Massachusetts: An Apples to Oranges Comparison

by Grace-Marie Turner

AEI’s Tom Miller challenges health economist Austin Frakt who wrote in a recent JAMA Forum article that the penalties in Obamacare are high enough to get people to comply with the individual mandate. 

Many others have argued that the initial penalty of $95 a year in the Affordable Care Act is insufficient to get people to purchase a $5,000 health-insurance policy, especially when people know other provisions of the law mean they can purchase a policy at the same low price if they wait until they get sick.

Frakt argues that the federal penalty will be sufficient based upon experience with the Massachusetts mandate. But this is an apples-to-oranges comparison.

“Despite cautioning that Massachusetts differs from the rest of the country in many ways, the usually careful Frakt still concludes that ‘all the best evidence and logic we have point in the same direction’ and indicate that the ACA’s mandate penalties will be adequate,” Miller writes in his AEIdeas blog post, “Hyping the individual mandate’s penalties.”

Then Miller proceeds to take apart Frakt’s argument: The size of the subsidies and penalties and the other regulatory differences between Obamacare and Romneycare are significant and do not provide a basis for legitimate comparison.

The authors’ suggestion that mandating coverage might play an even larger role in encouraging the healthy to participate in health insurance markets nationally than it has in Massachusetts represents more of a “hope” than a “finding,” and it fails to speak to the particular effectiveness of the size of the ACA penalties or the law’s enforcement policies.


Frakt cites another study which found “that Massachusetts’ mandate and penalties reduced average premiums from what they would have been without them, thereby curbing adverse selection. However, a closer look at the study suggests some quick jumps across categories and wider holes through which more ACA mandate hopes than robust evidence are driven around in circles,” Miller says.

Miller also cites community rating regulations that already were in place in Massachusetts before the state’s health-reform law was passed in 2006 that contained premium variation. But there is no such existing law in the nation, and the premium distortions, and spikes for some populations, are expected to be much greater as a result. This makes comparing the two markets highly problematic.

What’s the larger point here? Austin Frakt usually does careful work in a fair-minded manner. Even within the JAMA Forum article, he notes that Massachusetts differs from the rest of the country in many ways, so one should be careful about making generalizations. . . .

The temptation is to push those points just a little too far, when it seems to be for a good cause (and all your friends agree with you already). 

Miller’s bottom line: “Whatever happened in Massachusetts stays in Massachusetts, for now.” 

In other words, the generalization just doesn’t work.

Focusing on Mental Illness

by Michael James Barton

In days following the tragedy in Connecticut, most of the focus has been on firearms legislation. I submit that we would be wiser to focus more attention on how states handle the mentally ill that are prone to violence over on the homepage. It is an issue that I do not think gets nearly the attention and debate it deserves, which is a shame since such modifications by states could make a difference.  

SCOPE Act: Protecting the Physician-Patient Relationship

by Phil Gingrey

A multitude of flaws in President Obama’s health- care law have been exposed, both prior to its enactment and since it passed on a straight party line vote. They range from tax hikes on small business owners and the middle class, to gutting $716 billion from Medicare, to its punitive individual mandate.

Little attention has been paid, however, to a component of the Affordable Care Act found in section 1311(h), which will prove catastrophic to the doctor-patient relationship. These few lines empower one bureaucrat—the Health and Human Services (HHS) Secretary—to determine whether a physician is providing “quality health care measures.” Based on that finding, the Secretary is empowered to cancel a physician’s health insurance provider policy, effectively forcing him out of practice.

Allowing the HHS Secretary, who is not governed by the Hippocratic Oath or a state medical board, to define “quality health care measures” will have a devastating impact on our health care system. Consider the recent controversy surrounding mammogram guidelines. In 2009, the U.S. Preventative Services Task Force advised mammograms for women over 50, which contradicts the American Cancer Society’s typical guideline that screenings begin at 40, and therefore served to divide the medical community.

Under President Obama’s health care law, should the HHS Secretary determine that performing mammograms on women younger than 50 violates a standard of care, the provider must comply, regardless of his or her concerns. Failure to do so would allow the Secretary to shut down a medical practice. The powers given to the Secretary are so broad, he or she could literally dictate how all physicians nationwide practice medicine. 

This violates the sanctity of the doctor-patient relationship, as physicians are trained to treat patients individually and not with a “one-size-fits-all” approach. Under this new regulation, patients’ standard of care may be diminished. This rule also threatens access, driving more doctors from their practices and creating an even greater shortage of medical providers. In turn, patients will face longer wait times in between appointments, and in some cases, it will be time they can’t afford to lose. Oftentimes, it is the sickest and poorest Americans’ access to care that is disproportionately threatened.

Much like the Medicare “cost-cutting” panel known as IPAB, section 1311(h) places another unelected bureaucrat in Americans’ health care decisions. The Secretary does not answer to a governing board and may be influenced by special interest groups or political  and financial interests. The regulation also directly contradicts the President’s promise that “if you like your doctor, you can keep him.”

The Safeguarding Care of Patients Everywhere (SCOPE) Act repeals this regulation, protecting patients’ access to their medical providers and ensuring physicians may continue treating individuals as they deem necessary. The SCOPE Act continues to hold physicians accountable to their state licensing boards, insurance companies and professional groups, rather than one federal bureaucrat.

The SCOPE Act is not a partisan issue, but a patient issue. We must ensure that those in need of care receive it from a medical provider who is not handcuffed by the HHS Department. Simply put, providers must be free to diagnose and treat patients as they have been trained and according to their sacred oath. Standards of practice must not fall victim to different administrations, leaving patients and physicians in the crossfire. Passing the SCOPE Act safeguards medical standards from the whims of political parties and the grips of outside influence. 

— Representative Phil Gingrey, M.D., is the U.S. congressman for Georgia’s eleventh district.

A Small-Government Solution to a Big-Government Problem

by Al Cardenas

Democrats — the perennial defenders of Medicare as we know it — have turned Medicare upside down with the adoption of Obamacare. And now the alarm bells are ringing in our senior-citizen communities as a result.

As it turns out, the GOP seems intent on branding itself this fall as the defenders of Medicare, attacking President Obama relentlessly for the hundreds of billions of dollars in cuts he’d make to the program to pay for his signature health-care reform law.

And while Governor Romney and his running mate, Representative Paul Ryan, may spend most of their airtime alerting Americans to the president’s cuts to Medicare, it’s their market-centered approach to reforming the program that deserves conservatives’ attention.

Only by reorienting Medicare in line with the principles of market competition can our leaders prevent the entitlement from sinking the federal budget — not to mention the economy.

Ryan’s plan to save Medicare keeps Medicare as-is for everyone over the age of 55. It then relies on a “premium support” model toward future recipients, which would provide seniors with subsidies and enable them to decide how to spend their health-care money. They’d be able to choose from an array of private plans or stick with traditional Medicare.

The would-be veep’s bold approach has become a tent-pole of Governor Mitt Romney’s presidential platform — and has distinguished the GOP ticket as the one that understands the need to introduce competitive discipline into an entitlement system wracked by inefficiency and waste.

Compare this to the Democrats’ plan for Medicare. Obamacare robs the entitlement to the tune of $716 billion by cutting payments to health-care providers.

