David DeGerolamo: Concerning the economic collapse of the United States, how did we get here?
We are where we are today because career politicians have prostituted the founders' clear intention to limit government in …Concerning the economic collapse of the United States, how did we get here? We are where we are today because career politicians have prostituted the founders' clear intention to limit government in the name of "doing good." For decades both parties have grown government well beyond the boundaries of the Constitution and created the very problem our founders sought to avoid - a deeply indebted government that is threatening the very survival of our republic.
~Sen. Tom Coburn, The Debt Bomb
The above assessment may not account for 100% of our economic collapse: we have to include corruption and incompetence in Washington, DC to have a complete accountability of the causes. But here is the incredible part: not only were the people complacent (and therefore culpable) in the demise of the republic, we still argue that political parties are the solution. The small percentage of the people who understand our financial debt crisis are blinded by supporting only one solution: get Obama out of office.
Alright. I agree that this president has not only destroyed our economy and social structure, he has also destroyed the Democrat party. Good. If we destroy the Republic party, we have a chance to save the republic. Step one is to stop arguing for our ignorance. Again both parties have gotten us to this point and neither one will or can fix it. A rather bold statement so let's explore it a little further.
The monetary policy of our country is controlled by an independent banking committee known as the Federal Reserve. Under their control, our dollar has been devalued and manipulated to the point of insolvency. Does the government understand this? Of course but they are impotent to control the situation, let alone fix it. The endgame is close upon us and the prognosis is terminal. How do I know? The government has taken control of your money market assets so that you do not control your private property. If people started to withdraw their cash, our banks would collapse immediately. Think about that statement because that is one of the keys. We no longer have control over our own money. Have you tried to withdraw a large sum from the bank recently?
Most of our banks and brokerage firms are also leveraged with European credit derivatives that are worthless. The recent examples of MF Global, PFG Best and the Sentinel Group proved that these institutions not only stole assets from their clients' segregated accounts, the assets will not be recovered (unless you are Jamie Dimon).
Step two is to understand that the government is not only bankrupt, our financial institutions are bankrupt. This means accepting the fact that the US dollar will collapse. When will this happen? Whenever China revalues their currency on hard assets - mainly gold. At the rate of their gold hoarding, it will not be long before our dollar will no longer be the world's reserve currency.
Step three is to understand that the price increases for gas and food are not going to moderate: they are going to "necessarily skyrocket".
CONTINUE READING: http://www.teapartynation.com/profiles/blog/show?id=3355873%3ABlogPost%3A2164303&xgs=1&xg_source=msg_share_post
Showing posts with label bankrupt. Show all posts
Showing posts with label bankrupt. Show all posts
Monday, August 20, 2012
Thursday, May 26, 2011
Looking for Medicare solutions, not politics as usual
The Miami Herald
Sen. Marco Rubio – Op-Ed
May 26, 2011
http://m.miamiherald.com/mh/db_42832/contentdetail.htm?contentguid=...
For me, Medicare is not a political talking point. My parents immigrated to the United States in the late 1950s. They worked hard for over 40 years to provide their children the chance to do all the things they themselves could not. But they never made much money.
As a result, they retired with precious little in savings. Medicare was and is the only way they could access healthcare.
When my father got sick, Medicare paid for his numerous hospital stays. And as he reached the end of life, Medicare allowed him to die with dignity by paying for his hospice care.
Like most 80-year-olds, my mother has several age-related ailments. Without the access to quality healthcare that Medicare pays for, I cannot imagine what life would be like for her.
America needs Medicare. We need it to continue without any benefit reductions for those like my mother currently in the system. And we need it to survive for my generation and my children’s generation.
But Medicare is going bankrupt. Anyone who says it is not is simply lying. And anyone who is in favor of doing nothing to deal with this fact is in favor of bankrupting it. Medicare will go broke in as little as nine years. No one likes this news, but it is the undeniable truth. And the sooner we begin to deal with it, the better off we are all going to be.
My goals are simple. First, I will not support any plan that changes Medicare for people like my mother who are currently on the plan. We cannot ask seniors to go out and get a job to pay for their healthcare.
Second, any solution must solve the problem. We need to save Medicare, not simply delay its bankruptcy.
And third, any solution cannot hurt economic growth. At a time of high unemployment, Americans cannot afford to pay more taxes.
