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BROKENPROMISESThe ObamaCare Story


IT’S GOING TO BE AGLORIOUSTHINGHouse Speaker Nancy Pelosi1. Stephen Dinan, “Pelosi: ObamaCare will be‘glorious’,” The Washington Times, December 23,2013. http://www.washingtontimes.com/news/2013/dec/23/pelosi-ObamaCare-will-be-glorious/


BROKENPROMISESThe ObamaCare StoryWritten byPatrick HedgerJosh WithrowJulie BorowskiLogan AlbrightEdited byReid SmithDean ClancyCONTENTSDesigned byMatt Battaglia1. “You Can Keep Your Plan” p.012. The Deficit p.053. New Taxes p.084. Rising Premiums p.115. Employment p.146. Young Americans p.177. Government Takeover p.20ObamaCare.It’s a story of broken promises.Formally known as the Patient Protection and Affordable Care Act,ObamaCare began life as a 2,700-page bill, written in incomprehensiblelegalese, in Washington back rooms, by left-wing ideologues and powerfulspecial interests. Rammed through Congress with bribes and payoffs, fewlawmakers had time to read it before voting on it. Then came 20,000 pagesof regulation, 1,200 waivers for politically connected corporations and laborunions, and more than 20 presidential delays of major provisions.Today, the results are in, and we can finally judge for ourselves the truth ofits supporters’ promises.Four years ago, the overwhelming majority of Americans had some form ofhealth care coverage. Most of us were basically happy with our plan. We werepromised over and over that if we liked our plan, we could keep it. Today,millions Americans have lost their health insurance, with millions moreunder the gun.Four years ago, we were promised that health care premiums would godown by at least $2,500 for every family. Today, premiums are on average 41percent higher.Four years ago, we were promised that ObamaCare “wouldn’t add a dime tothe deficit.” It has already added billions of dollars to the deficit.Four years ago, millions of Americans and small businesses, struggling tokeep their heads above water, were promised that ObamaCare would createmillions of new jobs. Today, thanks to that very law, millions are losingtheir jobs or being shifted into part-time status, and unemployment remainsstubbornly high.Four years ago, Americans were promised that ObamaCare would be thevery opposite of a government takeover of health care. “Why, it’s really afree-market, conservative idea!” Already, some impatient progressives arecalling for moving past ObamaCare to the next step: a complete governmenttakeover.Four years ago, Americans were promised that every American would finallyhave affordable health care. Today, 50 million Americans remain uninsured.At least 30 million will remain uninsured in perpetuity.These are just some of ObamaCare’s broken promises.In these pages, FreedomWorks presents the heart-breaking facts.The harsh truth is that the happy rhetoric of ObamaCare’s most enthusiasticdefenders has amounted to nothing more than a tall tale. Because PresidentObama and Congressional Democrats couldn’t — and in our view, neverintended to — keep their lavish promises, millions of Americans are nowlosing their jobs, their hard-earned money, and their precious health carecoverage.This book is written for the American people — the true victims ofObamaCare’s broken promises.freedomworks.org


POST-ROLLOUTSHIFT IN OPINIONAs you may know, a health reform bill was signed into law in 2010. Given what you know about thehealth reform law, do you have a generally favorable or generally unfavorable opinion of it?FavorableUnfavorableDon’t Know/RefusedJul:50%Jan:50%Oct:51%Jul:35%Jan:41%Oct:34%2010 2011


Sep:45%Nov:49%Dec:48%Jan:50%Sep:40%Nov:33%Dec:34%Jan:34%Jan:16%2012 2013 2014


YOUCANKEEPYOURPLANPresident Barack Obama12. Barack Obama,“Remarks at a Rally forGovernor Jon S. Corzinein Holmdel”, July 16,2009, available via theGovernment PrintingOffice. http://www.gpo.gov/fdsys/pkg/PPP-2009-book2/pdf/PPP-2009-book2-Docpg1117.pdf1


“First of all, if you’ve got healthinsurance, you like your doctor, you likeyour plan—you can keep your doctor,you can keep your plan. Nobody istalking about taking that away fromyou.”—President Barack Obama 2Barack Obama and his Democratic allies made repeatedassurances that if Americans had health care coverage, nothingin their prized legislation would upset that status quo.For all the problems with the American health care industry,the overwhelming majority of Americans already had healthcoverage they liked and wouldn’t tolerate being robbed ofthat precious peace of mind. In 2012, two years prior to theimplementation of the Affordable Care Act (ACA), the U.S.Census determined that 85 percent of the population wascovered in some way, shape, or form. 3 The plurality of theremaining 15 percent listed reasons unrelated to the insuranceindustry or the reforms of ObamaCare as the reason they lackedinsurance. 4 In total, less than five percent of the populationwas uninsured for the reason that ObamaCare hoped to solve:affordability. 5Nobody was talking about taking away existing insurancecoverage while the president was pitching ObamaCare in 2009.By 2014, that’s all that the insurance industry, politicians, themedia, and the American people are talking about. Beginningin October and November of last year, those that had purchasedplans on the individual insurance market began to receivesomething different than the usual holiday catalogs in the mail:cancellation notices.As a direct result of the rules and regulationsimplemented by ObamaCare, millions ofAmerican’s lost their existing health insuranceplans.The damage has been extensive. The Associated Press has beenmonitoring the raw number of cancellations on a state by statebasis. Of the 50 states, 18 are not actively tracking insurancecancellations including major population centers like Texas,Ohio, and Virginia. In the remaining 32 states, the AP hasreported that 4.7 million individuals have had their insurancepolicies cancelled because of ObamaCare as of the end of 2013. 6The real number is most certainly higher given the number ofstates not reporting and the fact that initial estimates suggestedas many as 16 million plans on the individual market did notmeet the initial qualifications to be grandfathered in under thenew ObamaCare standards. 72. Barack Obama, “Remarks at a Rally for GovernorJon S. Corzine in Holmdel”, July 16, 2009, availablevia the Government Printing Office. http://www.gpo.gov/fdsys/pkg/PPP-2009-book2/pdf/PPP-2009-book2-Doc-pg1117.pdf3. “Income, Poverty and Health Insurance Coveragein the United States: 2012,” United States CensusBureau, September 17, 2013. http://www.census.gov/newsroom/releases/archives/income_wealth/cb13-165.html4. “Key Facts about the Uninsured Population,” TheHenry J. Kaiser Family Foundation, September26, 2013. http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/5. Ibid.6. The Associated Press, “Policy notifications andcurrent status, by state,” Yahoo! News, December 26,2013. http://news.yahoo.com/policy-notifications-current-status-state-204701399.html7. John McCormack, “Millions of Americans AreLosing Their Health Plans Because of ObamaCare,”The Weekly Standard, October 23, 2013. http://www.weeklystandard.com/blogs/millions-amer-icans-are-losing-their-health-plans-because-ObamaCare_764602.html2


YOUR PLANWhy are existing policies being cancelled? It seems antitheticalto the stated goal of the Affordable Care Act, which is to getpeople covered. As it turns out, the initial lie of “if you likeyour plan you can keep your plan” was twofold. Under the newlaw, every insurance plan in the country must cover all of thefollowing 10 services deemed essential by the Department ofHealth and Human Services (HHS): 8• Ambulatory patient services• Emergency services• Hospitalization• Maternity and newborn care• Mental health and substance abuse disorderservices, including behavioral health treatment• Prescription drugs• Rehabilitative and habilitative services anddevices• Laboratory services• Preventative and wellness services and chronicdisease management• Pediatric services, including oral and visioncareThese coverage requirements are the primary force drivingthe sweeping cancellations. As Karen Ignagni, the presidentof America’s Health Insurance Plans, an industry trade grouprepresenting the health care industry, said,“The only reason consumers are gettingnotices about their current coveragechanging is because the ACA requiresall policies to cover a broad range ofbenefits that go beyond what manypeople choose to purchase today.” 9She touches on a critical point that has been largely overlookedwhen evaluating the president’s promise about being ableto keep “your plan.” If the government is forcing you to buycoverage beyond your needs, is it really “your” plan?The number of cancellations is enormous because millions ofAmericans don’t meet the profile of needing each of these 10services that are now mandated to be covered. Before, federallaw left people free to choose what coverage best met theirneeds—now a federal bureaucracy that knows little, if anything,about them is making that decision for them.This raises questions about whether or not yournext health care plan is really “your” plan at all.Consider the following few scenariosIf a 40-year-old woman with no history of mental health issuesor use of addictive substances is forced to buy coverage formental health and substance abuse, is that really her plan?If a 25-year-old single and childless male is forced to purchasepediatric oral and vision coverage for children he doesn’t have,is that really a plan for him?Consider a divorced 55-year-old man with grown childrenliving on their own that is now forced to buy maternity andnewborn care. Is this a plan neatly tailored for him?Anyone can see that for large swaths of Americans, some ofthese benefits deemed essential by HHS are entirely superfluous.Yet because these services are now required to be covered underObamaCare, not only do nearly 5 million or more Americansnot have access to services they’ll never use, but are nowwithout any coverage for the care they are likely to need.8. “The Basics of Essential Health Benefits,”United Health Care. http://www.uhc.com/live/uhc_com/Assets/Documents/EssentialHealth-BenefitsBasics.pdf9. “AHIP Statement on Consumers Keeping TheirCurrent Coverage,” America’s Health InsurancePlans, November 14, 2013. http://www.ahipcoverage.com/2013/11/14/ahip-statement-on-consumers-keeping-their-current-coverage/3