That’s of great concern to American voters. Nearly three-quarters are worried that cuts in payments to doctors and hospitals will cause them to stop accepting Medicare patients, according to a new American Conservative Union (ACU) poll conducted by McLaughlin and Associates.

Even worse, Democrats are determined to undo the aspects of Medicare that harness market forces — and thereby yield lower costs than the alternative — like the Medicare Part D drug benefit.

Part D allows seniors to purchase prescription drug coverage from private insurers. Beneficiaries can shop around for the plan that best meets their prescription needs. Insurers must compete for enrollees’ business. And the government subsidizes most or all of the plan’s price.

As conservatives we have never been fans of the expansion of the entitlement state that Part D represents. But the Democrats’ plans for reforming the program would only make our entitlement crisis worse.

Many on the left are pushing to implement a “rebate” for those seniors who qualify for both Medicare and Medicaid, the so-called “dual eligibles.”

But if drug companies are forced to sell their drugs at below-market prices to some Part D enrollees, the result will be higher prices for everyone else. Such a “rebate” would amount to a new tax on American seniors — and would be especially harmful to those who take multiple medications.

A study by the Lewin Group, a consulting firm, found that monthly Part D premiums for non-dual-eligibles could increase by 25–50 percent if rebates were enacted.

It’s no wonder, then, that 65 percent of likely voters oppose President Obama’s proposed “rebate” in Part D, according to the ACU poll.

Of course, a plan to levy new taxes on Medicare beneficiaries is hardly surprising coming from the Obama administration. Obamacare is teeming with taxes, mandates, and regulations that threaten to throw our already wobbly economy into a tailspin.

Again, as conservatives we certainly had our issues with the creation of Part D, but the program has been successfully run and is now coming in 43 percent under budget.

In turn, the president’s proposed rebate would unravel these successes and savings and just create new problems.

Thanks to America’s aging population combined with Medicare’s flawed funding structure, the program is on the road to fiscal ruin. According to a 2012 report for the Medicare trustees, the program’s trust fund will run dry by 2024.

Voters will have to decide how to address this looming cost crisis. Republicans want to rely on the market forces that have made even the most wasteful government programs more cost-effective. And they have the backing of American voters — four in five of whom support this approach within the drug benefit.

Democrats, meanwhile, are committed to harmful new taxes and reduced services for America’s seniors.

The irony is that while Democrats use phony scare tactics to claim Republicans want to end Medicare, it is the Republicans’ sound fiscal solutions that would save it.

— Al Cardenas is the chairman of the American Conservative Union.

Obama’s Medicare Cuts Will Affect Benefits

by Robert Moffit

Question: If you cut funding for benefits, will you then affect persons dependent upon those benefits? Of course you will. Financing directly affects the quantity and quality of the benefits available to the beneficiaries. 

Uniquely in the case of the Medicare program, some folks are laboring mightily to obscure that simple fact; a feverish effort akin to what G. K. Chesterton once described as an elaborate exercise in the “fine art of missing the point.”

Exhibit A: The administration’s practiced defense of its $716 billion in Medicare payment cuts. In his recent debate with Representative Paul Ryan, Vice President Biden said, “We stopped overpaying insurance companies, doctors, and hospitals.” Likewise, in his first debate with Governor Romney, President Obama emphasized that Americans would be “no longer overpaying insurance companies . . . by making sure that we weren’t overpaying providers.” The messaging point: medical professionals and organizations will be cut, not your benefits.

Exhibit B: The labored disjunction between financing and benefits you find in the media. Chelsey Moran of CBS News in a September 12, 2012, report on “misleading Medicare ads,” commenting on the administration’s Medicare payment cuts, flatly declares: “The cuts, however, do not limit access to Medicare recipients, and Mr. Obama’s health care law actually gives more benefits to seniors — including new preventive care benefits and increased prescription drug coverage.” Likewise, John Presta, writing at, insisted, “The changes to Medicare does not affect Medicare recipients directly, but rather reduce payments to hospitals, health insurance plans and other providers. It eliminates a program called Medicare Advantage whose costs have gotten out of control and which will be covered by traditional Medicare at a lesser cost.” Jeffrey Bruner, a “fact-checker” writing for The Tennessean said of the $716 billion Medicare payment reductions: “It doesn’t cut any current benefits.” One finds similar declarations in many other media outlets, including Politifact and the Los Angeles Times.

But Obama’s Medicare payment cuts do directly affect Medicare benefits. Take the Medicare Advantage program, a popular system of private health plans, covering 27 percent of all seniors. Per capita spending is indeed higher in Medicare Advantage than traditional Medicare because patients get additional benefits. Cutting Medicare Advantage payments means cutting those benefits. On September 22, 2009, during the Senate Finance Committee’s consideration of the Senate version of the health-care bill, Senator Mike Crapo (R., Idaho) closely questioned Douglas Elmendorf, the director of the Congressional Budget Office (CBO). The topic was the impact of the administration’s proposed cuts on the value of benefits in the Medicare Advantage program:

Senator Crapo: It is my understanding that under your analysis the value of the additional benefits that those in Medicare Advantage receive today would end up being reduced to about $46 a month per member in 2019. And that is a little more but not too much more than just half of what it is today? 

Mr. Elmendorf: My notes say $42 of additional benefits per month in 2019, and I’m told that it’s a little less than half of what we would project under current law.

Senator Crapo: So, approximately half of the additional benefit would be lost to those current Medicare Advantage policy holders?

Mr. Elmendorf: For those who would be enrolled under current law, yes.

Senator Crapo: So, the current plan holders would recognize about half the benefits they see today under the current law?

Mr. Elmendorf: Yeah, that’s right.

Back to the media “watchdogs.” For example, Presta’s account is marred by basic inaccuracies. Notwithstanding his confident assertion that traditional Medicare covers Medicare benefits at lower cost, Medicare Advantage plans overwhelmingly bid below Medicare’s benchmark payment for standard Medicare benefits. Also, in point of fact, the president’s health law does not “eliminate” Medicare Advantage.

But it does severe damage. Medicare Advantage provides a variety of benefits that traditional Medicare does not cover, including protection from catastrophic illness. The Medicare actuary analyzed the payment cuts to Medicare Advantage in 2010 and projected that patient enrollment in the program would be cut in half by 2017. Likewise, independent analysts have confirmed Elmendorf’s initial CBO assessment. Heritage research shows that, by 2017, the value of an enrollee’s Medicare Advantage benefits will decline by an average of $3,714.

The administration’s Medicare payment cuts are also targeted to hospitals, nursing homes, home health agencies, and even hospice programs. Ms. Moran’s confident assertion that Obama’s payment cuts will not “limit access” of Medicare patients is based on precisely nothing. The truth is exactly the opposite. The Medicare actuary in his April 22, 2010, report said that the Medicare payment reductions would “jeopardize” patient access. In his addendum to the 2012 Medicare Trustees Report, the actuary reaffirmed his initial assessment that by 2019 the Medicare Part A payment cuts will cause an estimated 15 percent of these Medicare providers to operate in the red, shift their business away from Medicare, or withdraw from treating Medicare patients altogether. By 2050, the number of these Medicare providers operating in the red would climb to 40 percent under the scheduled cuts. The outlook: Fewer and fewer Medicare providers, reimbursed at bargain-basement Medicaid rates, caring for twice as many retirees, will not “guarantee” your access to Medicare benefits.   

