Today, a major provision of Secretary of Health and Human Services, Kathleen Sebelius’s health care law will take effect…employers must provide coverage for contraception and abortion, as she has mandated. Read more
Secretary of Health and Human Services, Kathleen Sebelius, has now had a chance to look at certain sections of Obamacare, and has decided that there are serious problems with the provisions creating federal disability insurance.
This portion of the law, known as the Class Act, seems to have been included for two reasons, First, it was the creation and pet project of Senator Ted Kennedy, and, second, it made Obamacare appear to be deficit neutral over a ten year period.
Ms. Sebelius has now determined that the program is designed to, well, go broke somewhere between 2020 and 2025. It’s too bad that she didn’t read the November 13, 2009 report from Richard Foster, the Chief Actuary for Medicare and Medicaid, or, for that matter, a post we did here in March, 2010 before Obamacare was passed. Both explained that Class was doomed to failure.
The problem is that for the first 5 years, Class will take in premiums, and pay out nothing. Thereafter, those who meet the definition of disability will start to collect benefits. However, during the first 5 years, the premiums collected will be spent to pay for other aspects of Obamacare, leaving little or nothing in the “pot” when people actually make a claim.
The law also calls for the program’s insurance premiums to remain flat while benefits would increase with inflation. That could lead to premiums being set so high in the beginning that they would discourage people from participating. But if premiums are set too low, they will be eclipsed by rising benefits.
The administration is concerned that [the]minimum income level [anyone making more than $1100 per year] may be too low and would result in so many workers drawing benefits that the financial viability of the program would be threatened.
All of the above probably explains why President Obama’s bipartisan Deficit Reduction Commission recommended late last year that this piece of Obamacare be repealed.
Undaunted, however, Ms. Sebelius has stated that she intends to, as they say, make it work. She’ll just ignore what Congress wrote, index premiums to inflation, raise minimum income levels, and do whatever else she feels like doing.
Wouldn’t it be nice if we could ignore Obamacare as well?
Regardless of the state you live in, state budgets are a mess. Governors and legislators are reviewing every line item to find out where cuts can be made. But, one of the biggest costs facing any state is Medicaid. And under Obamacare those costs will rise dramatically as millions will be added to the rolls.
On Thursday, Secretary of Health and Human Services, Kathleen Sebelius, sent a letter to all governors offering sage advice on what could be done about this Medicaid problem. Her solution…cut benefits.
That’s correct, the same administration that, as we speak, is inventing new ways to drive up health costs (see: new taxes on insurance companies, medical device manufacturers, drug manufacturers, to name just a few), is now proposing that states solve their budgetary nightmare by cutting benefits.
Among the suggestions, cut some programs,
such as physical therapy, dental care, eyeglasses, and even some prescription drugs.
And, if all else fails, states should look into,
removal of some people from the program. [emphasis supplied]
Seems to me this group hasn’t a clue. First we’re told that everyone has to have “affordable health care”, and then we’re told that it’s ok to cut benefits, and drop folks from the health insurance rolls.
Gee, I can’t wait for Obamacare to be fully implemented. Does the word “rationing” come to mind?
Steve did a post earlier this week about the rise in insurance premiums that consumers are now seeing. The insurance companies have said that anywhere from 1% to 9% of those increases are the direct result of Obamacare mandates, with the rest of any increases attributable to rising health care costs.
Yesterday, the Obama administration struck back.
Kathleen Sebelius, secretary of Health and Human Services, issued the warning in a letter to Karen Ignagni, the insurance industry’s top lobbyist.
Ms. Sebelius said some insurers were notifying enrollees that their insurance premiums will increase next year as a result of the law’s new benefits…
“There will be zero tolerance for this type of misinformation and unjustified rate increases,” Ms. Sebelius wrote. “We will not stand idly by as insurers blame their premium hikes and increased profits on the requirement that they provide consumers with basic protections.” [emphasis supplied]
Let’s analyize that statement.
Beginning soon, as an example, insurers will have to provide “free” preventive care to their insureds. So, when a patient has a mammogram performed at her local hospital, the patient will pay nothing. Is the hospital performing the procedure for free? Is the radiologist reading the test results for free? Of course not. Currently, you and your insurer split those costs in some fashion. Within months, the insurance company will have to pay the entire cost. How will the insurance company cover their additional cost…by raising premiums, of course.
Months ago, the Congressional Budget Office warned us about this, but apparently, Ms. Sebelius didn’t get the memo.
