The Hubbub

Listing all Hubbub postings by date.

Health Care: Don’t Repeat the Mistakes of the States
Grace-Marie Turner
Richmond Times-Dispatch, 04/25/10
Article available here and here.

House Speaker Nancy Pelosi famously said before Congress voted on her massive health overhaul legislation that "we have to pass the bill so that you can find out what is in it."

Now that the bill has been signed into law, the American people are finding a lot not to like -- from a new federal requirement that every citizen must have expensive government-defined health insurance to a mandate that states dramatically expand access to their Medicaid programs.

Yet missing in the 2,700 pages of legislation is a serious effort to contain health costs -- the No. 1 priority for health reform. Unless costs are addressed, efforts to expand access to health care will fail.

The states can tell Pelosi how hard that task will be and the high price of bad policy decisions.

For starters, consider state-run health plans, akin to the "public option" that so dominated the health reform debate. While a federal public option didn't make it into the final bill, states are required to set up health insurance purchasing exchanges that can take many forms.

California lawmakers are considering a bill to institute a single-payer health system -- the ultimate public option. But the experiences of Tennessee and Maine illustrate why state-level public options can backfire.

In 1994, Tennessee launched "TennCare," a program that expanded Medicaid eligibility to uninsured citizens who weren't able to get health insurance through their employers or existing government programs and to citizens who were uninsurable because of pre-existing conditions.

The state hoped to afford this vast expansion of Medicaid through the use of managed care. But costs quickly spiraled out of control.

Between 1994 and 2004, Medicaid's per-capita cost increased by 71 percent in the U.S. overall, but TennCare's costs rose by a whopping 146 percent! Indeed, by the end of TennCare's very first year, the state was forced to close enrollment to uninsured adults. Only the uninsurable could enroll.

Despite TennCare's mammoth expenditures, health outcomes did not improve, according to an analysis by the Heritage Foundation. Even Phil Bredesen, Tennessee's Democratic governor, has called the program "a disaster."

Tennessee is not alone. Maine's experiment with a public option also has been fraught with problems.

Dubbed DirigoChoice, the program was developed in 2005 with the goal of providing coverage for all 128,000 uninsured Mainers by 2009. Despite spending $155 million on the program, only 8,000 state residents were enrolled as of this January, and the state's uninsured rate has barely changed.

In addition, DirigoChoice failed to control health costs. In the program's first four years, premiums increased 74 percent -- almost double initial estimates.

Many states have focused on restricting access to prescription drugs to cut costs -- with markedly little success. One policy that several states have tried in their Medicaid programs is "step therapy," whereby patients must try less-costly prescription drugs before their doctors can prescribe more expensive treatments -- even if the doctors don't believe the cheaper drugs will work. Not only does that mean government bureaucrats are playing doctor and overriding a doctor's medical decisions, the policy often ends up costing the state more!

For example, a 2008 study of Georgia's Medicaid program showed that step therapy actually increased costs for patients requiring antipsychotic medication. Although step therapy saved Georgia's Medicaid program roughly $20 per person each month in drug spending, the state spent $31.59 more per member each month on outpatient services. That was hardly a money-saver.

Georgia is not alone. Washington State has implemented a program to control spending on prescription drugs in its Medicaid program by using "therapeutic substitution" designed to automatically provide patients with less expensive drugs in the same therapeutic class.

But such substitutions can actually increase overall health costs. A 1996 study in the American Journal of Managed Care concluded that substitution of cheaper, older drugs increased the use of other health care resources and resulted in longer illnesses, more trips to the hospital and emergency rooms, and increased overall spending.

Because Congress failed to address rising costs in any meaningful way in its health overhaul law, the task of controlling spending, especially in the expanded Medicaid program, will continue to fall to the states. As they contemplate their options, officials would be wise to study these health policy blunders as cautionary tales.

Shortsighted programs can backfire with bigger costs in the long run, especially when bureaucrats try to play doctor. 

Nine Broken ObamaCare Promises From Rick Foster's Report
Grace-Marie Turner
National Review Online: Critical Condition, 04/23/10
Article available here.

Not one of its major programs has gotten started, and already the wheels are starting to come off of Obamacare. The administration’s own actuary reported on Thursday that millions of people could lose their health insurance, that health-care costs will rise faster than they would have if the law hadn’t passed, and that the overhaul will mean that people will have a harder and harder time finding physicians to see them.

The White House is trying to spin the new report from Medicare’s chief actuary Richard Foster as only half bad because it concludes that, while costs will increase, only 23 million people will remain uninsured (instead of 24 million previously estimated).