There are lessons here. First, on Medicare especially, double check the media “fact-checkers.” Like the rest of us, they are fallible creatures, struggling with complex material. They also have strong (mostly liberal) views, even if they struggle mightily to repress them for the appearance of journalistic objectivity. Second, use common sense. Try to imagine a liberal media response to conservatives cutting subsidies for school-lunch programs, and defending it by saying they’re just reducing funding for cafeterias (the “providers”), not the kids’ soup and sandwiches.

Bottom line: Your Medicare benefits are not safe from Obamacare, unless your idea of a “guarantee” is a politician’s campaign promise. Good luck with that.   

Will Expanding Medicaid Save States Money?

by Edmund F. Haislmaier

It’s not just the political Left that’s pressuring states to adopt the costly Obamacare Medicaid expansion. Hospitals and clinics, too, are leaning on state lawmakers to expand the rolls. Indeed, there have even been recent studies in some states purporting to show that adopting the Medicaid expansion would be a fiscal positive for the state’s budget, supposedly because it would increase state tax revenues and allow cuts to other state health spending.

My colleague Drew Gonshorowski and I have published a short guide for state lawmakers that deconstructs some of the key assumptions underlying projected fiscal benefits.

One of the biggest — and most dubious — assumptions offered up is that expanding Medicaid will let states save money on “supplemental” payments now made to hospitals and clinics for treating the uninsured.

Such savings are doubtful. Hospitals and clinics have a long track record of successfully lobbying to preserve or restore state “supplemental” funding. For example, the 2006 Massachusetts health-reform legislation, which transformed supplemental payments going to “safety net hospitals” into premium support for the low-income uninsured, achieved near-universal coverage. Yet despite that, Massachusetts’s safety-net hospitals successfully lobbied to continue receiving over $200 million a year in supplemental payments from state taxpayers.

Under Obamacare, it is even more implausible to assume states would be able to cut funding for uncompensated care. That’s because any state payment cuts would have to be imposed on top of Obamacare’s federal payment cuts. Obamacare cuts federal Medicaid “Disproportionate Share Hospital” (DSH) funding by $18.1 billion and Medicare DSH funding by $22.1 billion over the years 2014–2020.

Consequently, governors and state legislators should expect their state’s hospitals and clinics to lobby them for more—not less—state funding to replace cuts in federal DSH payments. State lawmakers who want to learn what their state is already spending—in addition to DSH—on supplemental payments should start by consulting a July GAO report entitled Medicaid: States Reported Billions More in Supplemental Payments in Recent Years. They should then dig into their own state budget documents to find out exactly who is getting exactly how much.

State lawmakers who are offered “rosy scenario” fiscal projections for expanding Medicaid would be well advised to think twice.

Edmund F. Haislmaier is a Senior Research Fellow in the Heritage Foundation’s Center for Health Policy Studies.

Medicare Coupons, Strokes, and Heart Attacks

by Robert Moffit

Those who favor reforming the giant Medicare program must explain themselves carefully. But opponents of Medicare reform can just manufacture and spread around some fantastic fictions. Consider a couple of real screamers:   

You’ll buy your health insurance with coupons! Vice President Joseph Biden described the Medicare defined-contribution proposal championed by Representative Paul Ryan (R., Wis.), as “Vouchercare.” Now, vouchers are forms, certificates, or coupons redeemable at cash value for the purchase of a good or service. You can’t have a voucher program without vouchers. Right? And vouchers are scary. So, opponents of reform bet that their success in scary “messaging” is dependent upon leaving millions of frightened Baby Boomers with the impression that they will be left alone with a little piece of paper to negotiate with big bad insurance companies. On September 5, 2012, addressing the Democratic National Convention and millions of television viewers, Cristina Saralegui, a television host, said that Governor Romney would turn Medicare from a “guarantee” into a “book of coupons.” Brian Francisco, writing for the September 17, 2012, edition of The Journal Gazette, reports that Indiana congressman Joseph Donnelly won’t stand for giving hapless Baby Boomers “coupons” to buy private health plans. In that nightmarish future, according to Donnelly, the government would say, “Here’s a coupon — hope your coupon works.In fact, there is no Medicare reform proposal, including Ryan’s, that would give future seniors coupons to buy their health insurance. Ryan’s defined-contribution system, for example, is modeled on the financing of Medicare Part D. In trying to sell the liberals’ Medicare “coupon” gimmick, Donnelly is peddling pure nonsense.

You’ll get a stroke choosing a health plan! Sylvia Lang, writing for the September 11, 2012, edition of Redding.Com, worries that in 2023, people younger than 55 years of age will be “sold” to the “profit lusting” insurance wolves. She says that Ryan’s Medicare proposal would operate like an unreformed individual insurance market, where persons can be rejected for coverage because of preexisting conditions or charged exorbitant premiums based on their health status. Except — it won’t. In all Medicare reform plans, including the Ryan plan, all health plans would be governed by Medicare’s traditional insurance rules, meaning that plans must offer you coverage and can’t reject you or drop you if you are sick. Likewise, health plans would get additional funding to cover the costs of older and sicker enrollees. But why let plain facts get in the way of a good, old-fashioned demagogic rant? Lang writes, “God help anyone in their 70s, 80s or 90s who has to deal with private insurers. Will Ryan take responsibility for the strokes and cardiac arrests that ensue?”

Well, millions of seniors must be recovering from the strokes and heart attacks caused by the life-threatening stress of enrolling in the plans they like. In fact, 90 percent of Medicare patients — including those in their 70s, 80s, and 90s — already are enrolled in a variety of private plans for their drug coverage. There are over 1,100 drug plans offered in 34 regions around the country. Even more shocking, roughly 27 percent of all seniors are enrolled in integrated private plans through Medicare Advantage. In Medicare Advantage plans, seniors routinely enjoy richer medical benefits, including care coordination and disease management, as well as protection from catastrophic out-of-pocket costs; benefits superior to traditional Medicare. Enrollees in private plans, including the poor and the disabled, report high rates of satisfaction, and recent research confirms that the quality of care for Medicare Advantage enrollees is superior to care received by enrollees in traditional Medicare. But, too bad, Ms. Lang wants to “get rid” of those plans. Ms Lang not only wants to take away seniors’ right to keep Medicare Advantage plans they have today, but she wants to stop seniors from choosing better private plans tomorrow. Notwithstanding the president’s promise to all the “little people” who want to keep their health plans, Ms. Lang knows what’s best for them.

The Medicare misinformation machine is spinning overtime. As President Ronald Reagan once said, “Well, the trouble with our liberal friends is not that they are ignorant, but that they know so much that isn’t so.”  

Debunking Bill Clinton’s Medicare Claims

by Robert Moffit

When former president Bill Clinton’s good, he’s very, very good. That formidable rhetorical skill was on display in his defense of Obama’s Medicare policy at the Democratic National Convention. Though Obama needs help, much of what Clinton said was flat out wrong. Consider just two examples.

