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Why ACA is Making Us Less Healthy   Leave a comment

I believe sincerely that everyone should have the right to do whatever he wants, provided it doesn’t harm other people or their property. I’m not saying I like it or think it is good for you, but I stand by your right to smoke like a chimney (so long as you don’t do it in my airspace), drink like a fish (but not if I share a household with you), or eat like a hippo (so long as I don’t pay your grocery bill).

Image result for medical careSadly, your lifestyle choices became my problem when the Affordable Care Act was passed. Your poor decisions now cost me money, which is a form of property. Hey, you, with the 50-inch waistline … that’s my kid’s college education in medical expenses that you expect me to pay, so yeah, I have a problem with the Affordable Care Act.

Back in 2009 when the Democratic-dominated government started touting the Affordable Care Act, they assured that the expansion of medical insurance coverage to all Americans would come at no cost to any citizen. A lot of us (about 60% of the electorate) were skeptical and that time and anyone paying even cursory attention to their medical insurance premiums since the go-live date for Obamacare knows our skepticism was well-founded. Medical insurance premiums have dramatically increased for most Americans not in the subsidized classes.

 

It might have seemed like a noble idea – that everyone should be required to have medical insurance just in case, but the Affordable Care Act also required medical insurance providers to cover pre-existing medical conditions.

That means that health-conscious people like me must subsidize medical care costs for people who make poor health choices. These poor health choices lead to diabetes, coronary artery disease, cancer, obesity, COPD, etc., all long-term chronic diseases that require expensive treatment. Coverage of pre-existing medical conditions greatly increased the cost that medical insurance providers were forced to pay out for treatment. This was supposed to be offset by young, healthy adults joining the health insurance pool, but younger, healthier people take one look at the expensive premiums and choose to pay the mandatory fine, because it is less than the premiums. This increases medical insurance premiums even more.

As Rick tried to highlight, individuals are less likely to make wise health choices if it is perceived that they will not have to bear the financial consequences of those choices because insurance paid by others covers the majority of the costs. Medical insurance holders are able to seek out healthcare services without the cost of those services being a major deterrent, which encourages people to go to the hospital and doctor for very minor ailments. After all, you want to get value for what you are paying for. Then doctors are motivated to extract the maximum amount of payment … prescribing expensive and sometimes unnecessary treatments and medications because insurance is covering the cost.

Rick points out that doctors and hospitals are often at the mercy of insurance companies and what gets approved for coverage, so they use a scatter-gun approach toward billing. Patients often demand more expensive treatment because of an impression that it’s better and because cost isn’t an obstacle. This completely undermines doctor-patient relationships where the goal is to choose the best and most sensible treatment options based on a cost-benefit analysis.

All of this has increased the cost of medical insurance. While providing medical coverage to everyone seems very humanitarian, it forces health-conscious people to subsidize the medical care costs of people who make poor choices and is causing employers to drop insurance coverage as it becomes unaffordable. If current trends hold, and there’s no reason to believe they won’t, the Affordable Care Act is going to bankrupt the middle class.

We’re not joking when we call it the UN-Affordable Care Act.

In a perfect world where liberty was still an ideal we upheld, everyone would be able to live their life however they want and be accountable for the personal and financial impact of their choices. The fact that I love bacon even though my family has a history of stomach and bowel cancer would not matter in the least to you because it wouldn’t affect you. Unfortunately, with the ACA, we’re all in this mess together, which means we all affect each other. It becomes absolutely imperative that we all strive to be the healthiest people we can be so as to reduce the economic burden on our neighbors.

Please don’t think I’m down on obese people to the exclusion of smokers or alcoholics or whatever. I’m using obesity as my demonstration condition because of the costs associated with it and it’s lack of social stigmaticism. My Baptist friends who don’t drink or smoke will smugly sit on their ample rears complaining that I’m wrong. “Being overweight is not unhealthy and has no impact on the cost of healthcare,” they will say.

Sorry, folks. You’re wrong. Research demonstrates that obesity and even being moderately overweight are the second leading causes of preventable death, right behind tobacco usage.