But looking at the details of Foster’s report shows the many, many danger signs for Obamacare and how many of its promises will be broken:

1. People losing coverage: About 14 million people will lose their employer coverage by 2019, as smaller employers terminate their plans and workers who currently have employer coverage enroll in Medicaid. Half of all seniors on Medicare Advantage could lose their coverage and the extra benefits the plans offer.

2. Huge fines for companies: Businesses will pay $87 billion in penalties in the first five years after the fines trigger in 2014, partly because they can’t afford to offer expensive, government-mandated coverage and partly because some of their employees will apply for taxpayer-subsidized insurance.

3. Higher costs for consumers: Tens of billions of dollars in new fees and excise taxes will be “passed through to health consumers in the form of higher drug and devices prices and higher premiums,” according to Foster. A separate report shows small businesses will be hit hardest.

4. A program created to fail: The new “CLASS Act” long-term-care insurance program will face “a significant risk of failure,” according to Foster. Indeed, he finds, “there is a very serious risk that the problem of adverse selection will make the CLASS program unsustainable.”

5. Spending increases: Under the new law, national health spending will increase by $311 billion over the coming decade. And instead of bending the federal spending curve down, it will move it upward “by a net total of $251 billion” over the next decade.

6. “Free-riders”: An estimated 23 million people will remain uninsured in 2019, roughly 5 million of whom would be undocumented aliens; the remainder would be the 18 million who decline to get coverage and who will pay the penalty.

7. Spending reductions are fiction: Estimated reductions in the growth rate of health spending “may not be fully achievable” because “Medicare productivity adjustments could become unsustainable even within the next ten years, and over time the reductions in the scope of employer-sponsored health insurance could also become an issue.”

8. You can’t keep your doctor: Fifteen percent of all hospitals, nursing homes, and other providers treating Medicare patients could be operating at a loss by 2019, which will “possibly jeopardize access to care for beneficiaries.” Doctors are threatening to drop out of Medicare because cuts in Medicare reimbursement rates mean they can’t even cover their costs.

9. Coverage but no care: A significant portion of those newly eligible for Medicaid will have trouble finding physicians who will see them, and the increased demand for Medicaid services could be difficult to meet.

This is an objective report by administration actuaries that shows this sweeping legislation has serious, serious problems.

And there’s more: Joint Economic Committee Republicans explain in a new report the impact of a rarely mentioned $14.3 billion per year tax on health insurance, effective in 2014. They find this tax will be mostly passed through to consumers in the form of higher premiums for private coverage. It will cost the typical family of four with job-based coverage an additional $1,000 a year in higher premiums and will fall largely, and inequitably, on small businesses and their employees.

States are fighting back. The Florida legislature voted Thursday to place a state constitutional amendment on the ballot that would ban any laws that compel someone to “participate in any health care system.” It requires a 60 percent vote to succeed. The legislation is modeled after the American Legislative Exchange Council’s Freedom of Choice in Health Care Act, which has been introduced or announced in 42 states.

Obamacare is far from settled policy. There are two more federal elections before the major provisions of the law take effect in 2014. Doctors are fighting mad, patients are scared, and companies are starting to realize that the promises of health-care-reform legislation could turn into a huge and costly burden.  

The studies released today only fuel the fires to repeal and replace the health-overhaul law.

More Danger Signs
Grace-Marie Turner
Health Policy Matters, 04/23/10
Article available here.

The White House is trying to spin the new report from Medicare chief actuary Rick Foster as only half bad because it concludes that, while the health overhaul law will cost more, it will cover more -- 23 million people will remain uninsured (instead of 24 million previously estimated).

But looking at the details of Foster's report shows many, many danger signs of ObamaCare and how many of its promises will be broken:

	
People will lose coverage: About 14 million people will lose their employer coverage by 2019 as smaller employers terminate their plans and as workers who currently have employer coverage enroll in Medicaid.
	
Huge fines for companies: Businesses will pay $87 billion in penalties in the first five years after the fines trigger in 2014, partly because they can't afford to offer expensive, government-mandated coverage and partly because some of their employees apply for taxpayer-subsidized insurance.
	
Higher costs for consumers: Tens of billions of dollars in new fees and excise taxes will "generally be passed through to health consumers in the form of higher drug and devices prices and higher premiums."
	
A program that fails before it starts: The new CLASS Act long-term care insurance program will face "a significant risk of failure," resulting in "a very serious risk that the problem of adverse selection will make the CLASS program unsustainable."
	
Spending increases: The Patient Protection and Affordable Care Act (PPACA) will increase national health spending by $311 billion from 2010 through 2019. And instead of bending the federal spending curve down, it will move it upward "by a net total of $251 billion" over the next decade.
	
"Free-riders:" An estimated 23 million people will remain uninsured in 2019, roughly five million of whom would be undocumented aliens, and the remainder would be 18 million who choose not to be covered and pay the penalty.
	