1. On the ten-year $716 billion in “savings” from Obama’s Medicare payment cuts, Clinton insisted: “There were no cuts to benefits at all, none.” Very Clintonesque: technically correct, and thoroughly misleading. In fact, President Obama and his allies in Congress cut the funding for Medicare benefits, which directly affects Medicare patients dependent on the funding of those benefits. By 2019, the Medicare actuary estimates that 15 percent of the affected providers will become unprofitable, and that number reaches 40 percent by 2050. As Medicare payments dip below the cost of Medicare services, medical professionals and institutions will withdraw from or cut back on providing Medicare services, guaranteeing serious problems for seniors trying to access those benefits. The Medicare actuary says that the cuts will “jeopardize” seniors’ access to care.

2. On Obama’s alleged contribution to the solvency of the Medicare (HI) Trust Fund, Clinton said: “And instead of raiding Medicare, he used the savings to close the donut hole in the Medicare drug program.” Recall that President Obama said he would not sign a health bill adding a “dime” to the deficit. So, the “savings” from the big Medicare payment cuts could be used to either shore up the Medicare trust fund or finance other provisions of Obamacare, such as the new entitlement expansions, thus keeping the bill deficit-neutral. Not both. In a December 23, 2009, memo on the Senate version of the bill, which eventually became law, CBO clarified the situation: “The key point is that the savings to the HI Trust fund under the PPACA would be received by the government only once, so they cannot be set aside to pay for future Medicare spending and, at the same time, pay for current spending on other parts of the legislation or on other programs.” 

So, what’s really happening? In a January 22, 2010, letter to Senator Jeff Sessions (R., Ala.), ranking member of the Senate Budget Committee, CBO Director Douglas Elmendorf reported that “The majority of the HI trust fund savings under PPACA would be used to pay for other spending and therefore would not enhance the ability of the government to pay for future Medicare benefits” (emphasis mine). Whatever else it does, that “other spending” doesn’t strengthen Medicare.

Oh, and about filling up that “donut hole. It is a congressionally created gap in drug coverage, where beneficiaries pay 100 percent of the costs up to a catastrophic threshold; a bizarre benefit designed to offset drug costs in Bush’s 2003 entitlement expansion. What Clinton did not say is that Obamacare reduces Medicare spending by $716 billion after taking into account the relatively few provisions of the law — like filling the “donut hole” — that increase Medicare spending. So, no; none of the $716 billion is used to close the “donut hole.”      

One more thing: Clinton noted that the $716 billion in “savings” is also assumed in Ryan’s proposed budget: “You got to give him one thing: It takes some brass to attack a guy for doing what you did.” But Ryan doesn’t propose to do what Obama did. Obama is just doing what Clinton tried and failed to do. In 1993, Clinton wanted to take $189 billion from Medicare and Medicaid (over the period 1994–2000) to finance the ill-fated Clinton Health Plan. Repealing Obamacare, as Ryan proposes, would end Obamacare’s spending and thus the use of Medicare “savings” to cover that spending. In Ryan’s plan, Medicare savings are for Medicare.  

Nobody beats Bill for brass.  

 — Robert Moffit is a Senior Fellow at the Heritage Foundation’s Center for Policy Innovation. 

Obamacare: It’s Still a Gateway to Single-Payer Health Care

by Sen. Tom Coburn

More than two years after the passage of Obamacare, the data overwhelmingly show the law will fail to achieve its core objectives of lowering costs and improving access. That, ironically, may have been the design. By making private insurance unaffordable for everyone, it will become available to no one. All that will be left is government-centered, government-run, single-payer health care.

Let’s look at the law’s promises that were rigged to fail.

First, supporters of the law said the law would bend the cost curve down and reduce health-insurance costs. Yet health-insurance premiums are increasing faster than before the law was passed and experts confirm costs will increase along with federal health spending.

Second, defenders of the law said the bill would massively extend health-insurance coverage. But in June the Supreme Court threw out the forced Medicaid expansion which the Congressional Budget Office originally estimated was responsible for half of new coverage under the law. And despite claims of increasing coverage, more Americans are without health coverage today than when President Obama took office.

Third, supporters claimed the law would reduce the deficit. Yet, none of the law’s gimmicks has managed to hide its true costs. One gimmick was omitting a $300 billion payment to doctors who care for seniors on Medicare. Another illusion was the promise of $70 billion in savings — half of the bill’s projected deficit reduction in the first decade — from a now-defunct long-term care program. The Congressional Budget Office’s most recent analysis shows the law is jammed with $1 trillion in tax hikes and will spend more than $1.7 trillion over the next decade.

Fourth, and most important, the law’s individual mandate was rigged to fail. Unless the law is repealed, in 2014, the new individual-mandate tax will effectively force all Americans to buy insurance. Health-insurance companies will be forced to offer coverage to virtually every American, regardless of their pre-existing condition or health status. Employers will be penalized if they do not offer health coverage. The problem is this approach will never work, which the lawmakers who backed the “public option” knew full well.

According to analysis by the Congressional Research Service, the IRS does not have the authority to enforce the individual-mandate tax. Moreover, because the tax penalty is far less than the price of purchasing health coverage and insurers are forced to cover Americans at any time, millions will choose to pay the tax and only sign up for coverage when they get sick. 

As a result, insurers will be left paying for people who are comparably older and sicker than the general population. The result is a classic death spiral where the costs of covering the insured skyrocket, discouraging even more people from buying insurance. States that have tried similar approaches have seen their costs skyrocket.

At the same time, employers will make a similar economic decision, choosing to pay a $2,000 penalty per worker, instead of paying four to ten times that for a worker’s health coverage.  As former Democrat Governor Phil Bredesen said, when employers do the math, dropping workers’ coverage “will make good financial sense.”

Many workers who are not offered coverage through their employer will be eligible for federal subsidies to buy government-approved insurance through insurance exchanges.  If workers seek health coverage through the exchange, the costs of the subsidies to taxpayers will skyrocket – likely by hundreds of billions of dollars. Yet, if workers chose to simply pay the mandate tax and go without insurance, health insurance costs will climb still further.

The scenario outlined above is not speculation but is a forecast based on current trends described by nonpartisan experts.

Taxpayers should remember that liberal Democrats — who have made “catching up with Europe” and imposing a single-payer, government-run health system on America their life’s mission — celebrated the law’s passage for a reason. For them, it was a win-win outcome. Either the law would succeed and expand government’s role in health care, contrary to their own understanding of how market-economies work, or it would fail and pave the way for single-payer health care in a politically feasible way. If the private insurance market crumbled, government could mount a rescue operation and “save” patients.

Thankfully, that future is not yet written. Lawmakers who believe patients and doctors, not politicians, should manage our health-care system have plenty of ideas on how to repeal and replace Obamacare. What we need, however, is for the American people to see the urgency of the problem and replace not just the law but the politicians who put it in place. 

That Terrifying Medicare Voucher Threat

by Robert Moffit

Vice President Joe Biden warned you: If you are 54 years of age or younger, be afraid. Be very afraid. If conservatives and misguided centrists have their way, in your old age, when you are frail and vulnerable, you could end up with a Medicare “voucher.” Recently, Representative Kathy Hochul (D., N.Y.) told an audience of senior citizens exactly what to expect: “You are now going to have a voucher and you can go out and negotiate with insurance companies on your own. . . . I heard that and said: No way.”