THEONCOMINGTRAIN ATTHE ENDOF THETUNNELThe wave of cancellations isfar from over. Affordable CareAct regulations are not isolatedto the individual insurancemarket. The same rules andregulations apply to the groupinsurance market, whichis dominated by coverageoffered by employers totheir employees. With vastlymore Americans receivingtheir health coverage viaemployers than by any othermeans, changes to this marketendanger the existing plans oftens of millions of Americans.The onslaught of groupmarketcancellations has yet tobegin in full force, primarilyfor two reasons. First, smallgroup plans, used by manysmall businesses, avoidedcompliance with some of themore stringent ObamaCarestandards by exploiting aloophole in the law. Businessesand groups that re-upped bythe end of 2013 were able tolock in their plans through theend of 2014, briefly shieldingthem from ObamaCareregulations. 10Large employers are currentlybenefitting from a delay ofthe “shared responsibility”provision of the AffordableCare Act, more commonlyknown as the employermandate. This mandaterequires that employers with50 or more employees provideaffordable health care plansto their staff or face penalties.On July 2, 2013, the Obamaadministration announced thatenforcement of this provisionof the law would be delayeduntil 2015, while the majorityof the law took effect inearnest on January 1, 2014. 11This delay allowed these largeemployers to escape certainpenalties and arbitrary rulesthat stipulate what qualifies asan acceptable plan accordingto the federal government. 12The mass cancellations,however, are still loomingdespite these brief reprieves.The Obama administrationitself, in 2010, quietlyreleased and posted notice inthe Federal Register that itestimated roughly 76 percentof small group plans, and 55percent of large employerbasedplans would be cancelledas a result of the AffordableCare Act. 13 Independentexperts pegged this at roughly80 million individuals at risk oflosing existing coverage. 14It’s their planAccess to affordable health caretailored to meet one’s needsis undoubtedly a challengethat many Americans face.However, instead of alleviatingthe problem, the dictation ofrandom standards of adequacyunder ObamaCare has madethe situation more difficult formillions and is set to pull therug out from underneath tensof millions more.The peace of mind thatmillions already enjoyed,knowing that their basic healthinsurance needs were covered,has been shattered, andarguably the most repeatedpromise regarding ObamaCarehas been broken.10. “FAQ —Renewal and Plan Year Change 2013,” Wellmark, Blue Cross, Blue Shield. https://www.pipac.com/docs/Small%20GroupNon-Gr%20FAQ.pdf11. Janemarie Mulvey, Bernadette Fernandez, and Annie L. Mach, “Delay in Implementation of Potential Employer Penalties Under ACA,”CRS Report for Congress, July 22, 2013. http://www.fas.org/sgp/crs/misc/R43150.pdf12. Linda Keller, “Impact of Health Reform Employer Mandate Delay Until 2015,” Intercare, July 3, 2013. http://view.intercaresolutions.com/impact-health-reform-employer-mandate-delay-2015-as-july-3-2013/13. Jim Angle, “Almost 80 million with employer health care plans could have coverage canceled, experts predict,” Fox News, November 26,2013. http://www.foxnews.com/politics/2013/11/26/evidence-shows-obama-administration-predicted-tens-millions-would-lose-plans/14. Ibid.4


I WILL NOTSIGN A PLANTHAT ADDSONE DIME TOOUR DEFICITS—EITHER NOWOR IN THEFUTUREPresident Barack Obama215 “Remarks by thePresident to a JointSession of Congress,”September 9, 2009.http://www.whitehouse.gov/the_press_office/Remarks-by-the-President-to-a-Joint-Sessionof-Congress-on-Healthcare5


Earlier in the samespeech Obama hadbeen interrupted byCongressman JoeWilson with a shoutof “You lie!” Such anaccusation would alsohave fit this claim.History was not with the presidentwhen he made his claim regardingthe law’s impact on federal spendingand deficits. Almost every majorentitlement program that thefederal government has created haseventually—and usually quickly—vastly exceeded its estimated costs,creating additional deficits.Take Medicare, for example. In1967, the House Ways and MeansCommittee estimated that the annualcost of Medicare would grow to$12 billion by 1990. Its actual costfor just the year 1990 was $110billion. Similarly, the Medicaiddisproportionate share hospital(DSH) program passed in 1987 wasestimated to cost $1 billion, andended up costing $17 billion in itsfirst year. 16With a total national debt that islarger than the entire economy’soutput for the year, at over $17trillion, existing mandatoryspending programs are already toobig to handle, and they’ll only getworse. The nation is well past thepoint where the cost-explosion ofentitlement programs is a distantworry—a problem to be tackled by amore intrepid, future generation.In 2013, just health care entitlementsalone (Medicare, Medicaid, and othersmaller programs like CHIP) cost$876 billion. Add in Social Security($809 billion), and other entitlementssuch as food stamps ($83 billion),and more than $2 trillion of thefederal government’s $3.8 trillion inexpenditures went to these autopilotspending programs. 17In just one decade those numbers aregoing to blow up to unprecedented,mindboggling levels, fueled bya massive wave of retiring babyboomers tapping into Social Securityand Medicare. With more than10,000 of them retiring each day from2010 to 2020, by 2023 Social Security,Medicare, and Medicaid alone areprojected to cost $3.03 trillion dollars,contributing to a predicted deficit ofnearly $900 billion.Unless these programsare structurally reformedsoon, the governmentwill have to cut benefitsdeeply, raise taxesmassively, or to go backto running trilliondollar-plusannualdeficits.And now President Obama has addedhis “deficit-neutral” Affordable CareAct to this already bleak picture.16. Sam Brownback,“Are Health CareReform CostEstimates Reliable?”Joint EconomicCommittee, July31, 2009. http://www.jec.senate.gov/republicans/public/?a=Files.Serve&File_id=5802c84c-e821-4ab3-baeb-793f3ae2e03617. Mandy R. Levit,D. Andrew Austin,“Mandatory SpendingSince 1962”, CRSReport for Congress,July 15, 2013. http://www.senate.gov/CRSReports/crs-publish.cfm?pid=%270E%2C*P%3C%5B%3C%23P++%0A6


