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Health Law Repeal: A Trail of “Broken Promises”

July 11, 2012

As House Republicans gear up for today’s vote on legislation to repeal “Obamacare”—the 31st such attempt in just 18 months—they return once again to the theme of broken promises.

To start, the bill charges; “President Obama promised the American people that if they liked their current health coverage, they could keep it. But even the Obama Administration admits that tens of millions of Americans are at risk of losing their health care coverage, including as many as 8 in 10 plans offered by small businesses.” A recent post on the House Ways and Means Committee’s website warns that “4 million to 20 million to 65 million” employees will lose insurance because of “Obamacare”—a range that seems curiously inexact.

The reality is quite different. Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University says that the “tens of millions of stuff” refers to bare-bones policies that do not meet the health law’s standard requiring insurers to spend 80% of what they collect in premiums on actual medical care. These are plans offered by McDonald’s and other employers that hire low-wage workers. Many of these employers were granted waivers, allowing them to offer this sub-par coverage to workers until 2014, when “subsidies and insurance reforms will make more comprehensive policies more affordable for most,” says Nichols. He continues, “They are technically correct that tens of millions [of workers] are in these policies now. They are NOT correct that people like them. They cover very small amounts of care, but they are all some employers currently offer.”

Another “broken promise” detailed by the latest repeal bill is that “the average American family already paid a premium increase of approximately $1,200 in the year following passage of the law. The Congressional Budget Office (CBO) predicts that health insurance premiums for individuals buying private health coverage on their own will increase by $2,100 in 2016 compared to what the premiums would have been in 2016 if the law had not passed.”

Again Len Nichols offers a reality check: “As usual, their claims are a mixture of hyperbole and fact misattributed to blame Obama.” The $1200 figure comes from the Kaiser Family Foundation’s annual Employer Health Benefits Survey which found an average 9% growth in employer-sponsored premiums between 2010 and 2011. Drew Altman, President and CEO of KFF wrote at the time; “The average family policy now costs more than $15,000 per year…Since we began doing this survey thirteen years ago, worker contributions to premiums have increased 168%, wages 50%, and inflation 38%.”

In this context it’s hard to imagine that passage of the health care law, and implementation of a few early initiatives are to blame for these long-brewing, troubling trends. The ACA provisions that went into effect after 2010 allowed young adults up to age 26 to stay on their parents’ insurance policies, required some plans to cover preventive services at no cost to patients, and did away with lifetime limits on spending.

Nichols, who is a healthcare economist, says that most “fair actuarial studies” attribute premium increases of just 1 to 3 percentage points (depending on the group plan size) to these provisions. For large group plans, the provisions add 1% to premiums. “Premium growth of 9% cannot be attributed to the ACA,” he adds.

So what is leading to the rise in health insurance premiums if not the excesses of the ACA?

Look no further than the insurers themselves. Some experts say last year’s 9% premium increase was partially a result of insurance companies jacking up their rates before 2012 rules went into effect that requires them to publicly justify any increases above 10%.  Another explanation is that insurers assumed that the economy would pick up and people who have been delaying doctor visits, not taking medications and putting off other medical care would start utilizing more services. (This has not happened, and in fact, health care spending slowed in 2010 and 2011 to roughly 3%, says Nichols.) There is also a documented rise in prices for health-related goods and services like prescription drugs and hospital fees.

KFF’s Altman writes, “In the short term, employers have few new tools to control premium increases.” Employees will continue to see more high-deductible plans (with or without health savings accounts) that have lower premiums but require them to pay $1,000 or more in deductibles before coverage kicks in. According to a 2012 census released by America’s Health Insurance Plans (AHIP), more than 13.5 million people now have high-deductible health plans. And a recent paper from the Rand Corporation predicts; “Half of all workers at employer-sponsored health plans — including those working for the government — could be on high-deductible insurance within a decade.”

In the end, there is much to dispute in the “numbers” employed by conservatives to justify repeal of the health law. This latest attempt, like the past 30 others, is merely an exercise in rhetoric designed to whip up opponents and will quickly die (like the others) in the Senate. But despite being a colossal waste of time, there is another danger when our lawmakers keep mixing apples with oranges when assigning blame for our current healthcare woes. As Kathleen Sebelius, Secretary of the Department of Health and Human Services writes in an op-ed in the Washington Post; “People are entitled to their opinions, but not to their own facts.”

