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Posts Tagged ‘Government-Run Health Care’

As I explained back in April, I’m cautiously optimistic that Obamacare will fall apart for the simple reason that it’s impossible to have a workable government-run healthcare system without the type of brutal rationing and sub-standard care found in places like the United Kingdom.

So part of me is happy that the White House has bumped into reality and now admits that it hasn’t been able to come up with a workable plan for the employer mandate.

But another part of me is unhappy.

One of the defining characteristics of a civilized government is adherence to the rule of law. Clearly written laws, applied equally and enforced fairly, are a big reason why nations such as Denmark can endure a big welfare state while countries like Argentina suffer from long-term relative decline even though it appears they have a smaller burden of government.

With this in mind, I’m rather troubled that the Obama Administration thinks it has carte blanche to arbitrarily disregard a legal requirement to implement the employer mandate beginning January 1, 2014. Even though it’s a bad law that should be completely repealed!

(This quandary reminds me of the old joke that the definition of mixed emotions is when your mother-in-law drives off a cliff…in your new car.)

My Cato colleague Michael Tanner is an expert on Obamacare, and here’s some of his analysis from The Daily Caller.

The dominoes are falling. The administration’s decision to postpone implementation of the Affordable Care Act’s employer mandate until after the 2014 midterm elections is just the first to fall. More will be falling soon thanks to the administration’s belated recognition that the health care law will be a job-killing burden on business. In fact, this is actually the second major part of Obamacare to be postponed in the past few months. This spring, the administration announced that the ACA Small Business Health Option Program (SHOP) would be postponed until at least 2015. …Or perhaps we should call this the third major part of the law to fall apart. In 2011, the administration was forced to permanently postpone implementation of the CLASS Act, Obamacare’s long-term care program.

So far, so good. Obamacare is imploding, just as many of us predicted.

Oh, it’s worth noting that there’s another shoe ready to drop.

The administration is also struggling to implement Obamacare’s federally run insurance exchanges. HHS Secretary Kathleen Sebelius has insisted that the federal government will be able to set up and run exchanges in some 33 states where state governments have chosen not to, but Sebelius has been unable to provide Congress or the public with a credible plan for doing so. A new report from the Government Accountability Office questions whether the exchanges will really be operational by their October 1 deadline.

Gee, I’m totally shocked to learn that government is incompetent. Knock me over with a feather!

But let’s focus on the part of the law that the White House just decided to ignore. Mike explains the meaning of the delayed employer mandate.

…the administration’s decision to postpone the employer mandate may make a bad situation worse, at least for workers. The postponement affects only the mandate that employers (with 50 or more workers) provide insurance. The individual mandate remains in place, requiring nearly all Americans to have insurance or pay a fine. Individuals who would otherwise have gotten insurance through their employers may now be forced to purchase their own insurance. It increasingly looks as though that insurance will be very expensive, especially for the young and healthy. In fact, as the Wall Street Journal recently reported, some consumers “could see insurance rates double or even triple when they look for individual coverage under the federal health law later this year.”

However, the White House has concocted a “solution” for the problem of providing subsidies to individuals in the absence of information from employers.

They’re going to offer people big piles of free money and rely on the honor system.

I’m not joking. Here’s how the editors at the Wall Street Journal describe the new system.

HHS now says it will no longer attempt to verify individual eligibility for insurance subsidies and instead will rely on self-reporting, with minimal efforts to verify if the information consumers provide is accurate. …People are supposed to receive subsidies only if their employer does not provide federally approved health benefits. Since HHS now won’t require business to report those benefits or enforce the standards until 2015, it says it can’t ask ObamaCare’s “exchange” bureaucracies to certify who qualifies either. …In other words, anyone can receive subsidies tied to income without judging the income they declare against the income data the Internal Revenue Service collects.

Needless to say, this will mean far higher costs for taxpayers, just as many of us warned even before the law was approved.

…that is the system Democrats installed when they passed the law, which is not supposed to be optional due to administrative incompetence. HHS promises to develop “a more robust verification process,” some day, but the result starting in October may be millions of people getting subsidies who don’t legally qualify. This would mean huge increases in ObamaCare spending. Some of these folks could be fraudsters, much as 21% to 25% of Earned Income Tax Credits flow to people who aren’t eligible, according to the Treasury inspector general. The same error rate for ObamaCare would amount to as much as $250 billion in improper payments in its first decade.

Here’s the bottom line.