In 2009 and 2010, the president was able to claim that hissignature law did not increase the deficit “one dime” becauseof budgetary sleight-of-hand. The Congressional BudgetOffice (CBO) produced a cost estimate of ObamaCare thatclaimed it would actually reduce the deficit by $118 billionover ten years. But the writers of the law cleverly reachedthis number by, among other things, starting to collectObamaCare’s taxes immediately, while the actual spendingportions of the law came into effect four years later.But the biggest factor in making ObamaCare anotherbudget-busting government disaster is the cost of thesubsidies paid to insurance companies in order to supposedlymake health insurance more affordable. Instead, the lawactually causes the cost of most insurance plans to sharplyrise, meaning that the subsidies to make them “affordable”will rise as well.The final CBO score of the ACA, before it passed in 2010,predicted that the insurance premium subsidies would cost$337 billion from 2014-2019. 18 Every year since, the CBOhas had to adjust those totals upward, with the most recentestimate finding that the insurance coverage provisions ofObamaCare will cost $823 billion through 2019, and increasetotal federal spending by $2.004 trillion by 2024. In short,since the CBO first scored ObamaCare, its cost to taxpayershas increased by 140 percent. 19Another of ObamaCare’s most expensive policies, expandingMedicaid in the states, will cost an additional $710 billionover the first decade. 20Then there are the insurance bailouts (technically called “riskcorridors,” “reinsurance,” and “risk adjustment”) that are builtinto ObamaCare. Insurance companies will take huge lossesif not enough healthy people—who pay more for insurancethan they take out—enroll in insurance plans underObamaCare. But the government will cover a percentage ofthose losses—putting taxpayers on the hook for still morebillions of dollars. For example, under the “risk corridor”payments program, insurers have 75 percent of their lossescovered; so for every $1 million an insurer loses, it will getroughly $750,000 from the taxpayers. And the cost of thisbailout is on top of the more than $1 trillion taxpayers arealready slated to shell out to insurance companies for thepremium subsidies in the exchanges.In total, the February 2014 CBO estimate of ObamaCare’stotal spending over the next decade (that is, through 2024)comes to a staggering $1.487 trillion dollars in new, deficitspending. 21 This is all on top of Medicare, Medicaid, andSocial Security; and that number, as previously mentioned,will certainly rise.For the record, that’s nearly 15trillion dimes and counting.18. Douglas W. Elmendorf, Letter to Harry Reid, Congressional Budget Office, March 11, 2010. http://www.cbo.gov/sites/default/files/cbofiles/ftpdocs/113xx/doc11307/reid_letter_hr3590.pdf19 Sarah Masi, Jessica Banthin, Philip Ellis, Holly Harvey, and Jean Hearne, “The Budget and EconomicOutlook: 2014 to 2024 –Appendix B: Updated Estimates of the Insurance Coverage Provisions of the AffordableCare Act,” Congressional Budget Office, February 2013. http://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-Outlook2014.pdf20. Ibid.21. Ibid.7


IT’S ATAX—ER,IT’S APENALTYFOR FREERIDERSNancy Pelosi322. Nancy Pelosi,interviewed on July 1,2012, Meet the Press(NBC). http://www.politico.com/blogs/politico-live/2012/07/pelosi-almost-callshealth-law-penalty-atax-127829.html8


Does ObamaCare raise taxes? TheDemocrats in Congress who helped writeand pass the law can’t seem to agree.While the law was still being designedand debated, ObamaCare supporterswere careful to avoid using the T-word,recognizing that Americans were alreadysuffering under a terrible economy andwere vehemently opposed to any taxincreases that would make their lives stillharder.However, this position left lawmakersin an awkward spot. If ObamaCare’sindividual mandate wasn’t a tax, whatwas it, and where was the constitutionalauthority to implement a penalty fordoing nothing? As the law came underfire, ultimately leading to a hearingbefore the Supreme Court, Democratshad to engage in all sorts of linguisticcontortions in order to stay on message.Then-Speaker of the House NancyPelosi found herself tripping over herown words as she tried to describethe law, uttering the fatal T-soundbefore correcting herself with the word“penalty.” 23 The Washington Post’s factchecker awarded two “Pinocchios” to Rep.Debbie Wasserman-Schultz’s flat denialof the claim that ObamaCare contains $1trillion in new taxes. 24 Health and HumanServices Secretary Kathleen Sebelius wenton record as referring to the mandate as a“fine,” and Senate Majority Leader HarryReid refused point blank to define the25 26mandate at all.And then there was this now-famous exchange between President Obama and ABC News interviewer George Stephanopoulos 27Under this [individual]mandate, the government isforcing people to spend money,fining you if you don’t. How isthat not a tax?My critics sayeverything is atax increase.My critics saythat I’m takingover every sectorof the economy.Well, hold on a second,George. … you can’tjust make up thatlanguage and decidethat that’s called atax increase. Any…I wanted tocheck for myself.But your criticssay it is a taxincrease.You knowthat.… Merriam Webster’sDictionary: Tax — ‘acharge, usually of money,imposed by authority onpersons or property forpublic purposes.’…whatyou’resaying is…Look, we can havea legitimate debateabout whether or notwe’re going to have anindividual mandate ornot, but…Well, no,but…George, the factthat you looked up Merriam’sDictionary, the definition oftax increase, indicates to methat you’re stretchinga little bit right now.Otherwise, youwouldn’t have gone tothe dictionary to checkon the definition.I mean what…But you rejectthat it’s a taxincrease?I absolutelyreject thatnotion.9


Yet, when the oral arguments were atlast heard before the Supreme Court,all of this doublespeak went out thewindow, as lawyers for the administrationrepeatedly, unabashedly, and emphaticallydefended the individual mandate as atax. They did so because, while theyknew the Constitution doesn’t authorizean individual mandate, it does permitCongress to levy “taxes.” Once the law hadshifted from Congress to the courts, theneed to deceive lawmakers ended and theneed to deceive judges began. Voilà! Themandate was now a tax.Senator Max Baucus (D-Montana), one ofthe architects of the law, admitted that thelaw broke the president’s pledge not tocreate any new taxes, andSenator Tom Harkin (D-Iowa), in arare moment of candor, compared theObamaCare mandate to redistributive28 29property taxes.Chief Justice John Roberts agreed withthe administration’s revised assessment,breaking the tie among the evenly dividedjustices and upholding the mandate as atax—a tax the administration had insisted,just months earlier, didn’t exist. 30By any objective analysis, ObamaCarerepresents a major increase in taxes. Theindividual mandate is only a small portionof the various fees, penalties, fines, andovert taxes that will take money from thepockets of American workers.Americans for Tax Reform (ATR), thenon-partisan think tank dedicated toopposing all tax increases, compiled a listof all the ways in which the AffordableCare Act violates its promise not to raisetaxes. 31 ATR’s analysis concluded thatthe law contains 20 examples of new orhigher taxes on families and businesses,totaling more than $500 billion over thenext ten years.NEW TAXES• a 3.8 percent surtax on investmentincome• a hike in the Medicare payroll tax• the individual and employermandates• a tax on health insurers• an excise tax on health insuranceplans• a tax increase on “black liquor,” atype of bio-fuel• a tax on drug companies• a lower deduction threshold onmedical bills• a cap on flexible spendingaccounts, typically used by parentsof special needs children• disallowing the use of healthsavings accounts to pay for overthe counter medicines• elimination of tax deductions forMedicare Part D• permitting the IRS to selectivelydisallow tax deductions if it deemsthey lack “substance”• a 10 percent excise tax on indoortanning• a tax increase on withdrawalsfrom health savings accounts(HSAs)• a salary cap for health insuranceexecutives; a tax on medicaldevices• reduced tax deductions for BlueCross/Blue Shield companies• an excise tax on charitablehospitals that fail to meet certainnew standardsThat’s quite a list for a law that waspromised to include no new taxes.As of this writing, the latest projectionsfrom the CBO predict $517 billion in federalrevenues as a result of the Affordable CareAct between 2014 and 2024. 32 In otherwords, ObamaCare imposes over half atrillion dollars in new taxes. This numberis lower than previous projections dueto exemptions from the employer andindividual mandates unilaterally granted bythe Obama administration.The Affordable Care Act was sold to theAmerican people with the promise that theywould not see any increases in their taxes.In retrospect, this was an opportunisticfalsehood advanced for political purposes, tocircumvent the public’s opposition to newtaxes. Semantics aside—whether termed“penalty,” “fine,” or “fee”—various estimatesconclude ObamaCare will cost Americanhouseholds and businesses somewherebetween $500 billion and $1 trillion dollarsin new taxes over the next ten years. Andthe Democrats in Congress knew this allalong.23. Nancy Pelosi, interviewed on July 1, 2012, Meet the Press (NBC). http://www.politico.com/blogs/politico-live/2012/07/pelosi-almost-calls-health-law-penaltya-tax-127829.html24. Glenn Kessler, “Does ‘ObamaCare’ Have $1 Trillion in Tax Hikes, Aimed at theMiddle Class?” The Washington Post, March 12, 2013. http://www.washingtonpost.com/blogs/fact-checker/post/does-ObamaCare-have-1-trillion-in-tax-hikes-aimedat-the-middle-class/2013/03/11/1e685f4c-8a9b-11e2-8d72-dc76641cb8d4_blog.html25. Kathleen Sebelius interviewed on October 7, 2013, The Daily Show with JonStewart (Comedy Central). http://www.nytimes.com/2012/06/29/us/supremecourt-lets-health-law-largely-stand.html?pagewanted=all26. Harry Reid interviewed on July 28, 2012, C-Span 3. http://www.c-spanvideo.org/clip/334446727. “Obama: Mandate Is Not a Tax,” ABC News, September 20, 2009. http://abcnews.go.com/blogs/politics/2009/09/obama-mandate-is-not-a-tax/28. Press Release, “Baucus Admits ObamaCare Breaks Obama Tax Pledge,” Americansfor Tax Reform, March 23, 2010. http://www.atr.org/userfiles/032310pr_Baucus_Admits_$250k%281%29.pdf29. Tom Harkin speaking at a Senate hearing on health care, November 5, 2013.https://www.youtube.com/watch?feature=player_embedded&v=MP9sqhCZb3s30. Adam Liptak, “Supreme Court Upholds Health Care Law. 5-4, in Victoryfor Obama,” The New York Times, June 28, 2012. http://www.nytimes.com/2012/06/29/us/supreme-court-lets-health-law-largely-stand.html?pagewanted=all31. Press Release, “Full List of ObamaCare Tax Hikes: Listed by Size of Tax Hike,”Americans for Tax Reform, June 29, 2012. http://s3.amazonaws.com/atrfiles/files/files/ObamaCare%20tax%20hikes.pdf32. Sarah Masi, Jessica Banthin, Philip Ellis, Holly Harvey, and Jean Hearne, “TheBudget and Economic Outlook: 2014 to 2024 –Appendix B: Updated Estimates of theInsurance Coverage Provisions of the Affordable Care Act,” Congressional BudgetOffice, February 2013.10