Here are some alarming economic implications for obesity:

  • Obese adults spend 42% more on direct medical care costs than adults who are a healthy weight.
  • Per capita medical care costs for severely or morbidly obese adults (BMI >40) are 81% higher than for healthy weight adults. In 2000, around $11 billion was spent on medical expenditures for morbidly obese U.S. adults.
  • Moderately obese (BMI between 30 and 35) individuals are more than twice as likely as healthy weight individuals to be prescribed prescription pharmaceuticals to manage medical conditions.

Did you know that 68.8% of the US citizens are considered overweight and obese? That represents a dramatic impact of overweight and obese individuals upon our medical care system.

Obesity is just one of many other preventable medical conditions that contribute to the cost of medical insurance, but obesity and being overweight are the most widespread.

We would all be personally well-serviced by quitting smoking, drinking less alcohol, exercising more, making better food choices, taking supplements wisely, and getting adequate sleep. There’s the direct positive impact on yourself, but better health habits would have a direct positive impact on the economy, and especially those of us who are forced to bear the cost of our nation’s medical care costs.

Unfortunately, you won’t see a financial benefit to making these changes. Unlike car insurance, where you receive lower premiums if you are a good driver who doesn’t have a lot of accidents, getting healthy doesn’t work the same way. Unlike life insurance, where you receive lower premiums if you’re a healthy individual, the ACA assures you will be paying for others who don’t make the same wise choices.

The result?

A less health population, which is indicated by slipping mortality rates. Although it sounds like such a great idea to provide medical insurance to everyone so they will be “healthier”, the reality is that the United States population has become less healthy as more of us have become covered by medical insurance.

For a Reasonable ACA Debate   Leave a comment

Back in January, Chuck Schumer kicked off the fight to save Obamacare with the slick slogan “Make America Sick Again.” Basically, the idea is to frame the dialogue by pushing hte narrative that Republicans want to repeal Obamacare and deprive millions of people of health insurance without a replacement plan. If Republicans can’t disprove that dark fantasy, they will deserve a midterm drubbing.

Image result for image of obamacare failureLet’s be clear – Obamacare is horrible. The unAffordable Care Act has increased health-care costs for many people. You don’t get to keep your doctor or your insurance plan. That’s important to say because it is the overwhelming reality for many Americans.

But recognize that Obamacare’s misguided supporters can trot out individuals who have benefited from the provisions of the Affordable Care Act and these two points against Obamacare does nothing to counter the now-growing narrative that 20 million Americans will lose their insurance if Congress repeals Obamacare.

I totally hate Obamacare, especially since Brad has spent the last three months just trying to get in to see a doctor for a shoulder injury and still hasn’t received any actual treatment, though he now has a diagnosis – quadralateral space syndrom. A muscle was damaged (trying to keep up with the teenager at bouldering) and the resulting scar tissue is pressing on a nerve. By the way, without an MRI machine or any real training in medical care beyond a few basic first aid classes, I guessed this problem. I sent him to the doctor to FIX the problem, but so far, crickets. Except we are now paying medical bills. Was the point of Obamacare to make health care less affordable? It’s working.

Back to the topic. Opponents of Obamacare must acknowledge, frankly and sincerely, that the Affordable Care Act has helped some Americans and assure the pubic that the replacement plan will also protect the sick and vulnerable. Take the anxiety away. Then stress that while the law created some winners, it also created many more losers, and that Obamacare supporters are blindly ignoring this reality.

Next, the repeal and replace faction must counter the false impression that the Affordable Care Act created 20 million winners. It’s important to understand that 20 million figure was an estimate from the Obama administration that comes from a government figure rather than actual enrollment data.

Here, proponents of repeal and replace should first remind Americans that the 20 million figure is merely an estimate from the Obama administration. Actual enrollment data, compiled by the Heritage Foundation, tells a different story. About 14 million people gained coverage from the end of 2013 to the end of 2015. Of that 14 million, 11.8 million gained their insurance through Medicaid expansion (otherwise known as welfare) and 2.2 million through private coverage. Other problems with the 20 million figure were outlined by the Heritage Foundation, laid out at length for Forbes. These too should be highlighted.

