ObamaCare Inflates Enrollment—And Premiums

By Sally C. Pipes

HealthCare.gov has officially closed and, despite months of technical hiccups, enrollment appears to have finished strong.

The Obama Administration estimates that 8 million people have signed up for coverage through the marketplaces. The president cited the figure as proof that “this law has made our health care system a lot better.”

Hardly. His enrollment numbers are artificially inflated. And the real rate of coverage may decline even further once consumers find out how much they’ll have to pay for insurance thanks to ObamaCare.

For starters, the administration’s 8 million enrollees include everyone who picked a plan—not just those who have actually paid for their coverage.

Insurers are reporting that 15% to 20% of those who have signed up haven’t paid their first premium. In other words, about 1.5 million people that the Administration counts as “enrolled” may still be uninsured.

Just because a consumer pays his first premium doesn’t mean he’ll make his second payment.

Insurance industry consultant Bob Laszewski has reported that 2% to 5% of enrollees haven’t paid their second month’s premium. If that sort of attrition continues, thousands of “enrollees” could end up uninsured before summer.

Further, many of ObamaCare’s 8 million enrollees previously had insurance—they just swapped out their existing policies for ones issued through the exchanges.

A recent RAND Corp. survey found that only one-third of exchange enrollees were previously uninsured.

The Congressional Budget Office reports that ObamaCare will spend $17 billion on exchange subsidies this year. A big chunk of that money will no doubt go to the two-thirds of exchange customers who previously secured coverage on their own.

Not exactly the wisest stewardship of taxpayer dollars.

Meanwhile, about a million of the 5 million people whose policies were canceled because they did not meet ObamaCare’s new rules remain uninsured.

The demographic composition of the exchange population also presents a problem.

Because the law forbids insurance companies from charging the old and sick more than three times what they charge the young and healthy, insurers must attract enough young, low-cost people to keep premiums down.

That hasn’t happened. Just 28% are between the ages of 18 and 34—well below the 40% the Administration said would be needed to keep ObamaCare’s exchange pools financially stable. It’s already clear that the exchange population is sicker than average.

According to a report from pharmacy benefit manager Express Scripts, exchange enrollees use 47% more specialty medications than the general insured population.

Demand for HIV meds is four times higher in the ObamaCare pool than in the existing commercial pool. Anti-seizure medication prescription rates are 27% higher.

Those drugs are more expensive. As Express Scripts puts it, “Increased volume for higher cost specialty drugs can have a significant impact on the cost burden for both plan sponsors and patients.”

Insurers will adjust to this reality by raising premiums. WellPoint predicts “double-digit-plus” rate increases across the country. In some areas premiums could go up 100%.

Cigna CEO David Cordani says his company has already brought up the coming “rate shock” with the Administration—and is pushing for changes to mitigate it.

ObamaCare’s exchanges appear to have survived their first enrollment period. But the government health-insurance platforms are far less healthy than the administration claims—and may crumble when they next open for business this fall.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Investors Business Daily.

Cover Oregon: Out of the Frying Pan


*This event is currently sold out. You can add your name to the waiting list by clicking the “Add to Waitlist” link in the Eventbrite registration box below.


Please join us for Cascade’s monthly Policy Picnic led by Cascade Policy Institute founder and senior policy analyst Steve Buckstein on Wednesday, May 21st, at noon.

Cover Oregon’s board has admitted its $200 million plus website failure, but the decision to move Oregonians to the healthcare.gov website could backfire big-time. Not only might the board not have the authority to pull the plug on Oregon’s health care exchange, but a federal court case threatens to deny Oregonians the tax credits that ObamaCare promised would make our insurance premiums “affordable.”  What else could go wrong?

Admission is free. Please bring your own lunch. Coffee and cookies will be served. Space is limited to sixteen guests on a first come, first served basis, so sign up early.

Sponsored By

Cover Oregon: Out of the Frying Pan…

On April 25th, after wasting more than $200 million in federal cash, Cover Oregon’s Board voted to pull the plug on Oregon’s failed ObamaCare health insurance exchange and go with the federal exchange technology as the “core” of its system. The first open enrollment period for Oregonians ends today. Oregon hopes to be back in business using the federal technology when the next enrollment period opens up on November 15.