HEALTH REFORMWILL REDUCEFAMILY HEALTHINSURANCEPREMIUMS BY$1,570-$2,240FOR THE SAMEBENEFITSSenator Kay Hagan(D-North Carolina)433. Office of SenatorKay Hagan, “HealthCare Facts: MiddleClass Families.” http://www.hagan.senate.gov/files/PPACA/Middle-Class.pdf.11


The Affordable Care Act was supposed to be just that—affordable. It’s right there in the name. The ability of the lawto reduce health insurance premiums and the cost of care wasone of its major selling points and a compelling argument in anation where health care costs have been consistently outpacinginflation and other expenses.“Everybody will have lower rates,”promised then-Speaker of the House Nancy Pelosi on Meet thePress in 2012. 34Ms. Pelosi is not the only one to make this promise. Then-Senator Ben Nelson (D-Nebraska) said in a press conferencethat the ObamaCare exchanges would lower costs. 35 Secretary ofHealth and Human Services Kathleen Sebelius publicly claimed,shortly after the passage of the ACA, that prices would godown, and Rep. Debbie Wasserman-Schultz (D-Florida) saidthat the ACA would “generally bring down the cost of healthcare coverage.” 36 37 Senator Jay Rockefeller (D-West Virginia)gushed:“What Americans got from theAffordable Care Act was a thoughtfullaw that brings us closer than everbefore to the goal of affordable healthcare for all, while simultaneously liftingfrom our economy the heavy burden ofrunaway health costs.” 38Americans were sensibly skeptical of these promises. The ACA,as written, did not appear to include any real mechanism forreducing costs. The requirement for companies to cover preexistingconditions would necessitate higher premiums, at leastfor some. Rather than permitting catastrophic coverage plansthat would only cover genuine emergencies, the lowest coverageplans permissible under the law included coverage for electiveand preventative procedures that would certainly result inhigher costs for consumers.When the ObamaCare website Healthcare.gov went live onOctober 1, 2013, its associated Facebook page began to fill withoutraged comments. Users complained of shockingly higherpremiums than were promised.Once a little time passed and data became available, a number ofindependent analysts started conducting rate analyses on healthinsurance plans before and after ObamaCare’s implementation,to see whether the reality lived up to the promises on which thelaw was sold to the American people.34. Nancy Pelosi, interviewed on July 1, 2012,Meet the Press (NBC). https://www.youtube.com/watch?v=QqONZAN_Us035. Ben Nelson, Press Conference, December, 2009.https://www.youtube.com/watch?v=8z98GH5hY4836. Kathleen Sebelius, Press Conference, 2010. https://www.youtube.com/watch?v=RWS0Hj06BBg37. Debbie Wasserman-Schultz, interviewed September,2009. Closing Bell (MSNBC), https://www.youtube.com/watch?v=yDTdEM92FeA38. Jay Rockefeller, “The Affordable Health Care ActWill Work,” Huffington Post, October 2, 2013. http://www.huffingtonpost.com/sen-jay-rockefeller/theaffordable-care-act-w_b_4031834.html12


The Wall Street Journal was the first out of the gate to take alook at the new health insurance premiums offered over thefederal exchanges.Across the country, the average premium for a27-year-old nonsmoker, regardless of gender,will start at $163 a month for the lowest-cost‘bronze’ plan; $203 for the ‘silver’ plan, whichprovides more benefits than bronze; and $240for the more-comprehensive ‘gold’ plan.In some states, these premiums will be higher still. The Journalcontrasts these rates with those of some of the plans availableto young and healthy people prior to the implementation of theACA.In Nashville, Tenn., a 27-year-old malenonsmoker could pay as little as $41 a monthnow for a bare-bones policy, but would pay$114 a month for the lowest-cost bronze optionin the new federal health exchanges. Likewise,the least-expensive bronze policy would riseto $195 a month in Philadelphia for that same27-year-old, from $73 today. In Cheyenne,Wyo., the lowest-cost option would be $271 amonth, up from $82 today. 39Supporters of the law claim that these less-expensive plans arenot as good as those available under the ACA, but shouldn’tconsumers be the ones to decide whether to purchase lowercost,lower-coverage plans if they feel that those mostappropriately meet their health care needs?The Society of Actuaries conducted a study that concludes:“The non-group cost per member per monthwill increase 32 percent under ACA, comparedto pre-ACA projections.” 40A study by the Heritage Foundation conducted a state-bystateanalysis of health insurance premiums and concluded thefollowing:Individuals in most states will end up spendingmore on the exchanges. It is true that in somestates, the experience could be the opposite.This is because those states had already overregulatedinsurance markets that led to sharplyhigher premiums through adverse selection, asis the case of New York. Many states, however,double or nearly triple premiums for youngadults. Arizona, Arkansas, Georgia, Kansas, andVermont see some of the largest increases inpremiums. 41An analysis of health insurance plans on offer in 2014 by theresearch firm Sector & Sovereign found broad increases indeductibles and premiums, with young people being the mostadversely affected. They found that a 21-year-old would haveto pay 81 percent higher premiums to maintain a plan with asimilar deductible. A 40-year-old would have to pay 29 percentmore, and a 64-year-old would have to pay 64 percent more. 42A comprehensive analysis by the Manhattan Institute foundthat “the average state will face underlying premium increasesof 41 percent. Men will face the steepest increases: 77, 37, and47 percent for 27-year-olds, 40-year-olds, and 64-year-olds,respectively. Women will also face increases, but to a lesserdegree: 18%, 28%, and 37% for 27-, 40-, and 64-year-olds.” Thestudy goes on to add “this is a best-case scenario,” assumingthat the ObamaCare exchanges begin to function as intended,resolving the access problems seen thus far. 43The promises of lower health insurance premiums werenot based on any objective measure, but instead were mereplatitudes designed to convince voters to buy into ObamaCare.Now that effects are actually observable, it is clear that mostpeople will actually be paying more for health insurance thanthey were before the ACA, and that this is especially true forthe young and healthy. If these individuals fail to enroll inObamaCare exchanges in the expected numbers, premiums willhave to rise still further to make up the difference.OBAMACARE MAYBE MANY THINGS,BUT AFFORDABLE ISNOT ONE OF THEM.39. Louise Radnofsky, “Prices Set for New Health careExchanges,” Wall Street Journal, September 25, 2013.http://online.wsj.com/news/articles/SB1000142405270230398390457909573113925130440. “Cost of the Future Newly Insured under theAffordable Care Act (ACA),” Society of Actuaries,March, 2013. http://cdn-files.soa.org/web/researchcost-aca-report.pdf41. Drew Gonshorowski, “How Will You Fare in theObamaCare Exchanges?” The Heritage Foundation,October 16, 2013. http://www.heritage.org/research/reports/2013/10/enrollment-in-ObamaCare-exchanges-how-will-your-health-insurance-fare42. Matthew Herper, “ObamaCare Raises HealthInsurance Premiums, Especially for the Young,”Forbes, December 5, 2013. http://www.forbes.com/sites/matthewherper/2013/12/05/ObamaCare-raiseshealth-insurance-costs-especially-for-the-young/43. Avik Roy, “49-State Analysis: ObamaCare toIncrease Individual-Market Premiums by Averageof 41%,” Manhattan Institute for Policy Research,November 4, 2013. http://www.manhattan-institute.org/html/miarticle.htm?id=9768#.UrMlsLQUZc513