I will support any serious plan that accomplishes these three things. It does not matter to me if it comes from a Democrat or a Republican. Saving Medicare is more important than partisan politics.
Rep. Paul Ryan has offered a plan that would make no changes whatsoever for anyone age 55 and older. I support it because, right now, it is the only plan out there that helps save Medicare. Democrats oppose it. Fine. But, if they have a better way to save Medicare, what are they waiting for to show us? What is their plan to save Medicare?
Either show us how Medicare survives without any changes or show us what changes you propose we make. Anyone who supports doing nothing is a supporter of bankrupting Medicare.
Where is the House Democrat plan to save Medicare?
Where is the Senate Democrat plan to save Medicare?
Where is President Obama’s plan to save Medicare?
They have no plan to save it, and they do not plan to offer one. They have decided that winning their next election is more important than saving Medicare for my mother and retirees like her.
I have been in the Senate just long enough to be disgusted by the reality that Washington has too many people who think their personal political careers are more important than our country’s future.
Maybe the Democrats’ strategy to use Medicare as a political weapon will work. Maybe not offering their own plan to save Medicare will help them win seats in Congress and re-elect President Barack Obama. Maybe it is great for the Democratic Party. But it is terrible for people like my mother, and it is terrible for America.
Medicare is going bankrupt. If something does not happen soon, in just a few years whoever is in charge in Washington will have to go to people like my mother and tell them we can no longer afford to continue providing her with the same Medicare she is used to.
We have always had intense partisan politics in America. But throughout our history, on issues of generational importance, our leaders have agreed to put aside politics for the sake of our country. Shouldn’t saving Medicare be that kind of issue?
I am ready to work with anyone in Washington who is serious about saving Medicare. I am open to any serious solutions they have.
We are running out of time to save Medicare for our parents and secure it for our children. If we fail, history will never forgive us.
SOURCE: http://www.patriotactionnetwork.com/forum/topic/show?id=2600775%3ATopic%3A3964704&xgs=1&xg_source=msg_share_topic
Sen. Marco Rubio – Op-Ed
May 26, 2011
http://m.miamiherald.com/mh/db_42832/contentdetail.htm?contentguid=...
For me, Medicare is not a political talking point. My parents immigrated to the United States in the late 1950s. They worked hard for over 40 years to provide their children the chance to do all the things they themselves could not. But they never made much money.
As a result, they retired with precious little in savings. Medicare was and is the only way they could access healthcare.
When my father got sick, Medicare paid for his numerous hospital stays. And as he reached the end of life, Medicare allowed him to die with dignity by paying for his hospice care.
Like most 80-year-olds, my mother has several age-related ailments. Without the access to quality healthcare that Medicare pays for, I cannot imagine what life would be like for her.
America needs Medicare. We need it to continue without any benefit reductions for those like my mother currently in the system. And we need it to survive for my generation and my children’s generation.
But Medicare is going bankrupt. Anyone who says it is not is simply lying. And anyone who is in favor of doing nothing to deal with this fact is in favor of bankrupting it. Medicare will go broke in as little as nine years. No one likes this news, but it is the undeniable truth. And the sooner we begin to deal with it, the better off we are all going to be.
My goals are simple. First, I will not support any plan that changes Medicare for people like my mother who are currently on the plan. We cannot ask seniors to go out and get a job to pay for their healthcare.
Second, any solution must solve the problem. We need to save Medicare, not simply delay its bankruptcy.
And third, any solution cannot hurt economic growth. At a time of high unemployment, Americans cannot afford to pay more taxes.
I will support any serious plan that accomplishes these three things. It does not matter to me if it comes from a Democrat or a Republican. Saving Medicare is more important than partisan politics.
Rep. Paul Ryan has offered a plan that would make no changes whatsoever for anyone age 55 and older. I support it because, right now, it is the only plan out there that helps save Medicare. Democrats oppose it. Fine. But, if they have a better way to save Medicare, what are they waiting for to show us? What is their plan to save Medicare?
Either show us how Medicare survives without any changes or show us what changes you propose we make. Anyone who supports doing nothing is a supporter of bankrupting Medicare.
Where is the House Democrat plan to save Medicare?
Where is the Senate Democrat plan to save Medicare?
Where is President Obama’s plan to save Medicare?
