Giving Back—Not the Role of Government


This week’s health policy news roundup curated by Jane Orient, M.D.

Many people forget that the government cannot give what it has not first taken. And once it takes power or gains a source of revenue, going back is very hard. For example: the Cadillac tax—so structured that most plans will eventually be treated as Cadillacs.

Having served its purpose of getting the budget numbers to add up so the Affordable Care Act would pass, the tax (which takes effect in 2018) is deplored by Republicans and Democrats alike. But economists and budget watchers warn that “unless it’s replaced by another way of changing tax incentives that encourage people to overspend on health care, the feel-good move to repeal the Cadillac tax could backfire.”

Repealing the tax itself would cost $91 billion through 2025, but the GOP repeal legislation is scored as a revenue raiser because getting rid of the individual mandate would boost the number of uninsured by 8.8 million, cutting government spending on health subsidies, the Congressional Budget Office says.

The government giveth; the government taketh away.

A letter signed by 101 economists, including Ezekiel Emanuel, emphasizes that it is not just the revenue, but the disincentive to use medical care that is important.

It’s a matter of “love, hate, and hypocrisy,” writes Howard Gleckman. We can’t “repeal it and replace it… with nothing.”

The Obama Administration opposes repeal, some Democrats don’t want to do anything to imperil the ACA, and lawmakers are squabbling over “pay-fors.”

Hillary Clinton, whose 1993 plan was not much different from Obama’s, opposes this tax. However, she favors even more intrusive micromanagement of medicine.

One small revision of ACA prevents the law from imposing expensive new requirements on employers of 51 to 100 workers.

Meanwhile, casualties of ObamaCare proliferate. Of 26 co-ops, 21 are either shut down or losing money. More than 100,000 policyholders in New York just learned that their Health Republic insurance plans will be canceled on Dec. 31. Loans from the taxpayers will never be paid back. “Abhorring for-profit insurance companies, [ACA architects] insisted that the Affordable Care Act establish nonprofit insurance cooperatives to compete with big players like Aetna and Humana,” writes Betsy McCaughey.

“Preposterously, the Obama administration specified that the co-ops be run by novices with no history of ties to the insurance industry. As if measuring risk and pricing policies is something that requires no expertise. Obama administration rules also barred the start-ups from spending money on advertising or marketing to make their products known. Why? Because the left has always blamed the high cost of health insurance on ad spending. It was a formula for failure.”

While federal oversight of doctors constantly tightens, there was virtually no federal oversight of ObamaCare exchanges. In a Sept 29 hearing before the House Energy and Commerce Oversight Subcommittee, only one of the six witnesses could say how much was spent on construction per enrollee. That state, Hawaii, spent close to $50,000, according to the witness.

Customer satisfaction with the Exchanges is low. About 70 percent of ObamaCare marketplace enrollees are dissatisfied with their ObamaCare plans, compared to 52 percent of Medicaid enrollees and 42 percent of Medicare enrollees. One big complaint is limited networks, and nearly half the plans have no out-of-network coverage.

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