Understanding Obamacare-  Premise, Promises, Consequences

Thirty one days from now,  October 1, 2013. Obamacare will enter a critical implementation phase – signing up for health exchanges.   Ninety days after that, on January 1, 2014,  the bulk of Obamacare’s other major provisions will become operational.  

It is now  three and one half years since Obamacare, aka The Patient Protection and Affordability Act, became the law of the land on March 23, 2010.   Now is a good time to review the progress of the law to date.

Premises

The  law’s premises are apparent in its title, “The Patient Protection and Affordable Care Act.”  The law was designed  to protect Americans against abuses and to make health care affordable.  To some extent,  it has achieved these goals.    It has assured coverage of those with pre-existing illnesses and young adults under 26 under their parents’ plans.   It has helped subsidize seniors falling into “donut hole.” It has made certain preventive tests “free” for Medicare patients. 

But it has fallen short on affordability. Premiums have steadily risen for most Americans.    And the overall direct and indirect costs – in taxes, penalties, and regulations – have exploded.   Over the decade of its planned implementation,  costs may be double or even triple the original cost estimate of $984 billion.   Politics is the art of reaching sustainable goals  from reasonable  premises.  In the case of Obamacare,  the premises, for the moment at least,  seem insufficient to meet the demands of universal coverage at an affordable price.

Promises

The most memorable  of Obamacare’s promises are these:   “If you want to keep your doctor, you can keep your doctor.”   “If you want to keep your health plan, you can keep your health plan.”   And, of course, there is the underlying promise that access to health care will be available to all Americans. These promises are in disarray for various reasons.    Health plans and employers are narrowing networks of doctors which they offer.    If your doctor is not in the network,  and you want to retain him/her, you will have to go “out of network” at a higher cost.  

According to the Congressional Business Office,  employers will be dropping coverage for as many as 7 million, possibly even 20 million, workers.  Older doctors are retiring or seeing fewer patients.  Others are quitting practice and going to work for hospitals.  Others are entering concierge, retainer, or cash only practices and reducing their “panels” of patients from 2000 to 500 or so.  And moe and more doctors are not accepting new Medicare or Medicaid patients.

I am reminded of the lines of  Robert Frost poem, “The woods are lovely, dark, and deep, But I have promises to keep, And miles to go before I sleep,  And miles to go before I sleep.”   The health care woods are lovely deep, dark, and complex, and President Obama has miles to go and promises to keep before his second term runs out.   The woods seem lovely when one is promising expanded coverage at reduced prices, but getting there is a long and tortuous process when you have promises to keep.

Consequences

Robert Ingersoll (1833-1899), an American politician and orator, once observed, “In nature, there are neither rewards nor punishments – there are consequences.”   These consequences may be unintended and adverse, when a law affecting all Americans is passed hastily under questionable circumstances against unanimous political opposition.  The consequences are political polarization,  multiple delays,   missed deadlines,  waivers and favors for political allies,  and lack of cooperation among those whose cooperation you need to  make  the health reform law workable.  

Mitch Daniels, Indiana’s Republican governor, said it well,

“Obamacare) will likely be a nightmare of missed deadlines, public confusion, inconsistent exceptions, and dashed expectations. Every claim made for the bill will be shown to be false: health costs will go up, not down; government spending and debt will go up, not down; the economy will be injured, not benefited; people in the millions will in fact lose their health insurance they have and like.”

Alienation of Allies and Potential Helpers

Governor Daniels might have added: alienation of vitally needed political allies.   American unions are up in arms at the rapid decline of the 40 hour work week and the unexpected quick replacement of full-time workers by part-time workers.   The governors and legislatures of 34 states have decided to opt out of Medicaid expansion and to leave it to the federal government to do the implementation dirty work.  The big insurers are pulling out of many state health exchanges.  The business community has responded to Obamacare uncertainties by hiring less and dropping coverage and benefits.

Tweet:  Premises, promises, and consequences of Obamacare, 3 ½ years old, are becoming apparent. The realities do not always match the rhetoric

Unions Seek Obamacare Repair

A man, sir, should try to keep his friendship in constant repair.

Samuel Johnson (1709-1784)

Richard Trumka, AFL-CIO President and James Hoffa, head of the International Brotherhood of Teamsters,  met this week at the White House with Denis McDonough,  Obama’s chief of staff, to do repair work on Obamacare friendship.  