They have no plan to save it, and they do not plan to offer one. They have decided that winning their next election is more important than saving Medicare for my mother and retirees like her.
I have been in the Senate just long enough to be disgusted by the reality that Washington has too many people who think their personal political careers are more important than our country’s future.
Maybe the Democrats’ strategy to use Medicare as a political weapon will work. Maybe not offering their own plan to save Medicare will help them win seats in Congress and re-elect President Barack Obama. Maybe it is great for the Democratic Party. But it is terrible for people like my mother, and it is terrible for America.
Medicare is going bankrupt. If something does not happen soon, in just a few years whoever is in charge in Washington will have to go to people like my mother and tell them we can no longer afford to continue providing her with the same Medicare she is used to.
We have always had intense partisan politics in America. But throughout our history, on issues of generational importance, our leaders have agreed to put aside politics for the sake of our country. Shouldn’t saving Medicare be that kind of issue?
I am ready to work with anyone in Washington who is serious about saving Medicare. I am open to any serious solutions they have.
We are running out of time to save Medicare for our parents and secure it for our children. If we fail, history will never forgive us.
SOURCE: http://www.patriotactionnetwork.com/forum/topic/show?id=2600775%3ATopic%3A3964704&xgs=1&xg_source=msg_share_topic
Saturday, August 21, 2010
Obamacare
The Obamacare Disaster Escalating
By Peter Ferrara on 8.18.10 @ 6:10AM
http://spectator.org/archives/2010/08/18/the-obamacare-disaster
Forthcoming for public release shortly will be my extensive study of the Obamacare legislation, “The Obamacare Disaster: An Appraisal of the Patient Protection and Affordable Care Act” (Heartland Policy StudyNo. 128, The Heartland Institute, August 2010), available shortly at the Heartland Institute website. Following Nancy Pelosi’s dictum that we will have to pass it first to know what’s in it, I personally slogged through the thousands of pages of this legislative atrocity for the study, as well as thousands of pages of supplemental materials such as government, think tank and media reports.
The bottom line is that you will lose your health care under this legislation, if not your job, your country as they bankrupt America, and maybe ultimately your life or the life of a loved one. All that to make dreamy, emotionalized, liberals happy, even though many of them are not happy because the socialism in the bill is not overt enough. Moreover, the promises made to the American people to pass the bill are shown in the study to be thoroughly false. This pattern of calculated deception, however, did not fool the American people, only members of Congress, many of whom will now pay with their jobs as a result.
But the study is not all gloom and doom. It thoroughly explains the Patient Power reforms that should replace it when it is repealed, drawing on the broad scholarship of the Patient Power movement and its intellectual leaders, such as John Goodman, Grace Marie Turner, Sally Pipes, Merrill Mathews, and Greg Scandlen, among others. It consequently serves as a guidebook for the grassroots Tea Party activists who will lead the long-term crusade for Health Care Liberation.
The Government Takeover of Health Care
Contrary to President Obama’s rhetoric, the Obamacare legislation involves precisely the thorough government takeover of health care. It creates 159 new bureaucracies, agencies, boards, commissions, and programs to rule over health care in America. Government authorities are empowered to tell doctors and hospitals what is quality health care and what is not, what are best practices in medicine, how their medical practices should be structured, and what they will be paid and when. Government authorities will mandate exactly what health insurance with what benefits workers and employers must buy, and the Act imposes tax penalties on them if they do not comply. Government authorities will dictate to insurance companies exactly what health insurance they must sell, to whom they must sell it, and what they can charge. Obamacare even redistributes premium income among insurers under a new “risk adjustment” mechanism.
But this is just the beginning. As in everything President Obama is doing, it lays the groundwork for much more thorough government control and compulsion over time, primarily through bureaucratic landmines involving grants of regulatory authority that will explode when the bureaucracy thinks it can get away with it politically. Among the biggest targets here will be doctors and hospitals, which over time will become complete vassals of the regulatory, bureaucratic state Obamacare establishes.
Higher Health Care Costs
President Obama promised while campaigning for his health reform legislation that it would reduce the “growth of health care costs for our families, our businesses, and our government,” in particular by reducing the cost of health insurance by $2,500 per family. But the Obamacare legislation will have just the opposite effect, sharply increasing health costs for families, businesses, and government.