THEHEALTHCARE BILLIS A JOBSBILLNancy Pelosi544. Nancy Pelosiinterviewed on February28, 2010, ThisWeek (ABC). http://abcnews.go.com/ThisWeek/weektranscript-housespeaker-nancypelosi-sen-lamar/story?id=9955285&page=414


In 2010, in an interview with ABC’s Elizabeth Vargas, then-Speaker of the House Nancy Pelosi hyped the Affordable CareAct with the claim that the health care law would create a totalof 4 million jobs over its lifetime—400,000 of which would becreated immediately. 45The Speaker did not reveal her source for this number,and a fair few eyebrows were raised in skepticism of sucha bold assertion. It was hard to see how a law that raisestaxes, increases costs for employers, and drives up insurancepremiums could be a boon for job growth.In 2011, the Director of the Congressional Budget Office (CBO),Doug Elmendorf testified before the House Budget Committeethat the Affordable Care Act, over the following decade, wasprojected to decrease labor force participation by 0.5 percent,a total loss of 800,000 jobs and a direct contradiction of Ms.Pelosi’s promise.Prior to the implementation of the law, such claims wereimpossible to verify. Now that the Affordable Care Act is infull effect, actual evidence against Ms. Pelosi’s statement can beevaluated.The employer mandate section of the Affordable Care Actrequires all companies with more than 50 full-time employeesto provide workers with health insurance coverage. It seemsreasonable, then, to expect that companies on the margin willeither reduce employment to fewer than 50 workers, or transfersome current full-time workers into part-time positions toavoid the costs of the mandate.By the end of 2013, nearly 400 businesses had announced plansto reduce the number of hours worked by their low-wageemployees as a response to the law. 47A 2012 study by the non-partisan American Action Forum,using a state-by-state analysis, found that the regulatory costsassociated with the Affordable Care Act had already decreasedemployment by 18,000 jobs at minimum. 48 These losses are notlikely to go away as the law ages.Witness the following exchange from the hearing 46[I]t’s been argued… that the newhealth care law willcreate jobs andincrease labor forceparticipation.But if I recall fromyour analysis,it was quite theopposite. Is thatnot the case?”Yes.House Budget Committee Chairman, Paul RyanCBO Director Doug Elmendorf45. Nancy Pelosi interviewed on February 28, 2010, This Week (ABC). http://abcnews.go.com/ThisWeek/week-transcript-house-speakernancy-pelosi-sen-lamar/story?id=9955285&page=446. Doug Elmendorf testifying before the House Budget Committee, February 10, 2011. http://www.gpo.gov/fdsys/pkg/CHRG-112hhrg64727/pdf/CHRG-112hhrg64727.pdf47. Jed Graham, “ObamaCare Employer Mandate: A List of Cuts to Work Hours, Jobs,” Investor’s Business Daily, December 19, 2013.http://news.investors.com/politics-ObamaCare/121913-669013-ObamaCare-employer-mandate-a-list-of-cuts-to-work-hours-jobs.htm48. Sam Batkins, “The State by State Impact of ACA Regulations,” American Action Forum, October 2012. http://americanactionforum.org/sites/default/files/ACA_regs.pdf15


COSTS & LOSSESJob Losses Regulatory Costs816$1 Billion2,917$3.4 Billion1,292$1.8 Billion1,383$1.7 BillionTOTALS$24.4 Billion in costs18,098 lost jobs978$1.6 BillionThe health care industry appears to beamong the hardest hit, as new regulationsand restrictions affect their costs. USAToday reported in October 2013 thathealth care providers were laying offmore workers than any other industry,with the losses attributed to hospitalregulations contained in the ACA. 49In addition to the employer mandate’seffect of reducing employment, otherprovisions in the law that increase thecosts of doing business, such as the taxon medical device manufacturers, riskmoving jobs from the United States toother countries where the regulatoryenvironment is more favorable.KemThe 2.3 percent medical device taxincreases the costs of domestic producers,and is expected to raise $29 billion inrevenues over the next ten years. 50 A 2012survey conducted by tax and advisorycompany KPMG found that 13 percentof medical device manufacturers wereconsidering cost savings in the form ofworker reductions in response to the tax,and an industry study by the ManhattanInstitute found that the impact could be as51 52great as 43,000 jobs moved overseas.49. Paul Davidson and Barbara Hansen, “A Job Engine Sputters as Hospitals CutStaff,” USA Today, October 13, 2013. http://www.usatoday.com/story/money/business/2013/10/13/hospital-job-cuts/2947929/50. “H.R. 436, The Protect Medical Innovation Act of 2012: Cost Estimate,” CongressionalBudget Office, June 4, 2012. http://www.cbo.gov/publication/4329051. Ichiro Kawasaki and Laura Sheridan Powers, “Medical Device Execs Say NewExcise Tax Will Hit Their Company Bottom Lines Hard,” KPMG LLP, April 18,2012. http://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Press-Releases/Pages/KPMG-Survey-Medical-Device-Execs-Say-New-Excise-Tax-Will-Hit-Their-Company-Bottom-Lines-Hard.aspx52. Diana Furchtgott-Roth and Harold Furchtgott-Roth, “Employment Effects ofthe New Excise Tax on the Medical Device Industry,” Manhattan Institute forHawkins, the president of majormedical device manufacturer Cook GroupInc., says of the costs of complying withthe medical device tax:That’s a plant a year thatwe’re not able to reinvest in.Or it’s a large clinical studythat we can’t invest in. Or it’smaybe 10 or 12 or 15 newproduct innovations that wecan’t reinvest in. If we can’tbuild the plants, then wecan’t hire the people. 53CBO now estimates that the president’shealth care law will drive 2.5 millionpeople out of the workforce by 2024—nearly triple the agency’s prediction from2010. 54 Democrats spin this governmentinducedunemployment as good news:Now more Americans, liberated from ajob, will be “free to follow their passion.”Nancy Pelosi argues:What we see is that peopleare leaving their jobs becausePolicy Research, September 2011. http://www.chi.org/uploadedFiles/Industry_at_a_glance/090711EmploymentEffectofTaxonMedicalDeviceIndustryFINAL.pdf53. Tony Pugh, “Medical Device Makers Push Congress to Repeal ExciseTax,” McLatchy Newspapers, September 22, 2011. http://www.mcclatchydc.com/2011/09/22/124940/medical-device-makers-push-congress.html54. Congressional Budget Office, “The Budget and Economic Outlook: 2014 to2024,” February 2014. http://cbo.gov/publication/4501055. Dan Friedman, “Pelosi: CBO Report Shows ObamaCare Gives AmericansFreedom to ‘Follow Their Passion,” New York Daily News, February 4, 2014,http://www.nydailynews.com/blogs/dc/2014/02/pelosi-cbo-report-shows-ObamaCare-gives-americans-freedom-to-follow-their-passionthey are no longer joblocked.… They are followingtheir aspirations to be awriter, to be self-employed,to start a business. This isthe entrepreneurial piece.So it’s not going to cost jobs.It’s going to shift how peoplemake a living and reach theiraspirations. … [T]his was oneof the goals, to give peoplelife, a healthy life, liberty topursue their happiness. Andthat liberty is to not be joblocked,but to follow theirpassion. 55The bottom line is two and a half millionjobs will be destroyed by ObamaCare.Clearly, the ACA is not the job-creationmachine Speaker Pelosi promised it wouldbe, and still amazingly believes it to be.The 4 million new jobsshe promised appear tohave been nothing morethan a gross fabrication.16


THIS LAW ISALREADY MAKINGA DIFFERENCE FORMILLIONS OF YOUNGPEOPLE, AND IT’SABOUT TO HELPMILLIONS MOREPresident Barack Obama656 “President ObamaSpeaks at the White HouseYouth Summit”, WhiteHouse, Dec. 04, 2013.http://www.whitehouse.gov/photos-and-video/video/2013/12/04/president-obama-speakswhite-house-youth-summit#transcript17


