The Latest Obamacare Horror Story

Tuesday, October 29th, 2013 and is filed under Blog, Issues, Obamacare

Last week, we asked for your personal Obamacare horror stories, as more and more middle class families are forced to surrender their dignity and grovel before government for their health insurance.  Here is the latest from Chris.  You can email me your story at daniel@madisonproject.com.

My wife and I have a combined household income of $100k.

My wife works as a nurse and I work for a small business that has never had great medical coverage so we have always used her insurance.

Pre obamacare her employee pay portion of the insurance coverage for the family was $4255/yr.  This was a $750 deductible and $25/copays

Unfortunately, she worked in a regional clinic at the time and many doctors in her clinic decided to retire explicitly naming obamacare as their reason for leaving their medical practices.  The clinic replaced the CEO and began making cuts of the nursing staff.  Seeing the writing on the wall we decided it would be a good idea for her to find other employment.

She went to work for a home health company and not a month after she started the company announced that they would no longer be offering health insurance to nurses of her status and directed us to the exchange.  I won’t go through the ordeal we have gone through with the exchange, suffice it to say that my experience mirrors the account that was recently posted on Redstate.com from Patricia in North Carolina with the exception that I never tried to call the help line.  I am certain that I will not get any subsidies, so I am not terribly motivated to try to work through all the bugs.

So now we are left with my employer sponsored coverage.  Last year the medical coverage through my employer was ~$14,000 with a $1,500 deductible per person

This year, my current coverage costs us $10,563/yr with a $3000 deductible on all of us (5 children) and this insurance went in to affect June of 2013 so is not even subject to much of Obamacare’s regulation.  I shudder to think what it will be when it gets renewed next year.

Obamacare didn’t just cause our health insurance costs to go up, it cost my wife a job.

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Can We at Least End Fourth-Party Payer in Healthcare?

Wednesday, October 23rd, 2013 and is filed under Blog, Issues, Obamacare

Like every other major federal intervention into the private economy, Obamacare was foisted upon us under the guise of solving a crisis.  In this case, they proposed a complete government takeover of healthcare for all Americans – all for the supposed goal of covering those who are uninsured.  Never mind that even after Obamacare is implemented and destroys the market for those who are already insured there will still be at least 30 million uninsured.

But like most government interventions, this problem has been engendered by previous government intrusions into healthcare.  The federal government’s officious involvement in the insurance market is the pre-existing condition to most of the cost issues associated with healthcare.  While nothing short of utopia will ever offer full quality health insurance to every individual in the country, the government-induced market distortions have expanded and magnified the problem for those who are uninsured.

For this piece I’d like to focus on the man-made problem of employer-based health insurance.  Who on earth thinks it’s a good idea for access to insurance to be tied to employment?  It’s bad enough that government interventions over the years has encouraged a market where a third party; namely, an insurance company, is responsible for primary payment of all healthcare fees, not just catastrophic or large-scale health costs.  We are stuck with a fourth-party payer system in which employers pay for that insurance.

In 1942, Congress passed the Stabilization Act, which instituted wage controls in the workforce.  Like every other deleterious government intervention, the wage controls led to unintended consequences.  In order to compete in the labor market, employers began to look for other means of compensation to attract talent and reward productive employees.  This gave rise to the tax exemption for employer-provided health insurance officially created by a 1954 IRS ruling. Concurrently, labor unions began engaging in collective bargaining for fringe benefits in addition to wages.

Consequently, over the following decade it became standard for employers to offer health insurance as part of an employee’s compensation package.  This in turn distorted the market and tilted the playing field away from the individual. It also dramatically spiked the cost of health insurance by over-utilizing health coverage and generating artificially increased demand.  This system also shielded consumers from the real cost of the coverage.  Hence, we are now stuck with a situation where those who don’t enjoy employer-provided coverage are holding the bag of higher costs – all brought to you by government’s infringement on the free market.

Now, Obamacare has exacerbated that problem and has actually punished those who buy private insurance – the very people who help lower the cost of healthcare.  As someone who doesn’t enjoy tax-exempt employer-provided insurance, I purchased a private plan for my family.  Given that we were using our own money, we were cost conscience and purchased the cheapest plan that suited our needs.  Our premium was $440 a month with a $5,000 deductible and $10,000 cap on out-of-pocket costs.  But all primary care visits and generic drug prescriptions were completely covered, and visits to a specialist had a $40 co-pay.  Everything we typically needed as a healthy family with two kids was covered except for emergency hospital visits, which would be subject to the high deductible.  Even that was capped at $10,000 – undoubtedly a high number – but would help us avoid bankruptcy.  Hence, it actually worked like insurance for us, while also covering almost all of the regular bills.  Despite the higher costs of healthcare and insurance baked into the cake, and the market tilted against private purchasers, we still found a plan that was reasonable.

Fast-forward to Obamacare, and now we are stuck without a plan.  We are punished for actually being cost-conscience and not over-utilizing the system.  Worst of all, we don’t get the same tax exemption that employers receive on behalf of their workers.