The only problem is that―as I testified before the Board―the Affordable Care Act states some nine times that only individuals signing up through “state established exchanges” qualify for federal tax credits to make their insurance premiums more “affordable.” Those using the federal exchange aren’t eligible for these credits, although the Obama Administration has ignored the clear wording of the law and granted them anyway.

On March 25 the Federal D.C. Circuit Court of Appeals heard arguments on this in the Halbig v. Sebelius case. One judge seemed to telegraph how he might rule by stating, “There is an absurdity principle, but there is not a stupidity principle. If the law is just stupid, I don’t think it’s up to the court to save it.”

If the courts eventually rule against granting tax credits to those using the federal exchange, Cover Oregon’s Board may have just pushed many Oregonians out of the frying pan and into the fire.

Steve Buckstein is founder and Senior Policy Analyst at Cascade Policy Institute, Oregon’s free market public policy research organization.

What Would Jefferson Say to the Little Sisters of the Poor?

In 1804 an Ursuline nun in New Orleans asked Thomas Jefferson to clarify in writing her religious community’s right to retain their property and to continue their ministries without government interference following the Louisiana Purchase. As French Catholic Louisiana was being incorporated into the Anglo-Protestant United States, the nuns were concerned about the status of their institutions under U.S. law. President Jefferson assured her that the government would not interfere with the sisters’ property, ministries, and way of life. In a letter dated May 15, 1804, he wrote:

“I have received, holy sisters, the letter you have written me wherein you express anxiety for the property vested in your institution….The principles of the constitution and government of the United States are a guarantee to you that it will be preserved to you, sacred and inviolate, and that your institution will be permitted to govern itself according to its own voluntary rules, without interference from the civil authority.”

Jefferson confidently promised that the American Constitution would protect the nuns and that the government would leave them alone. So why don’t Catholic sisters today even qualify for a religious exemption from ObamaCare’s insurance mandate that requires contraception and abortion coverage? It may seem unbelievable, but according to the Obama Administration’s definition of “religious employer,” sisters are not included.

Last year the Department of Health and Human Services (HHS) directed almost all employers to include coverage of contraceptives and abortion-inducing drugs in their employee health insurance policies, or else pay a fine of $100 per employee, per day. HHS subsequently published a final rule that requires many health insurers to charge all enrollees to cover the cost of elective abortions.

The “HHS Mandate” has a narrow conscience exemption that applies only to organizations whose purpose is solely to inculcate religious values and which employ and serve primarily members of their own faith. The exemption does not include religiously affiliated or faith-based institutions which serve all people without discrimination (like hospitals, colleges, schools, and social service agencies). And it doesn’t apply to communities of nuns.

Because of this, the Becket Fund for Religious Liberty filed a lawsuit September 24 in federal district court in Denver on behalf of the Little Sisters of the Poor. The Sisters are a nearly 200-year-old religious community dedicated to caring for the elderly poor. They run 30 homes in the U.S. (four in the West) and care for nearly 13,000 people in 31 countries.

“We cannot violate our vows by participating in the government’s program to provide access to abortion-inducing drugs,” said Sister Loraine Marie, a superior of one of the American provinces of the Little Sisters community.

“The Sisters should obviously be exempted as ‘religious employers,’ but the government has refused to expand its definition,” said Becket Fund senior counsel Mark Rienzi. “These women just want to take care of the elderly poor without being forced to violate the faith that animates their work. The money they collect should be used to care for the poor like it always has―and not to pay the IRS.”

According to the Becket Fund, the lawsuit “is the first of its kind both because it is a class-action suit that will represent hundreds of Catholic non-profit ministries with similar beliefs and because it is the first on behalf of benefits providers who cannot comply with the Mandate.”