HHS’s logistical challenges are real. But our bet is that the Administration is also using them as a pretense in a deliberate bid to make it much easier to join the exchanges. That’s because the health planners are terrified that enough healthy, low-cost people won’t sign up and therefore the Affordable Care Act’s strict regulations on underwriting and risk-pooling will blow up insurance markets. As more and more of ObamaCare tumbles, the Administration is resorting to anything that can salvage the goal of permanently expanding the U.S. entitlement state.

In other words, the White House is willing to sacrifice the rule of law (not to mention quality health care) in order to achieve a political goal of expanded dependency.

Let’s close on a humorous note with some great cartoons, starting with this gem from Gary Varvel.

Obamacare Cartoon July 2013 2

If you like the “train wreck” theme, you can see a great Steven Kelley cartoon by clicking here.

Next we have a Nate Beeler cartoon that makes the very obvious connection between the latest White House decision and the 2014 midterm elections.

Obamacare Cartoon July 2013 3

The Democrats lost 25 House seats in 2010 because of Obamacare according to one academic study, so maybe Obama is being clever by postponing part of the law.

Here’s a Lisa Benson cartoon that captures the haphazard and sloppy way the law was put together.

Obamacare Cartoon July 2013 4

I guess Nancy Pelosi was right when she said that the law had to pass before we discovered what was in it (though as Gary Varvel illustrates here, all the surprises are bad).

Let’s conclude with two cartoons that take a big-picture look at Obamacare, beginning with one from Chip Bok that was very appropriate on July 4.

Obamacare Cartoon July 2013 1

Last but not least, we have a great cartoon from Rick McKee.

Obamacare Cartoon July 2013 5

If I haven’t exhausted your interest in Obamacare cartoons, you can enjoy some more by clicking here, here, here, here, and here.

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The political elitists in Washington are worried that the American people are lukewarm – or even downright hostile – about Obamacare.

You can imagine two of them having a conversation, with the first saying, “Don’t these stupid peasants realize we’re giving them stuff?!?” and the second responding “We need the riff-raff in flyover country to feel grateful so they’re more likely to vote in favor of continued dependency!”

It never occurs to them that maybe, just maybe, people value freedom. Or, even if they don’t care about liberty, perhaps they object to the fact that government costs a lot and delivers very little. Nobody likes paying for a steak and getting a hamburger, after all.

But the statists think it’s just a matter of messaging, and this mindset is even seen in news coverage.

Here’s some of what Politico wrote today.

Obamacare MessagingThe Obama administration and its health-law allies are gearing up this summer to slice through three years of confusion and opposition to Obamacare. They’ve got their work cut out for them. Obamacare won’t have a shot at success unless millions of people sign up for insurance — the healthy as well as the sick. …Organizing for Action, spun off from President Barack Obama’s campaign operation, went up with a seven-figure TV ad buy in June, touting the new benefits and promising to offer “the truth” about the law. Enroll America, a nonprofit group with ties to the White House, wants to leverage the grass roots across the country and engage big-name celebrities for the cause.

To put it mildly, they have their work cut out for them.

Thanks to absurd regulations and mandates that prevent the insurance market from working properly, young people and healthy people will have to pay far more than the market rate to obtain insurance.

Needless to say, not that many people will be dumb enough to take that deal, regardless of how many empty-headed Hollywood millionaires take part in a PR campaign telling them it’s the “cool” thing to do.

Especially when another brainless part of Obamacare basically allows people to wait until they get sick and then get insurance. If you’re wondering how that will work, just imagine how auto insurance would work if you could wait until after your DUI accident to get a policy – and you got subsidized by all the responsible drivers!

Obamacare defenders may delude themselves into believing that the mandate will work, but the penalty for noncompliance (oops, apologies Chief Justice Roberts, I meant the “tax” for noncompliance) is a lot less than the cost of an insurance policy.

And I don’t think the American people will be pleased when the army of new IRS agents starts harassing them to sign up for a bad deal.

It’s almost enough to make me feel sorry for the hacks at OFA and elsewhere who are trying to sell this lemon.

Simply stated, it doesn’t matter how much lipstick you put on a pig.

Let’s close with some amusing Obamacare cartoons, starting with one by Bob Gorrell which sort of shows how the IRS will enforce the new law.

Obamacare Cartoon 7

By the way, my favorite IRS-related Obamacare cartoon can be seen here.

Here’s a good cartoon by Steve Breen about the cost of the new law.