The best plan of action would be for the government to stop distorting the market and eliminate the healthcare exemption for employers while cutting the corporate tax rate to offset the defacto tax increase.  Imagine trading this nearly-$300 billion distortion in the insurance market for an across-the-board tax cut?  Obviously that is politically untenable.  The next best course of action is to offer individuals the same exemption employers get.  It is simple unconscionable that Democrats refuse to sign onto this commonsense and fair approach.  Couple this with purchasing insurance across state lines, and insurance will become portable like any other product.

That won’t handle every last person with pre-existing conditions, but a lot of people incur the most trouble with health insurance when they have children born with medical issues during a lapse of employment.  Moreover, the rest of the population will have the ability to support their families with dignity and self-respect at all stages of life.

But dignity, self-respect, independence, and prosperity are not part of the plan.  They are obstacles in the eyes of the liberal elite.  They want complete dependence on government, thereby cementing their perennial power.  Making basic goods and services unaffordable is just the cost of doing business.

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When Will Republicans Understand Free Market Healthcare?

Sunday, April 21st, 2013 and is filed under Blog, News, Obamacare

Healthcare is one of the most complex policy issues.  The lack of free market healthcare, engendered by endless government interventions (and secondary interventions to fix the original interventions), has made policy solutions even more cumbersome.  But the overarching principle of any reform must begin with the understanding that federal intervention in the healthcare industry has inexorably driven up the cost of healthcare and health insurance.  As such, no healthcare policy panacea can begin with growing government and further distorting the already grossly-altered healthcare market.

Instead of proposing more free market solutions, Republicans are offering pale-pastel versions of Democrat government intervention as solutions.  Here are two examples.

Last week, Congressman Larry Bucshon (R-IN) introduced the Orwellian-named “Truth in Healthcare Marketing Act of 2013” (HR 1427) – a bill that forces optometrists to disclose all their licensing and qualifications in all advertising.  It grants wide latitude to the Federal Trade Commission to regulate and penalize offenders.  The bill is heavily backed by special interest hustlers like the AMA and American Academy of Ophthalmology (AAO).  The ophthalmologist lobby doesn’t want competition from cheaper healthcare providers (optometrists), and they want to use the boot of the federal government to ensnare them in red tape.

It is this sort of anti-free market special interest legislating that has crowded out choice and competition from the marketplace.  The reality is that there are already strict laws in most states to punish those optometrists who step outside of their scope of service beyond their qualifications. There is no reason, beyond special interest politicking, for the federal government to get involved.  The bill was introduced on April 9, a day before the AAOs national meetings in DC commenced.

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Austerity Cuts vs. Real Entitlement Reform

Tuesday, April 9th, 2013 and is filed under Blog, Obamacare, Taxes

In his latest attempt to cajole Republicans into raising taxes, Obama has called for a budget plan that makes some cuts to Medicare providers and subjects Social Security payments to the chained CPI.  John Boehner was correct to reject this ploy of holding entitlement savings hostage for tax increases.  However, he has come close to negotiating such a deal in the past, and there are some GOP officials who are saying they would still agree to such a trade.  Lindsey Graham has already expressed encouragement over the proposal.

We must remember that even to the extent we would be willing to trade tax increases for something transformational, Obama’s proposal is not entitlement reform, and it certainly doesn’t represent something transformational.  It is a proposal of austerity cuts to the status quo.

The problem with entitlements is not limited to the budgetary cost to the federal government, although that is certainly a major concern.  The problem with our entitlements – in the case of Medicare and Medicaid – is the lack of choices, free market forces, and the inflationary cost of healthcare to the individual.  The problem with Social Security is the lack of private property rights, dreadful rate of return, lack of individual liberty, and hopeless dependency on government.  Limiting benefits to the chained CPI might be fine for the government option, but it should not replace policies that offer more choices.  Means-testing benefits might save money, but we must not forget that Social Security is already means-tested, as its benefit formula is tendentious towards low-income earners relative to what they contribute to the program.

Consequently, any real entitlement reform must follow the principles of free markets, limited government, and individual liberty.  The budgetary problem will self-correct through any conservative reform.  We are all rightfully outraged that Obamacare will force us to purchase health insurance, but where is the outrage over the lack of choice and control over our own retirement and healthcare as seniors?  We don’t need European austerity measures if they will not accompany a pro-growth plan that encourages private ownership and choice in retirement security.

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Gallup: Majority Reject Universal Healthcare Coverage

Wednesday, November 28th, 2012 and is filed under Blog, News, Obamacare

It is both wrongheaded and imprudent for the government to pursue any goal towards universal outcomes.  Rather it’s the job of government to ensure universal opportunity.  Nowhere is this more evident than with the healthcare system.

In the pursuit of universal health insurance coverage, the federal government has driven up the cost of healthcare with market distorting mandates, subsidies, and interventions.  Fortunately, the public now understands that the government must focus on lowering costs for everyone, rather than universal coverage – an unattainable goal.

According to a new Gallup poll, a record 54% of respondents believe that universal health coverage is not the responsibility of the federal government.   As you can see, that is a record high and a huge reversal from the past, in which most Americans bought into this notion that it’s possible to provide universal coverage without killing the healthcare system and raising costs.