Jefferson explained to the Ursuline nuns that American law would protect them and their institutions, regardless of the differences among American citizens:

Whatever the diversity of shade may appear in the religious opinions of our fellow citizens, the charitable objects of your institution cannot be indifferent to any; and its furtherance of the wholesome purposes of society, by training up its younger members in the way they should go, cannot fail to ensure it the patronage of the government it is under. Be assured it will meet all the protection which my office can give it.

“I salute you, holy sisters, with friendship and respect.”

Like the Ursuline nuns of Jefferson’s time, the Little Sisters of the Poor seek to secure their right to live out their faith through service to those in need. Catholic sisters do not give up their religious freedom when they establish nursing homes―or any other ministry. We can imagine what Thomas Jefferson might think of American women having to sue the Obama Administration to defend their First Amendment rights. But can we doubt he would be dismayed by how intrusive and coercive the federal government has become since the day he wrote so cordially to a group of French nuns about the safeguards of the American Constitution?

Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.

Seven Steps to Replace ObamaCare with Something That Works

By Sally C. Pipes

Under the Affordable Care Act, state health insurance exchanges open for business October 1 (although the executive director of Cover Oregon has admitted Oregon’s exchange will experience some delays). While ObamaCare remains a controversial―as well as logistically catastrophic―law, President Obama took a shot at its opponents recently, saying, “There’s not even a pretense now that they’re going to replace it with something better.”

Au contraire. Ideas for “something better” abound—but the president hasn’t shown interest in them. He has instead remained devoted to his eponymous law, which promises higher costs and worse care. At this point, ObamaCare’s critics have to play the long game―and press for delays in the law’s implementation, whether by rolling back certain parts of the law or defunding it through a continuing resolution, until the White House has a new occupant.

Here are seven provisions that should be part of a replacement agenda that would ensure that all Americans have affordable, accessible, quality health care.

First, change the federal tax code so that individuals can purchase insurance with pre-tax dollars, just like businesses can. Most Americans don’t realize the full cost of their health care because they get employer-subsidized insurance. Consequently, they over-consume health care. That drives up costs. To offset the cost of insurance for those who don’t get coverage through work, Congress could institute a refundable tax credit.

Second, it’s long past time to expand the availability of health savings accounts, where patients can save pretax dollars for health services. And, HSAs must be combined with catastrophic coverage. Doing so would encourage Americans to shop smartly for their care, as they’d be spending their own money.

Third, Congress should allow the purchase of insurance across state lines. Insurance policies issued in Rhode Island cost 2.5 times what they do in Alabama. People should be able to purchase a plan that suits their needs. Such a move would increase competition and lower costs.

Fourth, policymakers need to increase funding for high-risk pools. Such pools were functioning well in many states before ObamaCare―providing affordable coverage to those with pre-existing conditions without raising premiums for everyone else.

Fifth, federal electronic health records (EHR) mandates have to go. The average initial cost of an EHR system is $44,000 per physician, with ongoing maintenance estimated at $8,500 annually. Those costs are passed on to patients. Instead, let providers implement EHR systems when it makes financial sense for them to do so on their own.

Sixth, Congress should scrap the essential health benefits mandates that require all policies to cover a battery of health services. Such mandates can raise the cost of insurance anywhere from 10 to 50 percent.

And seventh, state-level medical malpractice reform is long overdue. Each year, more than $100 billion in health care expenditures are driven by doctors’ and hospitals’ worries about medical liability. Common sense tort reform that immunizes providers from frivolous lawsuits would usher in lower costs for patients.

Of course, all these reforms are contingent on repealing ObamaCare. The House of Representatives has certainly tried to move that effort forward, voting 40 times to do so.

Death by a thousand cuts may be more realistic, at least in the short term. In June, the House voted to repeal ObamaCare’s medical device tax, with 37 Democrats joining Republicans to pass the bill.

And in the past three months, 22 House Democrats have signed onto legislation repealing the Independent Payment Advisory Board (IPAB)―ObamaCare’s doomed plan to have 15 unelected bureaucrats dictate Medicare spending with no real congressional oversight or control.

Public opinion and legislative momentum favor ObamaCare’s delay, if not its outright repeal. And contrary to the president’s assertion, there is a plan to replace ObamaCare with something better. Once the president is no longer standing in the way, Congress should implement that plan―and fix American health care for real.