Yes, no way. There is no major Medicare reform proposal, including the Ryan proposal, that would issue future senior citizens a voucher (a certificate or coupon or a check for a fixed dollar amount) and then force them to fend for themselves — on their own – in negotiating with health-insurance companies who will, as Florida congresswoman Debbie Wasserman-Schultz also insists, “cherry pick” the healthy and drop or deny coverage to the sick.

It’s all scary nonsense. The Ryan proposal, among others, is a defined-contribution system that in, say, 2023 would provide direct payment from a government account to a health plan of a person’s choice, including traditional Medicare; health plans, including employer-based retiree plans, would have to meet government standards, including benefit standards of the traditional Medicare program, plus new and much-needed protections against the costs of catastrophic illness; all such plans would be offered through a Medicare exchange; all such plans would be governed by existing Medicare insurance rules, meaning persons could not be legally denied coverage or dropped merely because they are sick; low-income persons would be specially protected from unforeseen out-of-pocket cost hikes; and all enrollees would benefit from an improved risk adjustment among plans in the competitive market to guarantee continuity of patient care and health-plan stability.

A voucher is, of course, a defined contribution; but not all defined contribution programs are “vouchers.” A voucher is just one form of defined contribution. The Merriam Webster definition of a voucher is a “form or check indicating a credit against future purchases or expenditures.” Many ordinary Americans have had some experience with vouchers when their flights were cancelled or delayed, and airlines issued them compensatory certificates redeemable in cash value for the purchase of food and lodging.

If liberals want to label Ryan’s Medicare proposal a “voucher,” as Representative Hochul insists, then logically they must also apply that term to huge chunks of today’s health-care system: the private plans in Medicare Advantage, which cover 27 percent of today’s beneficiaries; the 1100 plans in the Medicare drug program, which cover 60 percent of today’s beneficiaries; the hundreds of plans in the Federal Employees Health Benefits Program(FEHBP), which cover roughly 8 million active and retired federal employees and their families, as well as the defined contributions for stocks, bonds, and equity funds in employer-based pension programs. Worse, “vouchers” will fund Obamacare’s insurance exchanges in 2014.

Meanwhile, liberals in Congress need to break the terrifying news to the vast majority of retirees around the country that they are in some form of “voucher” system already. They just don’t know it.

— Robert Moffit is a Senior Fellow at the Heritage Foundation’s Center for Policy Innovation. 

CAP Action Dowdifies CBO Medicare Report

by Rea Hederman

A Harvard economics professor has made a strange claim about a 2006 Congressional Budget Office report on Medicare premium support. Writing for the Center for American Progress Action Fund, a liberal lobbying organization, Dr. David Cutler and his co-authors assert that “CBO concludes that premium-support plans would achieve much of their federal savings from ‘increases in the premiums paid by beneficiaries, not from increases in the efficiency of health care delivery.’” This would be a strong negative finding indeed. But that is not, in fact, what CBO concluded. 

The quote is lifted from a paragraph in which the CBO outlines why opponents dislike premium-support reform. The full sentence, found on the first page reads, “Opponents also maintain that much of the federal savings from premium support would come from increases in the premiums paid by beneficiaries, not from increases in the efficiency of health care delivery.” In other words, Dr. Cutler — a foe of premium support — is presenting his viewpoint, but labeling it as a CBO conclusion.

This is unfortunate. Using this new methodology and citing the same report, one could just as easily say that CBO concludes that premium support would “lead to a more efficient Medicare program, one in which the government and beneficiaries received more for the money that is spent on Medicare, whatever that level of spending might be, than they do today.”

In fact, CBO drew very few conclusions in its 2006 report. It did, however, present one very important conclusion: that premium support, based on a process of competitive bidding, would save substantial money for taxpayers. The most money would be saved with the federal share of Medicare based on the lowest competitive bid. CBO found that much of this savings would be from the high-cost areas of traditional Medicare. 

Medicare is a complex policy issue, and clarifying the policy options in a fashion that is understandable to the general public is the right thing to do. It is unfortunate that Dr. Cutler and his co-authors chose to misrepresent the CBO conclusions.

— Rea Hederman is assistant director of The Heritage Foundation’s Center for Data Analysis.

The New Resident Duty Hours Fail

by Jason D. Fodeman

A year ago, the Accreditation Council for Graduate Medical Education (ACGME) changed the rules governing the schedules of medical residents. The new work hours were intended to curb resident fatigue, which the Institute of Medicine (IOM) had previously concluded was contributing to medical errors and accidents. But the new duty hours have actually exacerbated fatigue, jeopardized resident education, and endangered patient care at our nation’s teaching hospitals.

Up until the current guidelines took effect in July of 2011, medical residents could work up to 80 hours per week and 30 hours continuously. The new rules, while maintaining the 80-hour schedule, have limited the maximum shift for first-year residents to 16 hours. Senior residents may work 28 hours straight.

Research published in the New England Journal of Medicine highlights that these mandates have failed to achieve what they were intended to. The study’s authors contacted every institution in the country that sponsors an ACGME-accredited residency program, and ultimately 6,202 residents at 123 different institutions completed a twelve-question survey. Of those surveyed, 43 percent indicated that resident work schedules had actually worsened, and 50 percent said that quality of life for senior residents had deteriorated, compared with 30 and 14 percent, respectively, who noted improvement in these areas. Forty-one percent of residents believed that the new guidelines have worsened their education, while only 16 percent believed the changes have benefited resident learning. The survey also indicated that some residents were concerned that patient care was suffering. Overall, 48 percent of residents disapproved of the changes, with only 23 percent approving.

At first blush, these findings may seem counterintuitive, but upon closer inspection, they make perfect sense. Residency programs still have the same number of workers with the same collective responsibilities, but the first-year residents are more limited in the shifts they may work. Consequently, second-year residents and above are increasingly given the most grueling schedules.

Before the changes went into effect, the first year of residency was very physically demanding — but as residents entered senior roles and took on more responsibility, the physical burden subsided in exchange for the intellectual challenge of managing sick patients with complicated problems. The reduction in physical stress granted the senior house staff time to think, read, and learn from patients.

The new duty hours have turned this commonsense approach to residency on its head. Now the residents with the most clinical responsibility are also the most physically taxed. As a result of the new work-hour mandates, senior residents are substantially more fatigued and have significantly less time and energy to read and learn from their patients. This does not just hurt the quality of resident training. It’s actually dangerous.

Medical residents currently care for the sickest and poorest patients. These mandates are impeding their ability to offer the best care. And by compromising the education and training of young doctors, these duty hours could jeopardize the quality of medical treatments provided to all patients.

The goal of these new regulations was to improve patient care, education, and quality of life for residents. As a resident working under this new regimen, I know that it has substantially missed the mark on all three parameters. The ACGME should revert to the old work-hour structure until a more practical and sustainable solution can be reached. If it fails to take the initiative to do this, then Congress and the Department of Health and Human Services should consider stepping in.

Resident fatigue is a real problem — patients should be protected from tired, overworked residents. But the ACGME’s cure is worse than the disease.

— Jason D. Fodeman, M.D., is an internal-medicine resident and a senior fellow in health-care studies at the Pacific Research Institute.

