Saturday, May 9, 2015

Lay of ObamaCare Land

It’s speculative but it’s beginning to look like the Supreme Court will uphold federal health care exchange subsidies. Seventy five percent of hospital executives expect subsidies to stick, and Karl Rove, the Republican strategist, is predicting the Court will rule in favor of subsidies.

Hospitals favor subsidies because the exchange subsidies reduce uncollected bills from the uninsured. Furthermore, health exchanges have spurred Medicaid enrollments by 12 million or so, again with reduction of unpaid hospital bills.

Rove is conceding that an unfavorable Court ruling would hurt the GOP by making them look heartless at the plight of an estimated 7 million stripped of their subsidies. Rove may also be thinking that the GOP House and Senate will be unable to come up with an alternative plan to supplant ObamaCare.

At this point, just over a month before the Court rules, there’s much we don’t know about ObamaCare. How many have actually enrolled? How high will premiums in individual markets rise? Will much will it cost government to bail out insurers if enrollment stalls and the young and healthy don’t sign up? How much will taxes jump for the middle class? And how will voters react in the 2016 elections?

What we do know are these facts. The rate of uninsured has dropped by roughly 17% to 12%. In an average of Real Clear Politics national polls, the public still opposes ObamaCare by 52.3% to 42.0%. The majority of the public wants ObamaCare fixed but not repealed. The physician shortage continues to grow, e.g. in Texas 35 counties have no primary care physicians, 185 counties have no psychiatrists, and 158 have no general surgeons. Medical schools have vowed to increase graduates by 30%. There are signs bipartisanship is rearing its pretty head with Congress overwhelmingly agreeing to a “doc fix” with shutting down of the flawed Sustainable Growth Rate formula and replacing it with a 1.5% annual increase in physician Medicare payments.

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