Spending reductions are fiction: Estimated reductions in the growth rate of health spending "may not be fully achievable" because "Medicare productivity adjustments could become unsustainable even within the next ten years, and over time the reductions in the scope of employer-sponsored health insurance could also become an issue."
	
You can't keep your doctor: Fifteen percent of all hospitals, nursing homes, and other providers treating Medicare patients could be operating at a loss by 2019 and "possibly jeopardize access to care for beneficiaries."
	
Coverage but no care: A significant portion of those newly eligible for Medicaid will have trouble finding physicians who will see them, and the increased demand for Medicaid services could be difficult to meet.

This is an objective report by administration actuaries that shows this sweeping legislation has serious, serious problems.
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No new taxes? Among the new taxes imposed by the law is a rarely mentioned, $14.3 billion a year tax on health insurance, effective in 2014. As Joint Economic Committee Republicans explain in a new report, the tax:

	
Will be mostly passed through to consumers in the form of higher premiums for private coverage.
	
Could cost the typical family of four with job-based coverage an additional $1,000 a year in higher premiums.
	
Will fall largely, and inequitably, on small businesses and their employees.

 A Congressional Budget Office analysis released Thursday said the average cost of the penalty will be slightly more than $1,000 in 2016 and that the government will collect about $4 billion a year in fines from 2017 through 2019 after the fines are fully in force.
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It's not that easy: The law stipulates that all insurance companies must allow "children" to remain on their parent's health plan until age 26 if the "child" is not eligible to enroll in an employer-sponsored health plan.

But imagine you are a major employer. How can you tell? Do you do an investigation of each of your tens of thousands of employees to find out if their kids have jobs -- and jobs that provide health insurance? This could be a significant cost to employers and one of the many, many shoes yet to drop on this centipede of a law.
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Let's get this right: Congress even failed to get health benefits right for itself, as we reported last week. The Office of Personnel Management put out a one-paragraph notice this week saying it was basically going to ignore the 13-page single-spaced report by the Congressional Research Service that questioned whether federal workers can still receive health benefits after the passage of ObamaCare. The OPM says it will continue to provide the coverage. So Congress may be the first to violate the impossible provisions of ObamaCare.

Now, The Daily Caller reports that the federal government may wind up imposing fines on itself as well. When the "535 lawmakers and the 15,000 or so people who work for them flood newly-created health insurance exchange markets, it's likely that some will apply for government subsidies, which in turn will trigger massive fines. Under the law, employers are subject to fines of up to $3,000 per person for each employee who receives government health care subsidies." This could mean fines for Congress alone of $50 million a year.

Major employers face the same threat, posing a huge risk for the future of employer-based health insurance. But they don't have a blank check to get taxpayers to pay the fine, like Congress does.
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Recommended reading: Ramesh Ponnuru of National Review has written an excellent and detailed description of the next battles in the campaign to repeal and replace ObamaCare. It's an insider's guide to political and policy strategies moving forward.

And here's a memo that will send chills up your spine. It is a detailed timeline of the trigger points in the health overhaul law, released by Rep. Joe Barton, ranking member of the House Energy and Commerce Committee. The qualifier at the beginning of the long, long list is an indictment in itself, saying that "the lack of clarity, internal inconsistencies, and ambiguity in the text" of the health overhaul law make figuring it out almost impossible, even for people whose job it is to write legislation!

It's frightening to read this 53-page, single-spaced description of hundreds and hundreds of specific mandates in the bill, almost any one of which represent a major change to our health sector. Read it and see for yourself.
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States in the driver's seat: The health overhaul law treats states like servants to the federal government, and they are fighting back.

For example, they are being told they must expand eligibility to Medicaid to all citizens with incomes up to 133% of poverty. They are being told they must set up exchanges that will be a mechanism for federal control over private health insurance. And the government is going to grab back revenue from rebates they demand from prescription drug companies.

This really is a federal takeover of health care. The law says that, beginning this year, HHS Secretary Sebelius has new authority to review any "unreasonable" increases in premiums for health insurance. Health insurance issuers are required to submit to HHS and to the state a justification for an unreasonable premium increase prior to implementing premium increases, and they must post this information on their websites.

As I testified before the Senate HELP committee this week, this requirement sets up a potentially dangerous battle between states and the federal government over how to hold down premiums -- which are sure to increase because of ObamaCare -- while states fulfill their duties to make sure insurance companies have the money to pay claims.

But the states have power to fight back. 

	
They can refuse to set up the new high risk pools, especially the 34 states that already have their own. Medicare actuaries say Washington quickly will run out of money to fund these new pools anyway.
	