Obamacare cartoon 8

For what it’s worth, some of us were predicting runaway costs even before the legislation was enacted.

Let’s finish with this amusing cartoon by Gary Varvel. Technically speaking, Nancy Pelosi was right.

Obamacare Cartoon 9

Though I imagine she thinks we just need some clever messaging so we understand why it’s okay that bad things are happening to children, retirees, and low-income workers.

Let’s conclude with some optimism. Click here to read my six-part hypothesis on why this bad law can be repealed.

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One of history’s worst butchers, Josef Stalin, is rumored to have said that, “The death of one man is a tragedy, the death of millions is a statistic.”

Sadly, there’s probably some truth in that statement.

I’ve shared a bunch of horror stories about the U.K.’s government-run healthcare system (see here, here, here, here, here, herehereherehereherehereherehere, here and here) and I challenge you to read them without feeling some mix of anger, sadness, despair, and disgust.

Now read these passages from a story earlier this year in the UK-based Daily Mail.

As many as 1,165 people starved to death in NHS hospitals over the past four years… According to figures released by the Office for National Statistics following a Freedom of Information request, for every patient who dies from malnutrition, four more have dehydration mentioned on their death certificate. …In 2011, 43 patients starved to death and 291 died in a state of severe malnutrition, while the number of patients discharged from hospital suffering from malnutrition doubled to 5,558. …NHS hospitals have also stood accused of fiddling figures to mask the numbers of patients dying needlessly.

Without names, faces, and specific details, it’s easy to read the words, shrug your shoulders, and remain emotionally detached.

“I’m Josef Stalin and I approve government-run healthcare”

But there’s probably a gripping and tragic story for every one of those 1,165 people who died, as well as the 5,558 people who suffered from malnutrition.

You’re probably wondering whether the doctors and nurses in the United Kingdom are especially incompetent and/or inhumane. That may be true, but these nauseating statistics also are the result of a deliberate government policy to hasten death. If you think I’m kidding, read this story about children being put on the “Liverpool Care Pathway.” But only if you have a strong stomach.

Makes you wonder what Paul Krugman was thinking when he asserted that, “In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false.”

By the way, I’m not implying that the American health care system is the ideal approach. Our system is grossly inefficient and wasteful thanks to government-caused third-party payer.

But with Obamacare being implemented, including the IPAB “death panels,” maybe we’ll have the worst of both worlds. The inefficiency and expense of American-style third-party payer and the clinical cruelty of British-style single-payer.

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I had some fun back in April when I noted that politicians and staff on Capitol Hill were getting very agitated about having to be part of Obamacare.

Well, it seems that the way the law applies to them is so costly that many of them are thinking about calling it quits.

Here are some of the heartbreaking details from a story in Politico.

Dozens of lawmakers and aides are so afraid that their health insurance premiums will skyrocket next year thanks to Obamacare that they are thinking about retiring early or just quitting. The fear: Government-subsidized premiums will disappear at the end of the year under a provision in the health care law that nudges aides and lawmakers onto the government health care exchanges, which could make their benefits exorbitantly expensive.

Gee, cry me a river. It’s about time that these pampered potentates on the Potomac learn how it feels to live in the real world.

The story warns of potential consequences.

If the issue isn’t resolved, and massive numbers of lawmakers and aides bolt, many on Capitol Hill fear it could lead to a brain drain just as Congress tackles a slew of weighty issues — like fights over the Tax Code and immigration reform. …Sources said several aides have already given lawmakers notice that they’ll be leaving over concerns about Obamacare. Republican and Democratic lawmakers said the chatter about retiring now, to remain on the current health care plan, is constant.

Oh no, what a threat! The politicians who have spent years (or decades in many cases) imposing more taxes, more spending, and more regulation are saying they may leave? Well, my attitude is that we should tell them “don’t let the door hit you on the way out.”

Maybe some new blood would lead to more rational – or at least less irrational – policy from Washington.

I’m heartbroken with grief for the unfortunate politicians

And it would be good to go back to the days when we had fewer congressional staffers. Maybe they wouldn’t dream up so many bad ideas if each office had only 3-4 staff.

Now that I’ve vented, I suppose it’s time to take a deep breath and acknowledge that the crowd on Capitol Hill has a legitimate gripe. Because of sloppy legislative language in Obamacare, it appears that the politicians and Hill staffers will have to pay for health insurance with after-tax dollars out of their own pockets.