Higher costs for government start with the expansion of the Medicaid entitlement, which was already slated to cost $5 trillion over the next 10 years. The Centers for Medicare and Medicaid Services estimates that Obamacare will increase Medicaid enrollment by 24 million new beneficiaries by 2015, adding an additional $410 billion in further federal costs for the program over the next decade alone.
Obamacare increases costs for the federal government further by adopting a massive new health insurance entitlement program for families earning up to four times the poverty level. In 2014, this new program will be providing $3,000 in taxpayer funds to families making $95,000. By 2018, almost $5,000 will be going to families making $102,000. CBO estimates that these subsidies will cost taxpayers an additional $457 billion over the first six years alone, through 2019. The Chief Actuary of Medicare estimates the total cost of this new entitlement will reach over $500 billion over the first six years. This is only the beginning, as this program will ultimately cost far more than now projected.
This is a massive increase in welfare extended to middle and upper-income families, irresponsibly added on top of the runaway, financially intractable entitlement promises we have already made. But Obamacare then adds a third new entitlement program, for long term nursing home care.
For the rest of us, Obamacare will sharply increase insurance costs. That starts with the mandates forcing everyone into comprehensive insurance coverage specified by the government, which will maximize the incentives for overconsumption of health care, to be paid for through the insurance. Then there are all of President Obama’s free new benefits now mandated, such as coverage for alcohol and drug abuse rehab, mental health services, preventive care, maternity benefits for single males and postmenopausal adults, and the elimination of all lifetime limits and caps. Free mandatory benefits raise health insurance costs.
Additional regulatory burdens will further increase costs. The guaranteed issue requirements force insurers to issue new policies to anyone who applies regardless of how sick they are, and the community rating requirements prohibit charging them more because of their illnesses. These requirements, which are just like forcing fire insurers to issue new policies to applicants whose houses are already on fire when they call, at regular rates, raise the costs of health insurance sharply for everyone else.
Two new taxes on health insurance, the Cadillac tax for supposedly high value insurance that will apply to more and more plans every year, and another tax on all health insurance from the start, will add nearly $100 billion to health insurance costs over the next 10 years alone. Then there will be sharply increased cost shifting to private health insurance due to the massive expansion of Medicaid to 24 million more people, and the more than massive Medicare cuts discussed below, as doctors and hospitals try to recoup their enormous losses by charging more to privately insured patients.
Counting just some of these cost increases, one study concludes that under Obamacare a typical family health insurance policy costing $12,300 today will cost $17,200 by 2013, $21,300 by 2016, and $25,900 by 2019. Another study concludes that insurance costs for young (up to 40) and healthy workers will double and triple in many cases.
These cost increases have already begun. But expect the liberal/left to insist that the soaring insurance costs caused by Obamacare prove that the public option, or even more overt socialized medicine, was needed after all. They will seek to prohibit the necessary premium increases, as in Massachusetts, and will be glad if that forces private insurers out of business.
Death Panels
While the liberal/left hides behind literal clowns mocking Sarah Palin for raising the issue of death panels under Obamacare, the legislation as passed documents the essential reality of the charge.
The recently released Annual Report of the Medicare Board of Trustees reveals that the Medicare payment rates for the doctors and hospitals serving seniors will be cut by 30% over the next 3 years. By 2019, those Medicare payment rates will be lower than under Medicaid. The Chief Actuary for Medicare reports that ultimately under Obamacare Medicare payment rates will be only one third of what will be paid by private insurance and only half of what is paid by Medicaid, where the poor often can’t find access to essential care.
Still further Medicare cuts adopted in the Obamacare legislation add up altogether to $818 billion over the first 10 years of full implementation, 2014-2023, and $3.223 trillion over the first 20 years, 2014-2033, for Medicare Part A (HI) alone! Adding in the cuts for Medicare Part B brings the total to $1.048 trillion over the first 10 full years, and $4.95 trillion over the first 20 full years. Eventually, as documented in the government’s own reports, Medicare Part A is cut by 60% per year, Part B by 43%!