They can set up their own health insurance purchasing exchanges based on the lightly regulated Utah model and dare the feds to tell them their exchanges don't meet the federally micromanaged model that ObamaCare mandates by 2014.
	
They can continue to support efforts, especially constitutional amendments, to challenge the federal government's intrusion into the freedom of its citizens. The Florida Legislature voted Thursday to place a constitutional amendment on the ballot that would ban any laws that compel someone to "participate in any health care system." It requires a 60% vote to succeed. The legislation is modeled after the American Legislative Exchange Council’s Freedom of Choice in Health Care Act, which has been introduced or announced in 42 states.

Washington needs the states more than the states need the Feds to make this work. This is the time to make sure Washington knows who's in charge.

Trying to ‘Fix’ the costs of ObamaCare
Grace-Marie Turner
The Daily Caller, 04/22/10
Article available here and here.

Americans consistently have said controlling health costs is their number one priority for reform. But Washington didn’t listen, and President Obama and congressional Democrats muscled through a 2,700-page bill that will actually cause health costs to soar even higher.

So now – with the ink barely dry on ObamaCare – some in Congress realize they need to focus on health costs. But their plans involve even more heavy-handed government regulation which is unlikely to succeed and may cause even more wreckage in our health sector.

I testified on Tuesday before a Senate committee considering legislation that would give the federal government authority to review health insurance premiums and impose penalties on companies if their premiums are deemed “irresponsible.” Many states have authority over health insurance rates today, yet rising prices remain a big concern for their residents.

That’s because, as Sen. Tom Coburn explained, Congress is focused on the symptoms rather than the causes of rising health premiums. Defensive medicine that leads to overuse of tests and procedures and a third-party-payment system that keeps patients in the dark about the costs of their medical care are just a few of the many contributing factors.

The National Association of Insurance Commissioners points out that giving the federal government the authority to review rates, “can do nothing to reduce claims expenses, which are the biggest component of the premium dollar.”

But rather than attack the real cost drivers, ObamaCare will exacerbate them with a host of provisions sure to increase health insurance premiums, including $569 billion in new taxes on individuals, small businesses, drugs, medical devices, and insurance companies.

So in order to hide the harmful impact of ObamaCare’s cost increases, Sen. Dianne Feinstein (D-CA) has introduced legislation that would allow the federal government to essentially cap health insurance premiums in dozens of states. Capping premiums without addressing the forces that are driving up costs would be like putting a lid on a pressure cooker and turning up the heat. Something would have to blow.

With ObamaCare, the non-partisan Congressional Budget Office says health insurance premiums will continue their steady upward climb and that they will accelerate faster in the individual market as a result of the new health reform law. It’s estimated that families purchasing insurance in this market would see a premium increase of an additional $2,100 in the year 2016. That means those families would be paying $15,200 in 2016 for health insurance as a result of passage of health reform, and $13,100 otherwise.

Why? Because the bill is littered with new taxes and mandates, including the $20 billion tax on medical devices, $60 billion in taxes on health plans, $27 billion in taxes on prescription drug companies, and more expensive federally-mandated benefits packages. These costs will be borne by – you guessed it – consumers in the form of higher health insurance premiums.

Massachusetts has experience with a health overhaul plan similar to ObamaCare, and high health costs continue to be a serious problem there. Onerous state regulations and expensive mandated benefits have made its health insurance premiums the highest in the nation.

And the state’s requirements that all insurers sell coverage, even if people wait until they are sick to buy a policy, has led thousands of people in the Bay State to game the system by purchasing insurance for short periods of time when they expect to incur large medical claims.

The Boston Globe reported that, “The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month.” These rising costs have led insurers to petition the state to allow them to increase their premiums to cover the claims.

A political uproar and court battles have ensued as the state tries to strictly limit their increases in health insurance premiums. But the major health insurers in Massachusetts say if they can’t raise their rates, they collectively could lose more than $100 million – “losses that will deplete their individual reserves, weaken their financial stability, and in some instances threaten their near-term solvency.”

As health care costs continue to soar – spurred on by ObamaCare’s taxes, mandates, and regulations – Massachusetts could be a harbinger of things to come at the federal level. Higher and higher premiums, court battles between government and insurers, companies becoming insolvent, and people having fewer and fewer choices of affordable private coverage.

Not exactly what the president promised with his health overhaul plan.

Grace-Marie Turner testimony to Senate HELP Committee on Protection from Unjustified Premiums
April 20, 2010

Grace-Marie Turner, president of the Galen Institute, has been invited to testify today before a Senate Health, Education, Labor, & Pensions Committee hearing on a proposal to give the federal government authority to review health insurance premiums and to impose penalties if they are deemed “unreasonable.”

