Liability and Health Reform
Update:
Health Care Reform News from the US Senate
JEC
October 1, 2012
Editor, Donna Baver Rovito
This periodic compilation of news and information
about health care reform relies on numerous sources for the stories health care
professionals and concerned citizens need to be well informed.
Periodic opinions or political comments are the
editor's and the editor's alone and appear in blue italics. This eNewsletter is
not affiliated with or financially supported by any advocacy organization or
political candidate or group.
COMMENTARY
These short daily (and sometimes more than once-a-day) blurbs about health
care reform are written and researched by Chris Jacobs, a senior policy analyst
for the Joint Economic Committee of the Senate Republican staff. So, yes,
they're somewhat partisan.
But they're also meticulously researched and backed up with links, facts,
and figures. He often comments on the news of the day - and spent several
entries on the President's speech to AARP.
I've saved the last two weeks' worth and have compiled them into this
newsletter, with the most recent entries first. If you'd like to be added to
his list, all you need to do is email him and ask: Chris_Jacobs@jec.senate.gov.
If you read these few paragraphs a day, you'll be well informed about the
ongoing health care reform debate - especially all the reasons that the new
health care law needs to be repealed.
Speaking of repealing the PPACA -
here's an urgent request for doctors and other health care
professionals:
I need QUOTES from you about why
you support repealing "ObamaCare," and why you support candidates who promise to
repeal it. If you support Mitt Romney for president BECAUSE you want PPACA
repealed, please state that as well, and send your quotes to me via email,
including your name, specialty, and where you practice. The quotes will be used
on websites, social media, etc.
Thank you!
Donna Baver Rovito
Editor, Liability and Health Reform Update
((OK, here are the short reports from Chris
Jacobs, most recent first......))
10-1-12 - "Invisible Obama" Breaks the Law -- And His
Promise to Seniors...
Throughout the last few months, President Obama has claimed
that his Medicare plan will help improve the program. He claimed in August
that “I’ve strengthened Medicare….I’ve proposed reforms that will save Medicare
money by getting rid of wasteful spending in the health care system.” In his deficit speech last
April, the President outlined those reforms:
We will slow the growth of
Medicare costs by strengthening an independent commission of doctors, nurses,
medical experts and consumer who will look at all the evidence and recommend the
best ways to reduce unnecessary spending while protecting access to the services
that seniors need.
The President of course was referring to the Independent
Payment Advisory Board, a panel of bureaucrats created in Obamacare to enforce
binding caps on Medicare spending – caps which the President’s 2011 deficit
submission proposed lowering even further.
There’s only one problem with the President’s claims that he
“strengthened Medicare” by creating the IPAB: President Obama has now
violated the law by failing to appoint nominees to a board he created.
According to page 426 of the statute, the law appropriates funds for IPAB
(originally $15 million, but lowered to $5 million last December) “for fiscal
year 2012” – that’s the fiscal year that ended on September 30, i.e., yesterday.
So Obamacare contemplates IPAB being up and running NOW –
yet President Obama has failed to nominate any appointees to the board. If the
President wants to save Medicare so badly – and IPAB is so critical to saving
Medicare – what’s he waiting for? Why is he breaking his promise to seniors?
And if IPAB is so innocuous and won’t harm seniors, why is he waiting until
AFTER his re-election campaign to announce who he wants to put on the board – is
it because the Administration plans on naming more radical appointees like
Donald “Rationing
with Our Eyes Open” Berwick to administer the IPAB’s new world
order?
Clint Eastwood’s “empty chair” speech at the Republican National
Convention generated much discussion as to its broader context. When it comes to
health policy, however, that empty chair takes on a clear meaning – the
vacancies on the IPAB board, caused by a President who would rather abdicate his
statutory duties than reveal the controversial plans he intends to implement
after the election.
10-1-12 - There He Goes Again: Biden Creates Another
"Bidenism"
Over the weekend, Joe Biden did what Joe Biden does best –
tied his tongue in knots – this time, over claims that Obamacare will actually
lower costs for American families. Politico quoted the Vice President as telling one
visitor at a deli that Obamacare “will help you dramatically,” because
individuals will “be able to get better health care than you had before at a
lower cost.” The only problem is that no one believes the claim is true – not fact-checkers, and
not the families that have seen premiums go up by over $3,000 since Barack Obama
was first elected.
President Obama also keeps trying to peddle the false claim
that Obamacare will lower insurance premiums. Writing in the New England Journal
of Medicine last week, the President claimed that “economists believe family
premiums will be about $2,000 less” in 2019 under the law. (Assuming of course
that businesses are even offering health insurance at all by
that point.) The op-ed (conveniently) doesn’t cite a source on this claim,
but the Administration has previously invoked a report published by the Business Roundtable in
November 2009 (i.e., before Obamacare was even enacted) to make this assertion.
However, the Roundtable’s study only presumes a reduction in the
increase of premiums. Don’t take my word for it: Look at Exhibit 1
of the study (depicted below), which study illustrates that under the maximum
achievable “savings,” large employer premiums in 2019 will be $23,151 per family
– or $12,408 higher than they were in 2009.
The President repeatedly promised during his campaign that he
would “cut” premiums – meaning they would go DOWN, not merely just “go up by
less than projected.” And the skyrocketing premiums Americans are paying for
health insurance are a constant reminder of how Obamacare falls short. Democrats
have no answer to the obvious question: How is a $12,400 increase in
premiums – as opposed to the $2,500 reduction that candidate Obama repeatedly promised –
a change that struggling middle-class families can believe in? Because,
as Joe Biden himself might say, middle-class families paying thousands more in
premiums because Obamacare failed to deliver is a really big deal
indeed.
9-26-12 - The Truth about Obamacare Keeps Coming
Forward
From the Manchester Union Leader last week came word of an
interesting development. In a debate, former Congresswoman Carol
Shea-Porter, who looks to regain her seat this fall, admitted that Obamacare –
which she voted for two years ago – WON’T reduce health costs:
Shea-Porter said the Obama health
care plan will slow the increase in health care costs, but no one should expect
them to drop. “Everyone knows that costs go up. For him [Rep.
Frank Guinta] to say health care costs should drop when nothing else ever drops,
it's just not accurate,” Shea-Porter said.
But Guinta said Congress should try to reduce health care costs. “I've yet to hear anyone say ‘Thank goodness for the Affordable Care Act because it slowed my (premium) increase,’” he said.
But Guinta said Congress should try to reduce health care costs. “I've yet to hear anyone say ‘Thank goodness for the Affordable Care Act because it slowed my (premium) increase,’” he said.
And the reason Rep. Guinta has yet to hear anyone say Obamacare has cut their
premium increases is because the law hasn’t fulfilled its promise. Even
fact-checkers have admitted this reality, when Politifact last month
officially declared candidate Obama’s promise to “cut the cost of a typical
family’s health insurance premium by $2,500 a year” a broken
promise:
No cut in premiums for
typical family
Back in 2008, we
collected over 50 promises Barack Obama made about health care….When it came to
health care premiums for the typical family, Obama said he would cut the annual
cost by $2,500. Months before Obama took office, a New York Times reporter
dubbed it one of the most audacious pledges of the campaign.
We reached out to David Cutler, an economist who advised Obama during the 2008 campaign and helped calculate the $2,500 figure that appeared in Obama's speeches. He said the calculation encompassed total health care costs, not just premiums. These would include out-of-pocket costs, employer-provided insurance costs, and taxes to pay for public insurance programs.
Cutler acknowledged that Obama made “occasional misstatements” that tied the $2,500 reduction to premiums and not total medical spending. We can't judge whether Obama misspoke, but we checked the Project Vote Smart database of public statements by politicians, which shows that Obama said premiums (and only premiums) would go down for the typical or average family by $2,500 repeatedly. You can see examples throughout the arc of his 2008 presidential campaign here, here, here, and here.