These draconian cuts for doctors and hospitals providing the health care to seniors under Medicare were the basis for the CBO score repeatedly cited by President Obama that Obamacare would actually reduce the deficit while expanding or adopting three entitlement programs. This doesn’t even include the further cuts to Medicare Advantage, the private alternative to Medicare which nearly 25% of seniors have chosen for their Medicare coverage because it gives them a better deal, and the further automatic Medicare cuts to be adopted by the unelected, appointed, bureaucrats at the Medicare Independent Payment Advisory Board under Obamacare.
Such draconian Medicare cuts would create havoc and chaos in health care for seniors. Doctors, hospitals, surgeons and specialists providing critical care to the elderly such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease will shut down and disappear in much of the country, and others will stop serving Medicare patients. If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect. Indeed, the Medicare Chief Actuary reports that even before these cuts already two-thirds of hospitals were losing money on Medicare patients. Health providers will either have to withdraw from serving Medicare patients, or eventually go into bankruptcy.
Apparently, President Obama’s concept of spreading the wealth includes sacking the Medicare system on which America’s seniors have come to rely for highly beneficial medical care, in favor of others who the Obama/Pelosi/Reid progressive vision deems more worthy.
As the government clamps down on private insurers as well as on payments from Medicare and Medicaid, the incentives for essential investment to maintain current facilities, expand and open new ones, and invest in and build out new innovations and breakthroughs, will be eviscerated. Investment in human capital as well as physical capital in health care will plummet, as doctors and other professionals increasingly flee health care. This effective decline in the supply of health care in the face of increasing demand will mean even higher prices and costs.
The study further explains how several provisions of Obamacare give insurers, doctors, and hospitals incentives to deny and ration health care to patients. A central component of the traditional high standard of living in America has been the best, most advanced, cutting edge health care in the world. No more. Obamacare is part of the declining standard of living for America.
America’s Coming Bankruptcy
When he was campaigning for Obamacare, President Obama insisted on national television that the mandate to buy insurance was not a tax. Now that it has passed, his lawyers are in court arguing that it is constitutional because it is a tax.
The mandate to buy insurance is economically, though not legally, indistinguishable from a tax. Even with the budget-crushing new entitlement subsidies in the Act, the insurance will be quite expensive, ranging up to 2 percent of income for people at 133 percent of poverty to 9.8 percent of income for people at 400 percent of poverty. That is like a new payroll tax, breaking two Obama pledges, since it applies just as well to those making less than $250,000 a year.
The study recounts at least 13 tax increases in Obamacare, adding up to at least $500 billion over the first 10 years, not counting the mandates. But that won’t begin to cover all of the spending involved in Obamacare, adding up to more than $2.4 trillion over the first 10 years of full implementation, from 2014 to 2024, and $5.3 trillion over the first 15 full years.
That will further explode the deficit and national debt by at least $2 to $3 trillion over the next 20 years. A major fallacy of the CBO score of Obamacare is that it assumes that only 19 million workers will qualify for the new Obamacare health insurance subsidies described above. In fact, as former CBO Chief Douglas Holtz-Eakin explains, under the incentives Obamacare provides employers to dump their health coverage, at least 43 million are likely to qualify. It could be 2 to 3 times as many, exploding original cost projections beyond imagination. The study explains other factors that will cause higher Obamacare spending and deficits. This would only follow the Medicare precedent, which was originally projected in 1965 to cost $12 trillion by 1990. But when 1990 came, it cost $109.7 billion, 9 times greater.
Patient Power v. Government Power
America does need to ensure that it maintains a health care safety net assuring that no one suffers due to lack of essential health care. But that can be accomplished without any of the big-government components of Obamacare. Indeed, done right, it can be accomplished while expanding the power and control of workers and patients over their own health care and actually reducing rather than enlarging government’s role in health care.
That would begin by repealing all 159 new bureaucracies, agencies, boards, commissions and programs created by Obamacare, and the rest of the legislative atrocity, reducing taxes and spending by the amounts described above, and the federal deficits and debt by at least $2 to $3 trillion over the next 20 years.
The next step would be to block grant Medicaid back to the states following the model of the hugely successful 1996 reforms of the old AFDC program. That would greatly benefit the poor, freeing them from the Medicaid ghetto to enjoy the same health insurance as the middle class. That would include the choice of Health Savings Accounts (HSAs), maximizing patient power and control, and market incentives to control costs. Medicare should be reformed to empower all seniors with a Medicare Advantage choice, including the highly beneficial HSAs.