The fact that Congress already is revisiting the issue of health costs shows its health overhaul law fails to address the central issue in the health reform debate. In fact, the legislation enacted last month contains many provisions which will cause health costs and health insurance premiums to rise even faster than otherwise. Capping premiums without recognizing the forces that are driving up costs would be like putting a lid on a pressure cooker and turning up the heat. Turner uses the example of Massachusetts’ health reform initiative as evidence that this approach will not succeed.

In addition, Turner highlight some of the progress that is being made through innovations in care delivery, in creative benefit offerings, and in lowering the cost of insurance and medical care to show that the competitive market can respond to the demands of consumers for better quality care at more affordable prices.

Here is a link to the full testimony. And here is a link to the five-minute, Cliff’s Notes summary.

Video of the hearing and Grace-Marie Turner's testimony can be found here.

Overhaul Law: Gotcha
Grace-Marie Turner
Health Policy Matters, 04/16/10
Health Policy Matters is available here.

Nothing seems to have amused readers of The New York Times this week more than correspondent Robert Pear's news story on Tuesday about members of Congress possibly legislating themselves and their staffs out of health insurance.

As we reported last week, this sloppily drafted bill never was intended to become final law but was merely a Christmas tree to get 60 votes (on Christmas Eve) in the Senate to advance the legislative process.

But Democratic leaders concluded that passing the Senate bill through the House was the only way any major health overhaul bill could be signed into law after newly elected Scott Brown broke the Senate's filibuster-proof majority.

We find, almost on a daily basis, more and more serious flaws in the legislation, ensnarling even the Congress.

The Times writes: "In a new report, the Congressional Research Service says the law may have significant unintended consequences for the 'personal health insurance coverage' of senators, representatives and their staff members" who may lose 'their current coverage, in the Federal Employees Health Benefits Program, before any alternatives are available.'"

Here are some excerpts from 126 reader comments to the Pear story:

	
"There is a God, and He has a sense of humour."
	
"They did not even bother reading the bill -- serves them right."
	
"Maybe if they read the bill they would know what was in it that they were voting to pass!"
	
"Ah the law of intended consequences."
	
"One word: Irony."
	
"Welcome to our world, members of Congress!"
	
"I think it might be a good idea from time to time for all members of Congress to deal with the kinds of uncertainty that the rest of us face every day."
	
"It seems appropriate Congress should be the first victim of this legislation."
	
"wow. these comments are from nyt readers???"

 

Yes, indeed.

And this week, two surveys showed that public opposition to the health overhaul law is growing, with 58 percent favoring repeal. Only 12 percent in a recent FOX News poll said they believed the law should be implemented as it is.

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Audacity: We hear that lobbyists are showing up in the offices of Republican members of Congress this week asking them to sponsor amendments to fix the many, many problems in the health overhaul law that are causing significant distress to their clients. Rep. Paul Ryan said he is telling them, "Work with us to repeal it. Then we'll talk."

**********

Doctors' distress: I was in Huntsville, Alabama on Friday to speak at the annual meeting of the Medical Association of the State of Alabama, a wonderful group of physicians whose outgoing president, Dr. Jorge Alsip, invited me to the "rocket city." Here is the PowerPoint presentation I gave.

Physicians in Alabama generally have smaller medical practices and will have an extremely hard time complying with the huge number of bureaucratic reporting and other regulatory requirements the overhaul law would impose.

There is a sense of disbelief and shock at what this would do to their practices and to their ability to continue to focus on providing the best patient care. One physician called from the audience at the beginning of my talk: "Say it ain't so!" I wish I could, but I did say that this is far from being settled policy. There is a global move toward consumerism, driven by greater patient demand for information and more control over decisions. I believe democracy and progress will prevail.

Physician Reps. Tom Price (R-GA) and Parker Griffith (R-AL), who represents the Huntsville area, also spoke and warned the doctors that the next step in government control over health care will be for doctors' medical licenses to be dependent upon accepting Medicare, Medicaid, and other publicly funded patients. And this week, Massachusetts threatened just that.

Dr. Price encouraged doctors to engage their patients as allies by keeping them informed, and he was refreshingly optimistic about the ability of the system of checks and balances to redress this tremendous abuse of political power the health overhaul law represents.

"The federal government may be able to tell physicians what it will pay for services in public programs, but it shouldn't tell you what you can charge," he said.

And Dr. Griffith, who switched his registration to Republican a few months ago, said his sensible, mainstream ideas were completely rejected in the Democratic caucus that, he said, has a hard left ideological agenda. He said he is very concerned that patient-centered, private medical practice as we know it will be a thing of the past if this overhaul law isn't blocked.

**********

Repeal is possible: Rep. John Shadegg (R-AZ) spoke on a conference call for physician leaders that we jointly hosted with The Heritage Foundation last evening. He said there is a growing sense among his colleagues that repeal is indeed possible.