But adjusting the 20 million figure downward to reflect a more accurate count will still result in a fairly large number of Americans obtaining insurance under the Affordable Care Act. So how to answer that? Explain that health insurance does not equal health care.

Brad and I have good health insurance. My employer is the largest group pool in Alaska. The union I am reluctantly a member of has been fighting being labeled a “cadillac policy.” That doesn’t do Brad any good because despite having medical insurance, he can’t get medical care.

We have to remind the public that while Obamacare helps some individuals, it harms many more. That’s my major argument with Obamacare boosters. They seem incapable of acknowledging this truth. They portray the Affordable Care Act as merely having some minor glitches which, if Republicans only helped, could be addressed. “Just tweak it,” they say.

Nonsense. It’s not a glitch that the unAffordable Care Act created losers. The law was intended to do that. Obamacare sought to cover older and sicker Americans by providing them government subsidies, which makes the taxpayers the losers and ripping off younger and healthier Americans. Because young and healthy Americans stayed away from the exchanges, insurance companies were forced to increase deductibles and co-pays and limit doctor and hospital networks, making the healthy individuals who did buy insurance even bigger losers.

The more indirect losers—such as workers unable to find full-time employment because of the Obamacare mandates, as well as doctors in private practice forced to sell out to hospitals—are more difficult to quantify, but they are just as real.

The Left hammers the need to protect those with preexisting conditions, but then acts as if Obamacare is the only way to do this. The public needs to learn that individuals with preexisting conditions who were unable to obtain insurance before Obamacare were only about 14 percent of the population. Obamacare did not adequately address the issue. About 10 percent of individuals with pre-existing conditions are still uninsured, and Obamacare doesn’t assure medical care for the seriously or chronically ill. There are a lot of people now paying so much for health insurance that they can’t afford actual medical care.

While those with uninsurable preexisting conditions represent just a small portion of our society, a replacement plan must address their needs, but what many Americans don’t know is that the Health Insurance Portability and Accountability Act of 1996 already provides some protection for those with pre-existing conditions who lose their insurance.

While the public thinks of HIPAA as a law protecting the confidentiality of medical records, prior to Obamacare, HIPAA prohibited both group insurance plans and plans obtained in the individual market from excluding coverage of pre-existing conditions, under specific circumstances.

HIPAA’s protections had some gaps, but an Obamacare replacement plan can address those limitations separately, and without upending the entire insurance market, perhaps by providing grants to states to fund high-risk pools. Alaska already had such a pool that offered coverage prior to Obamacare. Like many states that offered these plans, it was discontinued as a result of Obamacare, but the Alaska Legislature is already seeking to reinstate the state-sponsored pool as high-risk insurers flee the market.

Other than adult children with chronic health conditions, the real beneficiaries of Obamacare’s 26-year-old coverage mandate are the parents. I cover both of our adult children because it gives us peace of mind that if something happens to my risk-takers, they will have coverage. But that benefit comes at the cost of higher premiums for all families with children. Require insurance companies to provide one quote covering children up to 26 and one that doesn’t. The true cost will no longer be masked, and parents can decide then if the cost is worth it. And I’ll negotiate with my children as to whether they should reimburse me for this expense as we do with care insurance.

Finally, Congress should add provisions for tax-free contributions to health savings accounts for the payment of medical expenses and for the purchases of medical insurance.

Then stop. Americans don’t want another comprehensive health care overhaul. Let’s give it time to see if the reform works to bring down costs and improve medical care again.

Secretary Tom Price   Leave a comment

I am not a Trump supporter, but he’s done some really good things as president, namely putting reformers into some key cabinet positions … though he is screwing up with his replacement for Labor Secretary.