It is also true that Obama used the number in a more expansive context sometimes, such as here during a speech in Newport News, Va, and here in a response to a report about Medicare and Social Security.
The 2008 New York Times article explains how Cutler and his colleagues calculated the $2,500 figure, a round number based on back-of-the-envelope arithmetic.
“That number is much simpler than the world of insurance actually is,” said Deborah Chollet, a health economist for Mathematica Policy Research, a nonpartisan policy analysis group….
In our search for evidence that the law might reduce the typical family's premiums, we contacted the Department of Health and Human Services, the federal agency implementing the law. The department could not provide proof that the average family would see a reduction, much less a $2,500 reduction.
In assessing this promise, we consider the following: An author of the $2,500 figure has disavowed its use as it relates to premiums alone. An independent health care analyst projects that premiums will go up for the typical family. The federal agency implementing the Affordable Care Act did not provide evidence that premiums will go down for the typical family. We rate this a Promise Broken.
We reached out to David Cutler, an economist who advised Obama during the 2008 campaign and helped calculate the $2,500 figure that appeared in Obama's speeches. He said the calculation encompassed total health care costs, not just premiums. These would include out-of-pocket costs, employer-provided insurance costs, and taxes to pay for public insurance programs.
Cutler acknowledged that Obama made “occasional misstatements” that tied the $2,500 reduction to premiums and not total medical spending. We can't judge whether Obama misspoke, but we checked the Project Vote Smart database of public statements by politicians, which shows that Obama said premiums (and only premiums) would go down for the typical or average family by $2,500 repeatedly. You can see examples throughout the arc of his 2008 presidential campaign here, here, here, and here.
It is also true that Obama used the number in a more expansive context sometimes, such as here during a speech in Newport News, Va, and here in a response to a report about Medicare and Social Security.
The 2008 New York Times article explains how Cutler and his colleagues calculated the $2,500 figure, a round number based on back-of-the-envelope arithmetic.
“That number is much simpler than the world of insurance actually is,” said Deborah Chollet, a health economist for Mathematica Policy Research, a nonpartisan policy analysis group….
In our search for evidence that the law might reduce the typical family's premiums, we contacted the Department of Health and Human Services, the federal agency implementing the law. The department could not provide proof that the average family would see a reduction, much less a $2,500 reduction.
In assessing this promise, we consider the following: An author of the $2,500 figure has disavowed its use as it relates to premiums alone. An independent health care analyst projects that premiums will go up for the typical family. The federal agency implementing the Affordable Care Act did not provide evidence that premiums will go down for the typical family. We rate this a Promise Broken.
The fact that Democrats – and even President Obama’s own
Administration – acknowledge that the law won’t meet the President’s stated
promise is yet another way that the promise of “hope and change” has evaporated
for families struggling to pay their insurance bills.
9-25-12 - Obama Administration, Asleep at the
Switch...
Yesterday various press outlets reported that the Administration warned
hospitals and other medical providers about questionable Medicare billing
tactics that could range from abusive to fraudulent. But that’s not the real
story – the real story is how the Administration was asleep at the switch
for years, allowing these abusive practices to continue, even
accelerate. A study by the Center for Public Integrity published in the
Washington Post more than a week ago, and highlighted in this space, noted
that “thousands of doctors and other medical professionals have billed Medicare
for increasingly complicated and costly treatments over the past decade, adding
$11 billion or more to their fees – and signaling a possible rise in medical
billing abuse.”
So what did the Administration do when this major Washington
Post expose appeared, questioning $11 billion in Medicare spending as
questionable, abusive, or even downright fraudulent? Exactly nothing. Only when
a second, similar
story appeared in the New York Times this weekend did Secretary Sebelius
finally send a letter questioning provider billing practices, and promising
vigilance on this issue – with “vigilance” hopefully meaning something, after
her Department’s years of neglect.
The Administration has asked questions of Medicare providers
about their billing practices, but the real questions belong to the
Administration:
1. Why did the Administration
wait so long to take action – and how many billions of dollars in questionable
transactions were completed because this Administration decided not to examine
billing practices for potential abuse and fraud?
2. How can the Administration
implement the 2700 pages of Obamacare if they can’t even ensure that existing
laws and practices within Medicare are being followed? Conversely, was the
Administration asleep at the switch when it comes to questionable billing
practices because HHS is spending all its time, personnel, and resources
implementing Obamacare, rather than watching over Medicare?
3. How can President Obama and
Secretary Sebelius claim Obamacare helps crack down on fraud, when they
allowed $11 billion in questionable transactions to go unchallenged? Given this
record, perhaps the Administration would be better off outsourcing oversight of
Medicare to the Center for Public Integrity and the New York
Times.
One final note: Three liberal advocates, including former OMB
advisor Zeke Emanuel and former CMS Administrator Donald Berwick, penned an op-ed in this
morning’s Wall Street Journal denouncing comprehensive Medicare reform, and
claiming that government-run Medicare can do a better job containing costs
because “the key to sustainable cost control lies in encouraging physicians and
hospitals to focus on quality rather than quantity, and value rather than
volume.” These claims would have somewhat more credibility if they weren’t
co-authored by someone who, in nearly two years at CMS, allowed transactions
potentially bilking Medicare for billions to pass through undetected right under
his nose. Given that track record, Dr. Berwick is in absolutely no position to
give lessons on how to “save” Medicare. Instead the old proverb rings true:
Physician, heal thyself.
9-25-12 - Obamacare's Taxes Hitting the Middle
Class
Even as President Obama claims he doesn’t want tax increases
to hit struggling middle class families, evidence has piled up in recent weeks
about the effects Obamacare’s massive “temporary refund adjustments” have had on the
economy. Earlier this month medical device manufacturer Welch Allyn announced it was
laying off ten percent of its workforce – amounting to several hundred jobs –
due to the “new onerous U.S. Medical Device Tax scheduled to begin in 2013 as
mandated in” Obamacare. To these workers, the idea that Obamacare’s tax
increases will not affect the middle class is a broken promise.
Separately, many federal workers received a version of the
e-mail below, noting that Flexible Spending Account limits will decline in 2013
from $5,000 to $2,500, thanks also to Obamacare. (It’s also interesting that,
unlike the rebate
checks issued under the law, the e-mail contains absolutely zero references
to “the Affordable Care Act” or “Obamacare” in explaining the reason for this
tax increase. Coincidence? I think not.) Candidate Obama promised families their
costs would decline by $2,500 – but instead, middle class families will lose
$2,500 in tax-free savings. It’s yet another example among many about how
President Obama has broken his promises – and those broken promises are breaking
the back of the middle class.
9-25-12 - Is Obamacare Accelerating Health Cost
Growth?
The Health Care Cost Institute yesterday released its annual report on the rate
of health expenditure inflation, and the news was not good – not only are
costs rising, they are rising at a faster rate than in prior years. As the
Washington Post reports:
Spending for
private health insurance surged by 4.6 percent in 2011…That growth rate is
faster than the rest of the economy and higher than the previous year, which had
3.8 percent growth. Average spending on a private insurance patient rose to
$4,547 in 2011, compared with $4,349 in 2010. That statistic suggests that a
recent downturn in health-care spending may have been a temporary product of the
recession rather than a more permanent change, as some health-care economists
have hoped.
As a reminder, candidate Obama said repeatedly his health plan would CUT
premiums by an average of $2,500 per family – meaning premiums would go DOWN,
not merely just “go up by less than projected.” The campaign also promised that
that those reductions would occur within Obama's first term. But as the below
graph shows, while candidate Obama promised premiums would fall by $2,500 on
average, premiums have risen by $3,065 since Barack Obama was elected
President.
Regardless of whether or not Obamacare was the cause of the
acceleration in health costs in 2011, the news once again illustrates how the
2700-page law has failed to live up to Barack Obama’s promise to lower costs for
struggling American families.