Starting this year,everyone is forcedto buy governmentapprovedhealthinsurance or face agovernment fine.Never before has the federal government forcedAmericans to purchase a private product, whetherthey want to or not. And this mandate is targetedprimarily at one group: adults in their twenties andthirties.The success of ObamaCare depends on healthypeople signing up for the ObamaCare exchanges.This is precisely why the Obama administrationhas launched multiple campaigns targeting youngpeople, who are of course among the healthiestAmericans. The administration’s goal is to enroll2.7 million 18-to 35-year-olds in the exchangesby the end of March 2014. 57 TV and webadvertisements encourage young people to signup for “affordable” health insurance. But there isnothing affordable about ObamaCare plans.In fact, many young people are betteroff not signing up for the expensiveObamaCare exchanges. Studies havefound that most young single peoplewith no kids will save at least $500by not opting into the exchangesand paying the government fineinstead. 58Nearly everyone is worse off under the law, butyoung people have been hardest hit. Young peopleare generally healthier and visit a doctor less thanolder people. The health care costs of 64-yearoldsare typically five times higher than those of21-year-olds. 59 Despite this difference in cost,based on age, ObamaCare prohibits companiesfrom charging older people more than youngpeople.No wonder young people havebeen hesitant to sign up for theexchanges—they will be the onespaying for the older people in thesystem.So far, exchange enrollments are skewed towardolder, and presumably sicker, folks. According toJanuary 2014 enrollment report released by theObama administration, only about one in fourObamaCare enrollees are young adults—that’sbelow their 40 percent target. 60Young people who rarely visit a doctor will seetheir health insurance costs skyrocket. 61 Manyyoung people would likely prefer to sign up forinexpensive catastrophic insurance just in casethey are hit by an unexpected emergency. But abasic and cheap insurance plan is no longer anoption. Due to the mandates in ObamaCare, youngpeople have less choice over their insurance plans.The law forces all insurance plans to cover a widevariety of health procedures and services. This57. Lewis Krauskopf, “Early ObamaCare numbersshow older Americans more apt to sign up”, Reuters,Nov. 20, 2013. http://www.nbcnews.com/health/early-ObamaCare-numbers-show-older-americansmore-apt-sign-2D1162410958. David Hogberg, “Why The “Young Invincibles”Won’t Participate In The ObamaCare Exchangesand Why It Matters”, National Center for PublicPolicy Research, http://www.nationalcenter.org/NPA652.html59. Lewis Krauskopf, “ObamaCare Will Cost MuchMore If Young Americans Don’t Start SigningUp”, Business Insider, Jan. 12, 2014. http://www.businessinsider.com/ObamaCare-will-cost-much-more-if-young-americans-dont-start-signing-up-2014-1#ixzz2qERbNnPs60. Sarah Kliff, “One in four ObamaCare enrollees areyoung adults. That’s below the target,” WashingtonExaminer, Jan. 13, 2014. http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/13/one-in-four-ObamaCare-enrollees-are-young-adults-thats-belowthe-target/61. “The Price of ObamaCare’s Broken Promises”,House Committee on Energy and Commerce, March2013. http://energycommerce.house.gov/sites/republicans.energycommerce.house.gov/files/analysis/20130305PremiumReport.pdf18


ultimately drives up the price of insurance andmakes it difficult to afford.ObamaCare will directly increasehealth insurance premiums by 41percent, on average. 62 Eighty percentof 20-somethings who earn morethan about $18,500 a year will seetheir health insurance costs go up asa result of ObamaCare. In California,the cost of a basic plan for a 25-yearoldmale will jump as much as 92percent, in Ohio as much as 700percent. 63Young, entry level employees are most likely tolose their pre-existing coverage under the law.ObamaCare actually encourages employers to stopoffering health insurance. Estimates are that asmany as 80 million cancellations of existing planscould be on their way, as insurance companiestransition the group market to higher cost plansmandated by the law. 64ObamaCare is also responsible for cutting youngpeople’s weekly working hours. ObamaCarepunishes employers with over 50 “full-time”employees. A full-time worker is defined assomeone working 30 or more hours a week. Over360 companies have already cut their employeeshours to 29 hours a week to avoid the ObamaCarefines. 65 Most of these people are likely young, lowwageemployees who may now need a second jobto pay the rent.Almost 6 million young Americans are out of workand not in school. 66 Since ObamaCare is extremelycomplicated, many employers are getting ridof entry level positions and avoiding new hiresbecause they have no idea how the law will beenforced. A Gallup poll shows that 41 percent ofsmall businesses have frozen hiring and 19 percenthave made layoffs because of ObamaCare. 67On top of all this, ObamaCare imposes 20 newtaxes. These includes new taxes on medical devices,workplace health benefits, sales on houses, and apenalty for purchasing over-the-counter productswith Health Savings Accounts (HSAs). The tax onmedical devices will be passed onto patients in theform of higher health care costs.Desperate to attract young people, the Obamaadministration has also been pandering to youngwomen by saying that contraceptives are “free”under ObamaCare. The word “free” is misleading.The law requires all insurance plans to cover allFDA-approved brand name contraceptives andprocedures. There may be no co-pays at the doctoroffice’s counter, but everyone will have to payhigher insurance premiums.ObamaCare advocates have also been touting that“adult children” (actual term used in the legislation)are able to stay on their parents’ insurance untilthey are 26 years old. This may sound great atfirst, but this policy has unintended consequences.The under-26 mandate has increased all insuredfamilies’ insurance premiums by $151 to $452 peryear. 68 It’s common sense: when the governmentforces insurers to provide more coverage to morepeople, costs must go up. There’s no such thing asa free lunch.Young people are going to be stuck withObamaCare’s gigantic bill. The national debt isalready at a record high at over $17 trillion. Thatmountain of debt must be paid back by currentand future generations. The law will cost at least$2 trillion alone and add $6.2 trillion to the longterm deficit. 69 Young adults, who already carryhistorically high levels of student-loan debt, willbe on the hook to pay for the massive ObamaCaredebt as well.In brief, ObamaCare is not in the bestinterest of most young people. Itdrives up their premiums, imperils theirworkplace coverage, reduces theiraccess to full-time jobs, hits them with20 new taxes, and increases the nationaldebt burden hanging over their dreams.62. Avik Roy, “49-State Analysis: ObamaCare toIncrease Individual-Market Premiums by Average of41%”, Forbes, Nov. 4, 2013, http://www.forbes.com/sites/theapothecary/2013/11/04/49-state-analysis-ObamaCare-to-increase-individual-market-premiums-by-avg-of-41-subsidies-flow-to-elderly/63. Dean Clancy, “Top 10 Ways ObamaCare Sticksit To Young Adults”, FreedomWorks, July 16, 2013,http://ObamaCarewr.fwsites.org/top-10-ways-ObamaCare-sticks-it-to-young-adults/64. Jim Angle. “Almost 80 million with employerhealth care plans could have coverage canceled,experts predict”, Fox News, November 26, 2013.65. Jed Graham, “ObamaCare Employer Mandate: AList Of Cuts To Work Hours, Jobs”, Investor’s BusinessDaily, Dec. 19, 2013, http://news.investors.com/politics-ObamaCare/121913-669013-ObamaCareemployer-mandate-a-list-of-cuts-to-work-hours-jobs.htm#ixzz2qEg4rb4966. “Almost 6 million young Americans out of school,work, study says”, Fox News, Oct. 21, 2013, http://www.foxnews.com/us/2013/10/21/almost-6-millionyoung-americans-out-school-and-work-study-says/67. Noah Rothman, “Poll: 41% Of Small BusinessesFroze Hiring Due To ObamaCare, 19% Have LaidOff Employees”, Mediaite, June 21, 2013, http://www.mediaite.com/online/poll-41-of-small-businessesfroze-hiring-due-to-ObamaCare-19-have-laid-offemployees/68. Jim DeMint, “Health Insurance Mandates to CoverDependent Children”, Joint Economic Committee,June 2012. http://www.jec.senate.gov/republicans/public/?a=Files.Serve&File_id=7df6d025-0bcf-4a9aa60c-fd924f3ec96869. Andrew Stiles, “GAO Report: ObamaCare Adds$6.2 Trillion to Long-Term Deficit”, National Review,February 26, 2013, http://www.nationalreview.com/corner/341589/gao-report-ObamaCare-adds-62-trillion-long-term-deficit-andrew-stiles19


WE PASSED APRIVATE SECTORMARKET-BASEDINSURANCECHOICE FOR ALLAMERICANSSen. Mary Landrieu(D-Louisiana)770. Congressional RecordVolume 159, Number132 (Monday, September30, 2013), Senate, PagesS7042-S7047. http://www.gpo.gov/fdsys/pkg/CREC-2013-09-30/html/CREC-2013-09-30-pt1-PgS7042.htm20