But if lawmakers allow ObamaCare to stand, the next stop will be a single-payer system, where government controls the health care system entirely. Senate Majority Leader Harry Reid has admitted as much. When asked in August if he felt the United States should abandon insurance as a means of accessing the health care system, Reid replied, “Yes, yes. Absolutely yes.” This will put America on the road to serfdom, and there will be no off-ramp.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by The Washington Examiner.

As the Expense of ObamaCare Sets In, Companies Cut Health Benefits

By Sally C. Pipes

Implementation of the Affordable Care Act continues this fall and winter, and employees of shipping giant United Parcel Service recently got an unexpected delivery. The company announced that it would stop offering health coverage to the spouses of 15,000 workers.

UPS’s workers and their families can thank ObamaCare for this special delivery. And UPS isn’t alone. American businesses are discovering that the president’s signature law will raise health costs for them and their employees in short order.

In a memo explaining the decision to employees, UPS stated that increasing medical costs “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost.”

One day before UPS’s big announcement, the University of Virginia announced that it would cut benefits for spouses who have access to health care through jobs of their own. The rationale was similar. Delta Airlines recently revealed that ObamaCare will increase its direct health costs by $38 million next year. After taking into account the indirect costs of the law, the company is looking at a 2014 health bill that’s $100 million higher.

Increasingly, large employers who aren’t dropping spousal health benefits are requiring their employees to pay monthly surcharges in the neighborhood of $100 per spouse. Many small businesses are dropping family coverage altogether because they expect that ObamaCare’s new tax on insurers will be passed on to them in the form of higher premiums. One Colorado-based business received notice from its insurer that the tax would increase premiums more than 20 percent.

The story is similar in Massachusetts. One new report concludes that over 45,000 small businesses in the Bay State will see premium increases in excess of 30 percent. In all, more than 60 percent of firms in the state will see their premiums go up.

Last month in California, the largest insurer for small businesses, Anthem, declared that it would not participate in the state’s small-business health insurance “marketplace,” Covered California. Only two years ago, Anthem covered one-third of small businesses in California. Anthem’s exit represents one less choice for consumers—and a sign that competition may not be as robust in the exchanges as the Obama Administration promised.

Small businesses are responding to these higher premiums by trimming their labor costs in other ways. That’s not good news for workers. Seventy-four percent of small employers plan to have fewer staff because of ObamaCare, according to a recent U.S. Chamber of Commerce survey. Twenty-seven percent are looking to cut full-time employees’ hours, 24 percent to reduce hiring, and 23 percent to replace full-time with part-time employees.

One in four small companies say that ObamaCare was the single biggest reason not to hire new workers. For almost half, it’s the biggest business challenge they face. These findings are consistent with a recent Gallup Poll showing that 41 percent of small businesses have already stopped hiring because of ObamaCare. Another 19 percent intend to make job cuts because of the law.

All this tumult in the labor market is fueled by more than the increase in premiums engendered by ObamaCare. The law effectively encourages companies to cut full-time jobs. ObamaCare requires employers with 50 or more workers to provide health insurance to all who are on the job for 30 or more hours per week. The law originally called for this “employer mandate” to take effect in 2014, but the Administration decided in July to delay enforcement of the mandate until 2015.

Employers are responding by doing just enough to avoid ObamaCare’s dictates. Administrators at Youngstown State University in Ohio recently told adjunct instructors, “[Y]ou cannot go beyond twenty-nine work hours a week….If you exceed the maximum hours, YSU will not employ you the following year.” A week prior the Community College of Allegheny County in Pittsburgh made a similar announcement.

Hundreds of employees at Wendy’s franchises have seen their hours reduced for the same reason. And part-time employees of Trader Joe’s, which has eight locations in the Portland area, are losing their company-sponsored health insurance. Trader Joe’s has offered health and dental coverage for years, but now part-time workers are being directed to the state health insurance exchanges.