Tom Price, a Georga orthopedic surgeon and Congressman, actually managed to survive the confirmation process to become Health and Human Services secretary. It signals that President Trump is serious about undertaking major efforts to repeal and replace Obamacare, along with other entitlement reforms. But we also need to look at Price’s Empowering Patients First Act to see whether Price really understands what are we doing. While I’m at it, I want to look at the other Republican offerings for repealing/replacing Obamacare.

We don’t have cable TV, so lately I’ve been listening to a variety of cable news programs while I work out at the gym. The other day was CNN day. After three different pundits said the “Republicans have no serious replacement for the ACA” I decided it was time to get serious about looking at the proposed alternatives. I’m running my analysis by my cousin who is a world-class research doctor who has opposed Obamacare since it was Hillarycare. Because opposing Obamacare is career-risky for doctors who aren’t private practitioners, he’s allowing me to make his observations under my blog, which protects his career a bit.

Price’s nomination also illustrates why those efforts face a difficult road to passage and enactment.

As news of the Price appointment leaked out late on Monday evening, reporters spent much of their time breathlessly analyzing Dr. Price’s health-care legislation—H.R. 2300, the Empowering Patients First Act—for clues as to what it might mean for the replace effort. However, Price’s bill may be more noteworthy for what it does not include than what it does:

  • There is no premium support plan for Medicare reform;
  • It doesn’t reform Medicaid—whether by block grants or per capita caps; and
  • It doesn’t offer any spending reductions to fund the refundable portion of tax credits Price proposes as an alternative to Obamacare’s insurance subsidies.

In other words, despite releasing a 243-page health-care bill, Price, along with his Republican colleagues in Congress, hasn’t translated into legislative specifics his policy positions on many, if not most, of the important health-care issues the Republican Congress will face next year. For instance:

  • How should a premium support system under Medicare be structured? Should payments to seniors be based upon the average plan bid, the lowest plan bid, or another formula? How quickly should those payments rise in future years?
  • How quickly should Medicaid block grants, or per capita caps, rise in future years?
  • Should an Obamacare repeal-and-replace plan rely on pre-Obamacare levels of taxes and spending, or should it redirect existing Obamacare spending in a different direction?

Price’s legislation does not shed much light on these and other critically important questions that Congress will need to undertake next year.

Budget Gimmicks and Magic Asterisks

As chairman of the House Budget Committee, Price earlier this year released a budget blueprint that did include some ideas for entitlement reform. However, that document included only about four pages of proposals on Medicare, Medicaid, and Obamacare—some of which focused more on making the case against Obamacare than outlining the specifics of a Republican alternative. Even though the Republican budget document said it repeals Obamacare, that’s not exactly true. The budget, like those issued by House Speaker Paul Ryan when he was Budget Committee chairman, assumes Obamacare’s higher levels of taxes and lower levels of Medicare spending to achieve balance within the decade. Either the budget doesn’t repeal all of Obamacare, or it assumes that Congress, after repealing Obamacare, would go back and re-enact equivalent levels of tax increases and Medicare spending reductions.

 Price’s Empowering Patients First Act, which proposes a new refundable tax credit, includes only one idea to pay for that credit—a cap on the tax deductibility of employer-sponsored health coverage. Although administered through the tax code, refundable credits are considered government spending. Washington basically writes “refund” checks to individuals and families with no income tax liability.

Basically, the chairman of the House Budget Committee proposed raising taxes (the cap on deducting employer-sponsored health coverage) to pay for new spending (the refundable portion of the tax credit/insurance subsidy).

I don’t think Price is an evil guy who is pretending to reform federal health insurance policy. He’s trying to avoid many of the political minefields omnipresent in health policy. That deliberate soft-shoe allowed his Senate confirmation to go through.

 

Price will now have enormous power over the regulatory process, but we have to recognize that Congress has a truly heavy lift to repeal Obamacare in reality. Yes, it is vitally important to get rid of Obamacare — not just economically, because of the future deficits or taxes it will require, but also for liberty, because this represents the chains of economic slavery that will limit our individual choices going forward.

 

Posted March 2, 2017 by aurorawatcherak in economics

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