Skip to comments.The Obamacare Debacle. It's Certain Failure is all too Predictable.
Posted on 11/15/2012 7:02:03 AM PST by SeekAndFind
If one wanted to sum up the consequences of the entire 2012 election in a single issue, look no farther than Obamacare.
The new health-care law is generally regarded as the signature achievement of the presidents first term. Its certainly emblematic of Obamas entire approach to government and what we can expect from his second-term initiatives.
The president promised a great deal of benefits from health-care reform: lower premiums, better care, universal coverage. He reassured Americans: If you had health insurance, and you liked it, you could keep it. The bills gross ten-year cost would be less than $1 trillion, and the legislation would actually reduce the deficit in the long run. The rich and some big businesses might have to pay a bit more in taxes, but the middle class would be better off.
But as with so many other policies of this administration, the results never matched the rhetoric. The pretty promises turned out to be just words.
Rather than work across the aisle, President Obama pushed his bill through on a purely partisan basis, using dubious parliamentary maneuvers and refusing to consider Republican alternatives. Nor was the president deterred by public opinion. Polls consistently showed that Americans opposed the presidents plan they still do but the president insisted on doing it his way.
The president who always prefers government to markets unsurprisingly produced a costly new entitlement program, financed by both new taxes and massive debt, that relies on top-down planning. The $1 trillion price tag has been left far behind. The Congressional Budget Office estimates that the bill will now cost at least $1.8 trillion through 2022, and other estimates suggest it could cost as much as $2.2 trillion over that period if all costs are taken into account, adding more than $823 billion to the deficit over ten years.
Even the governments own actuaries expect it to drive up insurance premiums. The most recent report by the Department of Health and Human Services estimates that in the future premiums will rise at 7.9 percent annually, double the rate they would have risen if Obamacare had not been passed.
Many of Obamacares taxes fall not just on the rich, but on the middle class and small businesses. In fact, the mandate tax in particular will hit 11 million middle-class taxpayers to the tune of $6 billion. Moreover, the laws costly new mandates and regulations are widely seen as a small-business job killer.
And, while Obamacare doesnt directly ration care, it puts in place structures that will almost inevitably lead to rationing. Notably, beginning in 2017, a board of 15 unelected bureaucrats, the Independent Payment Advisory Board (IPAB), will have the authority to impose drastic cuts to physician reimbursements under Medicare. If abused, this authority could allow the government to refuse to pay for some treatments or providers, effectively rationing care. Even under the best of scenarios, the already-planned cuts will force as many as 15 percent of hospitals to close and cause many doctors to stop seeing Medicare patients. Given Medicares enormous unfunded liabilities, some reduction in benefits is inevitable, but it is typical of the Obama administration to prefer that bureaucrats rather than individual consumers decide how that reduction takes place.
In addition, millions of Americans are discovering that they will not be able to keep their current health-care plans. This includes seniors who will lose their Medicare Advantage plans, and businesses and individuals who find their plans non-compliant with Obamacares required benefits (such as Catholic charities and schools that are now required to offer birth control, including abortifacients). Surveys suggest that 10 to 30 percent of employers could drop their coverage, dumping their workers into plans offered on the government-run exchanges.
Yet, for all this, Obamacare falls far short of its goal of universal coverage. Nearly 20 million Americans will still be uninsured after the bill is fully implemented. Millions more will simply be dumped into Medicaid.
A President Romney could have used waivers, executive orders, and his power over budgets to delay or cut back on parts of the law.
Thus, on health care, as on so many other issues, last Tuesdays election left us with a president whose belief in big government and centralized control has been and will only continue to be a disaster. The 2012 election has delivered us a devil we know all too well.
Michael Tanner is a senior fellow at the Cato Institute and author of Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution.
“Its” (not “It’s”).
OK, so when they take away my affordable catastrophic insurance and force me to buy unaffordable Obamacare insurance that I can’t afford and thus won’t buy, incurring their mandated tax-penalty which I won’t pay, thereby incurring their wrath and consequences, impounding my property and sending me off to the Gulag . . . will I get to come back if it collapses? Or will it collapse sooner rather than later?
Just getting ready to post the same thing.
Maybe he DID mean “it is failure”... or not.
The failure is planned.
Every business person I know says the cost is soaring, they are seriously depressed and cutting back business plans, and they are talking about dropping employee coverage because paying the voucher fine is cheaper.