Meanwhile, companies with fewer than 50 employees are thinking twice about expanding—and thus being ensnared by ObamaCare’s requirement that they provide health insurance. The cost of each additional employee could be staggering. A firm with 51 employees that declined to provide health coverage would face $42,000 in new taxes every year—and an additional $2,000 tax for with each new hire. Providing coverage, of course, would be even more expensive.

As private firms large and small grapple with ObamaCare-fueled cost increases, one large employer—the federal government—has been quietly exempting itself from portions of the law. Top congressional staffers like their current benefits under the Federal Employee Health Benefits Plan (FEHBP), wherein the government pays up to 75 percent of the premiums. But the law requires those who work in lawmakers’ personal offices to enter the exchanges. And in many cases, staffers make too much to qualify for health insurance subsidies through the exchanges. So they’d be facing a hefty cut in their compensation.

Fearing a mass exodus of congressional staffers from Capitol Hill, the Obama Administration fudged the law to permit lawmakers’ employees to receive special taxpayer-funded subsidies of $4,900 per person and $10,000 per family. Yet only three months ago, Senate Majority Leader Harry Reid (D-Nev.) claimed that Congress wouldn’t make exceptions for itself.

President Obama no doubt knows that these congressional favors won’t go over well with ordinary Americans. So he’s called on his most popular deputy—former President Bill Clinton—to try to sell the law to the public once again. But unless the former president can lower employer health costs with little more than the power of his words, his sales pitch will likely fall flat.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published byForbes.

For Small Business Owners, The ObamaCare Reality Bites

By Sally C. Pipes

More than 40 percent of small businesses have frozen hiring because of ObamaCare, according to a new poll from Gallup. A fifth have actually cut their workforces as a direct result of the health care reform law.

That’s not exactly the future President Obama forecast in 2009, when he told an audience of small-business owners that his health care reform package was “being written with the interests of Americans like you and your employees in mind.” He boasted that he had “no doubt [the law] would benefit millions of small businesses.”

Instead, small-business owners are learning that ObamaCare will drive the cost of insurance up without providing the choice of policies it promised. The law intended to make purchasing insurance easier for small businesses by creating exchanges, where firms could band together with their peers in one statewide risk pool—and thus leverage their buying power to secure lower premiums and access to a wide variety of plans. The Congressional Budget Office projected that two million people would get insurance through the small-business exchanges.

Insurers would compete for small businesses’ allegiance, driving down prices further. Employers would name a benefits level, and then their employees could choose from among several plan options at that level. Under the status quo, by contrast, they may be stuck with the plan their employer picks for them—if they even get insurance at all.

But the exchanges aren’t unfolding as planned.

For starters, it’s not clear that the exchanges will be ready by the October 1 deadline set by ObamaCare. Creating these government-directed insurance marketplaces in all 50 states plus the District of Columbia has proved far more complicated than bureaucrats anticipated.

Maryland, which was one of the first states to embrace ObamaCare, announced in April that it would delay the launch of its small-business exchange by at least three months. A recent Government Accountability Office report said that all 16 states and the District of Columbia building their own exchanges are behind schedule—missing deadlines on 44 percent of the key activities needed to get them up and running. In Oregon, the state’s largest health insurer and three others are steering clear of the state exchange designed to serve small employers.*

In the mad dash to get the exchanges built, officials are cutting corners. The promised choice of plans has been the first casualty. This June, the federal government announced that every business owner shopping in the 33 federally run exchanges will have to pick one plan for all his full-time employees.

In some states, there may only be one choice for every single small business in the state—as insurers have been reluctant to participate. Just one insurer signed up to provide small-business coverage in Washington’s exchange. Ditto for New Hampshire and North Carolina. In Mississippi, not a single insurance company has signed up for the federally run exchange. That lack of competition will no doubt yield higher premiums. ObamaCare’s many mandates will exacerbate their upward march.

The health care reform law requires all policies to cover preventive care free of charge—along with a host of other “essential” benefits. Policies cannot cap annual or lifetime health care spending, and annual deductibles cannot exceed $2,000 for an individual or $4,000 for a family in the small-group market.