An article by Adam Hume in National Review reinforces that perspective. Hume writes about the creation of the British National Health Service. I can't do his piece justice in a short summary, but he concludes that people are wrong who say we are doomed because, once an entitlement is in place, it never can be repealed.

Hume says the massive overhaul plan may well fail because the ultra-partisan law imposes huge new taxes, provides benefits to relatively few, cuts existing services, and imposes expensive mandates on virtually everyone. The NHS never would have been possible with that kind of launch.

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Here's what's coming: Massachusetts is our canary in the coal mine for health reform. As a harbinger of things to come, here is a link to the form that all Massachusetts residents must file with their state income taxes to verify that they have health insurance.

And this is a state form! Imagine how much more complicated it will be when the federal government does this with the unbelievable number of income categories, insurance requirements, subsidy levels, and other complexities in the health overhaul law!

**********

Legislation to regulation: In 1965, when Congress created Medicare and Medicaid, the bill was 137 pages long. When the Mayo Clinic counted the number of pages of regulations governing the two programs about 30 years later, they found 130,000 pages of rules they must comply with.

Do the math: One THOUSAND pages of regulation for every page of legislation? How is implementation of this new overhaul law even possible?

**********

Testimony: I will be on Capitol Hill on Tuesday, testifying at a hearing on "Protection from Unjustified Premiums" before the Senate Committee on Health, Education, Labor and Pensions. Stay tuned.

ObamaCare Will Make Every Day Feel Like April 15th
Grace-Marie Turner
Washington Examiner, 04/13/10
Article available here and here.

New taxes on investments, taxes on medical supplies, taxes on drugs and health insurance, and taxes on you if you are just breathing… the list of taxes Americans will face just got a lot longer thanks to ObamaCare.

The health overhaul plan just enacted represents the largest tax hike in U.S. history - $569 billion over 10 years through a dizzying array of taxes and fees that promise to frustrate taxpayers at every turn.  ObamaCare will make every day feel like April 15th.

And despite President Obama’s campaign promise that no one making $250,000 or less would see a tax increase, Congress’ Joint Committee on Taxation confirms that these tax hikes will hit millions of middle- and working-class families who are struggling to make ends meet.

Here are just a few of the most egregious ObamaCare taxes that hard-working Americans will be facing in the $2.6 trillion health overhaul bill:

    * “Breath tax”:  The infamous “death tax” now has a new sibling: the $17 billion “breath tax.”  The new health overhaul law requires everyone in America who breathes to have health insurance by 2014; some will get subsidies, but most will have to pay a fine if they don’t buy the health insurance required by the federal government.  Last week, Internal Revenue Commissioner Douglas Shulman said that enforcement of the individual mandate will come by seizing tax refunds and “collection, if need be.”

    * Taxes on medical devices:  Surgical scissors, wheelchairs, intravenous bags, dental retainers and braces, CT scanners, stretchers, exam room tables, heart stents, pacemakers, surgical gloves, spineboards at every local pool, scales at a doctor’s office or health club, any diagnostic test for any disease or condition – all will be among the products and procedures subject to ObamaCare’s special $20 billion medical device tax beginning in 2013.  This tax will make these medical supplies more expensive, will drive up the cost of health care and health insurance for Americans, will threaten jobs in the medical device industry, and confiscate money needed for new innovative breakthroughs.

    * New Tax on Health Insurance Providers:  Even though soaring health costs are the problem Americans most wanted government to solve, ObamaCare promises to drive costs even higher by instituting a new $60 billion tax on health insurers.  Insurers and health plans can be expected to pass along this tax to policyholders through higher premiums.  So starting in 2014, Americans will be forced to buy health insurance, and the federal government will be actively making it more expensive.

    * Medicare Payroll Tax:  Starting in 2013, ObamaCare increases the Medicare payroll tax for many small business owners and others earning more than $250,000 a year.  This tax hike will place yet another burden on small business owners who the country needs to create jobs and lead the economy into recovery.  This job-killing payroll tax is estimated to raise $86.8 billion over seven years.

    * New Tax on Investment: In addition to the Medicare payroll tax hike, investment income will now be subject to a tax of 3.8% starting in 2013 for those in higher income categories.  Even middle-class homeowners who realize a capital gain of $250,000 or more on the sale of their home will be hit by this Medicare tax, which will drain another $123.4 billion out of taxpayers’ pockets and into the government’s coffers over seven years.

    * New Drug Tax:  ObamaCare’s new tax on brand-name drugs kicks in next year and is estimated to raise $27 billion over nine years.  The public can expect to have these costs passed on to them in the form of higher drug prices and higher insurance costs.