With ObamaCare, tens of millionsof Americans are getting a firsttaste of European-style, top-down,government-run “single payer” healthcare. From limited access to advancedtreatment options to exorbitantwait lists for even the most basicprocedures, what people in othercountries endure is now on thehorizon for the United States. Andthere is no need to even look overseasto find cause for worry. Existingforays into government-run healthcare — Medicare and Medicaid —provide their own troubling glimpsesof things to come.Medicare and Medicaid are singlepayersystems with the goal ofproviding universal coverage forspecific populations: the elderly andthe disabled (in the case of Medicare)and the poor and welfare-dependent(in the case of Medicaid). Theseprograms have been around since1965 and, despite being universallyWait times for specialistappointments (2010)CountryLess than4 weeksfunded by all taxpayers, are financiallyunsustainable, with trillions of dollarsin unfunded obligations. 71 And yetleading Democrats are demandingmore.Senate Majority Leader Harry Reid,Department of Health and HumanServices Secretary Kathleen Sebelius,and President Barack Obama himselfhave all voiced their support forinstalling a national single-payersystem to replace the health caremarket. Yet with the realities ofEuropean socialized medicineavailable at a keystroke, passingany sort of forthright governmenttakeover of the health care system inthe United States was not politicallyfeasible. Even rumors of ObamaCarebeing such a plan were enough todrive millions of people to the streetsin protest prior to the legislation’sintroduction in Congress.And no wonder. Europeanpatients are taking it on the chin2 monthsor moreAustralia 54.0% 28.0%Canada 41.0% 41.0%France 53.0% 28.0%Germany 83.0% 7.0%Netherlands 70.0% 16.0%New Zealand 61.0% 22.0%Norway 50.0% 34.0%Sweden 45.0% 31.0%Switzerland 82.0% 5.0%UnitedKingdomUnitedStates72.0 19.0%80.0% 9.0%Wait times for ElectiveSurgery (2010)Countryas governments limit access tohealth care, due to budget cuts andconstraints put in place to combatdire fiscal situations.A report released late last year inthe United Kingdom, a nationwith almost complete governmentcontrol of health care paymentsand treatment, found that there aremore patients on waiting lists forcare than at any other time over thelast half-decade: nearly 3 millionpeople in total. 72 Similar problemsdon’t occur here in the United Stateswhere, despite our comparable, ifnot worse, fiscal problems, healthcare payments and administrationare mostly detached from the bloatedgovernment. Despite the system’sflaws, the United States can be proudthat it continuously outperforms itsWestern counterparts when it comesto outcomes like the ability to see aspecialist or have elective surgerywithin a reasonable amount of time:Less than1 month4 monthsor moreAustralia 53.0% 18.0%Canada 35.0% 25.0%France 46.0% 7.0%Germany 78.0% 0.0%Netherlands 59.0% 5.0%New Zealand 54.0% 8.0%Norway 44.0% 21.0%Sweden 34.0% 22.0%Switzerland 55.0% 7.0%UnitedKingdomUnitedStates59.0 21.0%68.0% 7.0%71. Veronique de Rugy,“The US Debt in Perspective,”The MercatusCenter, July 16, 2013.http://mercatus.org/publication/us-debt-perspective72. Nick Collins,“NHS waiting lists arelongest in five years,”The Telegraph, Aug.15, 2013. http://www.telegraph.co.uk/health/healthnews/10246145/NHS-waiting-lists-arelongest-in-five-years.htmlSource for Charts: 2010 Commonwealth FundInternational Health Policy Survey in ElevenCountries.http://www.commonwealthfund.org/Topics/International-Health-Policy/Table.aspx?ind=424http://www.commonwealthfund.org/Topics/International-Health-Policy/Table.aspx?ind=423Americans know their health system had problems, butthey weren’t looking to throw out the good with the bad.That’s why ObamaCare had to be sold to the Americanpeople as primarily a “market-based” approach, and eventhen had to be jammed through Congress on a party-linebasis with lies, bribes, and parliamentary tricks. Afterfour years and a presidential election, the law has provednot to be the “market-based” reform its authors claimed,confirming the worst fears of millions.The true nature of ObamaCare, as the first leap in thenationalization of all Americans’ health care coverage, isrevealed by the way it interacts with the existing federalhealth care programs, Medicare and Medicaid.21


SINGLE-PAYER CASE STUDY NO. 1The Medicaid ExpansionMedicaid is a federal entitlementprogram that directly finances thehealth care expenses of those thatmeet its eligibility requirementsplus any additional standards setby the various states. It is fundedjointly by federal and state taxpayers,and jointly managed by Congressand state legislatures. (In practice,Congress tends to call the shots.) Justlike original Medicare, it is essentiallya single-payer system.Medicaid coverage is far inferiorto private insurance. To reducecosts, most states have pushedtheir Medicaid populations intoHealth Maintenance Organization(HMOs), and have legislatively cutreimbursements for doctors andhospitals to the bone. As a result,Medicaid is now the worst insuranceproduct around. For example,Medicaid only pays about 61 percentof what Medicare pays, nationally,for outpatient physician services. 73(And Medicare only pays about 85percent of what private insurancepays.) Medicaid is so stingy aboutreimbursing doctors that nationallyone-third of doctors are unwillingto see new Medicaid patients. 74When an insurance companyunderpays doctors and hospitals,the result is reduced access to care.Patients enrolled in a stingy insuranceplan get moved to the back of theline; their care is rationed by thesilent tax of longer wait times andpostponed appointments.Medicare currently underpaysdoctors and hospitals by about15 percent, compared to privateinsurance companies. Thanks toObamaCare, Medicare will beMedicaid patients have worse accessand health outcomes than privatelyinsured patients. 75Instead of reforming the troubledand inferior Medicaid program,ObamaCare greatly expanded it.The Affordable Care Act expandedthe national eligibility standards forMedicaid to include virtually all lowincome,childless adults, and widenedthe income eligibility windowsfor previously qualified groups.According to the CongressionalResearch Service, this set of changesto Medicaid “represents the singlelargest eligibility expansion since thestart of the program in 1965.” 76The ObamaCare Medicaid expansionis considered by the proponentsof ObamaCare to be a second-tierfeature of the massive new law—something they don’t tout. Yet,with new Medicaid and insuranceexchange enrollment figures fromaround the country beginningto be pooled and released by theDepartment of Health and HumanServices, the trend so far indicatesthat private exchange-based plans aretaking a back seat to the expansion ofslashing payments much more deeply,and seniors will get hurt.In 2010, the Medicare agency’sChief Actuary, Richard Foster,calculated that under ObamaCareMedicare’s reimbursement ratesto hospitals and physicians will fallso steeply that they will actually belower than Medicaid’s by the latterpart of this decade. Medicaid’s ratesare notoriously low—the lowest inthe country, in fact. That’s why asignificant share of doctors refuse toold-fashioned Medicaid.Available data for the first threemonths of open enrollment on theexchanges shows that these muchtoutedentry-points into ObamaCare(made famous by Healthcare.gov) have enrolled 2.15 millionpeople in private insurance plans. 77Medicaid enrollment over thissame period totals more than 6.3million, nearly 1.6 million of themenrolled automatically by their givenexchange. 78 In other words, sincethe implementation of ObamaCarebegan last October, for every personenrolled in private insurance, aroundthree more have been shoved intosingle-payer Medicaid.With roughly three-times asmany people being put into thegovernment Medicaid systemthan are being enrolled in privateinsurance, it is impossible to arguethat the Affordable Care Act’sprimary role is to connect individualsto private health plans. The truth isthe opposite: ObamaCare’s Medicaidexpansion is simply an expansion ofsingle-payer, government-run healthcare.SINGLE-PAYER CASE STUDY NO. 2Shrinking Medicare Seniors’ Access to Caresee Medicaid patients. Additionally,Foster predicted that, thanks toObamaCare’s slashing of Medicarereimbursements, 15 percent ofAmerican hospitals will go out of79 80business.To be sure, Medicare needs to bereformed so that it costs taxpayersless. But ObamaCare’s way of cuttingMedicare—rationing by way ofreimbursement cuts—is the wrongway to do it. Instead, patients shouldbe given more control of their care.73. Peter Ubel, “WhyMany Doctors AreReluctant to SeeMedicaid Patients,”Forbes.com, November7, 2013. http://www.forbes.com/sites/peterubel/2013/11/07/why-many-physicians-are-reluctant-to-see-medicaid-patients/74. Phil Galewitz,“Study: Nearly A ThirdOf Doctors Won’t SeeNew Medicaid Patients,”Kaiser Health News,august 6, 2012, http://www.kaiserhealthnews.org/stories/2012/august/06/third-ofmedicaid-doctors-sayno-new-patients.aspx75. Kevin Dayaratna,“Studies Show:Medicaid PatientsHave Worse Accessand Outcomes thanthe Privately Insured,”Heritage.org, November7, 2012. http://www.heritage.org/research/reports/2012/11/studies-show-medicaidpatients-have-worse-access-and-outcomes-thanthe-privately-insured76. Julie Stone, EvelyneP. Baumrucker, CliffBinder, Elicia J. Herz,Elayne J. Heisler &Alexandra J. Rothenburger,Medicaid andthe State Children’sHealth Insurance Program(CHIP) Provisionsin PPACA: Summaryand Timeline,” CRSReport for Congress,August 19, 2010. http://assets.opencrs.com/rpts/R41210_20100819.pdf77. “Health InsuranceMarketplace: JanuaryEnrollment Report,”ASPE Issue Brief,January 13, 2014.78. Center For Medicareand Medicaid Services,“Medicaid & CHIP:December Monthly Applicationsand EligibilityDeterminations Report,”Department of Healthand Human Services,January 22, 2014. http://www.medicaid.gov/AffordableCareAct/Medicaid-Moving-Forward-2014/Downloads/December-2013-Enrollment-Report.pdf79. Avik Roy, “The NextPhysician Access Problem:Medicare,” Forbes.com, March 9, 2011.http://www.forbes.com/sites/aroy/2011/03/09/the-next-physician-access-problem-medicare/80. Richard Foster,Center for Medicareand Medicaid Services(CMS), “Memorandum:Projected MedicareExpenditures under anIllustrative Scenariowith AlternativePayment Updates toMedicare Providers,”https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/downloads/2010TRAlternativeScenario.pdf.22