Businesses are starting to see the result of all these mandates and regulations. An analysis of 11 states by the insurer WellPoint projects that small-group premiums will jump an average of 13-23 percent.

In Rhode Island, insurers want to boost small business premiums by 14 percent, on average. Maryland’s biggest insurer, CareFirst BlueCross BlueShield, is pushing for an average small-business rate hike of 15 percent. And a survey by the American Action Forum earlier this year found that major insurers in five big cities were expecting small-business premiums to more than double for small firms with healthier employees. So rather than freeing small businesses from the burden of having to manage their own health benefits, ObamaCare has raised the prices they’ll pay and limited their options.

It’s no wonder that small businesses are cutting benefits, putting off hiring—or even firing workers. A quarter of small firms say they’re considering whether to drop insurance coverage, and 18 percent have reduced their employees’ hours to part-time. Thirty-eight percent say that ObamaCare has caused them to pull “back on their plans to grow their business.” So much for writing the law with the “interests” of small businesses and their employees in mind.

The Obama Administration just announced that they’d delay the implementation of the employer mandate, which would require all businesses with more than 50 full-time employees to offer health insurance. Hopefully, ObamaCare’s small-business exchanges will be the next component of the law to be delayed.

* “Insurers skip Oregon’s small employer insurance exchange—for now,” Business Journal, May 3, 2013 (http://www.bizjournals.com/portland/blog/2013/05/insurers-steer-clear-of-oregons-small.html?page=all).

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute in San Francisco. She is a guest contributor for Cascade Policy Institute. A version of this article was originally published by Forbes.

Is Being on Medicaid Better Than Having No Insurance at All?

By Roger Stark, MD, FACS

Does having health insurance actually save lives or improve health more than being uninsured? This question has not been answered until very recently.

In 2008, Oregon lawmakers decided they had enough additional public money to add 10,000 people to the state’s Medicaid program. So, Oregon officials held a lottery that ultimately signed up 6,400 new Medicaid enrollees. A further 5,800 people were eligible for the program but were not selected. People in this group had the same health and economic profile as the lottery winners. This created the perfect test case on the effectiveness of Medicaid in providing care. These 5,800 people became the control group in an objective, randomized study.

The two-year results of the health comparison study were published recently in The New England Journal of Medicine. The conclusion is surprising. It turns out that having Medicaid health insurance does not improve health outcomes, nor does it improve mortality statistics, compared with having no insurance coverage at all. The Medicaid group had no improvement in the important objective measurements of blood sugar levels, blood pressure, and cholesterol levels. The study did find that vaguely defined “mental health” did improve. However, this was done via subjective telephone interviews, not objective clinical data. For those few people requiring prolonged medical and hospital treatment, having Medicaid did improve their financial status because their medical bills were covered by federal and Oregon taxpayers.

The existing Medicaid program has 60 million enrollees nationally at a cost of $430 billion per year. Looking forward, the cost is estimated to increase to $900 billion per year by 2019. Medicaid is an extremely inefficient program, and reimbursement for doctors and other providers is about half of what private insurance pays for the same services. Doctors are not able to pay their own overhead with these low payment rates. Consequently, existing Medicaid patients have trouble getting access to health care.

The Washington State Medical Association did a recent survey of primary care providers. Results showed 18 percent had dropped all Medicaid patients, and 24 percent were not taking new Medicaid patients, due to poor payment and the complexities of Medicaid cases compared with privately insured patients. Getting access to health care is a significant problem for people in the existing Medicaid program in Washington. It turns out that having insurance on paper is not the same as actually obtaining health care services.

The Affordable Care Act, or ObamaCare, gives states the option to expand Medicaid to at least 16 million new patients nationally and 280,000 in Washington State. The law says that any adult over the age of 18 who earns less than 138 percent of the federal poverty level will be eligible for Medicaid. The estimated cost of this expansion to taxpayers is at least $450 billion over the first 10 years, beginning in 2014.

The Oregon study confirms that Medicaid does not provide better health care to people than having no health insurance at all. These terrible results not only come with a huge taxpayer cost, but also trap poor individuals in a virtually worthless health insurance plan.