9-24-12 - David Axelrod, Pots, and
Kettles
Obama campaign adviser David Axelrod appeared on
MSNBC’s Morning Joe this morning, and repeated the old tropes that Obamacare
“plowed [money] back into Medicare,” and that “Medicare’s length of life has
been extended” due to Obamacare. We’ve previously fact-checked all of these
statements here. But what caught us as interesting was
this comment:
There’s an awful lot of
demagoguery out there. And in that environment, it’s very hard to have a serious
discussion about issues like that.
It is entirely true that there is an awful lot of demagoguery
about Medicare and entitlements out there. The problem for Mr. Axelrod is that
most of it comes from Democrats:
·
As one House Member put it, if the President had
proposed a true restructuring of our unsustainable entitlements, that
would “cancel out any bludgeoning that Democrats might give the Republicans over
Medicare and Medicaid.”
·
The Washington Post’s liberal Plum Line reported last year
that Senate Democrats don’t want to pass Medicare reform because it would be
“giving away the biggest [political] advantage” Democrats have had “in
some time.”
·
Last November, Rep. Steve Israel, Chair of the Democratic
Congressional Campaign Committee, in an interview with the Post “declined to say
whether a [deficit] agreement to cut entitlements might have hindered his
political strategy.” In other words, Democrats WANTED the
supercommittee to fail – so that they could resume their “Mediscare” political
attack ads against Republicans.
If Mr. Axelrod wants to criticize the members of his own
party for using Medicare as a political cudgel, we’re all ears. But unless and
until that happens, if the Obama campaign wants to complain about Medicare
demagoguery, they might be wise to first look in the mirror.
9-21-12 - Fact Check: Access to Physician
Services
In reviewing the transcript of the President’s speech
before AARP, there was one dubious statement we overlooked, and it’s this:
“A new study says that under their [premium support] plan, if just 5 percent of
seniors switch to private plans, 40 percent of doctors who currently take
Medicare would stop accepting it. So think about that. Millions of seniors would
be forced to change doctors.” As one might expect, there are several problems
with this statement:
· First, it
wasn’t a “study” in any sense of the term – and it certainly wasn’t independent.
The President was referring to a back-of-the-envelope calculation by his former
budget director in a Bloomberg column this week. One might
argue that the author of the study, Peter Orszag, might be slightly biased
towards the President this November, seeing as how he used to work for
him.
· Second, Obama
himself mis-characterized the Orszag column. Here’s what Orszag actually
wrote: “About 10 percent of the U.S. population is now
enrolled in traditional Medicare, and an additional 5 percent has private
Medicare plans. Let’s assume, for the sake of argument, that the Ryan plan would
cause another 5 percent of the population to shift…” Orszag
based his conclusions on 5 percentage of the entire American public switching
away from Medicare, whereas the President said Orszag’s conclusions were based
on 5 percent of seniors switching away from Medicare – a much lower bar. So
the President over-stated the impact of Orszag’s “study” and its effects on
physician access.
· Most
importantly, Orszag’s conclusions – which were over-estimated by the President –
aren’t borne out by recent evidence. Medicare Advantage enrollment HAS gone up
by leaps and bounds in recent years – since 2003, it has more than doubled in
both absolute terms and as a percentage of Medicare beneficiaries. In other
words, seniors have switched plans, as the chart below shows. Yet the Medicare
Payment Advisory Commission said this year that “overall, beneficiary
access to [Medicare physician] fee schedule services is good.” If Orszag
believes that beneficiaries switching to private plans would cause doctors to
stop seeing Medicare patients, then why did a 100 percent increase in Medicare
Advantage enrollment not have a significant effect on access to physician
services in traditional Medicare?
Peter Orszag has made ludicrous claims before. He previously said that
Obamacare’s CLASS act would be “on a firm financial footing of its own,” only to
watch as the program collapsed even before it began. Given the
evidence above, his claims about physician access appear as logical as his
claims about the CLASS Act, and should be taken just as seriously.
9-21-12 - Fact Check: "At the Mercy of
Seniors"
The Hill reports that, during his remarks to AARP this
morning, the President attacked Republicans for leaving seniors “at the mercy of
insurance companies.” Well, in case you missed it, here are five ways the
President and his Administration have left seniors at the mercy of one
organization with insurance interests – AARP – by granting them special
exemptions and ignoring their questionable insurance practices:
1. AARP’s lucrative
Medigap insurance was exempted in Obamacare from the ban on pre-existing
conditions; medical loss ratio requirements; caps on insurance industry
executive compensation; and the tax on all other health insurance
plans.
2. The Department of
Health and Human Services didn’t think all these Obamacare exemptions were
enough; last year they also exempted Medigap insurance from premium rate
review – even though AARP, which carries the plan with the largest market
share, earns greater profits the more seniors pay in premiums.
3. At a conference
hosted by America’s Health Insurance Plans in March 2010, HHS Secretary Sebelius
encouraged the
insurance industry to give up some of its profits, at a time when health
insurance profit margins were about 2 percent. Yet neither Secretary Sebelius
nor anyone else in the Administration ever criticized AARP for making a profit
margin of nearly 5 percent on its Medigap insurance.
4. In April 2010, the
Administration engaged in very public efforts to “encourage” insurance companies to
ban rescissions and extend coverage to young adults earlier than is required by
the law. But no one from the Administration has taken similar steps to
encourage AARP to stop discriminating against sick seniors applying for Medigap
coverage.
5. In a speech at an AARP
conference in October 2010, Secretary Sebelius praised AARP as the “gold
standard in cutting through spin and complexity to give people the accurate
information they need.” Yet the National Association of Insurance Commissioners
(NAIC) has previously expressed concern about the potential for
conflicts-of-interest associated with percentage-based compensation
arrangements. So Secretary Sebelius praised as the “gold standard” for
“accurate information” an organization that has the types of financial conflicts
her insurance commissioner colleagues have criticized as ripe for
abuse.
If the President is so worried about leaving seniors at the
mercy of insurance companies, perhaps he should tell the people within his own
Administration to stop granting political favors to Democrats’ cronies
at the AARP.
9-21-12 - Fact Check: Paying in to
Entitlements
The President just told the AARP that seniors pay in to
Social Security and Medicare. The problem is, that claim is half true. While
individuals obviously do pay in to the Social Security and Medicare programs,
most beneficiaries receive more in benefits than they paid in in
taxes. An Urban Institute study about the entitlement benefits and taxes
recipients will receive (and pay) over their lifetimes found that a senior
with average wages retiring this year will have paid $58,000 in Medicare taxes –
but will receive over $167,000 in Medicare benefits. The
Associated Press ran a story on this issue in December 2010, and its
headline was clear: “What You Pay for Medicare Won’t Cover Your
Costs.”
Our nation’s entitlement programs are in dire need of reform,
to become more sustainable. Perpetuating myths about their long-term viability,
which the President’s comments imply by saying individuals fully-fund their
benefits when paying into the system, only makes generating the political
consensus necessary for true entitlement reform more difficult.
9-21-12 - Fact Check on Medicare and
Obamacare
The President just told the AARP that the claim that
Obamacare took $716 billion from Medicare was “not true.” The problem is that
the facts say otherwise:
·
Last November, Nancy Pelosi admitted that Democrats “took a half a
trillion dollars out of Medicare in [Obamacare], the health care bill” to
pay for more federal spending.
· The
Congressional Budget Office agrees; that’s why the CBO said that the Medicare
reductions in Obamacare “will not enhance the ability of the government to
pay for future Medicare benefits” – because those savings will be used
to fund other unsustainable entitlements. If Democrats want to use the Medicare
savings provisions to extend the life of the Medicare trust fund – and not to
fund the new entitlements created by the law – the Congressional Budget Office
previously estimated what the fiscal impact would be: “A
net increase in federal deficits of $260 billion” through 2019.