A true health care safety net ensuring essential health care for all can be achieved with state high risk pools, and consumer choice tax credits, ensuring affordability and access to health insurance for everyone. The study explains as well market consumer protection laws prohibiting insurance company fraud, and deregulation enabling a national market competition to truly control costs.
Because of all of the problems created by Obamacare, the misshapen legislation is just the beginning, not the end, of the battle to reform health care policy in America. Obamacare is so fundamentally wrong-headed that it takes us in the opposite direction of the essential reforms that are needed. Perhaps such a disastrously wrong step was necessary to draw the public’s attention to the true patient power reforms that would liberate health care in America.
By Peter Ferrara on 8.18.10 @ 6:10AM
http://spectator.org/archives/2010/08/18/the-obamacare-disaster
Forthcoming for public release shortly will be my extensive study of the Obamacare legislation, “The Obamacare Disaster: An Appraisal of the Patient Protection and Affordable Care Act” (Heartland Policy StudyNo. 128, The Heartland Institute, August 2010), available shortly at the Heartland Institute website. Following Nancy Pelosi’s dictum that we will have to pass it first to know what’s in it, I personally slogged through the thousands of pages of this legislative atrocity for the study, as well as thousands of pages of supplemental materials such as government, think tank and media reports.
The bottom line is that you will lose your health care under this legislation, if not your job, your country as they bankrupt America, and maybe ultimately your life or the life of a loved one. All that to make dreamy, emotionalized, liberals happy, even though many of them are not happy because the socialism in the bill is not overt enough. Moreover, the promises made to the American people to pass the bill are shown in the study to be thoroughly false. This pattern of calculated deception, however, did not fool the American people, only members of Congress, many of whom will now pay with their jobs as a result.
But the study is not all gloom and doom. It thoroughly explains the Patient Power reforms that should replace it when it is repealed, drawing on the broad scholarship of the Patient Power movement and its intellectual leaders, such as John Goodman, Grace Marie Turner, Sally Pipes, Merrill Mathews, and Greg Scandlen, among others. It consequently serves as a guidebook for the grassroots Tea Party activists who will lead the long-term crusade for Health Care Liberation.
The Government Takeover of Health Care
Contrary to President Obama’s rhetoric, the Obamacare legislation involves precisely the thorough government takeover of health care. It creates 159 new bureaucracies, agencies, boards, commissions, and programs to rule over health care in America. Government authorities are empowered to tell doctors and hospitals what is quality health care and what is not, what are best practices in medicine, how their medical practices should be structured, and what they will be paid and when. Government authorities will mandate exactly what health insurance with what benefits workers and employers must buy, and the Act imposes tax penalties on them if they do not comply. Government authorities will dictate to insurance companies exactly what health insurance they must sell, to whom they must sell it, and what they can charge. Obamacare even redistributes premium income among insurers under a new “risk adjustment” mechanism.
But this is just the beginning. As in everything President Obama is doing, it lays the groundwork for much more thorough government control and compulsion over time, primarily through bureaucratic landmines involving grants of regulatory authority that will explode when the bureaucracy thinks it can get away with it politically. Among the biggest targets here will be doctors and hospitals, which over time will become complete vassals of the regulatory, bureaucratic state Obamacare establishes.
Higher Health Care Costs
President Obama promised while campaigning for his health reform legislation that it would reduce the “growth of health care costs for our families, our businesses, and our government,” in particular by reducing the cost of health insurance by $2,500 per family. But the Obamacare legislation will have just the opposite effect, sharply increasing health costs for families, businesses, and government.
Higher costs for government start with the expansion of the Medicaid entitlement, which was already slated to cost $5 trillion over the next 10 years. The Centers for Medicare and Medicaid Services estimates that Obamacare will increase Medicaid enrollment by 24 million new beneficiaries by 2015, adding an additional $410 billion in further federal costs for the program over the next decade alone.
Obamacare increases costs for the federal government further by adopting a massive new health insurance entitlement program for families earning up to four times the poverty level. In 2014, this new program will be providing $3,000 in taxpayer funds to families making $95,000. By 2018, almost $5,000 will be going to families making $102,000. CBO estimates that these subsidies will cost taxpayers an additional $457 billion over the first six years alone, through 2019. The Chief Actuary of Medicare estimates the total cost of this new entitlement will reach over $500 billion over the first six years. This is only the beginning, as this program will ultimately cost far more than now projected.