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The Effects of Anti-Free-Market Healthcare

Friday, September 28th, 2012 and is filed under News, Obamacare

We’ve spent a lot of time in these pages showing how government interventions into healthcare have distorted the market and arbitrarily raised the cost of providing healthcare and health insurance.  But there is a more serious problem as well.  The lack of free market healthcare has reduced access to healthcare, driven out the best talent from the medical field, and will eventually lead to rationing.  Here is an illuminating survey of current doctors conducted by the Physicians Foundation (via Ben Domenech’s Transom):

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Free Market Healthcare

Tuesday, August 28th, 2012 and is filed under Blog, Obamacare

Over the past few months, we’ve been trying to impress upon conservatives the importance of arguing healthcare from a position of strength.  It’s not enough to merely oppose Obamacare.  We need to show voters how the rising costs of health insurance and healthcare have been engendered by the very interventionist policies that Democrats are now promising in an insidious attempt to fix their original sins.  The subsidies and mandates contained in programs such as Medicare, Medicaid, Obamacare, and Romneycare are the biggest factors in distorting the health insurance market.

In that vein, I found three terrific articles that cut to the heart of the lack of free market healthcare and how it is perpetuating the cycle of government.

The first is from Thomas Sowell, “Politicians Make Health Insurance More Expensive.”  This is one of the most cogent, yet simply written explanations of why healthcare is gratuitously expensive as a result of government intervention.  He rightfully points out how it is the government mandates for coverage that drive up the cost of premiums; how 50 state markets preclude increased choice and competition on a federal market, and how the tendentious treatment of employer-based coverage has exacerbated the problem with coverage for pre-existing conditions:

Too many political “solutions” are solutions to problems created by previous political “solutions” — and will be followed by new problems created by their current “solutions.”

There is no free lunch. In the case of health insurance, there is not even an inexpensive lunch.

Health insurance would be a lot less expensive if it covered only the kinds of risks that can involve heavy costs, such as a major operation or a crippling disability. While such things can be individually very expensive, they don’t happen to everybody, and insurance is one way to spread the risks, so that the protection of a given individual is not prohibitively expensive.

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Voters Want Less Government. Will GOP Communicate to Them?

Monday, August 27th, 2012 and is filed under Blog, Elections, Issues

Amidst the torrent of polling data on an array of political races and policy issues, it is easy to lose focus on the central point of contention in today’s world of politics.  The fundamental disagreement between the right and the left is over the proper role of government.  The left feels that government should control virtually every aspect of our economy and our lives – from cradle to grave – while the right believes that government must focus on its core constitutional duties, and that it is, in fact, deleterious to our lives and prosperity when it traverses those constitutional confines.

In terms of the public’s views on this central point of contention, there is no ambiguity in the polling data.  The latest Washington Post/ABC-News poll shows that registered voters support limited government with fewer services over larger government with more services by a whopping 56-38% margin.  When asked in the recent Fox News survey whether they believe government should leave them alone or lend a helping hand, likely voters chose the limited government message by a 54-35% margin.  Among Independent voters, the margin was 63-25%.

With such ubiquitous support for limited government, why is Obama leading on most policy issues, especially those issues like healthcare and energy where he has used the boot of government to spike the cost of vital services on average Americans?  How is he neck-and-neck with Romney in national polls and ahead in many battleground state polls?

To a certain extent, many voters harbor an incoherent and self-contradictory political philosophy.  They like the mellifluous sounding terms of “limited government” and “balancing the budget,” but are largely susceptible to the misinformation they hear from the Democrat media regarding specific policy issues.  However, much of the gap between self-professed support for principles of limited government and support for Republican candidates is due to the poor articulation from most key players in the party.

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Arguing Free Market Healthcare from a Position of Strength

Thursday, August 16th, 2012 and is filed under Blog, Issues, Obamacare

With Paul Ryan on the ticket, there is no way to avoid the Medicare and broader healthcare issue.  Accordingly, Romney must embrace it.  The idea is not to defend cuts to Medicare.  There are no cuts to Medicare under free market reforms.  The only cuts to Medicare will occur under the current system of Soviet-style government rationing.

Here is an article I wrote earlier this year laying out the case for Republicans to argue Medicare reform from a position of strength.  It’s all about decreasing the inflationary cost of healthcare and health insurance, not granting universal access.  Republicans must show how it is the government-run healthcare system that is actually increasing the cost of health insurance exponentially, not just for seniors, but for all Americans.

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Study: One in 10 U.S. Employers to Drop Health Coverage

Wednesday, July 25th, 2012 and is filed under News, Obamacare

Via Wall Street Journal:

Around one in 10 employers in the U.S. plans to drop health coverage for workers in the next few years as the bulk of the federal health-care law begins, and more indicated they may do so over time, according to a study to be released Tuesday by consulting company Deloitte.

The majority of Americans under age 65 who have health insurance get it through an employer. A big question about the law is whether companies will continue to offer coverage after a slate of changes starting in 2014 will give Americans more options for buying coverage without the help of an employer.

Keep in mind that the fact that Americans are reliant upon employers for their health insurance is in itself a result of onerous government regulations.  Now everyone will be forced to rely on government for their health insurance.