· The
non-partisan Medicare actuary also previously confirmed that the Medicare reductions in
Obamacare “cannot be simultaneously used to finance other federal outlays and to
extend the [Medicare] trust fund” solvency date – rendering dubious any
potential claims that Obamacare will extend Medicare’s solvency.
President Obama himself admitted the problems with
Obamacare’s supposed logic in a 2010 interview, when he
stated that “You can’t say that you are saving
on Medicare and then spending the money twice.” Yet that’s EXACTLY what the law
did – and no amount of spin can change that fact.
9-21-12 - The Obama Administration's Protection
Racket
Shortly, President Obama will be addressing the AARP convention via
satellite. He will undoubtedly say nice things about AARP’s role as a “senior
advocate.”
But what he won’t discuss are the ways in which his own Administration has
allowed AARP to continue making billions in profits on its insurance
business:
1.
AARP’s lucrative Medigap insurance was exempted in Obamacare from
the ban on pre-existing conditions; medical loss ratio requirements; caps on
insurance industry executive compensation; and the tax on all other health
insurance plans.
2.
The Department of Health and Human Services didn’t think all these
Obamacare exemptions were enough; last year they also exempted
Medigap insurance from premium rate review – even though AARP, which carries
the plan with the largest market share, earns greater profits the more seniors
pay in premiums.
3.
At a conference hosted by America’s Health Insurance Plans in
March 2010, HHS Secretary Sebelius encouraged the insurance industry to give up
some of its profits, at a time when health insurance profit margins were about
2 percent.
Yet neither Secretary Sebelius nor anyone else in the Administration ever
criticized AARP for making a profit margin of nearly 5 percent on its Medigap
insurance
4.
In April 2010, the Administration engaged in very public efforts to “encourage” insurance companies to
ban rescissions and extend coverage to young adults earlier than is required by
the law. But no one from the Administration has taken similar steps to
encourage AARP to stop discriminating against sick seniors applying for Medigap
coverage
5.
In a speech at an AARP conference in October 2010,
Secretary Sebelius praised AARP as the “gold standard in cutting through spin
and complexity to give people the accurate information they need.” Yet the
National Association of Insurance Commissioners (NAIC) has previously expressed
concern about the potential for conflicts-of-interest associated with
percentage-based compensation arrangements. So Secretary Sebelius praised as
the “gold standard” for “accurate information” an organization that has the
types of financial conflicts her insurance commissioner colleagues have
criticized as ripe for abuse
Why might the Administration look the other way despite these
abuses? Documents released by the Energy and Commerce
Committee yesterday provide myriad reasons, showing all the political favors
senior Administration officials asked of AARP as they rammed Obamacare through
Congress:
· Jim Messina,
White House Deputy Chief of Staff: “We need [AARP CEO] Barry Rand to go meet
with Ben Nelson personally and just lay it on the line. ‘We will be with you, we
will protect you. But if you kill this bill, seniors will not forget.’ We are at
59 [votes in the Senate], we have to have him.” (page 7)
· Jim Messina:
“Can we get immediate robo calls into Nebraska urging [Ben] Nelson to vote for
cloture?” (page 9)
· Nancy-Ann
DeParle, Director, White House Office of Health Reform: “Can AARP support
accountable care orgs [sic] and some other delivery system reforms?”
(page 26)
· Jim Messina:
“Latest top 25 targets list from House leadership” (page 35)
· Ann Widger,
Office of Public Engagement: “We would really like AARP to participate in this
roundtable.” (page 37)
· Ann Widger:
“Did you guys put out any paper today on the McCain [Medicare] amendment?” (page
39)
· Jim Messina:
“[Rep. Larry] Kissel a problem…Help.” (pages 42-43)
·
Nancy-Ann DeParle: “Can you get me a copy of the [AARP]
bulletin we discussed yesterday?” (page 64)
Secretary Sebelius has already admitted she has acted
improperly in using her office to conduct political activities; the Office of Special
Counsel last week concluded she violated the law to do so. Given all of the
above, it is not unreasonable to question whether the Secretary, and others
within the Administration, made a calculated political decision to grant special
favors to AARP – and ignore its questionable business practices – because AARP
endorsed Obamacare.
Yesterday President Obama claimed that he changed Washington “from
the outside” by enacting Obamacare. The pattern of conduct described above
suggests just the opposite: That the President rammed Obamacare through only by
establishing what amounts to an inside-the-Beltway protection racket between the
Administration and AARP – the former will allow the latter to continue
overcharging seniors for insurance, so long as AARP uses its advocacy megaphone
to endorse the President’s liberal causes
9-21-12 - Sen. DeMint Op-Ed :AARP Sells Out Seniors
for Obamacare
Pasted below my signature is an op-ed by Sen. DeMint in Politico, highlighting
the ways in which AARP takes advantage of seniors to generate billions of
dollars in profits from its insurance business. It also discusses all the ways
in which this Administration has willfully turned a blind eye toward AARP’s
unsavory insurance practices – because AARP has given its full-throated support
for Obamacare and other elements of the President’s liberal
agenda.
|
AARP
sells out seniors for 'Obamacare'
By: Sen. Jim DeMint September 21, 2012 12:27 AM EDT |
|
President Barack Obama is scheduled to speak Friday via satellite to a
convention sponsored by AARP. His speech will likely extol the virtues of
“Obamacare,” and engage in scare tactics about conservative proposals to make
Medicare sustainable. But here are five facts you’re unlikely to hear from the
president, or AARP, about how each treats seniors:
First,
while AARP poses as a disinterested senior advocate, it functions as an
insurance conglomerate, with a liberal lobbying arm on the side. AARP depends on
profits, royalties and commissions to make up more than 50 percent of its annual
revenues. Membership dues from seniors account for only about 20 percent. The
sums involved aren’t chump change: AARP’s $458 million in health insurance
revenue in 2011 would rank it as the nation’s sixth most profitable health
insurer.
Second,
AARP wins when seniors lose. Because AARP receives a “royalty fee” of 4.95
percent of every premium dollar paid by seniors buying Medigap insurance from
the organization, AARP earns more profit when seniors pay more in premiums. Even
former AARP executives admitLINK that the billions of dollars raised from these
business enterprises have compromised the organization’s mission and
independence.
Third,
AARP’s policy positions just happen to coincide with its financial interests.
“Obamacare,” which AARP lobbied heavily for, could yield the group windfall
profits of more than $1 billion over the next decade by forcing seniors off
Medicare Advantage plans and into Medigap supplemental coverage. Conversely,
AARP engaged in a secret lobbying campaign to block Medigap reforms last year
that by one estimate would have saved nearly 80 percent of seniors an average of
$415 per year – but cost AARP billions in profits.
Fourth,
AARP knows it can protect its financial interests by aligning with Democrats, no
matter what its members think. That’s one reason why AARP endorsed “Obamacare,”
though the organization’s call response logs indicate opponents outnumbered
supporters by more than 50 to 1.
Consider: One senior AARP executive wrote the White House in November
2009, saying “we will try to keep a little space between us” on health care –
because AARP’s “polling shows we are more influential when we are seen as
independent, so we want to reinforce that positioning….The larger issue is how
best to serve the cause.”
“The
cause” in this case is liberalism, the Obama agenda and “Obamacare” in
particular.
Fifth,
the Obama administration has reciprocated AARP’s support by giving the group
preferential treatment. “Obamacare” exempted Medigap insurance – a market AARP
dominates – from virtually all its new mandates, including the ban on
preexisting condition discrimination. The Department of Health and Human
Services exempted Medigap plans from insurance rate review, though AARP, whose
plan is the most popular form of Medigap coverage, makes more in profit the
higher premiums rise. Though the administration has publicly attacked other
insurance companies with much smaller profit margins, it has not openly
criticized AARP’s business practices.
It’s not
that AARP and the administration don’t know better – they do. The AARP executive
who wrote White House officials knew that AARP had to be “seen as independent.”