CBO found that premiums in the individual market will rise by 10% to 13% more than if Congress did nothing. Family policies under the status quo are projected to cost $13,100 on average, but under ObamaCare will jump to $15,200.
So, the “misinformation” Ms. Sebelius speaks about in her warning letter would be better directed at those who not only voted for Obamacare, but who also spent months telling us that our insurance costs would fall when Obamacare was passed.
I submit, just as the CBO knew what would happen, so did Congress. But, they needed to spread that misinformation in an attempt to convince the American public that this was a good bill. Now, they are confronted with the stark reality of what they did.
As Pogo would have said, “we have met the enemy and he is us”.
One would be hard pressed to prepare a “public service announcement” any more deceitful than that recently released by the Department of Health and Human Services. Apparently, it’s Secretary Kathleen Sebelius, who hasn’t bothered to either read the bill or any of the myriad of analyses prepared by either the CBO, or the Office of the Actuary for Medicare and Medicaid (OACT). Read more
Today, Federal District Court Judge Henry E. Hudson of the Eastern District of Virginia issued an Order that will allow the State of Virginia to proceed with its lawsuit against Obamacare. In a 36 page opinion, the Court found that Virginia’s Complaint against the federal government had sufficient merit, as we lawyers’ say, to state a cause of action.
In March, the State of Virginia filed a law suit against the federal government claiming that Obamacare’s mandate that we all must purchase insurance, was unconstitutional, in that, among other things, it was in direct conflict with a Virginia law that prohibited any mandate that all buy insurance.
The federal government asked that the suit be dismissed claiming that Obamacare was a valid exercise of Congress’s power to regulate interstate commerce, as well as Congress’s power to tax. For more background on the government’s argument you may want to review this post.
As to the interstate commerce argument, the Court noted that:
Never before has the Commerce Clause and associated Necessary and Proper Clause been extended this far. [See: page 25 of the above link].
The court next addressed the power to tax argument, but began that discussion with the following:
Contrary to preenactment representations by the Executive and Legislative branches, the [government] now argues alternatively that [the mandate that all buy insurance] is a product of the government’s power to tax for the general welfare. [See: page 25]
The Court noted that because Congress, in the law itself, called this a “penalty”, not a tax , the power to impose a penalty must be in aid of an enumerated power. In other words, some other section of the Constitution must be called upon to support it.
In conclusion, the court said,
…all [arguments] seem to distill to the single question of whether or not Congress has the power to regulate – and tax – a citizen’s decision not to participate in interstate commerce. Neither the U.S. Supreme Court nor any circuit court of appeals has squarely addressed this issue. No reported decision from any federal appellate court has extended the Commerce Clause or the Tax Clause to include the regulation of a person’s decision not to purchase a product, notwithstanding its effect on interstate commerce. [See: page 31]
Cutting through everything else we hear about Obamacare, that is the ultimate question. Exactly how far reaching is the government’s power to demand that it’s citizens engage in conduct that the citizens may not otherwise do?
At the “close of business” on Friday, we should get a better understanding of what the states think about the prospects of Obamacare. This is because the states have until Friday to decide whether to be a part of the government’s high risk pools.
This piece of Obamacare is scheduled to be implemented 90 days after the passage of the bill, or, approximately, June 21, and, it is designed to provide insurance to people with pre-existing conditions who otherwise are unable to obtain insurance. The program will last until 2014 when the insurance exchanges open, and, it is funded with $5 billion to cover the cost of the insurance.
So far, at least Georgia and Nebraska have declined to participate, and many other states, including Kansas (Health and Human Services Secretary Kathleen Sebelius’s home state) are leaning toward “opting out”. Why would they opt out? What follows are two compelling reasons.
First, although the program is funded with $5 billion to cover the cost until 2014, Richard Foster, the chief actuary for the Centers for Medicare and Medicaid,
reported last week that the high-risk program will run out of money next year or in 2012.
What happens then? Well, the states are left holding the bag.
And, second, the states can’t get any information about what federal mandates will be placed on the program from the Secretary of Health and Human Services.
HHS will draft the program’s rules only after states decide whether to sign up.
Where I come from, that’s called “buying a pig in a poke”. And, Georgia’s insurance commissioner, John Oxendine agrees.
…[H]e feared that the high-risk pools would “ultimately become the financial responsibility of Georgians in the form of an unfunded mandate.”
This is not shaping up as a good beginning for Obamacare.