By Kevin Zeese
At its one year anniversary the Obama health care law is shrinking while the health care crisis grows. Americans who lack any health coverage still exceeds 50 million, over 45,000 deaths occur annually due to lack of health insurance, and 40 million Americans, including over 10 million children, are underinsured.
Premiums are rising and coverage is shrinking for many Americans who get their coverage at work. Last week, the number of waivers granted to the Obama health law broke 1,000 protecting inadequate insurance plans. The Obama administration has told states they could reduce the number of people covered by Medicaid as well as reduce the services provided. And, the centerpiece of the law is under court challenge – the mandate forcing Americans for the first time ever to buy a corporate product – is heading to a close Supreme Court decision.
Thus far only 12,000 people have enrolled in the Pre-existing Condition Insurance Plan despite an aggressive marketing effort. The Medicare actuary, Rick Foster, told The Hill the low enrollment is a “surprise,” given that “millions” are eligible for the coverage. The Medicare actuary had originally predicted the new pools would enroll 375,000 people by the end of 2010, but the insurance is too expensive for most people who need it.
Better results might be being seen for young adults. Approximately 13.2 million 18-29 year olds are without insurance, 30% of that population. Under the health care law these youth can stay covered under the parents’ health insurance. There are no hard numbers for how many have taken advantage of this but the Obama administration estimates it could be as many as 1.2 million. As we see with the pre-existing illness option, predictions are one thing and reality is very likely another. Covering each dependent costs about $3,380 in 2011, so it is difficult to predict how many families can afford that cost in these difficult economic times when unemployment and underemployment are up and incomes are down.
The trend in health insurance is rising premiums and shrinking coverage for many Americans who get their coverage at work. Premiums have been increasing from 20% to 60% for many Americans and businesses. Further, the law may decrease employment-based insurance by 3 million people by 2019, according to the Congressional Budget Office (CBO) and the Joint Committee on Taxation. This combined with high unemployment and underemployment will push people into the individual insurance market. The individual market is particularly at risk for increased premiums which is of growing importance because of high unemployment. Blue Shield of California decided this month to withdraw a major hike in the face of public outcry. This would have been the third rate hike since October, the three increases would have raised rates by 87% for 200,000 policy holders. While some hope the Obama health law will slow premium hikes, Claudia Fegen, MD of Physicians for National Health Program writes under the Obama heath law “sudden premium hikes are still possible and, in my opinion, quite likely under the new law.”
Underinsurance, requiring Americans to pay more of the cost of health care, may become the norm. The new law may actually cause underinsurance as plans where patients pay an average of 40% of their health care bills qualify to fulfill the employers’ obligations to provide coverage rather than pay an assessment. To make insurance premiums affordable, the quality of insurance will need to be reduced so there is less coverage, more out-of-pocket costs, as Don McCanne, MD, Senior Fellow for Physicians for National Health Program writes: “’Unaffordable underinsurance’ is rapidly becoming the new standard in the United States.” Massachusetts, the model on which the Obama reforms are based, recently found that medical bankruptcies have not decreased with the new law. The lesson – it is not just health insurance, but the quality of the insurance that matters. Unfortunately, the Obama administration is showing support for high deductibility plans with large out of pocket costs that do not provide financial or health security.
The promise of the Obama health plan was that millions of underinsured would get decent insurance coverage because the “reform” required minimum levels of insurance. But, waivers to the requirements of the 2010 law are being widely granted as a result millions of Americans will continue to get inadequate health coverage. Waivers thus far affect 2.6 million people and are being granted to businesses, unions, insurance companies as well as states who cannot meet the Obama law requirements. The administration says the purpose of the waivers is to avoid disruption in the insurance market, in clearer language it is to prevent employers from dropping coverage and insurance companies from leaving markets. The requirement for a waiver is relatively simple; the applicant must show HHS “a significant increase in premiums or a decrease in access to benefits.” Ninety-four percent of requests for waivers have been granted, the largest area where waivers have been denied has been for unions. Republicans have asked HHS for in-depth details about every waiver decision and request.