Simply put, this health overhaul plan will take at least $569 billion out of the pockets of taxpayers and businesses over the next ten years through new and higher taxes, and will make the problems of soaring health costs even worse.  No wonder the more Americans hear about ObamaCare, the less they like it.

A Hard Sell
Grace-Marie Turner
National Review Online: Critical Condition, 04/13/10
Article available here and here.

Members of Congress are returning to Washington wondering what happened to President Obama’s promise that he could convince a very skeptical public that his health-overhaul plan is a good thing after all.

Many members who voted for the legislation had to hide out from their constituents over the Easter recess to avoid scathing criticism. Public animosity toward Obamacare is getting worse, not better, with Rasmussen showing that 58 percent now want it repealed. Fox reported last week that only 12 percent want the legislation to be implemented as is.

People are not buying into the president’s sugarcoating because they can see for themselves the destructive path ahead. Every day more facts emerge about the legislation Congress slammed through on a hyper-partisan vote:

1. Doctor shortages loom: Experts warn there won’t be enough doctors to treat the millions of people newly insured under the law. At current graduation and training rates, the U.S. faces a shortage of up to 150,000 physicians in the next 15 years, according to a report by the Association of American Medical Colleges.

2. Costs continue to soar: Massachusetts governor Deval Patrick is in a knock-down, drag-out battle with health insurers. He is refusing to allow them to raise their rates to cover the added costs they are incurring as a result of the state’s three-year-old universal coverage law. The companies lost a first-round court battle yesterday. They say they will lose hundreds of millions of dollars and could go out of business if they can’t raise their rates to at least cover their costs.

Sen. Dianne Feinstein (D., Calif.) is reportedly shocked that the new law does not give federal regulators the power to block double-digit health-insurance-premium increases. In a preview of battles to come, Sen. Feinstein and Rep. Jan Schakowsky (D., Ill.) are pushing legislation to expand federal and state authority to prevent insurance companies from boosting rates excessively. This is a direct path to a single-payer, government-run health system.

3. Where’s my free health care? eHealthInsurance, the online broker for health insurance, says it has been flooded with calls from people asking, “Where do we get the free Obamacare, and how do I sign up for that?” Would-be customers had expected the overhaul law to translate into instant, affordable coverage.

Are people happy when they find out that the subsidized coverage doesn’t begin for four years and that even then, only a fraction of people will qualify? What about when they learn that most Americans will be required to buy expensive, government-mandated policies? Or that new taxes start right away but still won’t make a dent in the tsunami of red ink the law creates?

4. Five little words: States and physicians have a new concern: Tucked away in the 2,700-page health overhaul law are five words that states fear will open the floodgates for lawsuits.

Until now, states participating in Medicaid have been required to provide payments to physicians. But on page 466 of the new law, states now will be liable for ensuring provision of “the care and services themselves.”

That means states are legally required not only to ensure that services are paid for, but that Medicaid recipients are seen by a doctor. Alan Levine, Louisiana’s health secretary, says this “leaves every state vulnerable to a new wave of lawsuits any time someone cannot access a service.” He says the added cost would be incalculable.

5. Ninety days to get going: The clock is ticking on the 90 days that HHS Secretary Sebelius has to get programs established in the states to provide coverage for uninsured people with high health risks. It is the tip of the iceberg in a mountain of regulations that must be written to get Obamacare up and running.

Demonstrating growing state rebellion against Obamacare, Georgia announced yesterday it isn’t going to participate in the new high-risk pools.

6. Constitutional challenges continue: Virginia attorney general Ken Cuccinelli argues that there is no constitutional authority for Congress to regulate commerce when citizens just want to do nothing — for instance, not buy insurance. He also argues that Medicare and Social Security are based upon constitutional taxing authority. But he says that a mandate to buy private insurance is not a tax; the tax is a penalty for not buying a product from a private company — an unprecedented demand from the federal government.

And finally, Cuccinelli says the legislation did not include a “severability” clause, which means that if one provision is declared unconstitutional, the whole law can be thrown out.

Officials are facing the growing realization that the legislation is very poorly drafted. The Senate bill never was intended to go into law as is; leaders believed they would be able to merge the House and Senate measures into a cleaned-up and final version of the bill. It was primarily a vehicle to cobble together 60 votes in the pre–Scott Brown Senate.

But after Democrats lost their filibuster-proof majority, the only choice was to pass the dreaded Senate bill as is. Now they have a poorly-drafted bill that exacerbates already overwhelming implementation challenges.

In a bit of justice, it turns out that the law creates significant confusion about whether or not members of Congress actually still have health insurance. The bill was amended in the Senate to make sure members and staff are in the system they created for the rest of us and must get their insurance through the new exchanges. But now there is confusion about whether or not they have coverage until the new exchanges actually start in 2014. A 13-page, single-spaced memo from the Congressional Research Service reaches no conclusion.