The Washington State Legislature is considering expanding Medicaid in the current state budget negotiations. The federal government is bribing states with federal taxpayer money to expand Medicaid. Many state lawmakers support the expansion because it feels like “free” federal money, and they reason that Medicaid is better than no health insurance at all. The large, randomized Oregon study shows this is not true.

Of course, state taxpayers are also federal taxpayers, so ultimately the people of Washington State will pay for this Medicaid expansion. Medicaid is a pay-as-you-go program. The idea of leaving free federal money on the table makes no sense. If Medicaid doesn’t expand, the burden of taxes should be reduced for everyone.

Medical outcomes for people in the Medicaid program are no better than outcomes for people without health insurance. This fact makes it very difficult to argue that Medicaid is better than no insurance, especially considering the tremendous cost involved. Washington’s state legislators would do better to improve their existing Medicaid program; eliminate waste, fraud, and abuse; improve access; and make the program a real safety-net health insurance plan that provides quality care at a reasonable cost. Oregon’s state legislators should do the same.

Dr. Roger Stark is a health care policy analyst at Washington Policy Center in Seattle, Washington and a retired cardiothoracic surgeon. He has authored numerous in-depth studies on health care policy. Dr. Stark was one of the cofounders of the open-heart surgery program at Overlake Hospital in Bellevue and served on the hospital’s governing board. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Three Years Later, ObamaCare Remains a Troubled Law

By Roger Stark, MD, FACS

President Obama signed the federal health care bill, The Affordable Care Act (ACA), into law three years ago. Let’s look at what has happened over the past three years.

The law remains extremely unpopular with Americans. Since passage, polls have consistently shown at least 50 percent of voters disapprove of the law. A recent Kaiser Family Foundation poll revealed that only 41 percent of respondents actually understood the law, while 57 percent did not.

The estimated cost of the law has gone up dramatically. Originally, the nonpartisan Congressional Budget Office (CBO) estimated ObamaCare would cost $940 billion over its first 10 years. This was based on a deception written into the law of 10 years of revenue starting in 2010 but only six years of benefits starting in 2014.

The CBO now estimates the cost to be $2 trillion over the 10 years starting in 2012. Revenue comes from a $716 billion cut to Medicare providers and over $1 trillion in new or expanded taxes. None of the significant Medicare cuts have taken place as scheduled, so the cost overrun of ObamaCare has already started. Health insurance companies are warning of 30 to 116 percent increases in premiums, and the government’s own CBO estimates at least 10 to 13 percent increases in rates.

Even President Obama sees the failure of parts of the law. He has signed the repeal of the long-term care provision, or CLASS entitlement. He also signed the repeal of the $1.7 billion Small Business Tax Reporting Requirement, which would have forced businesses to report every vendor transaction over $600 to the IRS. A bipartisan majority in the U.S. Senate recently voted 79 to 20 to repeal the 2.3 percent tax on medical device makers’ revenue (not profits).

The administration has, to date, granted 1,600 waivers to unions and various favored companies allowing them to opt out of ObamaCare. For the rest of us, the government has issued 20,000 pages of new regulations for implementation of the law and will force patients to fill out a 21-page application to receive care under the ACA (that’s the EZ form; the long form is 60 pages).

Medicaid expansion and new government-run insurance brokerages, or exchanges, are fundamental provisions of ObamaCare. Yet, 18 states have opted not to expand Medicaid, and 26 states have no plans to set up a state-run exchange.

The proponents of ObamaCare cling to a number of inconsequential benefits. Young adults from ages 19 to 25 now can be covered on their parents’ health insurance plans. These are the young and healthy, however, and the vast majority don’t need health care and don’t have much impact on health care costs. Also, when they turn 26 their parents’ coverage ends. They then will have to pay more than their fair share for health insurance because of the community rating requirement that forces young, healthier people to pay the same premium as older, sicker individuals.

Proponents also tout the mandated preventive care in the law. Yearly physical examinations and other preventive care are not “free,” and for large numbers of patients have no impact on health outcomes, nor do they save money.