There’s has been a falling out between unions and the White House over the dramatic shift from full-time to part-time work.   Obamacare penalizes businesses with 50 or more workers that do not offer health coverage for those workers. Businesses have reacted  by shifting  5 of 6 new workers to a 29 hour week.

Unions have always been steadfast Democrat friends.   But the big shift to part-time work over the last six months has tested the friendship.  Signs of the fraying friendship surfaced in a July  in a letter to  Democrats, Harry Reid, Senate majority leader,  and Nancy Pelosi House minority leader, which read, in part:

““We believe that there are common-sense corrections that can be made within the existing statute that will allow our members to continue to keep their current health plans and benefits just as you and the president pledged,” they wrote, “Unless changes are made, however, that promise is hollow.”

The letter went on to say unions feared the health law could “shatter not only our hard-earned health benefits, but destroy the foundation of the 40-hour work week that is the backbone of the American middle class.”

“Since the ACA was enacted, we have been bringing our deep concerns to the administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is … the huge accommodation for the employer community -- extending the statutorily mandated 'December 31, 2013’ deadline for the employer mandate and penalties.”

Of the outcome of  White House conference this week,  Trumka and White House officials were reluctant to say more. Of the shift to part-time work, Trumka commented, “That is obviously something that no one intended, That’s something that needs to be addressed, and I’m sure that we’ll continue to work on it.”

The friendship repair  is on.   Whether the fix will involve waiver or favors for union members is not  known.   The public is already upset over the favors rendered to Congressional staffs and other Obama allies.

Tweet:   Union leaders met at White House to try to fix Obamacare-induced shift from full-time to part-time work: 40 hour week is goal of unions.

Defund or Delay Obamacare?  The Humpty Dumpty Question

“The question is, “said Humpty Dumpty, “which is to be the master, that’s all.”

Lewis Carroll (1831-1898), Through the Looking Glass

Humpty Dumpty sat on a wall,

Humpty Dumpty had a great fall,

All the King’s horses and all the King’s men,

Couldn’t put Humpty Dumpty together again.

Nursery Rhyme

Obamacare reminds me of Humpty Dumpty.  If Obamacare has a great fall, i.e. is defunded or falls because of its great faults , will the Obama administration be able to put it together again?

Or,  if Obamacare is delayed a year, who will then be the master , the President or Congress, after the midterm elections?   The answer to the question depends, I suppose, on the make-up of the new House and Senate.

These are the questions and issues at stake as Republicans and the White House battle over raising the debt limits  as leverage to block the health law – either by stripping away its funds or delaying implementation?  Will the master be the man on White Horse in the White House who insists on raising spending and taxes?  Or will the masters be men in the black hats who insist on government living within its means by cutting spending and setting limits on entitlements and the budget?

Tweet:   Will Obamacare be like Humpty Dumpty and have a great fall? If it falls, will Obama’s administration be able to put it together again?

Obamacare’s Biggest Impact

What is Obamacare’s biggest impact?

Frequently asked question

Will Obamcare's greatest  impact, 

• Be on seniors , whose benefits will be cut to finance Obamacare and assure its fiscal sustainability?

·         Be  on the young and healthy, who will be forced to pay higher premiums to pay for comprehensive government-approved plans for services they do not feel the need?

·         Be  on physicians, who will take pay cuts and be compelled to give up their independence and to invest in electronic health records in names of “efficiency” and “care coordination?”

·         Be on the uninsured and the underinsured who will receive government subsidies and greater access to care?

 

• Be on the middle class who will, on the average, be paying higher premiums for individual and small group and employer health plans?

·         Be on the nation’s businesses who will now have to cover full-time employees or pay the federal piper to the tune of $2000 to $3000 per worker?

It may be none of these.  It may be the nation’s  low paid retail and fast-food and union workers.  They may asked to forego full-time employment with benefits for part-time employment without benefits.  This hit will make it difficult to make ends meet and support either themselves or their families.

Employers across the land are reducing employee hours to 29 hours a week to avoid health law penalties,  The unions are particularly upset.   Joseph Hansen, president of the United Food and Commercial Workers, says the law will have a “tremendous impact as workers have their hours reduced and their incomes reduced.”