He wasn’t independent, of course – comments about “serv[ing] the cause” make
that clear. But he knew he had to appear impartial to AARP’s
members.
And as a
former state insurance commissioner, Health and Human Services Secretary
Kathleen Sebelius must know that percentage-based “royalty” payments create a
strong incentive for abuse. Nonetheless, Sebelius called AARP the “gold
standard” for “accurate information” – though AARP makes more profits the higher
the Medigap premiums rise for seniors.
As much
as Obama claims to eschew Chicago-style politics, this administration’s crony
relationship with AARP gives every appearance of being an old-fashioned
protection racket. The administration lets AARP make billions of dollars in
profits off seniors, as long as they continue to support “the cause” and funnel
those profits toward supporting Obama’s liberal
agenda.
That’s
why the administration won’t speak out against AARP’s abuses; why Democrats who
said they ended “the worst insurance industry abuses” in “Obamacare” exempted
Medigap insurance from virtually the entire law, and why the Obama campaign is
so willing to use AARP as a political shield in running negative attack ads
against his opponent.
The
president recently said, “no American should have to spend their golden years at
the mercy of insurance companies.” What he won’t tell seniors today is that,
thanks to his administration’s protection racket, that isn’t
true.
Millions
of seniors have been — and will continue to be — taken advantage of, because
this administration’s protection racket turns a blind eye toward the insurance
industry abuses of the AARP.
Sen. Jim
DeMint (R-S.C.) is serves on the Senate Commerce, Science and Transportation
Committee, which has oversight over AARP, as well as the Joint Economic
Committee
|
9-20-12 - Two Math Lessons for President
Obama
In his speech to the Democratic National Convention a
few weeks ago, President Clinton said that one of the new ideas Democrats
brought to Washington was “arithmetic.” Which is particularly ironic, given two
developments associated with yesterday’s updated CBO estimates of the mandate taxes
associated with Obamacare:
1. The Administration claimed that the tax
increase wouldn’t harm middle-class families because the tax “will only affect
people who can afford health care but choose not to buy it.” But the
Congressional Budget Office estimated that 600,000 people with incomes UNDER the
federal poverty
level – that’s $15,130 for a family of two in 2012 – would pay higher taxes
due to the Obamacare mandate. CBO has also projected that the average
premium in the Exchange will be $15,200 per family per year. Last time I
checked, $15,200 was greater than $15,130 – meaning some people
may face higher taxes because Obamacare forces them to buy health insurance
whose total premium could cost more than their family’s entire
income.
2. CBO also admitted
that “most of the increase—about 85 percent—in the number of people who are
expected to pay the penalty tax [since CBO’s April 2010 estimate] stems from
changes in CBO and JCT’s baseline projections since April 2010, including the
effects of legislation enacted since that time, [and] changes in the economic
outlook, primarily a higher unemployment rate and lower wages and
salaries.” I could be wrong, but I thought it was better for
unemployment to be going down, not up, and for wages to be going up rather than
down. In which case a President running for re-election on a slogan of moving
“Forward” has in reality moved the American economy backward since CBO made its
initial estimates two years ago.
9-20-12 - Profits Before Principles: How AARP Wins
When Seniors Lose
Senator DeMint has released a report,
entitled “Profits Before Principles,” which examines the business practices of
AARP. The report includes new research showing how AARP would lose billions of
dollars if Obamacare is repealed or Medigap reforms are passed. AARP
secretly lobbied against bipartisan Medigap reform during last year’s debt
supercommittee negotiations, which would have lowered costs on seniors but
lowered AARP’s profits by $1.8 billion, while hiding that information from their
members. The report also explores the group’s ties to the Obama
Administration and Democrat Party. It details the numerous mandate exemptions in
Obamacare that Medigap insurance received, a market AARP happens to dominate.
The Department of Health and Human Services (HHS) has also repeatedly shielded
AARP from new health insurance regulations and government
oversight.
9-19-12 - "Medicare Quantitative Easing:" Kathleen
Sebelius Channels Ben Bernanke
The Administration announced today its projection that
Medicare Advantage enrollment will rise next year. What it did NOT mention in
its announcement is why the program’s enrollment may climb: Because of a
Medicare Advantage demonstration program costing more than $8 billion, and
implemented solely by executive fiat, that looks suspiciously like an attempt to
avoid the effects of Obamacare’s $300 billion in Medicare Advantage cuts prior
to the 2012 election. In other words, even as the Administration implements
the cuts with one hand, its demonstration program – which amounts to a
three-year Obamacare waiver for seniors – temporarily undoes the cuts with the
other, because Secretary Sebelius has decided to spend an additional $8 billion
purely on her say-so.
This attempt by the Administration to essentially print money
so its Medicare Advantage problem goes away before the 2012 election has not
escaped criticism. Both the Medicare Payment Advisory Commission and the
Government
Accountability Office have raised serious questions about the demonstration
program. One
report by GAO suggested the program may exceed the Administration’s
statutory authority. The Associated Press also reported on the Medicare Advantage
demonstration last year, noting that the program “could head off service cuts
that would have been a [political] headache for Obama and Democrats in next
year’s elections.” Even a former Democrat staffer who worked in the Clinton
Administration admitted that the effort amounted to a political stunt: “It’s
fair to say that [Medicare] could not tolerate dislocation, given the political
climate.”
Some conservatives have criticized Chairman Bernanke’s latest
efforts at quantitative easing, noting that the Federal Reserve’s initiatives to
print money could prove difficult to unwind in the longer term and lead to
inflation. Likewise, Secretary Sebelius’ efforts to print $8 billion to solve a
political problem could prove the tip of the iceberg in its long-term fiscal
effects. The Administration assumes all the Medicare spending reductions
will go into effect, but the Medicare Advantage demonstration program
illustrates how the Obama White House has already reversed one of the major
spending reductions – the Medicare Advantage cuts – to fend off political
dissent during the President’s re-election campaign. So either seniors
will lose access to
Medicare Advantage plans, the Obama Administration will continue to undo the
cuts – thus causing the deficit to increase – or some combination of the two
will take place. Either way, Secretary Sebelius’ “political quantitative easing”
when it comes to Medicare Advantage is not likely to end well for seniors, or
for taxpayers.
9-19-12 - More Silliness from Peter
Orszag
Former Obama Administration budget official Peter Orszag uses
his weekly column
in Bloomberg to make claims that premium support proposals will result in
fewer doctors accepting patients in traditional, government-run Medicare. But
the article includes several faulty premises, starting with the fact that
“Medicare represents such a large share of the health care market.” The word
“market” appears frequently in the Orszag article – but the term has very little
to do with government-run Medicare. A program like Medicare – which relies
upon government-dictated, top-down, “take it or leave it” pricing structures –
is NOT a market, under any true sense of the term – it’s tantamount to economic
dragooning of medical providers.
If Orszag and others on the Left want to argue that
Medicare IS a market, ask them how they would respond if half of all doctors,
hospitals, or both suddenly decided to drop out of the Medicare program.
Does anyone really believe that liberals would allow such a scenario to happen?
Of course they wouldn’t. And given the trillion-dollar budget deficits under
President Obama – making new money to finance reimbursement rate increases
virtually impossible to find – Democrats would instead propose new forms of
coercion to keep doctors from leaving the Medicare program. Orszag may talk
about markets all he wants, but it’s patently obvious that no Democrat would
ever allow a true marketplace for provider participation to develop within
Medicare.
Second, if premium support really does result in some
percentage of physicians leaving traditional Medicare, seniors could choose a
Medicare Advantage plan to maintain access to their favorite doctors and
hospitals as part of that plan’s provider network. Orszag claims that “the
existing Medicare program already offers Medicare Advantage plans, so perhaps
anyone who wants private insurance already has it. But then, what is the point
of Ryan’s Medicare reform?” Well, one point is that premium support would
mitigate the effects of Obamacare’s $300 billion in cuts to Medicare Advantage,
which will reduce the
program’s enrollment by half and plan choices by two-thirds. So seniors
would actually have a true choice in health plans under premium support, which
would fix the damage Obamacare is about to inflict on the Medicare Advantage
program.