The major area of waivers are so-called mini-med plans, these are limited medical plans which provide workers with as little as $2,000 in health care coverage. The Obama health care law requires $750,000 minimum coverage in 2011. The mini-med plans do not provide security in the event of serious illness or accident. The vast majority of these waivers are for employment-based health coverage. Some of the initial waivers went to fast food chains like McDonalds and Jack-in-the-Box. Unions, insurance companies and state governments have also received waivers. Four states have received waivers, Florida, New Jersey, Ohio and Tennessee. Waivers are set to disappear in 2014, when people will be required to purchase insurance with tax payer subsidies – assuming that Obama health law survives and that low-paid workers can afford insurance even with a subsidy.
The area that will have an even bigger impact is roll backs of Medicaid. Medicaid was projected to be the largest area of expansion of medical care under the Obama health care plan, covering 16 million more people, making up half the projected increase in additional Americans covered with some type of insurance under the Obama law. That now seems like a mirage.
HHS Secretary Sebelius wrote the 50 states letting them know benefits could be cut, poor people could be required to pay a higher share of costs and that federal law allows states to reduce people covered by Medicaid. Medicaid is health care for the poor and is jointly funded by federal and state governments. Medicaid currently covers 53 million poor children, poor pregnant women and disabled and extremely poor adults. Individuals must make less than $14,500 to be included in Medicaid.
More than half the states want permission to remove hundreds of thousands of people from Medicaid. Arizona alone is planning to reduce Medicaid coverage by 250,000 people and the Obama administration has indicated it will not oppose this reduction in coverage. In Wisconsin, where Governor Walker has proposed deep cuts to Badgercare (which includes Medicaid and other programs) up to 350,000 could lose health care coverage. Rather than an increase in the number of people covered, the nation is on a path to reduce total people covered.
Other states, like New York, Hawaii and California which are led by Democratic governors, are cutting benefits of Medicaid programs that already provide insufficient coverage. Medicaid is often one of the largest expenses of a state but because the cost is shared with the federal government it is also a large source of revenue. As a result it takes more than $2 of Medicaid cuts to save a state $1. When Medicaid is cut the economy is weakened and revenues reduced as for every dollar cut, jobs are lost. Cutting health care for the poor and disabled continues the downward economic spiral.
The other area where increased coverage was promised is the mandate forcing Americans to buy insurance. The mandate is hotly contested in the courts with 27 states challenging the law and over 20 lawsuits filed it. The courts have split 3-2 in favor of the mandate thus far. In the two decisions finding the mandate unconstitutional, a Virginia judge threw out only the mandate, while a Florida judge found the mandate so intertwined with the rest of the law that he would stop the whole law. The decisions have come down along partisan lines, with three district judges appointed by Bill Clinton upholding the law as constitutional; two district judges — one appointed by Ronald Reagan and the other by George W. Bush — finding it unconstitutional. The U.S. Supreme court has five Republican appointed justices and four appointed by Democrats. It is generally viewed as four on the center-left, four on the right and Justice Kennedy as the swing vote. The vote on the Supreme Court will be a close one.
The health care law faces a congressional challenge, especially from the Republican controlled House of Representatives which has already voted to repeal the law, but more importantly, promises to use the power of the purse to not fund its implementation.
One thing that has gotten off to a strong start is the growth of the federal insurance bureaucracy. The complicated federal office that regulates private insurance along with other important duties under the Obama health law already has 252 employees and a budget of $93 million for 2012 budget requested by the White House.
The imploding health care law is creating an opening which may require a re-consideration of health care reform within the next five years. Americans consistently favor simply expanding and improving Medicare to cover all Americans. Even Terry Dougherty, director of MassHealth, from a state which the model for the Obama law is in place is reaching the obvious conclusion: “I like the market, but the more and more I stay in it, the more and more I think that maybe a single payer would be better.” He notes that unlike the insurance industry government costs less, with much lower administrative costs and “We don’t build big buildings. We don’t have high salaries. We don’t have a lot of marketing.”
The “Expanded and Improved Medicare for All Act,” H.R. 676, a bill that sets up a single payer system has been introduced. It would provide health care to all and give consumers the most choice, provide strong health coverage as well as save money for government, business and individuals. Unlike the Obama law, improved Medicare for all would also be easier to implement. Medicare transitioned Americans over 65 from private insurance to Medicare within 18 months and did so without computers.
The next time around, it will be time to finally consider real health care reform that confronts the health insurance industry which makes coverage of all Americans unaffordable. It will finally be time to put in place a health care program that ensures the all U.S. residents have health care at less cost than they currently pay.