As Grace Marie Turner, president of the Galen Institute, observes in an August 27 Forbes article entited “It’s a Fact, Not Anecdote, That ObamaCare Is Turning Us into a Part-Time Nation.”

“ Bureau of Labor Statistics data shows that the ratio of full-time jobs has completely flipped this year from historic trends. Last year, six full-time jobs were created for every one part-time job.  This year, one only full-time job is being created for every new part-time job.”

That stark  fact is why the Obama administration delayed the employer mandate for a year.  It was too obvious to ignore.   It did not want the employer mandate to negatively  impact (there’s that word again) the outcome of the November 4, 2014 mid-term elections.

The impact of Obamacare has not gone unnoticed by the nation’s businesses,  large and small.  Delta Airlines and UPS and other large business have responded by limiting or eliminating the eligibility of spouses. In the small business sector, the law is resulting in layoffs, fewer hours, and reduced hiring. Obamacare is increasing employee costs,  reducing the desire to provide coverage, and cutting the incentive  to grow. The motivation will be to drop coverage, reduce full-time to part-time work, and shift employees to exchanges where workers may qualify for federal subsidies.

Welcome to the new normal – part-time rather than full-time work, government benefits rather than employer benefits,  a tepid rather than a robust  economic recovery.

Tweet:  Obamacare’s biggest, most profound, most lasting impact may the great shift from full-time to part-time work to avoid Obamacare penalties.

 

Why Doctors Are Wary about Swapping Horses in Midstream

It is best not to swap horses while crossing the river.

Abraham Lincoln (1809-1865)

The Obama administration is asking doctors to swap horses to transition from independent practice to government managed care. ObamaCare redefines the role of physicians from acting as independent practitioners to being members of coordinated health care teams. Many physicians are skeptical of this transition.  They prefer private competition with physicians as personal patient advisors to government-driven coordination within larger organizations.

Government policies that encourage this swap are.

·         Accountable Care Organizations – integrated hospital-physician groups in which hospitals and doctors share savings by achieving greater efficiencies through more coordinated care.

·         Bundled Payments – Fixed payments to physicians and hospitals for episodes of care.

·         Quality Reporting -  Publically accessible information on “quality,” as judged by computer data.

·         Price Transparency – Publically accessible information on prices.

·         Pay for Performance -   Reimbursement policies that explicitly reward “quality.”

·         Electronic Health Records – Government incentives that reward or punish doctors for “meaningful” use of electronic records to create a national interoperative system..

·         High-Deductible and Consumer-Directed Health Plans – Promotion of plans that encourage consumers to pay-out-of pocket with tax-free money.

Why are the majority of doctors, based on numerous surveys,  so skeptical of these federal policies?

Because the policies represent and are emblematic of:

1.      a fundamental transition from private, independent practice to a government-controlled practices.

2.       a metamorphosis from clinical judgment a point of care to managed judgment from afar.

3.       A  change from personal decisions for individual patients within the doctor’s office to managed decisions based on population-based data.

4.      A  definition of “quality,” based on quantitative data rather than on patient satisfaction  meeting patient needs through doctor-patient decision-making.

5.       A belief that patient “coordination” by teams will be better, more efficient, cheaper, and produce better outcomes than individual attention and careful listening to patients and their problems.

6.       A feeling that outside management by nonclinical “experts” should supersede agreements between patients and doctors as to what course is best.

7.      A consensus that opinions rendered by elitists is superior and more reliable than commonsensical decisions by patients and doctors.

8.      A mindset that cumulative and detailed documenting is more important than intuitive  doctoring.

9.      A belief that coordinated care will end duplication,  unnecessary care, and bungled handoffs and make care better and less expensive.

10.  The  idea that health care coordination with teams of health care professionals. will make federal health care spending more “fiscally sustainable.”

Tweet: We need to examine trade-offs  of Obamacare “coordination”vs. competition policies on  price, quality, outcomes, and patient satisfaction.

Source: Katherine Baicker and Helen Levy, “Coordination versus Competition in Health Care Reform,” New England Journal of Medicine, August 29, 2013.

ObamaCare Implementation Dates

Now this is not the end. It is not even the beginning of the end.  But it is, perhaps, the end of the beginning.