That’s not the only part of Obamacare Orszag conveniently
left out. His piece ignores entirely the fact that both the Congressional
Budget Office (which Orszag himself used to head) and the non-partisan
Medicare actuary believe that Obamacare will result in providers becoming
unprofitable and leaving the program. Here’s what the actuary had to
say:
In the Office of
the Actuary’s April 22, 2010 memorandum on the estimated financial effects of
the Affordable Care Act, we noted that by 2019 the update reductions would
result in negative total facility margins for about 15 percent of hospitals,
skilled nursing facilities, and home health agencies. This estimated percentage
would continue to increase, reaching roughly 25 percent in 2030 and 40
percent by 2050. In practice, providers could not sustain continuing
negative margins and, absent legislative changes, would have to withdraw from
providing services to Medicare beneficiaries, merge with other provider
groups, or shift substantial portions of Medicare costs to their non-Medicare,
non-Medicaid payers.
Unless and until Orszag wants to acknowledge what his former
colleagues at CBO and elsewhere have said – that Obamacare itself will reduce
access to Medicare providers by as much as 40 percent over the long term – he
has little right to cast stones elsewhere. We should take no lessons from
someone who, given his VERY selective memory, appears more interested in scoring
cheap political points for his former boss than in having a substantive policy
discussion.
9-17-12 - Coming Attractions: Obamacare Goes
Hollywood!
Over the weekend, the New York Times reported on California’s attempts
to implement Obamacare. Among other things, the state is looking to build
support for the law by hiring a PR firm to engage in some old-fashioned
Hollywood propaganda:
Realizing that much
of the battle will be in the public relations realm, the exchange has poured
significant resources into a detailed marketing plan — developed not by state
health bureaucrats but by the global marketing powerhouse Ogilvy Public
Relations Worldwide, which has an initial $900,000 contract with the
exchange….
And Hollywood, an
industry whose major players have been supportive of President Obama and his
agenda, will be tapped. Plans are being discussed to pitch a reality
television show about “the trials and tribulations of families living without
medical coverage,” according to the Ogilvy plan. The exchange will also seek to
have prime-time television shows, like “Modern Family,” “Grey’s Anatomy” and
Univision telenovelas, weave the health care law into their plots. “I’d like
to see 10 of the major TV shows, or telenovelas, have people talking about ‘that
health insurance thing,’ ” said Peter V. Lee, the exchange’s executive director.
“There are good story lines here.”
Indeed, there are many good story lines – and television show
ideas – from Obamacare. We have several we’d like to suggest:
“The Office:” Kathleen
Sebelius and federal bureaucrats channel Dwight Schrute in the famous “Health Care”
episode, deciding which treatments and diseases will, and will not, be
covered under Obamacare. No word yet on whether Count Choculitis will
in fact be considered a covered benefit under the law.
“Lost:” Instead of being
trapped on an island, participants in this series will instead be marooned in a
vast federal
bureaucracy including 159 new boards, bureaucracies, and programs,
along with over 12,800 pages of regulations. In the pilot episode, thousands of small
businesses found that Obamacare’s complex small business tax credit left them
stranded and confused amidst a complicated array of paperwork that bogged down
their firms – and saw many businesses not qualify for a credit at all.
“Nick Riviera, M.D.:” The networks originally
proposed a revival of the popular “Marcus Welby” series. Unfortunately, due to
Obamacare’s unsustainable reductions in Medicare
reimbursement rates, Dr. Welby – along with many other medical providers –
will soon stop
practicing medicine. As a result, the networks resorted to “The Simpsons’”
most famous graduate
of Hollywood Upstairs Medical College. Expect to see members of the medical review board
as recurring
characters in this show…
“Unhappy Days:” In this
show, Tom Bosley
is forced to shrink his hardware store business, as Obamacare’s employer mandate
will discourage new employment. Rather than pay tens of thousands of dollars in penalties, he stops hiring new
workers and converts his full-time employees to part-time status. His
workers respond with a single despondent reaction: “Whoa!”
Coming soon to a small screen near you!
9-17-12 - How the Status Quo Leaves Medicare Ripe for
Abuse
Yesterday, the Washington Post ran its second major expose in
as many months about abuses in the Medicare program. Last month’s article
was about the way drug companies abused reimbursement for anti-anemia
drugs; yesterday’s piece focused on providers “up-coding” – that is,
claiming to see patients for longer and more intense visits, so as to claim
higher reimbursement from Medicare. The article notes the practice has become
widespread, and costs Medicare billions annually:
Thousands of
doctors and other medical professionals have billed Medicare for increasingly
complicated and costly treatments over the past decade, adding $11 billion or
more to their fees — and signaling a possible rise in medical billing
abuse, according to an
investigation by the Center for Public Integrity.
Between 2001 and
2010, doctors increasingly moved to higher-paying codes for billing Medicare for
office visits while cutting back on lower-paying ones, according to a year-long
examination of about 362 million claims. In 2001, the two highest codes were
listed on about 25 percent of the doctor-visit claims; in 2010, they were on 40
percent. Similarly, hospitals sharply stepped up the use of the highest codes
for emergency room visits while cutting back on the lowest
codes….
Medicare billing
data do not indicate that patients are getting more infirm, as their reasons for
visiting their doctors were essentially unchanged over time. And annual surveys
by the federal Centers for Disease Control and Prevention have found little
increase in the amount of time physicians spend with patients. That suggests
that at least part of the shift to higher codes is due to “upcoding” — also
known as “code creep” — a form of bill-padding in which doctors and others bill
Medicare for more expensive services than were actually delivered, according
to health experts and the data analysis by the center.
Because
physicians and hospitals are paid by Medicare in a fee-for-service format
according to the services they perform, many have discovered that they can get
paid more by billing for more, and/or more intense, procedures and services.
Ironically, the Post article notes that “the aggressive push to electronic
medical records” – which Obama Administration officials claimed would
lower health costs – “is likely fueling the trend toward higher
codes” and greater Medicare spending.What does Obamacare do to change fee-for-service medicine? The answer ranges from “precious little” to “not enough.” The law does include various demonstration programs designed to improve coordination of care, and shift emphasis back towards primary care physicians. But the non-partisan Congressional Budget Office, in a January report analyzing dozens of Medicare demonstration programs over decades, said these programs did not contain health costs – because of the flawed and perverse incentives included in fee-for-service medicine:
The evaluations
show that most programs have not reduced Medicare spending….Demonstrations
aimed at reducing spending and increasing quality of care face significant
challenges in overcoming the incentives inherent in Medicare’s fee-for-service
payment system, which rewards providers for delivering more
care…
Ironically, Medicare premium support could encourage a
movement away from fee-for-service medicine – by offering an avenue for
providers and insurers to come up with new and innovative payment methods that
focus on value and quality rather than performing services. But President Obama
and liberal Democrats have decided to oppose these reforms – which means that,
under President Obama, we’re likely to see even more stories about how Medicare
providers are manipulating and abusing the reimbursement system to the tune of
billions of dollars
9-12-12 - Which is Greater: $2 Billion or $843
Billion?
Yesterday the Administration released a report claiming
that Obamacare saved Americans from more than $2 billion in health insurance
premiums. The report includes many questionable assumptions; one footnote admits
the claim that rate review reduced individual insurance premiums by 1.4 percent
was “not weighted by enrollment” – meaning that the numbers in the report could
have very little resemblance to what individuals actually purchased in the “real
world.” Politico concluded this morning that the HHS
“analysis” was deceptive:
[Administration officials]
admitted during a conference call yesterday that the report did not distinguish
between savings from rate reviews that would have been achieved by the state
systems in place before [Obamacare] came along and savings from the law's new
mandatory review of double-digit increases, for instance. And it did not
estimate what greater savings had been gotten from the substantial assistance
HHS has given to states to beef up their rate review operations. Long story
short: The lead on the press release — “The health care law — the Affordable
Care Act — has saved consumers an estimated $2.1 billion on health insurance
premiums” — is a little misleading.