Over the coming months and years, those who voted for health overhaul will find themselves perpetually on the defense in explaining the cascade of problems it creates, and opponents surely will not hesitate to point out its failings and who is responsible.

The uninsured rolls will continue to swell, the huge tax increases will kill jobs and depress economic growth, seniors will start facing the consequences of Medicare Advantage cuts, deficits will continue to soar, and the quality of care will steadily get worse as doctors and hospitals become more responsive to bureaucrats than to patients. Obamacare will be blamed.

ObamaCare’s job-killing impact is just getting started
Grace-Marie Turner
Chicago Tribune, 04/01/10

It didn't take long for businesses — especially in Illinois — to start feeling ObamaCare's job-killing punch. While most of the punishing mandates and taxes don't start immediately, public accounting rules operate on a more timely basis. Some businesses have disclosed that their value will be negatively impacted by the new health reform law.

In the last week, four major Illinois-based companies —Boeing, Caterpillar, Deere & Co. and Illinois Tool Works — have announced they will take charges of $150 million, $100 million, $150 million and $22 million, respectively, because of one provision in the new law.

In order to pay for the plan's estimated $924 billion cost, the tax deduction for companies providing their retirees with drug benefits has been reduced. The White House said this change closed a tax "loophole" created to encourage companies to provide their retirees with drug benefits rather than moving them into Medicare's prescription drug program.

Having exhausted their large bag of accounting gimmicks, congressional Democrats slashed this tax incentive to raise an estimated $4.5 billion over the next 10 years.

While this looked good on paper, the New York-based consulting firm Towers Watson conducted a study that found this tax change will cost companies $14 billion in future years. That's a job-killing hit to Illinois businesses and employees already struggling with a 12.2percent unemployment rate.

It's estimated that 6.3 million retirees currently receive drug benefits from their former employer's health plan. As a result of ObamaCare, many companies are expected to curtail or end these drug benefits and instead push them onto Medicare's drug program, where taxpayers will foot the bill.

The Moran Co., a Washington-based health care consulting firm, believes drug benefits will be altered for 1.5 million to 2 million retirees because of this tax change. These retirees will join Medicare Advantage policyholders and millions of others whose benefits are up in the air as a result of ObamaCare.

We soon may begin to see the negative impacts of just this one provision in the health care reformplan: jobs may dry up as businesses lose value, millions of seniors will lose the drug coverage they currently enjoy, and the burden on taxpayers will increase due to more people on Medicare Part D.

And on top of that, these companies are facing political pressure because of the plan.

The companies' public disclosures — in filings to the Securities and Exchange Commission — are required by law. Failure to promptly report a charge carries stiff penalties, and no doubt would open the company up to potentially expensive litigation.

Rather than acknowledge the legal realities businesses face, congressional Democrats led by Henry Waxman of California and Bart Stupak of Michigan are applying political pressure by hauling some CEOs before Congress to explain why they say their companies are taking this charge because of ObamaCare.

That puts businesses in a lose-lose situation: follow the law, report the charge and endure a congressional grilling, which may lead to who knows what. Or they could ignore the law and not report the charge, which would place the company and its executives in legal jeopardy but spare them a congressional investigation. Either way, American business loses and the health reform law will prove to be the job-killer many Americans feared.

Repeal and Replace ObamaCare
Grace-Marie Turner
Galen Institute: Health Policy Matters, 04/01/10

So what do we mean by that, exactly? The fallout from ObamaCare is just beginning, with news articles every day showing the damage the health overhaul law is poised to inflict on our economy and health sector.

The latest Rasmussen poll found 54% of those surveyed want the law repealed. But there are real problems in our health sector that demand it be replaced with a better plan.

Opponents of ObamaCare have seized on the repeal and replace theme as an acknowledgement that we must stop this government takeover of our health sector and offer better ideas.

So here is a handy guide to the key policy ideas behind Repeal and Replace, letter by letter:

Repeal ObamaCare's massive new taxes
Eliminate job-killing mandates on businesses
Protect citizens from IRS enforcers by repealing the individual mandate
Eliminate cuts in benefits to seniors on Medicare Advantage
Avoid crippling the states with expensive mandates
Limit government intrusion into personal medical decisions
AND
Real help for people to purchase health insurance they choose
Expand states' ability to help people with pre-existing conditions
Put Medicare savings into saving Medicare
Lawsuit abuse reform
Allow doctors and patients to control medical decisions
Control costs though consumer-friendly health reform
Expand access through cross-state purchasing of health insurance

AND STOP THE RECKLESS DEFICIT SPENDING

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