So the American people are taking it in the back, a complete lie and disaster to insure Obama’s non working voters.
It’s not supposed to work. It’s supposed to fail, forcing single-payer. Duh.
It was intended to fail.
It ony paves the way for a single-payer system.
Thank you to all the dumb asses that put this maggot back in office.
Maybe - lazy thieves, definitely.
Please fix the apostrophe. I can’t read an article with a glaring error in the title.
oh for Pete’s sakes it Cato institute, get something more respectable
The ironic thing in my mind is that the Health Care issue was one that really needed to be addressed. If 0bama had taken the time and examined each part and it’s impact logically, potentially a good law may have come out of it. There are some aspects, the “pre-existing conditions” clause for example, that even the most conservative of my friends and acquaintances support. However, the way it was rammed down our throats and the impact, not only on the Health Care Industry, but the economy, is intolerable. The result is that the entire monstrosity must be nullified.
Or, will they just put up with the chaos until they get used to it?
The dirty little secret is that Congress will bow to the public pressure and pain created by Obamacare and eliminate the cost savings measures. They will not reduce payments to doctors and hospitals further increasing the costs and adding to the debt and deficit. The Dems will do whatever they can to fix and save Obamacare. In the process they will wreck the healthcare system and bankrupt the country.
The last thing we needed was another entitlement program. SS and Medicare now represent a $60 trillion unfunded liability. We have 70 million now on Medicaid and Obamacare will add 18 million more to the system. Add to that an aging population that is retiring at 10,000 a day for the next 20 years. Health care costs are going up period.
Obamacare will be the albatross around Obama and the Dems' neck. Maybe we will get a Rep who can really detail the disaster that Obamacare is and will be. Romney was hamstrung in that regard.
This is what happens when you nominate a candidate that effectively took health care off the table as a campaign issue.
I wonder if employers will "get used to" the new plan? Today, if I am sick and need to take time off of work to see a doctor, I can usually get in and get out in a day's time. Tomorrow, I might still get sick, but I might wait days to get in to a doctor. And perhaps longer, if specialized treatment is required. How long will employers be tolerant of this inefficiency?
The best bet for defeating Obamacare at this point is to start a movement to have it apply equally to *all* Americans, including our worthless leadership and, of course, all union workers.
Doesn't that sound like the Canadian system? Isn't that what liberals want, a universal, national health care system?
“The new health-care law is generally regarded as the signature achievement of the presidents first term.”
The government now has full ownership of our physical beings. Amazingly, morons are out there celebrating being enslaved by the first black president.
This was my original response when the legislation was still pendiing and for the most part it is still valid today:
When this health care for all crap passes, right now the legislation states that it will be illegal to sell private policies over the date of passage. It also says that HSAs will no longer be allowed. That means that my current policy will no longer be allowed and neither I nor my employer will be allowed to privately purchase an alternative.
I will not accept the public option that I will be dictated to join. I will not give the government control over my physical body. I will not pay their fines, I will not surrender to the impending warrant for my arrest. When they knock on my door, I will not answer. When they kick it in, I will make the news.
Hows that for unification, libtards? You loons are currently legislating my death. I will chose the terms and I will bring as many of you along as possible!
But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security
my plan is no “health care”. I will have insurance, as I do, I just will not partake of medical services unless injured. Just injury insurance, stitches broken bones. Otherwise if I get sick I am gonna let it take its course. If I die, so be it.
Liberal pograms do not fail—they just need more money and more time. /s
“Will they conclude that government should stay out of the health care field?”
Quite the contrary. The genius of Obamacare is that it inextricably mixes government and the private sector. Every failure will be blamed on “greedy” “profit-making” private insurers, drug companies, medical device manufacturers etc. while government will take credit for every success (e.g., reducing the number of uninsured). Every “problem” identified will be accompanied by a demand that government fix that problem. Thus, like the tar baby, the government will become ever deeply entangled in health care. Progressives are hoping things get broken enough that they can usher in single payer health care as the solution to the “failed” private market.
SS and Medicare now represent a $60 trillion unfunded liability
If you have your health, why, you have got everything.
He who provides and consumes the health care decides nothing. He who pays for the health care decides everything.
Bend, Oregon America!
If Americans and their elected continue to allow the United States Constitution to be abused, misused, and trashed then we deserve what we get. I suggest we all hammer our elected with the admonition they follow the Constitution and quit bending the laws to suit others and themselves. We would not be whining about Obamacare had we all protected the U.S. Constitution......don’t be bullied by those who abuse our Constitution...that document protects us all...