Of course, there’s a reason why the Administration felt the
need to put out this “misleading” report yesterday – to distract from Tuesday’s
coverage of the annual
Kaiser survey on employer-provided insurance, which showed that premiums
went up by nearly $700 per family this year. That increase is in direct
contradiction to candidate Obama’s repeated promises to CUT premiums
by $2,500 per family. Overall, premiums have gone up by $3,065 per family
since Barack Obama was elected President, compared to his promise that premiums
would go down by $2,500 per family.
In light of yesterday’s Kaiser Foundation study, and today’s
release of updated Census Bureau data on health insurance
coverage, we’ve revised the JEC paper released last month on the premium
impact of Obamacare’s failure to deliver. The updated JEC report, which is
attached, finds that the average family has paid $12,791 more in health
insurance premiums over the past four years due to Barack Obama’s failed premium
promise – and the failed promise has cost the economy as a whole more than $843
billion.
I’m no math major, but last time I checked, $843 billion was
a LOT bigger than $2 billion. Meaning that even if you think yesterday’s HHS
report isn’t “misleading,” it’s still a mere drop in the bucket when compared to
Obamacare’s much larger failure to deliver for the American
people.
9-12-12 - "Forward?" Census Data Show Obama's Economic
Damage
As we previously noted, the Administration is likely to
“spin” the modest gains in the number of insured Americans as due to Obamacare’s
under-26 health insurance mandate. Census Bureau officials already mentioned the
provision in their conference call announcing the uninsured data, and other
Administration officials are likely to follow suit.
But the real story behind today’s uninsured numbers is not that
Obamacare worked, but that the “stimulus” didn’t. The graph below tells the
tale: From 2007 through 2011, the number of individuals with employer-based
insurance fell by nearly 9 million – from 179 million in 2007 to 170.1 million
last year – while Medicaid enrollment exploded 28%, from 39.7 million in 2007 to
50.8 million last year. And that’s even before Obamacare could result in 25
million more Americans enrolling in the Medicaid program, according to the Medicare
actuary.
As the chart below makes clear, the data reflect economic
trends that pre-date President Obama’s term in office. But as last year’s 2.3
million increase in Medicaid enrollment demonstrates, President Obama’s economic
policies haven’t improved the existing trends – and in some cases have
accelerated the damage. If the Administration wants to claim that Obamacare’s
under-26 mandate helped reduce the number of uninsured, then it should similarly
accept responsibility for the economic policies under which there are nearly 4
million more uninsured – and over 8 million more individuals on Medicaid – then
when Barack Obama was elected four years ago.
9-12-12 - Three Things You Need to Know About Today's
Census Uninsured Report
The Census Bureau released their annual report on poverty,
income, and the uninsured this morning; the report is now online and can be
found here.
Important facts you need to know from the health insurance section of the
report:
1. Uninsured
Numbers Fall Slightly: The total number of uninsured fell to 48.6 million, a
decrease of just over 1.3 million compared to 2010’s level of 50.0 million
uninsured. The uninsured rate fell 0.6 percentage points to 15.7 percent. It’s
also worth noting that the coverage gains, while modest, were relatively
consistent across all age, income, and demographic categories – so while the
Administration will attempt to attribute most or all of the coverage gains to
the under-26 insurance mandate, other factors were also clearly
involved.
2. Public
Coverage Rises Significantly: While the number of individuals with private
insurance rose by about 800,000 individuals, with most of that increase coming
from employer-based coverage, the number of individuals with government-provided
health insurance rose appreciably. Public insurance coverage increased by 3.9
million, led by an increase in Medicaid enrollment of 2.3 million. The
Medicare population also rose by about 2 million, likely reflecting both the
retirement of the first Baby Boomers and an increase in disability claims due to
the recession. (Note that some people can be enrolled in multiple public
programs, explaining why the increase in public insurance coverage is less than
the combined increase in Medicaid and Medicare coverage.)
3. SCHIP
Crowd-Out Grows: Today’s report saw a continuation of existing trend, in
which millions of children have lost private insurance coverage and gained
coverage through government programs. Since 2007, the number of children
enrolled in private insurance has fallen by nearly 4 million, while the number
of children enrolled in Medicaid (which also includes SCHIP) has risen by nearly
5.4 million, or more than 25%. As a reminder, a significant expansion of SCHIP
was enacted in February 2009. While it’s unlikely that the entire migration
from employer-sponsored coverage to Medicaid was caused by individuals
voluntarily dropping out of employer coverage to enroll in government-sponsored
coverage, it likely contributed to this ongoing migration.
Also of interest is a breakout of the various cohorts of the
uninsured:
· The number of
non-citizens (both legal and illegal) without health insurance rose totaled 9.7
million. Non-citizens comprise just under one-fifth of the total number of
uninsured.
· According to
supplemental
data, the number of uninsured individuals with household incomes under
$25,000 totaled 19.1 million, or nearly 40% of the 48.6 million uninsured. Many
of these individuals may be eligible for public assistance through Medicaid and
SCHIP. Also, as noted in greater detail below, a significant number of these
uninsured may in fact already be enrolled in public insurance programs, but
their insurance status is not accurately reported by the Census
data.)
· The number of
uninsured individuals with household incomes over $75,000 totaled 7.5 million,
or just over 15% of the 48.6 million uninsured. Many of these individuals may be
able to obtain coverage on their own, but may choose not to do so if they do not
consider the insurance policies offered to be of value to them.
Both a specific and a general caveat on the Census data.
First, the income-based data cited in the two bullets directly above may have
reliability issues, particularly when compared to prior year reports. For
instance, last year’s Census report found 16.1 million uninsured in families
with household incomes under $25,000. For this particular group of uninsured to
rise by 3 million (from 16.1 million in last year’s report to 19.1 million today), at
a time when the uninsured population as a whole was falling by 1.3 million,
seems contradictory. This potential anomaly may explain why the income-based
data were relegated to a supplemental spreadsheet on the Census website this
year, rather than being placed in the report itself, as was the custom in prior
years.
Second, and more generally, while the Census Bureau figure of
uninsured Americans is among the most widely reported, it is far from the only
measure used – or the most accurate. Many indicators confirm that the Census
survey represents a “point-in-time” snapshot of the uninsured population at any
given moment, and does not reflect the number of individuals without insurance
for long periods of time – those in most need of assistance. For instance, while
the Census report found 50.7 million uninsured in 2009,
a separate study by the Centers for Disease Control
found that 32.8 million Americans were uninsured for one year or longer in 2009,
and a survey of
health spending conducted by the Department of Health and Human Services found
41.3 million non-elderly Americans lacked coverage for all of 2009. In 2009,
the Census survey saw a larger jump in the number of uninsured than the other
two reports, which could be a result of methodological flaws, and/or the fact
that many of the uninsured lacked health coverage for periods of less than a
year. (For a further discussion of these issues, see also a 2006 Kaiser Family
Foundation brief comparing the uninsured surveys, as well as a 2003 CBO
analysis of the long-term uninsured.)