Sebelius calls the Supreme Court’s decision to uphold the Affordable Care Act “a turning point in the health-care debate, a chance to stop refighting old political battles and move forward with implementing and improving a law that is already lowering health-care costs and providing more security for millions of American families.”

What kind of “numbers” will it take to get us past the “refighting” stage?

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From → ACA, Health care

3 Comments
  1. Jean Anne Cipolla permalink

    Naomi – thanks for such great work, breaking down the distortions. I know that, personally, I’ve had three different health insurance plans over the past 12 years and each years my premiums have gone up between 5 and 10 percent and that was on an employment based plan and a self-purchased plan, all well before the ACA ever came into existence. And that didn’t include my changes in co-pays and prescriptions and other out of pocket costs. The shifting of costs from insurer and employer to consumer has been very high, at least for me, over the past 12 years.

  2. Aaron permalink

    Of course they will blame Obamacare for the rise in premiums. The Repubs are trying to win an election. Please don’t pretend that the Dems wouldn’t do the same thing if the roles were reversed.

    Also, the vote in the SC for the bill was 5 for, 4 against. Not exactly overwhelming by any means. How can the justices be so divided on this issue? Are they not just interpreting the law? The reason is that the mandate is unconstitutional. I think most people have forgotten that we live in the land of the free. We aren’t forced to buy a driver’s license, unless we want to have the benefits of driving a car. Should be the same for this health insurance program.

    I have, for the most part, voted Republican in elections, but I no longer have faith in either party to uphold the Constitution. They are all rewriting the Constitution, and doing it plain sight.

  3. I don’t agree with your analysis. You mention that it is hard to imagine that the passage of the health care law, and implementation of a few early initiatives are to blame for these long-brewing, troubling trends.
    I don’t think you know exactly what Obamacare entails. There are far more than a few early initiatives that have been implemented. Adding millions of uninsured people to Medicaid is hardly a minor early initiative. Adding children to parent policies until the age of 26 is not minor. The electronic record demands and policies are hardly minor. Money given out from HHS for “stimulus” is hardly minor. Especially when you consider that much of the money was given to entities that have nothing to do with healthcare, for instance Public Television along with billions of dollars that were thrown out the window for such nonsense programs.
    And you honestly think that all this money isn’t going to raise the price of healthcare? You don’t even need to know math to know that all the above mentioned is money that went out and someone has to pay for it. And what I mentioned is only the tip of the iceberg.
    Obamacare is thousands of pages long. Most of which have nothing to do with healthcare. As Nancy Pelosi so ignorantly said, “Once it becomes law we will all know what it says,” If that didn’t raise a few red flags in your head than you are niave and I suggest you don’t sign any contracts in your future.
    Common sense tells us that if you add people to the Medicaid roles, add people to policies, add unreasonable burdensome policies to healthcare workers and hand out money to every special interest group you like, it is going to raise the cost of something and someone is going to pay for it.
    Democrats like to pretend that everyone in this country is entitled to what everyone else has.
    You see how this belief has affected the country so far? Four years of entitlements has put this country in dire straits. As nice as it sounds to give everyone a piece of the pie, it can’t be done. Someone has to pay.
    I would imagine most of you reading blogs etc. are working people with bills to pay. I also would have to assume by your anaylsis and comments that you don’t mind giving away more and more of your paycheck to pay for others. Then I would have to conclude that you are lying to yourself. No one wants to give away their hard earned money.
    People deserve help when they are in need. Not because they refuse to work or take any responsibility for their own plight in life. Anyone being truthful with themselves knows this. It is easy to pretend that you are giving and compassionate and have such a pure heart and soul. It is another thing to act on what you say. Truth is you don’t want to keep giving away more of more of what you have earned anymore than I do.
    Working people can not and shoud not have to bear the burden of everyone else without even having a say about how it is handed out. I am willing to help anyone who shows me they are appreciative of the help and they are taking some steps towards taking responsibility to provide for themselves. Handouts have to end!
    The only people in this country who deserve anything from their fellow citizens are those who are physically or mentally incapable of providing for themselves.
    If Obamacare had anything good to offer to “healthcare” I might be accepting of it. But it doesn’t. Except that it will control who will get some forms of treatment and who will not, it is one huge package of giveaways.
    As an RN I can tell you that this law is completely bad for all of us.

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