Winston Churchill (1874-1965), Speech in London, 1942
 

2013
 

09/09 - Insurers agree upon exchange participation agreements with HHS.

09/30 - Obama's Office of Personnel Management (OPM) to rule on whether Members of Congress, under ObamaCare, retain their subsidies.

10/01 - Exchanges begin enrolling individuals.

10/01 - Fiscal year ends: ObamaCare defunding fight expected.

10/01 -U.S. Treasury finds it has insufficient funds to pay bondholders on time.

2014
 

01/14- Full implementation begins.

• Individual mandate takes effect.
• Employer mandate delayed until 2015.
• Income verification checks suspended.
• Guaranteed issue mandate takes effect.
• Community rating mandate takes effect.
• Minimum essential coverage rules take effect.
• Actuarial value mandate takes effect.
• Ban on annual limits takes effect.
• Health insurance deductible limits mandate takes effect.
• Maximum out-of-pocket limit mandate takes effect.
• Medicare Advantage medical loss ratio (MLR) price control takes effect.
• Medicaid expansion takes effect [note: made optional for states by the Supreme Court]
• Health insurance tax takes effect.
• Temporary Pre-Existing Condition Insurance Plan (PCIP) expires.
• Temporary reinsurance program for retiree coverage expires.

04/01 - Obama's goal: 7 million enrollees, including 2.7 million adults under 35.
 

11/04 Midterm elections.  All 435 House of Representive seats and 33 of 100 Senate seats to be contested.

Tweet;:Target dates for Obamacare implementation are 9/30/13, 10/1/13, 1/1/14, and 4/1/14. By these dates, we should know fate and path  of Obamacare.

ObamaCare  Fraud Formula Flawed

I cannot give you the formula for success, but I can give you the formula for failure - which is"Try to please everybody.

Herbert Bayard Swope (1882- 1951), American Journalist, 3-Time Pulitzer prize winner

The IRS's new fraud prevention program, planned for use with Obamacare, has been plagued with implementation problems, according to a Treasury Inspector General for Tax Administration report.

“ObamaCare Fraud Prevention Program Plagued with Implementation Problems,” Washington Free Beacon, August 27, 2013

People ask me what I worry about with Obamacare.

I worry but two aspects of Obamacare.implemention.

·         I worry about generalized system failure because of Obama’s desire to please all of the people in health system. In a democracy,  with its various population segments and political factions,  this is impossible.  You cannot please all of the people all of the time – conservatives,  liberals, libertarians,  believers, agnostics, atheists, secularists, capitalists,  socialists, and in health care, those who believe in coordination and competition (K. Baicher and H. Levy, “Coordination versus Competition in Health Care Reform,  New England Journal of Medicine, August 29, 2013).  

This task is complicated by the complexity o Obamacare – a collection of mandates, public insurance expansions, and regulations that affect different groups of Americans in different ways, at different times.  Try to explain these differences and the  convoluted morass to a skeptical American public.There are always two sides to any health reform policy formula ingredient -  Accountable Care Organizations, bundled payments, quality reporting, price transparency, pay for performance , electronic medical records, or high deductible and consumer-directed health plans.  All of these policies require computer competence,  security and privacy safeguards, and protection against hackers and identity thieves. 

·         I worry about the electronic competence of the Administration and that of the  various states health exchanges.      The Obama administration assures us that everything is on go and that every major government program – Social Security and Medicare and others – have experienced hitches, glitches, and bumps in the road – and so will Obamacare.  But Obamacare is not Medicare.  It has a much larger scope, involves multiple population groups,  has different eligibility requirements,  diffenent time entries of mandates and regulations, and is much more partisan because it poisoned the political well by passing it without a single Republican vote.   Furthermore,  it must create a computer “hub” that integrates computer programs from seven different federal agencies,  It even now  says it may determine eligibility by taking the word of those who might be eligible for subsidies without electronically verifying their information.   It must develop and run computer programs in 34 states who have opted out of Medicaid expansion and let the federal government take over.  And finally, the government is on a tight schedule to get its various programs ready for prime time, and it has already not met deadlines for 42 of 83 Obamacare provisions. This is the formula for massive fraud and abuse.