We are also told the law prohibits insurance companies from denying coverage to patients because of pre-existing conditions. Research shows that only 62,000 people in the United States are in this group with no insurance and a pre-existing health problem. Spending $2 trillion to provide coverage to this small group is irresponsible and could be handled by shared-risk pools like the one Washington State already has.

The ACA is a 2,700-page, achingly complex, monstrous law that will soon control one-sixth of our economy. The country continues to dislike ObamaCare and remains puzzled by its mind-numbing complexity.

Everyone agrees health care needs to be reformed. Patients making informed choices in a free market―not top-down government mandates that will only result in higher costs, not better care―will put patients in charge of their health care decisions and their own health care dollars.

Dr. Roger Stark is a health care policy analyst at Washington Policy Center in Seattle, Washington and a retired physician. He has authored numerous in-depth studies on health care policy. Dr. Stark was one of the cofounders of the open-heart surgery program at Overlake Hospital in Bellevue and served on the hospital’s governing board. He is a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center.

Policy Judgment on Health Care Law “Is Reserved to the People”

By Jason Mercier

The Affordable Care Act is constitutional in part and unconstitutional in part.”

With these words, the Chief Justice of the U.S. Supreme Court John Roberts, in a 5-4 decision, removed the policy fate of the federal health care law from the hands of judges and placed it squarely in the lap of voters this fall to decide what happens next.

Depending on your perspective, Roberts’ decision was either an example of judicial restraint or, as the four Supreme Court Justices who dissented wrote, “carries verbal wizardry too far, deep into the forbidden land of the sophists.”

Either way, the Chief Justice repeatedly made it clear that the Court was not passing judgment on the “wisdom or fairness” of the federal health care law or if it “embodies sound policies.”

Roberts explained, “Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.”

Perhaps it should be no surprise that a vast law that has deeply divided the country and barely passed Congress on a party-line vote would be decided by just one vote in a 5-4 opinion by the Supreme Court.

It is also somewhat fitting that the law about which then-Speaker of the House Nancy Pelosi said Congress “[has] to pass the bill so you can find out what’s in it, away from the fog of controversy” would contain a tax on Americans who don’t buy a product the government wants them to, which no one knew was in the bill until the Supreme Court ruled on it.

This, despite the promises made by President Obama proclaiming to the public that he “absolutely reject that notion” that the proposed health insurance mandate was a tax. Despite these public statements, the President did, in fact, argue to the Court that the mandate was a tax (after first telling the Court it wasn’t on the first day of arguments). This two-faced defense of the law proved to be its saving grace, as otherwise the Court would have tossed the individual mandate and the law as a violation of the Commerce Clause.

After winning the legal debate by arguing the health insurance mandate was instead a tax, the President is back to telling the American people it isn’t a tax but a penalty. The White House proclaimed after the Court’s 5-4 ruling, “It’s a penalty, because you have a choice. You don’t have a choice to pay your taxes, right?”

The one choice we do have is to decide what happens next.

Some would have the Court’s decision be the last word on the policies of the federal health care law. While it is in the legal sense, to paraphrase Winston Churchill, the Court’s decision is not the end. It is not even the beginning of the end; but it is, perhaps, the end of the beginning of the policy debate.

Placing the ultimate decision on the fate of the federal health care law back in the hands of voters, Chief Justice Roberts wrote, “The Framers created a Federal Government of limited powers, and assigned to this Court the duty of enforcing those limits. The Court does so today. But the Court does not express any opinion on the wisdom of the Affordable Care Act. Under the Constitution, that judgment is reserved to the people.”

This November, we the people will have the opportunity either to affirm the policies of the federal health care law or to pursue a different direction.

Jason Mercier is director of the Center for Government Reform at Washington Policy Center in Olympia and a guest contributor for Cascade Policy Institute, Oregon’s free market public policy research center. Washington Policy Center’s 10th Annual Health Care Conference on July 10 will focus on the next steps for state policymakers on implementation of the Affordable Care Act.

1 2 3