Violating the DNA of Our Culture

by Grace-Marie Turner

Obamacare violates American values down to our country’s very DNA.

A majority of Americans continue to oppose the health law because we understand that it is at odds withthe fundamental principles and democratic processes of our country. We were aghast at the way the law was enacted two years ago — ignoring citizens who were marching in the streets and burning up the phone lines on Capitol Hill pleading with legislators to vote “no.”

We oppose its government-centric takeover of our health sector with its mandates on individuals to purchase government-approved health insurance, mandates on businesses to pay for insurance or pay huge fines, and the massive new government bureaucracy to centrally manage one-sixth of our economy.

The HHS anti-conscience mandate that has now taken effect is not an aberrant rule but is woven into the fabric of a law that is in conflict with the Constitution and with American values. The U.S. Conference of Catholic Bishops called the federal regulation an “unprecedented threat to individual and institutional religious freedom.”

But the Obama administration has determined that most employers and health plans now will have to provide “free” access to a long list of “preventive” health services, including sterilization procedures and contraceptives that can cause abortions.  Citizens and businesses have become servants to the state.

The White House is trying to deflect opposition and frame this as a fight over the right to free birth-control pills.  But we understand that this is really about the fundamental issue of the founding principles of this country and the meaning of the Constitution’s protection of our freedom.  The real question is not whether women can have access to these products but whether health plans and employers can be compelled by the government to pay for them even if doing so violates their religious beliefs.

When the law was being debated in Congress, the Obama administration repeatedly assured Catholic leaders that it would respect religious liberty in implementing Obamacare. This mandate shows that the Obama administration has broken its promises and has no intention of reversing course.

The anti-conscience rule gives pro-life private employers and health plans the choice of violating their fundamental beliefs by paying for the offending products or dropping health insurance for their employees, in which case they are subject to steep fines.

Forty-three Catholic dioceses have filed twelve lawsuits challenging the anti-conscience mandate. The Becket Fund for Religious Liberty also is representing a number of colleges and other religious institutions in suing the government over the mandate.

More than 2,500 pastors and evangelical leaders have signed a letter to President Obama asking him to reverse the mandate.

As George Weigel has said, the anti-conscience rule is “a grotesque overreach by state power, one that threatens the entire fabric of civil society as well as the first of American liberties, religious freedom.”

We will not allow the First Amendment to be trampled, and this battle will continue.

Good Luck Finding a Doctor under Obamacare

by Grace-Marie Turner


“No matter how we reform health care, we will keep this promise to the American people: If you like your doctor, you will be able to keep your doctor, period.”

President Barack Obama,

Speech to the American Medical Association

Chicago, June 15, 2009

In truth, prospects are bleak that you will be able to keep your doctor and even bleaker that there will be enough doctors to meet demand under Obamacare.

The health overhaul law expands health insurance to millions more people without significantly increasing the number of physicians or other providers. And Obamacare has exacerbated the physician shortage because many are considering leavingthe practice of medicine altogether rather than practice under the dictates of Washington bureaucracies.

An Investor’s Business Daily/TIPP survey conducted in September of 2009 found that 45 percent of doctors said they “would consider leaving their practice or taking an early retirement” if the health law stands.

More than 800,000 doctors were practicing in 2006, according to government data. Projecting the poll’s finding onto that population means that 360,000 doctors would consider quitting!

And even without a mass exodus, the Association of American Medical Colleges envisions a shortageof about 160,000 doctors by 2025.

The greatest tragedy of Obamacare may be losing prematurely a generation of the most highly-trained, skilled physicians in history to a health overhaul law that the American people did everything they could to stop.

Physicians say they simply won’t practice under Obamacare rules that strip away much of their autonomy, drown them in bureaucracy, and leave them even more exposed to lawsuits.

Health care already is one of the most highly-regulated industries in the country, and doctors and nurses are forced to devote a significant amount of their day to detailed paperwork, adding to their frustration and taking away from time with patients. Reporting requirements will increase significantly under the health overhaul law, and the penalties for those who run afoul of the avalanche of new rules also will increase.

The supply of doctors will dwindle as demand for services reaches an all-time high. Fewer of those in private practice are taking patients on Medicare, and even fewer can afford to see the millions of new patients likely to be enrolled in Medicaid. 

By increasing demand for care without a comparable increase in the supply of doctors to treat the additional infusion of patients, the law will exacerbate the current physician shortage, as the New York Times reportedon Sunday.   

“In the Inland Empire, an economically depressed region in Southern California, President Obama’s health care law is expected to extend insurance coverage to more than 300,000 people by 2014,” the Times reports.

“But coverage will not necessarily translate into care: Local health experts doubt there will be enough doctors to meet the area’s needs. There are not enough now. Other places around the country, including the Mississippi Delta, Detroit and suburban Phoenix, face similar problems,” according to the article.

Shortly after the law was passed, an April 2010 survey of physicians, conducted by Athena Health and Sermo, foundthat 79 percent of physicians were less optimistic about the future of medicine; 66 percent said they would consider dropping out of government health programs; and 53 percent would consider opting out of insurance altogether.

In August of 2010, The Physicians Foundation completed another major survey of doctors and found that:

  •  67% of doctors had a “somewhat” or “very” negative initial reaction to the new law
  • 74% said they would take steps to change their medical practice over the next one to three years
  • 60% of these doctors said that the new law will force them to close or restrict certain categories of patients: 93% will stop seeing or restrict the number of Medicaid patients they see, and 87% will close or restrict their Medicare practice.
  • Ominously, 89% of physicians said that they believed that the survival of the traditional model of independent private medical practice is threatened. In fact, hospitals already ownmore than half of medical practices, and that unwelcome trend will be accelerated under the new health law.

Seniors are most at risk because they have the greatest need for medical care. The health law takes more than $700 billion out of Medicare to finance new health-insurance spending, primarily by cutting payments to physicians and Medicare Advantage health plans.

If these cuts were to stand, experts at the Centers for Medicare and Medicaid Services say the number of hospitals, nursing homes, and hospice centers facing financial losses under the new law would jump to “roughly” 25 percent in 2030 and 40 percent by 2050. Many Medicare providers will be forced to either stop seeing Medicare patients or go bankrupt entirely.

Doctors are quietly making their plans now to restructure their practices, retire early, get another job, or otherwise protect themselves from the coming regulatory avalanche and payment cuts. 

Ultimately, the consequences of the health overhaul law will be passed along to patients through restricted access, long waits for appointments, and rationed care. It’s up to the voters in November to pull the emergency brake, that last chance to stop the Obamacare freight train.

Better Health Care Through Innovation

by Kathryn Nix

Obamacare was sold, in part, on the promise that it would improve the quality of medical treatment and reduce costs through better care coordination and disease management. For the Medicare program in particular, this was to be accomplished primarily through the creation of Accountable Care Organizations (ACOs).

Small wonder, then, that earlier this month the administration trumpeted the fact that 154 ACOs were now “on board” to participate. That may sound like progress, but it’s not the whole story.

The government hasn’t actually come up with anything novel here. Many of the outfits now designated as “ACOs” have been working to achieve these goals for years, if not decades.

