Thursday, September 25, 2014

The Obamacare Disaster

By Alan Caruba

By far the worst law passed by Congress in 2010 was the Affordable Care Act (ACA) otherwise known as Obamacare. It was passed without a single Republican vote and as more Americans experience the higher costs and other aspects of it realize how it has negatively affected their lives, it should eventually be dismembered and ended.

Obamacare is progressivism written large and is an example of earlier examples. Obamacare is a massive drain on government funding, particularly with regard to Medicaid.  Medicare and Medicaid were established in 1965 and after 47 years they are broke. Their unfunded liabilities are enormous.

Likewise, Social Security, established in 1935 is broke. Fannie Mae came into being in 1938 to encourage home ownership and contributed to the 2008 financial crash along with the banks that were pressured to make “sub-prime” loans to people who lacked the means to pay their mortgages. It had to be bailed out to the tune of millions. The same is true of Freddie Mac, established in 1970.

Time and time again, the programs established out of progressive ideals and purposes have proven to be failures, largely in terms of the unfunded liabilities, now in the trillions, that they have created.

Obamacare is famous for the lies that President Obama told. Thousands lost the medical insurance they had. Thousands lost access to their personal physicians. The Obama administration has continued to lie about it, inflating and including the numbers of “uninsured” it covers by including those who lost their insurance and had to sign up for it.

Stephen T. Parente, the associate dean of Carlson School of Management and director of the Medical Industry Leadership Institute at the University of Minnesota, in a June Wall Street opinion, warned that “Industry experts and consumers should once again brace for significantly higher premiums.”

“Since premium growth has averaged at least 5% over the past five years, it is unlikely the law’s federal subsidies will increase enough to make up the difference in out-of-pocket premium costs,” predicting that “lower-and-middle income consumers will be forced out of the private insurance market.” He noted that “the steepest increases will not occur until 2017” and, of course, by then Obama will be out of office.

The Detroit Press reported on Sept. 21 that “A significant benefit of the Affordable Care Act is the opportunity to receive money-saving tax credits up front to cut the overall cost of health insurance, but now hundreds of thousands of consumers could owe back some of that money next April.”

“The law’s ‘reinsurance’ program will also expire in 2017. Health insurers will no longer be able to bill the government for 80% of a patient’s healthcare costs when they make more than $45,000 in annual claims.”

The impact of Obamacare on the ability of people to have full-time jobs is already being felt as employers, especially small business operations, have been forced to either fire full-time employees to stay below the limit of fifty or reduce some to a part-time status. This is affecting the ability of smaller businesses to grow and expand. Those unable to afford Obamacare will be forced to sign up for Medicaid, already a financial burden on states. Others will stay uninsured and face a penalty.

Parente called Obamacare’s promise to deliver universal health care “a fatal conceit” that will die of unaffordability,

In September, Casey B. Mulligan, a professor of economics at the University of Chicago, in a Wall Street Journal opinion wrote that “Although the ACA helps specific populations by giving them a bigger slice of the economic pie, the law diminishes the pie itself. It reduces the amount that Americans work and it makes their work less productive. This slows growth in both personal income and gross domestic product.  In further expanding the frontiers of redistribution, the ACA reduces the benefits of employment for both employers and employees” as the “result of penalizing businesses for hiring and expanding” resulting in less hiring and expanding.”

That’s a formula for reducing the nation’s economic growth.

Holman W. Jenkins, in a September opinion, described Obamacare as “just another subsidy program, throwing money at health care. In economics, you can’t subsidize everybody but we’re trying: 50 million Americans get help from Medicare, 65 million from Medicaid, nine million from the Department of Veterans Affairs, seven million (and counting) from Obamacare, and a whopping 149 million from the giant tax handout for employer-provided health insurance.”

“Much of this money,” noted Jenkins, which will total about $1.3 trillion in 2014, is shoveled out regardless of need, driving up prices, and spurring production of services of dubious value.”  Holman is a member of the Wall Street Journal editorial board.

Meanwhile, the U.S. continues to suffer economically as, due to high corporate taxes, more corporations take flight to other nations, establishing their headquarters outside of our nation.

In every respect, Obamacare has been a disaster since it was enacted. Its website turned out to be a multi-million dollar failure and this was the case of several state sites as well. In mid-September the government reported that tens of thousands of people are likely to lose their health insurance at the end of the month because they missed a deadline to confirm they are legally residing in the U.S.

Most dramatically, Obamacare has required the President to do what he is not empowered by the Constitution to do. Only Congress can change a law, but Obama has unilaterally made changes, mostly out of political considerations leading up to the November midterm elections.

The following Democrats are running for re-election in November. They are Mark Begich (AL), Dick Durbin (IL), Al Franken (MN), Kay Hagan, (NC), Mary Landriu (LA), Jeff Merkley (OR), Mark Pryor (AR), Jack Reed (RI), Jeanne Shaheen (NH), Mark Udall (CO), Tom Udall (NM), and Mark Warner (VA). All voted for Obamacare. All should be defeated and replaced by Republicans.

I will leave whether Obamacare can be repealed to a future Congress, but the House, controlled by Republicans has repeatedly passed laws to do so.

Obamacare is the ultimate progressive legislation. One can only hope that it will convince Americans it is time to turn from its long history of passing such legislation and endorse steps to reduce the enormous unfunded debt they represent.

Instead of bleeding Americans of their earnings, Congress needs to empower them to retain what they have worked for and to make individual decisions about healthcare insurance purchased from a free and competitive market.

© Alan Caruba, 2014

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