That’s actually the way the health insurance market should work, but I doubt lawmakers and Hill staffers want to be the guinea pigs for the new system. They’d rather experiment on us.

But you can’t make an omelet without breaking a few eggs. And if things get too hard for those blokes and gals, maybe the powers that be on the Hill can re-hire the grief counselors who were put on the payroll after the 2010 elections.

Not that they deserve any sympathy. As illustrated by this article, staffers and politicians quickly get hired as lobbyists, thus further contributing to the culture of corruption in Washington.

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I’ve complained ad nauseam about how government has screwed up the health sector, both because of spending programs such as Medicare and Medicaid and because of tax and regulatory distortions that have mutated the supposedly private insurance market into some bizarre form of pre-paid, all-you-can-eat healthcare.

These policies have created a third-party payer crisis.

https://danieljmitchell.wordpress.com/2010/12/08/everything-you-need-to-know-about-healthcare-economics-in-one-chart/There are a few tiny parts of our healthcare system where markets are allowed to operate and consumers are in charge of spending their own money, and in these areas – such as cosmetic surgery, laser eye surgery, and abortion – we find stable prices and rising quality.

But how do we move free market from isolated niches into the mainstream of the healthcare sector?

Well, it’s happening in small ways organically, largely because the current system has become an even bigger mess under Obamacare.

I’ve already cited the case of a North Carolina doctor who decided to use market-based pricing, and I’ve shared a very powerful video from Reason TV about  a hospital in Oklahoma that’s doing the same thing.

Now we have a free market revolution by a doctor in Maine.

Dr. Michael Ciampi took a step this spring that many of his fellow physicians would describe as radical. The family physician stopped accepting all forms of health insurance. In early 2013, Ciampi sent a letter to his patients informing them that he would no longer accept any kind of health coverage, both private and government-sponsored. Given that he was now asking patients to pay for his services out of pocket, he posted his prices on the practice’s website. …“It’s been almost unanimous that patients have expressed understanding at why I’m doing what I’m doing… the decision to do away with insurance allows Ciampi to practice medicine the way he sees fit, he said. Insurance companies no longer dictate how much he charges. He can offer discounts to patients struggling with their medical bills. He can make house calls. “I’m freed up to do what I think is right for the patients,” Ciampi said. “If I’m providing them a service that they value, they can pay me, and we cut the insurance out as the middleman and cut out a lot of the expense.”

His expenses have come down, and consumers benefit from much lower prices.

Ciampi expects his practice to perform just as well financially, if not better, than before he ditched insurance. The new approach will likely attract new patients…because Ciampi has slashed his prices. “I’ve been able to cut my prices in half because my overhead will be so much less,” he said. Before, Ciampi charged $160 for an office visit with an existing patient facing one or more complicated health problems. Now, he charges $75. Patients with an earache or strep throat can spend $300 at their local hospital emergency room, or promptly get an appointment at his office and pay $50, he said. Ciampi collects payment at the end of the visit, freeing him of the time and costs associated with sending bills, he said. …“If more doctors were able to do this, that would be real health care reform,” he said. “That’s when we’d see the cost of medicine truly go down.”

I have no idea if all medical costs would fall by 50 percent in a market-based system, but even if the system-wide savings were only half that much, that would be an enormous benefit to the economy.

In other words, it would be great to repeal Obamacare, but fixing the healthcare system requires far more sweeping reform.

We’ve tried everything else, and all these other options have failed. Maybe it’s time to give the free market a chance.

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I’ve frequently argued that “third-party payer” is the main problem with the healthcare system. In simpler terms, this is the notion that a market won’t function very well if consumers think they’re spending someone else’s money.

Why be a careful consumer, after all, if someone else is picking up the tab?

This is a pervasive problem in the United States, thanks to government programs such as Medicaid and Medicare that account for nearly 50 percent of total healthcare spending.

But our supposedly private insurance system also contributes to the problem. Under our convoluted internal revenue code, there’s no tax on worker compensation in the form of employer-provided fringe benefits such as health insurance. This allows workers to avoid a significant amount of both income tax and payroll tax by getting more and more of their compensation in the form of fringe benefits.

And since the average employer-provided family policy now costs about $15,000, the tax savings are significant. I like it when the government is deprived of revenue, of course, but this policy also contributes to the third-party payer problem by encouraging over-insurance.

Indeed, we’ve reached the point where only 12 percent of healthcare costs are paid for directly by the consumer. No wonder the healthcare market doesn’t function very well!