This is a massive increase in welfare extended to middle and upper-income families, irresponsibly added on top of the runaway, financially intractable entitlement promises we have already made. But Obamacare then adds a third new entitlement program, for long term nursing home care.
For the rest of us, Obamacare will sharply increase insurance costs. That starts with the mandates forcing everyone into comprehensive insurance coverage specified by the government, which will maximize the incentives for overconsumption of health care, to be paid for through the insurance. Then there are all of President Obama’s free new benefits now mandated, such as coverage for alcohol and drug abuse rehab, mental health services, preventive care, maternity benefits for single males and postmenopausal adults, and the elimination of all lifetime limits and caps. Free mandatory benefits raise health insurance costs.
Additional regulatory burdens will further increase costs. The guaranteed issue requirements force insurers to issue new policies to anyone who applies regardless of how sick they are, and the community rating requirements prohibit charging them more because of their illnesses. These requirements, which are just like forcing fire insurers to issue new policies to applicants whose houses are already on fire when they call, at regular rates, raise the costs of health insurance sharply for everyone else.
Two new taxes on health insurance, the Cadillac tax for supposedly high value insurance that will apply to more and more plans every year, and another tax on all health insurance from the start, will add nearly $100 billion to health insurance costs over the next 10 years alone. Then there will be sharply increased cost shifting to private health insurance due to the massive expansion of Medicaid to 24 million more people, and the more than massive Medicare cuts discussed below, as doctors and hospitals try to recoup their enormous losses by charging more to privately insured patients.
Counting just some of these cost increases, one study concludes that under Obamacare a typical family health insurance policy costing $12,300 today will cost $17,200 by 2013, $21,300 by 2016, and $25,900 by 2019. Another study concludes that insurance costs for young (up to 40) and healthy workers will double and triple in many cases.
These cost increases have already begun. But expect the liberal/left to insist that the soaring insurance costs caused by Obamacare prove that the public option, or even more overt socialized medicine, was needed after all. They will seek to prohibit the necessary premium increases, as in Massachusetts, and will be glad if that forces private insurers out of business.
Death Panels
While the liberal/left hides behind literal clowns mocking Sarah Palin for raising the issue of death panels under Obamacare, the legislation as passed documents the essential reality of the charge.
The recently released Annual Report of the Medicare Board of Trustees reveals that the Medicare payment rates for the doctors and hospitals serving seniors will be cut by 30% over the next 3 years. By 2019, those Medicare payment rates will be lower than under Medicaid. The Chief Actuary for Medicare reports that ultimately under Obamacare Medicare payment rates will be only one third of what will be paid by private insurance and only half of what is paid by Medicaid, where the poor often can’t find access to essential care.
Still further Medicare cuts adopted in the Obamacare legislation add up altogether to $818 billion over the first 10 years of full implementation, 2014-2023, and $3.223 trillion over the first 20 years, 2014-2033, for Medicare Part A (HI) alone! Adding in the cuts for Medicare Part B brings the total to $1.048 trillion over the first 10 full years, and $4.95 trillion over the first 20 full years. Eventually, as documented in the government’s own reports, Medicare Part A is cut by 60% per year, Part B by 43%!
These draconian cuts for doctors and hospitals providing the health care to seniors under Medicare were the basis for the CBO score repeatedly cited by President Obama that Obamacare would actually reduce the deficit while expanding or adopting three entitlement programs. This doesn’t even include the further cuts to Medicare Advantage, the private alternative to Medicare which nearly 25% of seniors have chosen for their Medicare coverage because it gives them a better deal, and the further automatic Medicare cuts to be adopted by the unelected, appointed, bureaucrats at the Medicare Independent Payment Advisory Board under Obamacare.
Such draconian Medicare cuts would create havoc and chaos in health care for seniors. Doctors, hospitals, surgeons and specialists providing critical care to the elderly such as surgery for hip and knee replacements, sophisticated diagnostics through MRIs and CT scans, and even treatment for cancer and heart disease will shut down and disappear in much of the country, and others will stop serving Medicare patients. If the government is not going to pay, then seniors are not going to get the health services, treatment and care they expect. Indeed, the Medicare Chief Actuary reports that even before these cuts already two-thirds of hospitals were losing money on Medicare patients. Health providers will either have to withdraw from serving Medicare patients, or eventually go into bankruptcy.