It is also worth noting that the Census survey relies on
individuals to self-report their insurance status, and some individuals may not
remember periods of health insurance coverage. Adding a “residual” question to
the Census survey in 2000 – to confirm that those without employer, individual,
or government coverage were in fact uninsured – reduced the number of uninsured
Americans by 8 percent. One survey conducted for the Department of Health
and Human Services in 2005 adjusted for the number of individuals which the
Centers for Medicare and Medicaid Services (CMS) reported were enrolled in
Medicaid, but who did not report insurance coverage for the Census survey. Such
adjustments for the Medicaid undercount reduced the number of uninsured by about
9 million – or one-fifth of the total uninsured – and the number of uninsured
children by half. For these reasons, the Census Bureau report itself admits that
“health insurance coverage is underreported [in the Census data] for a
variety of reasons,” meaning that by Census’ own admission, the number of
uninsured is lower than its report indicates
9-11-12 - Higher Premiums Now, Higher Premiums
Later
As we’ve previously reported, the main take-away from
the Kaiser survey of employer-sponsored coverage
is that premiums rose this year by an average $672 per family – and more than
$3,000 since Barack Obama was elected in 2008. Worse yet, a look at other
elements of the survey demonstrates that many Americans will be affected by even
higher premiums when all of Obamacare’s mandates take effect:
- Eight percent of covered
workers face a waiting period of four or more months (Exhibit 3.8, p. 60) to
qualify for employer health coverage. But the law specifies that employers must
shorten waiting periods to no more than 90 days. These workers will face
premium increases thanks to Obamacare.
- Approximately one in seven
(14%) covered workers – and more than one in four (27%) covered workers in small
firms – have single deductibles of $2,000 or more (Exhibit 7.6, p. 117). But the
law caps deductibles for a single policy at $2,000. These workers will
face premium increases thanks to Obamacare.
- A majority (51%) of workers
in high deductible health plans have family plan deductibles of over $2,000
(Exhibit 8.8, p. 160). But the law caps single plan deductibles at $2,000 per
year. These workers will face premium increases thanks to
Obamacare.
- More than two in five (42%)
workers in high deductible health plans have family plan deductibles of over
$4,000 (Exhibit 8.10, p. 162). But the law caps family plan deductibles at
$4,000 per year. These workers will face premium increases thanks to
Obamacare.
- More than one in eight
covered workers (13%) are in plans with no annual out-of-pocket maximum (Exhibit
7.29, p. 140). But the law prohibits annual limitation on cost-sharing above a
government-defined threshold. These workers will face premium increases
thanks to Obamacare.
All these workers will face premium increases as a direct
result of provisions in Obamacare. And that assumes that workers will get to
keep their coverage at all. For the nearly one in five (19%) workers in
high-deductible plans, Secretary Sebelius and HHS will publish regulations that
hold the potential for many, if not most, high-deductible plans to be considered
NOT “government-approved.” And given that premiums in high-deductible and
consumer-driven health plans were more than $2,000 cheaper than the average PPO
insurance policy, according to the Kaiser study, a finding by the Administration
that these plans are not “government-approved” will result in millions more
Americans BOTH losing their current coverage AND being forced to purchase even
more expensive insurance.
Democrats will claim that today’s higher premiums are an
anomaly. But looking at the survey data, and analyzing the provisions of the
law, it becomes obvious that when it comes to skyrocketing premiums thanks to
Obamacare, you ain’t
seen nothing yet.
9-11-12 - Obama's Health Care Legacy: A $3,000 Premium
Increase
The most important story in health care today involves the
release of the Kaiser Family Foundation’s annual survey of employer-sponsored health insurance
premiums. According to the survey, premiums rose by $56 per month, or
$672 per year, for the average family health insurance plan – that’s an increase
of more than 4 percent, more than twice the rate of
inflation.
As a reminder, candidate Obama said repeatedly his bill would CUT premiums by
an average of $2,500 per family – meaning premiums would go DOWN, not merely
just “go up by less than projected.” The campaign also promised that that those
reductions would occur within Obama's first term. However, the
annual Kaiser Foundation survey of employer-provided insurance found that
average family premiums totaled $12,680 in 2008, $13,375 in 2009, $13,770 in 2010, $15,073 in 2011, and $15,745 this year. In
other words, while candidate Obama promised
premiums would fall by $2,500 on average, premiums have risen by $3,065 since
Barack Obama was elected President. (A visual representation of
this broken promise – updated to reflect this year’s survey data – is attached
below my signature.)
Other conclusions from the Kaiser study:
·
You CAN’T Keep Your Current Coverage: The survey
found that a majority (52%) of workers have now been forced out of their
pre-Obamacare coverage – that’s an increase of 8 percent from just last
year. The loss of employees’ pre-Obamacare coverage is occurring even faster
than the Administration’s own estimates, which concluded half of all
employers – and as many as 80% of small businesses – will be forced to give up
their current coverage by 2013. Just as important, by giving up their
pre-Obamacare plans, both employers and employees will be subjected to costly
new mandates that will increase premiums.
·
New Requirements are Raising Premiums: Significant
percentages of workers were in plans that had to change their services covered
(41%) or cost-sharing requirements (33%) to meet Obamacare’s new preventive
service mandates. And the percentage of plans having to increase their benefits
due to Obamacare rose by 10 percent when compared to last year. These new
mandates by definition will raise premiums for plans, as this year’s premium
increase demonstrates.
Just before Obamacare passed, former Speaker Pelosi famously
said
we had to pass the bill to find out what’s in it. Today we have once again found
out just how much the 2700-page law is failing to live up to the President’s
promises.
9-10-12 - The Obama Campaign's Magical Medicare
Mystery Tour
Over the weekend, the Obama campaign renewed their refrain
of “Mediscare” attacks during a series of speeches in Florida. The new hook
for the President was a Center for American Progress study, which we
have already
debunked elsewhere. One of the study’s authors was Harvard economist David
Cutler – and a new National Journal piece (subscription required)
shows that the “hot shot of the health economics world” has, shall we say,
evolved slightly when it comes to reforming Medicare:
·
I In an e-mail to staff of the Simpson-Bowles fiscal
commission back in 2010, Cutler proposed “removing the special status of
traditional Medicare.” In the CAP report he co-authored just last month, Cutler
said that “the Romney-Ryan plan increases system-wide costs by promoting private
insurance that will be more costly than the existing [traditional] Medicare
system.”
· The
introduction to the CAP paper last month said that Governor Romney and Chairman
Ryan “want to convert our nation’s Medicare program into a voucher system for
people who are under 55 years of age.” Which is exactly what Cutler
himself proposed back in 2010, when he wrote the Simpson-Bowles commission and
suggested “moving the Medicare population into the exchanges…that would be the
same as the voucher.” As the National Journal article notes, “Cutler wasn’t just recommending that the Democrats
incorporate vouchers into Medicare, something the Obama campaign is squarely
against now. He was also proposing that the federal government move seniors into
insurance exchanges through a much-criticized executive-branch Medicare board
[i.e., the Independent Payment Advisory Board created by Obamacare]. That is a
proposition you won’t hear in talking points from either Cutler or the Obama
campaign.”
· In the CAP
paper last month, Cutler wrote that “private insurance that will be
more costly than the existing Medicare system.” Which is the exact
opposite of the conclusion reached in another August article, this one in the Journal of the American
Medical Association: “beneficiaries must pay more for traditional
Medicare or join a private plan.” And one of the authors of that JAMA
piece? You guessed it – David Cutler.
So the highlight of the Obama campaign’s “Mediscare”
mud-slinging argument is an analysis from someone who has flip-flopped on 1)
keeping traditional Medicare’s preferred status; 2) converting Medicare into a
“voucher” program; and 3) whether traditional Medicare will be more or less
costly than private insurance plans (with that last flip-flop taking place in
the lengthy time span of three weeks). When trying to explain away his
contortions on Medicare reform, Cutler told National Journal he was “trying to explain health care economics to people who are
not economists or health care specialists….I agree, people should read my
articles and books. But if they don’t, I need to communicate in pieces.” In
other words, believe Cutler – or at least some of the “pieces” of his analysis –
instead of your own lying eyes.
One thing’s for certain: There’s a whole lot of change in
these disingenuous assaults by Team Obama. But there isn’t a lot of hope in
them, that’s for sure. Nor is there a lot of principle either.
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