I believe you're absolutely right. And, I believe that Obamacare will, like Medicare, develop its own constituency of voters. I suspect that future GOP candidates will be advocating "improvements" rather than repeal. In fact, isn't that what Romney did this year with his promise to "save" Medicare and his promise to "repeal and replace" Obamacare? How many candidates out there (at any level of government) are advocating that government get out of the health care system entirely?
Did you read where it said that was at a point in time while the legislation was only being discussed? Yes, many of the details of the actual legislation changed. My sentiment did not!
“I will not pay their fines, I will not surrender to the impending warrant for my arrest. When they knock on my door, I will not answer. When they kick it in, I will make the news.”
Probably not how it will happen.
You fail to pay the fine, they won’t issue you a tax refund. If you have no tax refund, they will continue to send letters, and fines, over the years until it gets big enough for them to take directly from your bank account. No bank accounts, no refunds, then they will have your employer garnish your paycheck.
No paycheck, then ultimately they might take your property, but it will be a long, long time. And by then there will be a single payer, unionized health care system.
Fraud notwithstanding, that national poll we took on November 6 says otherwise.
Ridiculous my butt. If you think that Obamacare is really going to reduce Medicare costs, you are smoking something. Medicare Part A has been running in the red since 2008. The shortfall is being made up using the IOUs in the HI Trust fund. These IOUs are being redeemed by the General Fund. Since we borrow 42 cents of every federal dollar spent is borrowed, we are adding to the national debt.
By law, 75% of the costs of Medicare Parts B and D are funded by the General Fund. The premiums only pay for 25% of the costs. In the 2012 Trustees Report $222 billion came from the General Fund in 2011 for SMI (Medicare Parts B and D) and $87.8 billion for Medicare Part A. These costs will continue to increase as the population ages and healthcare costs increase faster than inflation. People who look at the actuarial soundness of Medicare assume that the USG will continue to fund 75% of SMI from the General Fund. Medicare is consuming about 15% of the non-Medicare portion of the federal budget and if not reformed will consume the entire federal budget.
Obamacare may be the law, but it has not been fully implemented with all of the projected tax revenue. From the Trustees:
Also, as described in the Medicare Trustees Report, the projections for HI and SMI Part B depend significantly on the long-range feasibility of the various cost-saving measures in the Affordable Care Act�in particular, the lower increases in Medicare payment rates to most categories of health care providers. For such efforts to be successful in the long range, providers will have to generate and sustain unprecedented levels of productivity gains or other improvements in efficiency."
"Concern about the long-range financial outlook for Medicare and Social Security often focuses on the exhaustion dates for the HI and OASDI trust fundsthe time when projected trust fund balances under current law would be insufficient to pay the full amounts of scheduled benefits. A more immediate issue is the growing burden that the programs will place on the Federal budget well before exhaustion of the trust funds.
Chart D shows the excess of scheduled outgo over dedicated tax and premium income for the OASDI, HI, and SMI trust funds expressed as percentages of GDP. Each of these trust funds operations will exert rapidly rising pressure on the Federal budget in future years. General revenues pay for roughly 75 percent of all SMI costs. From now through 2024, interest earnings and asset redemptions, financed from general revenues, will cover the shortfall of HI tax and premium revenues relative to expenditures. In addition, general revenues must cover similar payments as a result of growing OASDI deficits through 2033.
In 2012, the projected difference between Social Securitys dedicated tax income and expenditures is $165 billion. For HI, the projected difference between dedicated tax and premium income and expenditures is $38 billion. The projected general revenue demands of SMI are $217 billion. Thus, the total general funds for Social Security and Medicare in 2012 are $420 billion, or 2.7 percent of GDP. Redemption of trust fund bonds, interest paid on those bonds, and transfers from the general funds provide no new net income to the Treasury, which must finance these payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.
Chart D shows that the difference between cost and revenue from dedicated payroll taxes, income taxation of benefits, and premiums will grow rapidly through the 2030s as the baby-boom generation reaches retirement age. This imbalance would result in vastly increased pressure on the Federal budget if the law were changed to maintain scheduled benefits in the absence of an increase in dedicated tax revenues, with such financing requirements equaling 4.8 percent of GDP by 2040.