As is often the case, government is just now catching on to what the private sector has already begun to accomplish. The problem is, whenever government tries to replicate a successful private model, it almost always fails. That’s because bureaucratic operations simply cannot keep up with the speed of innovation. Ultimately, it becomes an outmoded relic that actually serves as a brake on further progress and delays the attainment of the goals it was meant to achieve.

This dynamic is evident in Medicare. The traditional, government-administered Medicare program is trying desperately to figure out how to bring down costs and offer better, more seamless care. Meanwhile, private plans, including those that participate in Medicare Advantage, have pursued numerous innovative approaches — and enrollees are reaping the benefits.

New collaborations among providers and insurers have been key. Take, for example, BlueCross BlueShield’s Patient-Centered Medical Home Initiative, which serves 4 million members, including Medicare Advantage patients, in 39 states. Early evidence indicates the program has reduced emergency-room visits and inpatient treatments without compromising the quality of care.

Aetna has taken a different tack, embedding nurse “case managers” in physician practices to coordinate care for 20,000 of its Medicare Advantage patients. In 2010, this produced a 12 percent reduction in costly acute-care days — on top of the overall 31 percent reduction across all the insurer’s care-management programs. 

Then there are Special Needs Plans (SNPs) specifically targeting the needs of the chronically ill. A study published in Health Affairs found that enrollees in one such Medicare Advantage plan had “shorter average lengths-of-stay in the hospital, lower readmission rates, slightly lower rates of hospital outpatient visits, and slightly higher rates of physician office visits than their fee-for-service counterparts.”

Meanwhile, new delivery models are also helping provide better quality at lower cost for all health-care consumers. “Hospital at Home” programs, such as the one offered by New Mexico’s Presbyterian Healthcare Services, use mobile nurses and physicians, as well as telemonitoring, to deliver hospital care to patients in their homes. It has produced as good or better outcomes for patients while saving 19 percent compared to costs for hospitalized patients. It’s also another example of a delivery innovation that is available to all privately insured patients, but not seniors enrolled in traditional Medicare.

Doctors Express, the first franchise urgent-care clinic, is addressing gaps in care options facing all patients. The clinics offer less expensive urgent care for those who do not require emergency-room treatment but cannot get in to see a primary-care doctor. One study shows that between 13.7 percent and 27.1 percent of emergency-room visits could be treated in an alternate setting, at a savings of as much as $4.4 billion annually.

One Medical Group, created in 2007, focuses on making primary care more patient-centered. In exchange for a nominal fee, all members enjoy same-day doctor appointments, online scheduling, and the ability to renew prescriptions or fine-tune treatment via e-mail — thereby avoiding unnecessary office visits. When office visits are necessary, patients spend less time waiting and more time with their doctor.

These are just a few examples of existing innovations. There are even more promising innovations on the horizon. Smart technology has paved the way for mobile apps to help patients manage their health, and tele-health enables caregivers to monitor and care for patients remotely. And advances in medical research will continue to revolutionize the practice of medicine.

But government doesn’t drive innovation in the health-care system — the private sector does. To keep the kind of successes outlined above coming, Washington must ditch the big-government approach to health-care reform represented by Obamacare. Congress should pass reform that encourages even more experimentation and innovation to benefit patients, rather than try to impose uniformity by copying yesterday’s successes and locking them in place under a government-run system.

— Kathryn Nix is a policy analyst in The Heritage Foundation’s Center for Health Policy Studies.

Poll: Obamacare Still a Huge Issue for the Voters This Fall

by Grace-Marie Turner

The latest New York Times/CBS News poll dives into public opinion on Obamacare following the Supreme Court decision and finds opposition to the law virtually unchanged from when it was enacted in 2010, with about half disapproving and one-third supporting the law. 

And those who strongly disapprove (36 percent) continue to significantly outnumber those who strongly approve (14 percent) of the law.

Support for repeal also remains strong: 61 percent of those polled say they want Congress to repeal the individual mandate (27 percent) or the entire law (34 percent). Only 15 percent want to keep the law as it is.

The poll was taken July 11 through 16. Other highlights:

Health care is a top issue for the voters. Eighty-two percent say that health care will be an extremely important (46 percent) or very important (36 percent) issue for them in deciding their vote for president in November.

Opposition to the law remains high. Overall, 50 percent either somewhat or strongly disapprove of the health law, and 36 percent approve.

Romney preferred. For those who say the Supreme Court ruling will impact their vote, 24 percent say they will vote for Romney and 16 percent for Obama.   Half said the SCOTUS decision won’t have much effect.

Spliton who will do a better job. Regardless of how they intend to vote, people are evenly split in who they think would do a better job of handling health care:  President Obama 43 percent and Mitt Romney 42 percent.

Puzzling plurality. A plurality also says that the Supreme Court did a good thing in keeping the law in place: 46 percent say it was a “good thing” and 41 percent said it was a “bad thing.” Maybe these voters believe it is the job of Congress to fix the mess.

One notable fact about the poll is the over-sampling of Democrats, presumably to match their greater turnout in the 2008 elections. Democrats represented 32 percent of those polled in the New York Times/CBS News poll compared to just 25 percent of Republicans. Independents represented 37 percent of the sample. 

This, coupled with the intensity factor, suggests that President Obama and down-ballot candidates will be in trouble if the balance shifts to greater turnout of Republicans in 2012 and the focus stays on Obamacare.

Updating Obamacare’s Damage Estimates

by Robert Moffit

Following the Supreme Court’s Obamacare ruling, the Heritage Foundation’s Health Policy Director Nina Owcharenko says that Washington policymakers must revisit their cost, coverage, and spending projections. Coincidentally, the Congressional Budget Office (CBO) announced their updated analysis is to be released the week of July 23. Get ready.

First, forget CBO’s initial ten-year estimate of 32 million newly insured, with new Medicaid enrollment accounting for roughly half of the coverage. Because Congress enacted a mandatory Medicaid expansion that the Court declared unconstitutional, that number will shrink. The only question is by how much. Congressional liberals did not design seamless coverage based on personal choice of plans. Poor people get Medicaid under the law, whether they like it or not; and now some of them won’t get coverage at all. So, we have a new “donut hole.”

Second, forget CBOs initial estimates on compliance with the individual mandate. At first, CBO said just 4 million a year would pay the “penalty.” But Chief Justice Roberts’s bold rewrite of the mandate as a “tax” introduces a very different dynamic: “Imposition of a tax . . . leaves an individual with a choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.” And while persons might be fearful of incurring a “penalty” for unlawful behavior, even without criminal sanctions, they may respond differently to an optional “tax.” They simply decide whether they want the government- approved insurance and its taxpayer subsidies or whether they would rather pay the “tax.”

Urban Institute analysts estimate that about 33 percent of Americans are “exempt” from the “tax,” mostly because of their low income. Some of us are uninsured and most of us get coverage through our employers. But employers can always drop workers’ coverage, and will have powerful new incentives to do so. The newly dumped workers will get taxpayer subsidies for insurance in the government exchange, thus hiking the law’s cost. If they don’t like the “mandatory” insurance, they could pay the minimal “tax,” and save thousands of dollars per year in insurance costs. They could always rely upon the emergency room, or just buy coverage when they get sick and drop it again when they get well.

