system, or in terms of the impact on our looming Greek-style default over unfunded liabilities. More on this later.

 

The Argument Against Obamcare

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The Supreme Court of the United States, beginning this week, will hear arguments in the case against Obamacare, brought by 26 states against the federal government. Their legal ruling, due sometime this summer, will determine, in the words of David B. Rivkin and Lee A. Casey, writing in an op-ed in the pages of The Wall Street Journal, “the Constitution’s structural guarantees of individual liberty, which limit government power and ensure political accountability by dividing that power between federal and state authorities”.

In their article, published today, attorney’s Rivkin and Casey may be giving us a sneak peek at how Paul Clement, the attorney arguing against Obamacare, will craft his arguments to the Court. Mr. Clement is the former United States solicitor general charged with arguing that Obamacare “represents an unprecedented overreach into the personal lives of Americans”, according to Jess Bravin, writing in the WSJ (“Courtly Battle in Health Case”). Mr. Clement is lead counsel in the case, brought by 26 states to overturn the Affordable Care Act, notoriously known as Obamacare.

Given that there are any number of ways, on any number of separate issues, that the Supremes could rule, I will refrain from making any predictions. It is interesting to note, though, that health insurers, who have been reluctantly complicit in the birth of Obamacare, the major negotiating point in their favor being the individual mandate, presented the court with a brief that was remarkably neutral, suggesting that, if the individual mandate is overturned, then the entire bill must be overturned. This is nothing more than window dressing: the insurers know that their survival, at least at the time, required a healthy dose of government-imposed regulation on their business model, turning them into crony-capitalist utilities in exchange for the chance to continue profiting from a system that many Democrat legislators have decried as “evil” and have vowed to destroy. What this means is that insurers signed on to Obamacare as soon as the government promised them that everyone must be on coverage, essentially mandating a compulsory market (with compulsory profit, too). As it turns out, given the kind of remarks we’ve heard from former Administration officials and the Secretary of HHS, their flight to regulatory safety was ill-advised and will result in their ultimate demise. Perhaps they should have stood their ground and made a fight for it, rather than make a pact with the devil.

 

 

 

HHS update on women’s health care

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The Department of Health and Human Services (HHS) has just announced that any and all FDA approved “contraceptive methods, sterilization procedures, and patient education and counseling for women with reproductive capacity,” will be provided under ObamaCare “without cost” in college/student-based health plans, and for women of college age but not attending school.

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