SINGLE-PAYER CASE STUDY NO. 3Shrinking Medicare Seniors’ ChoicesBy now, most are familiar withthe ObamaCare exchanges, wellpublicizedby the firestorm ofglitches that plagued their launchlate last year. In theory, theseexchanges operate as artificial“marketplaces” where customers shopfor government-approved privateinsurance plans available in their areaand, in many cases, receive taxpayersubsidies to help pay for them.While hailed as a new andrevolutionary approach togovernment facilitation of healthcare, this practice has already existedon a smaller level since 1997, wellbefore Barack Obama became ahousehold name. Medicare Part C,also known as Medicare Advantage,works in largely the same way thatthe ObamaCare exchanges do.Like ObamaCare, Medicare Part Cis a “premium support” program.Here’s how it works. Patients pickfrom a set of government approvedplans offered by private insurancecompanies. In order to determinewhich private insurers get toparticipate in this “market,” thegovernment first sets a benchmarkfor how much it is willing to pay perpatient in a given area, varying theamount based on the age and sex.Private insurance companies thensubmit bids to the government forthe privilege of competing to providethe entire Medicare benefit package(Parts A and B) to enrollees in thatarea. To promote competition,the government takes a portionof the difference between the bidand the benchmark payment andrefunds it to enrollees in the formof lower premiums, reduced costsharing,or additional benefits notcovered by original (single-payer)Medicare. Enrollees are free tochoose among the most affordableand comprehensive coverage plansavailable in their area. The ideais that, while still a governmentprogram, consumers have somesemblance of choice and can enjoythe fruits of regulated competition.About one in four Medicarebeneficiaries has opted into Part C,because of the greater choices andextra benefits if offers compared tooriginal (single-payer) Medicare.The problem is that Democrats donot like Medicare Part C, because itshines a light on the flaws of original(single-payer) Medicare, with itsmassive bureaucracy, thousands ofarbitrary price controls, and tens ofthousands of pages of regulationsand red tape. So in the AffordableCare Act, they altered the MedicarePart C payment formula to drivepatients out of the choice-based PartC program and back into single-payerMedicare. For the top 25 percent ofcounties where total Medicare usageand costs are the highest, ObamaCarelowers the Part C benchmarks to 95percent of single-payer Medicare. 81In essence, this means that thegovernment isn’t willing to pay thesame amount for a patient using thechoice-based Part C system as for apatient using government-dictated,single-payer Medicare. In addition,ObamaCare slashes the refunds usedto lower costs and expand benefitsavailable to enrollees. Prior toObamaCare, companies could recoup75 percent of the difference betweentheir bid and the governmentbenchmark. Now, refund paymentsare tied to an ad hoc rating systemwhere the majority of companieswill only receive 50 percent of thedifference, directly increasing costsand reducing benefits to patients. 82ObamaCare was sold as promotingpatient choice and competition,but these changes to Medicare PartC reveal an intention hostile tochoice. ObamaCare intentionallyputs government’s thumb on thescale against choice for seniors. Whyshould we believe it will promotechoice for non-seniors?81. “Explaining HealthReform: Key Changes inthe Medicare AdvantageProgram”, The Henry J.Kaiser Family Foundation,May 2010. http://kaiserfamilyfoundation.files.wordpress.com/2013/01/8071.pdf82. Ibid.23


OVER THERE,OVER HEREThe concern all along was that ObamaCare was first and foremost a majorstep in nationalizing health care coverage for millions of Americans—anoutcome dreaded by anyone familiar with the situation in many Europeancountries. Thus, the law was sold just as Senator Landrieu described it: “aprivate sector market-based insurance choice for all Americans.”Hardly. With ObamaCare fully implemented, it’s clearer every day just howoff the mark the law’s champions were—and, in spite of an entire ocean, howmuch closer Europe really is. Changes to Medicare and Medicaid, heretoforeovershadowed in the news by the law’s allegedly “market-based” reforms, arein fact driving millions of Americans away from private coverage based inconsumer choice and competition into inferior European-style, governmentrunhealth care mills.24


596462596458696454505054 56383134353934Politiciansmay lie, butnumbersdon’t.And the numbers are staggering: nearly 5 millioninsurance policy cancellations and climbing,premiums increasing by double and triple digitpercentages, dozens of new taxes, and almost $1.5trillion in new debt.Together they speak the unimpeachable truth thatObamaCare and its most prominent supportershave completely and utterly failed the Americanpeople. However, as telling as all of theseenrollment, employment, and other economicstatistics are, perhaps the greatest indicator of theAffordable Care Act’s legacy isn’t at all what thepoliticians or the numbers are saying. Instead, it’swhat the American people are saying.38For decades, we the people have been demandingour leaders act to address the undeniable issueswith the healthcare system. President Obamaand his allies in Congress heard this call andinterpreted it in a way that allowed them to expandthe size and scope of government’s influence overthe healthcare industry and our lives in general.Yet in the wake of the passage, implementation,and ongoing collapse of ObamaCare, a seismicshift has occurred in America. For the first timein recent memory, a vast and growing majorityof Americans have begun to reject the idea thatgovernment has a role in the administration andprocurement of our healthcare.We cannot ignore the issues of access andaffordability that continue to plague the healthcareindustry, but we also cannot ignore the fact thatgovernment interference has only exacerbatedthe problem, not alleviated it. ObamaCare cannotbe allowed to continue to crumble and take moreAmericans’ healthcare, paychecks, and jobs with it.This year, this moment of truth for the AffordableCare Act, must be the year Americans act and electleaders that are not only committed to repealingObamaCare, but are also willing to fight for thepatient-centered, not government-dominated, carethe people need.The story of ObamaCare has been written,but its end rests with the American people.283341474644 422000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013ROLE OF FEDERAL GOV’T IN ENSURING AMERICANS HAVEHEALTHCARE COVERAGEDo you think it is the responsibility of the federal government to make sure all Americans havehealthcare coverage, or is that not the responsibility of the federal government?25% Yes, government responsibility% No, not government responsibility


OBAMACAREIS AN AMAZINGSUCCESS STORYSO FARSen. Mark Pryor(D-Arkansas)Skot Covert, “MarkPryor: a foe ofyoung Americans,”The Daily Caller,September 12, 2013.http://dailycaller.com/2013/09/12/mark-pryor-a-foeof-young-americans/26


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