Not “like” the insurance? Yep. Another fly in the buttermilk is that nasty HHS benefit mandate requiring Americans to fund abortion-inducing drugs, among other things. Forcing persons to comply with rules that are unethical or violate their religious convictions is ugly business. Offended employers (not just Catholics) could drop the feds’ required coverage. By 2014, these firms would decide whether to pay the employer “tax penalty,” while like-minded workers could pay the individual “tax” for reasons of conscience. These workers could go bare, get some sort of “bootleg” insurance, or make some financing arrangement more economically or ethically acceptable.

Coercion begets contempt. Compulsory “pay offs” — in taxes or penalties — only render the law all the more odious. When Prohibition ended, H. L. Mencken, the great American essayist, sauntered down to the local bar and ordered a tall, cool glass of water, proclaiming it his first drink of water in years. CBO can’t measure such sentiments, but they’re real.

Sailing an ocean of uncertainties, CBO may chart a course with a range of estimates on spending and taxpayer costs, reflecting different assumptions. While they’re at it, CBO could also generate a per capita ten-year cost of the newly insured. Whatever they do, expect higher costs, more uninsured, or both.

Marx Brothers Fiction

by Grace-Marie Turner

The commentary article in Tuesday’s Washington Post by HHS secretary Kathleen Sebelius reminds us of the Marx brothers: “Who are you going to believe? Me, or your own eyes?”

She is living in a fantasy world in believing that the health-care overhaul law has made the U.S. health system stronger by, as she claims, lowering health costs, helping small businesses, and making Medicare stronger. Let’s look at the evidence.

Costs: Then-candidate Barack Obama promised in 2008 that health-insurance premiums would fall by $2,500 a year for the average American family by the end of his first term in office. As we approach that date, premiums have risen by nearly as much — from $12,680 in 2008 to $15,073 in 2011, according to the Kaiser Family Foundation. And the Congressional Budget Office found that Obamacare’s new insurance mandates will increase premiums on the individual market, when the law takes full effect, by an additional $2,100 per family above what they would have been absent the law.

There are at least 20 new or higher taxes in Obamacare that will be passed along to consumers in the form of higher premiums, including taxes on medical devices and health-insurance premiums.

Hospitals, doctors, businesses, and consumers all expect health-care costs to rise under the law. By a nearly five-to-one margin, hospital executives expect that the health law will hurt their bottom lines.

Small businesses: Such companies have been reluctant to sign up for the tax credits offered to them in the health-care law because they find them overwhelmingly complex and not worth the frustration. Only 360,000 employers have claimed the credit, which is less than 10 percent of the 4.4 million potential recipients originally projected by the Obama administration. At least 55 percent of small-business owners favor repealing the health overhaul law and 36 percent oppose; 46 percent of them feel that the new law will hurt their business, and only 27 percent think it will help.

Medicare: And the law does not enhance Medicare’s sustainability. Obamacare takes $500 billion out of Medicare to create another new entitlement program. In the words of the non-partisan Congressional Budget Office, this “will not enhance the ability of the government to pay for future Medicare benefits.” That’s because those (elusive) savings will be used to fund other unsustainable entitlements. 

And Obamacare will compromise seniors’ access to physicians. A survey conducted by The Medicus Firm, a national physician-search firm, found that 46 percent of primary-care physicians would leave their practice — or try to leave — as a result of the laws onerous new requirements and bureaucratic compliance. According to a survey conducted by the Doctor Patient Medical Association, 90 percent of physicians surveyed think the medical system is on the wrong track, and 83 percent say they are thinking about quitting.

None of this makes Medicare or the health sector stronger

And one final thought: The Supreme Court did not uphold the health-care law, as Secretary Sebelius claims. Only two provisions of the law were contested before the Supreme Court. The court held one of them to be unconstitutional — commanding the states to dramatically expand their Medicaid programs — but Chief Justice Roberts allowed the provision to stand by making acceptance of the expansion optional for the states. And it allowed the individual mandate to stand only as a tax, claiming that it was not supported by either the Commerce Clause or Necessary and Proper provision in the Constitution, as the government claimed.

Many other legal challenges to other provisions in the law remain, but the final verdict will come from the voters in the court of public opinion in November.

At Some Point, Can We Please Focus On The Patients?

by Michael James Barton

During several harrowing days with my sick uncle in the hospital last year, I had two epiphanies: First, the hospital system is set up for the hospital, not for the patient. This led to the second epiphany: During my lifetime, almost all of the discussions about health care coming out of Washington have focused on costs, insurance companies, regulations, licensing, doctor training, Medicare, prescription-drug polices, mandates, coverage, and so on, with rarely a thought about what should be the priority: treating the patients. 

I thought maybe from the perspective of doctors and nurses all of it might make more sense, but friends and family in the medical field confirmed that hospitals often lack basic good business practices. Part of this may be because, while being a doctor requires some very impressive skills, those skills do not often overlap with good management abilities (much like attorneys tend to — ahem — not be the most effective managers). I would think that other factors — such as the prevalence of third-party payers, Medicare/Medicaid payments at below-cost, etc., certainly don’t make hospitals any easier to run. 

Health care continues to be front and center in Washington’s debates, but it looks doubtful anything significant is going to happen until after Inauguration Day in January 2013, no matter who wins the election. My hope is that, when we go back to the drawing board on implementing health-care policies, the nation re-orients its focus on patient care. We don’t have hospitals to provide jobs for health-care policy wonks, vice presidents for community affairs, and Medicare social-science research analysts. We have hospitals to treat patients, and would do well to remember that moving forward. 

Supreme Court Health-Care Decision: It Is Not Over

by Nina Owcharenko

The recent Supreme Court decision may be a disappointment. Many thought the justices would strike the law in its entirety and end this bad dream for the country now. Unfortunately that did not happen. But there is more to come.

The law remains unworkable, unaffordable, and bad health-care policy. It straps the American people with higher taxes and higher premiums and more spending and more deficits. It also breaks the many promises made by President Obama, including keeping the coverage you like, not adding to the deficit, protecting Medicare, and not increasing taxes or premiums on middle-class families.

The House of Representatives has scheduled another vote on full repeal of the health-care law, putting the decision in the hands of the Democrat-controlled Senate.

In addition, there are the 23 lawsuits representing more than 50 organizations relating to the highly polarizing HHS mandate requiring religious employers to provide coverage of abortion-inducing drugs, contraception, and sterilization, regardless of religious or moral objections. These suits challenge the constitutionality of the law relating to religious freedom. This benefit mandate is just the first of many more controversial decisions likely to come out of the administration relating to the essential-benefit package.

Furthermore, as 2013 nears, there are the existing Obamacare taxes that will take effect. Notably, there will be the $210 billion raised by increasing the Medicare payroll tax from 2.9 percent to 3.8 percent and expanding the tax to investment income. While on the surface this tax appears to only impact those individuals with incomes above $200,000 and above $250,000 for couples, that threshold is not indexed to inflation. So, like the AMT, more people will face this tax in the years to come. 

Finally, the election. The American people have been consistent in their opposition to the health care. The Court’s decision will likely not impact American’s long-settled views that health reform based on the premise on more government, more regulations, and more mandates is the wrong way to solve the country’s health-care problems.

— Nina Owcharenko is Director of the Center for Health Policy Studies and the Preston A. Wells Jr. Fellow at the Heritage Foundation.