With this bit of background, let me explain why I’m about to say something quasi-nice about Obamacare.

Since I’ve already said the law is a fiscal nightmare and explained how it further cripples market forces in healthcare, this may be a bit of a surprise.

But even ogres and trolls occasionally have good points, and the same is true of Obamacare.

There’s a provision in the law that will cap the tax break for employer-provided health insurance. Here are parts of a New York Times report.

Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past. …Expect to have your blood pressure checked or a prescription filled at a clinic at your office, rather than by your private doctor. Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees. …Companies hoping to avoid the tax are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care. In a way, the changes are right in line with the administration’s plan: To encourage employers to move away from plans that insulate workers from the cost of care and often lead to excessive procedures and tests, and galvanize employers to try to control ever-increasing medical costs. …as many as 75 percent of plans could be affected by the tax over the next decade — unless employers manage to significantly rein in their costs.

The key passage in the above excerpt is that this change will “encourage employers to move away from plans that insulate workers from the cost of care.”

That’s just another way of describing how to deal with the third-party payer problem.

But I’m not an unqualified fan of this provision of Obamacare. I like getting rid of tax breaks, but not if it means more money for government. I want to use the money to lower tax rates, not to fatten government coffers. Needless to say, that’s not what happened with Obamacare.

Moreover, I don’t want employers figuring out how to reduce costs. Consumers need to be in charge, But if you read more of the story, it’s clear that many supporters of Obamacare don’t understand this critical distinction.

Proponents of the law say the Cadillac tax is helping bring down costs by making employers pay attention to what their health care costs are likely to be in the long run. “It’s really one of the most significant provisions” in the Affordable Care Act, said Jonathan Gruber, the M.I.T. economist who played an influential role in shaping the law.

Since Prof. Gruber played an “influential role” in the law, I guess we shouldn’t be surprised that he’s misguided even on this provision. But let’s set that aside.

I just wanted to point out that the “Cadillac Tax” would be my choice if I was forced to identify a silver lining to the dark cloud of Obamacare.

P.S. I’m not trying to rationalize a bad law. I want Obamacare repealed and I actually am reasonably optimistic that this can happen.

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After the Supreme Court’s politically motivated decision to approve Obamacare, I shared a bunch of depressing (but funny) cartoons, including a few focusing on added power for the IRS.

That was a miserable point in time.

Five Justices on the Supreme Court basically said the Constitution didn’t limit the federal government, even though that’s exactly what our Founding Fathers were trying to do when they put together the document! And they gave the green light to a costly expansion of the welfare state.

Oh, and that decision was handed down on my birthday. What a kick in the gut.

Since that time, though, I’ve become a bit more optimistic.

I’m feeling hopeful because Obamacare is turning out to be a disaster. But why is that a reason for optimism?!?

Well, as I recently wrote, this creates an opportunity to help people understand that big government is the problem in health care.

Obamacare was enacted in 2010, and it was perceived to be a paradigm-shifting change in the healthcare system, even though it was just another layer of bad policy on top of lots of other bad policy. …But because people think we’ve had a paradigm shift and government now is in charge (pay attention, since this is my key argument), they will be much more likely to blame “Obamacare” and “government” for all the warts and inefficiencies of the healthcare system. This means the public will be more receptive to pro-market policies, such as Obamacare repeal, tax reforms to reduce over-insurance, as well as the Medicaid and Medicare reforms in the Ryan budget.

Here are some new cartoons that illustrate the law’s growing unpopularity.

We’ll start with this contribution from Eric Allie.

Obamacare Crtn 5

For obvious reasons, it sort of reminds me of this Jerry Holbert cartoon.

Our next cartoon is from Henry Payne.

Obamacare Crtn 4

And here’s one from Chuck Asay, our runner-up from the cartoon contest.

Obamacare Crtn 3

What makes the Asay cartoon so appropriate is that people who supported the law will now have to defend every bad thing that happens.

Speaking of which, a prominent Democrat recently warned that Obamacare was turning into a “train wreck,” and Steven Kelley turned that comment into a very good cartoon.

Obamacare Crtn 2

Let’s close with another Henry Payne cartoon.

Obamacare Crtn 1

A very relevant cartoon since the job market remains far below its potential. Something else that defenders of the law will have to justify.

If you haven’t exhausted your interest in anti-Obamacare cartoons, you can enjoy some others here, here, here, and here.

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