Washington has shown little competence in stamping out Medicaid-Medicaid fraud.   Fraud consumes 15% of the $1 billion CMS budget. As Peter Drucker observed, “The best we get from government in the welfare states is competent mediocrity. What is impressive is the administrative incompetence.”  Finally,  evidence is mounting that government control of computer technologies is out of hand,  as seen in abuses and leaks of the National Surveillance Agency, and the Chinese hacking into our corporate and government systems.

As Alfred E, Newman said in Mad Magazine, “What, Me Worry?”  You bet I do. I worry about the competence of the Obama  administration to enforce the employer mandate,  verify eligibility for insurance subsidies. require employer-provided policies to cap employees' out-of-pocket costs, and establish the computer systems needed to make Obamacare a workable reality.

Tweet: Ingredients of a CMS failure to control Obamacare fraud are all there, and its computer programs are not yet ready for prime time.

 

 

 

 

 

Lobbying for Obamacare on K Street

A major Washington, D.C thoroughfare populated by think tanks, lobbyists, and advisory groups.

K Street

Business is booming on OK Street.   Since 2010, when Obamacare passed, 30 former Obama staffers have set up lobbying shops there.  K Street boosts the nation’s largest lobbying firms – Isakovitz & Blalock, Glover Park Group, Alston & Bird, BGR Group, the Akin Group.  In 2010, more than 1000 stakeholders lobbied for Obamacare special interests, and in the first quarter of 2013,  500 more joined the fray.  

In 2010, $3.55 billion was spent on lobbying.  This year that number may surpass $5 billion.  The battle for the survival of Obamacare has been joined.  Because of the law’s implementation time line,  lobbying for and against the law will probably continue for the next ten years.

It has been estimated 23 lobbyists exist for every member of Congress. There are 22,000 lobbyists, 12,000 clients, and 1700 lobbying firms.  Lobbyists go by the names of special interest groups, advocacy groups, and lobbying groups.  Some groups are predatory;  others are defensive; others call themselves educators; still others say they are fighting for justice.  Every major corporation contracts with  a lobbying group, or has a  in-house lobbying department.   Money spent on lobbying is breathtaking, e.g. $4.6 million by AARP.   Every major industrial segment hires lobbyists to the tune of $1 million to $5 million for each industry group.

The public and journalists are cynical about lobbyists. They use  terms like influence peddling, log rolling, gravy train, and windfalls to describe their activities.  Lobbyists tend to be lawyers, defeated or retired Congressmen or senators, former presidential staff members, or simply insiders who helped write or know a lot about the health law.

According to Ivan Adler of the McCormick Group, which specializes in government relations, "Healthcare lobbying on K Street is as strong as it ever was, and it's due to the fact that the Affordable Care Act seems to be ever-changing, What's at stake is huge. ... Whenever there's a lot of money at stake, there's a lot of lobbying going on…When Biden leaned over and said to Obama, “This is a big f--king deal,” he was right.”

Lobbying is a mystifying, opaque, human, and behind-the scenes activity.   It is now only what you know but who you know.   Everybody claims to know what lobbying is all about.

Everybody knows, for example, that lobbying:

·          lends itself to cynicism, to insider wheeling and dealing.

·         the surest path to influence and affluence  through Washington’s revolving doors.

·         a common approach  to influencing  political outcomes.

·         an example of why making of legislative laws resembles the making of sausages.

·         shows why certain lobbies are more powerful than others;  American Trial Lawyers making sure tort reform never occurs.

·         Obama’s special deals with drug firms, health plans, and hospital and physician advocacy groups made Obamacare possible.

·         lobbyists tend to know where the bodies are buried.

·         is a potent mix of money for the next campaign, insider-intelligence, and political leverage.  

Tweet: Lobbying Is part of Washington, D.C.’s  Merry-Go-Round. Don’t be cynical  it’s an integral and and permanent part of the political process.

The Last Word: ObamaCare Explained

Do not explain too much.

William Strunk, Jr, E.B. White, The Elements of Style, 1972

I wish he would explain his explanation.

Lord Byron (1788-1824), Don Juan, 1818

“I take pride in giving the last word to  ObamaCare proponents.   Here the Obama administration in its Obamacarefacts website explains ObamaCare's rationale. I take particular exception to one statement: “Doctors and hospitals all agree, they want to keep Obamacare.” (italics mine).