The bottom line is that the $60 trillion is probably understated in terms of the total federal budget. And the imputed impact of Obamacare on reduced payments to hospitals and doctors may well be ephemeral in much the same way as the "Doc fix" that must be implemented every year to waive the reduction in physician payments under Medicare.
Medicare beneficiaries receive three times more in benefits than they pay into the system. How can you sustain such a system?
This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.
If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.
By 2015, major barricades and roadchecks will be standard for all thoroughfares, US troops will be tasked to quell riotous behaviour across the Homeland. Finding a doctor much less a competent one will be nigh impossible. Voting will be mandatory, even for the newly amnestied, never mind they know nothing about this nation except its rulers&overlords are cutthroat..
You want upheaval, Libs, you got it. bring your band-aids and your bongs. leave the photo ID at home. it won’t matter, face recognition software will peg your identity a mile away.
just a prediction..
I'm sure you meant 'programs' ... or did you? :^)
kabar, you put a lot of effort into that post and I appreciate it. However what was ridiculous was representing Wolf’s comment as saying the $60 trillion is solely SS and Medicare. It’s not. And Wolf using old numbers because he thinks it helps his cause is disingenuous.
Also they are not liabilities as they can be changed by congress at anytime. But that one’s more of a semantic disagreement.
Of course something needs to be done to reign in healthcare costs. Obamacare is what we have to deal with right now. I still don’t understand why Republicans hate it since it’s basically a Heritage Foundation plan. I would have been much happier with a true single-payer system and the ability to control prescription drug prices.
The $60 trillion unfunded liability is correct today. The lower number is predicated on Obamacare's impact, which we have yet to see since it has not been implemented fully yet. I give more credence to the Trustee's report.
Also they are not liabilities as they can be changed by congress at anytime. But that ones more of a semantic disagreement.
Yes, they can be changed at any time to reduce benefits and increase taxes as was done in 1983 when SS went in the red. SS has been in the red now since 2010. It will stay permanently in the red until it is reformed.
Source: CBO "Combined OASDI Trust Funds; January 2011 Baseline" 26 Jan 2011. Note: See "Primary Surplus" line (which is negative, indicating a deficit)
Matters are even worse than this chart shows. In December, Congress passed a Social Security tax reduction. Workers are temporarily paying 2 percentage points less, from 6.2 percent to 4.2 percent, in Social Security payroll taxes this calendar year. Since the government is making up the shortfall out of general revenues, CBOs deficit projections for the trust funds do not include that. But CBOs figures predict that the "payroll tax holiday" will cost the governments general fund $85 billion in this fiscal year and $29 billion in fiscal year 2012 (which starts Oct.1, 2011.) Since every dollar of that will have to be borrowed, the combined effect of the " tax holiday" and the annual deficits will amount to a $130 billion addition to the federal deficit in the current fiscal year, and $59 billion in fiscal 2012.
Social Security has passed a tipping point. For years it generated more revenue than it consumed, holding down the overall federal deficit and allowing Congress to spend more freely for other things. But those days are gone. Rather than lessening the federal deficit, Social Security has at last as long predicted become a drag on the governments overall finances.
Of course something needs to be done to reign (sic) in healthcare costs. Obamacare is what we have to deal with right now. I still dont understand why Republicans hate it since its basically a Heritage Foundation plan. I would have been much happier with a true single-payer system and the ability to control prescription drug prices.
Ah, now I understand where you are coming from. You are a socialist who believes in nationalized healthcare. I have seen it firsthand in Europe. It doesn't work. And it will devour the federal budget and ruin the quality of healthcare. There will be less access and more bureaucracy.
As PJ O'Rourke has said, "If you think healthcare is expensive now, wait until it is free."
Have a good day.
I can just see the executive order to conscript the medical personnel fleeing from his mandates. Then forcing them to do abortions and after birth murders while the supremes deem this necessary for the well being of citizens. He is nothing but evil and a harbinger of thing to come.
What? Not according to the SSA it hasn't.
People don’t understand: big “O” wants the Country to fall
so that He can impose socialism.
LOL Stalin would be proud. /s
“This is what happens when you nominate a candidate that effectively took health care off the table as a campaign issue.”
Exactly. Which is why I wonder if the GOPe is that inept or that they just want to consistently lose. I really don’t know.
And now they’re seriously considering embracing the illegals and ignore the conservative. Any wonder people are talking secession and/or third party?
It is supposed to fail so the government can nationalize health care (sinlge payer) while declaring it some sort of emergency