Apparently, President Obama’s concept of spreading the wealth includes sacking the Medicare system on which America’s seniors have come to rely for highly beneficial medical care, in favor of others who the Obama/Pelosi/Reid progressive vision deems more worthy.
As the government clamps down on private insurers as well as on payments from Medicare and Medicaid, the incentives for essential investment to maintain current facilities, expand and open new ones, and invest in and build out new innovations and breakthroughs, will be eviscerated. Investment in human capital as well as physical capital in health care will plummet, as doctors and other professionals increasingly flee health care. This effective decline in the supply of health care in the face of increasing demand will mean even higher prices and costs.
The study further explains how several provisions of Obamacare give insurers, doctors, and hospitals incentives to deny and ration health care to patients. A central component of the traditional high standard of living in America has been the best, most advanced, cutting edge health care in the world. No more. Obamacare is part of the declining standard of living for America.
America’s Coming Bankruptcy
When he was campaigning for Obamacare, President Obama insisted on national television that the mandate to buy insurance was not a tax. Now that it has passed, his lawyers are in court arguing that it is constitutional because it is a tax.
The mandate to buy insurance is economically, though not legally, indistinguishable from a tax. Even with the budget-crushing new entitlement subsidies in the Act, the insurance will be quite expensive, ranging up to 2 percent of income for people at 133 percent of poverty to 9.8 percent of income for people at 400 percent of poverty. That is like a new payroll tax, breaking two Obama pledges, since it applies just as well to those making less than $250,000 a year.
The study recounts at least 13 tax increases in Obamacare, adding up to at least $500 billion over the first 10 years, not counting the mandates. But that won’t begin to cover all of the spending involved in Obamacare, adding up to more than $2.4 trillion over the first 10 years of full implementation, from 2014 to 2024, and $5.3 trillion over the first 15 full years.
That will further explode the deficit and national debt by at least $2 to $3 trillion over the next 20 years. A major fallacy of the CBO score of Obamacare is that it assumes that only 19 million workers will qualify for the new Obamacare health insurance subsidies described above. In fact, as former CBO Chief Douglas Holtz-Eakin explains, under the incentives Obamacare provides employers to dump their health coverage, at least 43 million are likely to qualify. It could be 2 to 3 times as many, exploding original cost projections beyond imagination. The study explains other factors that will cause higher Obamacare spending and deficits. This would only follow the Medicare precedent, which was originally projected in 1965 to cost $12 trillion by 1990. But when 1990 came, it cost $109.7 billion, 9 times greater.
Patient Power v. Government Power
America does need to ensure that it maintains a health care safety net assuring that no one suffers due to lack of essential health care. But that can be accomplished without any of the big-government components of Obamacare. Indeed, done right, it can be accomplished while expanding the power and control of workers and patients over their own health care and actually reducing rather than enlarging government’s role in health care.
That would begin by repealing all 159 new bureaucracies, agencies, boards, commissions and programs created by Obamacare, and the rest of the legislative atrocity, reducing taxes and spending by the amounts described above, and the federal deficits and debt by at least $2 to $3 trillion over the next 20 years.
The next step would be to block grant Medicaid back to the states following the model of the hugely successful 1996 reforms of the old AFDC program. That would greatly benefit the poor, freeing them from the Medicaid ghetto to enjoy the same health insurance as the middle class. That would include the choice of Health Savings Accounts (HSAs), maximizing patient power and control, and market incentives to control costs. Medicare should be reformed to empower all seniors with a Medicare Advantage choice, including the highly beneficial HSAs.
A true health care safety net ensuring essential health care for all can be achieved with state high risk pools, and consumer choice tax credits, ensuring affordability and access to health insurance for everyone. The study explains as well market consumer protection laws prohibiting insurance company fraud, and deregulation enabling a national market competition to truly control costs.
Because of all of the problems created by Obamacare, the misshapen legislation is just the beginning, not the end, of the battle to reform health care policy in America. Obamacare is so fundamentally wrong-headed that it takes us in the opposite direction of the essential reforms that are needed. Perhaps such a disastrously wrong step was necessary to draw the public’s attention to the true patient power reforms that would liberate health care in America.
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