This is simply untrue.  Doctors and hospitals are deeply divided on Obamacare’s merits and impacts. ObamaCare  calls for a 40% reduction if hospital and physician reimbursements over the next decade through “savings.”  When is the last time government achieved “savings” on an entitlement program? Not in my lifetime and not in yours. This is hyperbole piled high.

“ObamaCare Explained as Simply As Possible”

“Here it is, ObamaCare explained. We've been explaining ObamaCare is detail, but here's the short version of ObamaCare explained for your convenience. ObamaCare, officially called the Affordable Health Care Act.  It is a health care reform bill signed into law in 2010 By President Barack Obama. The parts of the reform laid out under ObamaCare bill is already in effect and the rest continues to roll out until 2022.”

What Does ObamaCare Do?

“ObamaCare helps tens of millions of Americans get access to affordable health insurance through expanding Medicaid and CHIP, improving Medicare and setting up a "Health Insurance Marketplace" where Americans making under 400% of the federal poverty level can purchase  subsidized insurance. ObamaCare's reforms also increase the quality of care and help to curb the growth in healthcare spending.”

“ObamaCare's provisions regulate insurance companies and health care standards, but doesn't control your health care or replace private insurance. ObamaCare lowers what most middle-to-low income Americans pay for health insurance, decreases the deficit and improves government run health care programs like Medicare by cutting out wasteful spending. ObamaCare also expands Medicaid to cover 15.9 million uninsured seniors and low-income individuals.”

ObamaCare Explained Taxes

“Those who aren't covered under Medicaid, CHIP or Medicare will have the option to buy private insurance, obtain insurance through the workplace, pay a small tax to not have health insurance (this helps it remain affordable for the rest of us) or buy private insurance through the ObamaCare exchanges. The ObamaCare exchanges are online marketplaces where health insurance companies compete to be your provider. The exchanges are state or federal run (depends on the state) online market places are easy to use and run similar to how you can buy car insurance online now. A State's ‘Exchange’ is commonly referred to as ‘Health Insurance Marketplace’ “.

ObamaCare Explained Who Can Get insurance / ObamaCare Health Insurance Marketplace:

“ On October 1st, 2013 your State's "Health Insurance Exchange Marketplace" opens up. All eligible Americans will be able to purchase Federally regulated and subsidized health insurance through private providers using side-by-side benefit, rate and network comparisons of plans. Check out our Health Insurance Marketplace Guide.”

ObamaCare Explained Businesses

“Both employers and health insurance companies greatly benefit from the reform and support it regardless of what you hear, since it provides major financial benefits to both.”

“Note: 3% of small businesses will pay a tax on profit over $250k or be required to provide healthcare if they have over 50 employees. The rest of the small businesses, mom and pops specifically, will have better access to cheaper healthcare for them and their employees. If they do decide to provide insurance for their employees they will receive generous tax breaks.”

ObamaCare Explained Seniors

“Seniors greatly benefit from the $716 billion of wasteful spending cut from Medicare and the closing of the donut hole. The money is reinvested in Medicare and ObamaCare to improve coverage and to insure tens of millions of more seniors. Medicaid insures 17 million more seniors.”

ObamaCare Explained Protections

“ObamaCare includes a number of protections for women including better access to preventive services, expands coverage to millions saving countless lives, ensures people can't be denied for preexisting conditions, stops insurance companies from dropping you when your sick. regulates insurance premium hikes for profit and improves the health care industry as a whole. Doctors and Hospitals all agree, they want to keep ObamaCare, in fact they have already started re-working the health care system, repealing ObamaCare now would cost them Billions.”

ObamaCare Explained Summary

“Obama Care saves millions of lives, trillions of dollars and gives the American worker more freedom by not being dependent on their employers or insurance companies for care. Health care is now in your hands, It's your health care, not the governments. The government just makes sure you get a fair shake and the insurance companies play by the rules. Thanks for checking out our quick ObamaCare explained breakdown. Check out the site for a more detailed explanation of ObamaCare.”

Tweet: Here in its ObamaCarefacts” website, Obama’s PR team explains “simply” why ObamaCare increases access and  quality and curbs costs.