The Homa Files

Once again, Speaker Pelosi was right “You’ll find out what’s in the bill when we pass it”.

Take the individual mandate: the provision that requires all people carry health insurance — even healthy non-consumers of health case services. They must play for ObamaCare’s fragile economics to work.  You see, it’s these people overpaying for their health insurance (i.e. premiums far exceed claims) that subsidizes the heavy users (i.e. claims far exceed premiums).

More than a dozen states have united to test the constitutionality of the individual mandate, arguing that the Feds can’t compel citizens to buy specific products simply as a condition of citizenship.  Feds argue that they can based on the supremacy (of Fed over states) and commerce (Feds can regulate interstate commerce) clauses in the constitution.

Regardless of how that turns out, there’s an interesting twist: though folks will be asked to ante in tax fines on their 1040s if they haven’t bought health insurance, the bill explicitly bans the IRS from enforcing the law.  There can be no criminal or civil penalties, no liens or seizures (whew, citizen’s big screen TVs are fancy cars out of reach), and no penalties or interests. 

The law is enforced by the ever powerful word “PLEASE”.

* * * * *

Excerpted from Verum Serum, The Individual Mandate Farce, March 25, 2010

One of the more controversial elements of ObamaCare is the mandate for most individuals to purchase insurance beginning in 2014.

Democrats who orchestrated the passage of this bill are mandating not only that the young and healthy obtain insurance, but also that even their most fervent liberal constituents must purchase this coverage from the evil, private insurance industry.

Republicans for their part have focused on the fact that this mandate will be enforced via threat of a financial penalty (or tax), with the added assumption that it is the dreaded IRS which will be enforcing this. And sure enough, it’s already been reported that the IRS anticipates hiring possibly in excess of 15,000 additional personnel to deal with the collection of the individual mandate, and other tax related provisions within the bill.

However, it turns out that the Democrats who crafted this bill hamstrung the ability of the IRS or any other federal agency to enforce or collect on this mandate. Here is what the federal Joint Committee on Taxation had to say about this issue in a report released earlier this week:

Individuals who fail to maintain minimum essential coverage in 2016 are subject to a penalty equal to the greater of: (1) 2.5 percent of household income in excess of the taxpayer’s household income for the taxable year over the threshold amount of income required for income tax return filing for that taxpayer under section 6012(a)(1);67 or (2) $695 per uninsured adult in the household. The fee for an uninsured individual under age 18 is one-half of the adult fee for an adult. The total household penalty may not exceed 300 percent of the per adult penalty ($2,085). The total annual household payment may not exceed the national average annual premium for bronze level health plan offered through the Exchange that year for the household size…

The penalty applies to any period the individual does not maintain minimum essential coverage and is determined monthly. The penalty is assessed through the Code and accounted for as an additional amount of Federal tax owed. However, it is not subject to the enforcement provisions of subtitle F of the Code. The use of liens and seizures otherwise authorized for collection of taxes does not apply to the collection of this penalty. Non-compliance with the personal responsibility requirement to have health coverage is not subject to criminal or civil penalties under the Code and interest does not accrue for failure to pay such assessments in a timely manner.

“Subtitle F of the Code” is the portion of the tax code which grants the IRS the authority to assess and collect taxes.

In other words, as the law is written the federal government has no legal authority to enforce this mandate, nor will it have any recourse to collect any penalties that go unpaid!

This is bad news for those who believe in the merits of the mandate and the bill in general.

Without an effective mechanism of enforcing the individual mandate, the entire system is likely to collapse.

WHY WOULD ANYONE OBTAIN INSURANCE COVERAGE PRIOR TO NEEDING IT? This was already going to be a problem with the relatively low cost of the penalty, but take away any meaningful enforcement of the individual mandate and it is a complete and total joke.

The net result will be an ever increasing shift of healthcare costs on to those who remain in the insurance system (or to tax payers), and possibly even the bankruptcy of the insurance industry.

Nice work guys.

Full article:
http://www.verumserum.com/?p=13582

Hint: phonied-up cost estimates and pay-offs to unions.  Who could have ever imagined ?

Provisions of the health-care law that expand benefits for home-bound elderly, certain early retirees and coal miners will likely cost more than expected, say analysts and even some of the measures’ proponents.

The programs would expand home health services for the elderly and disabled and aid health plans covering retirees too young for Medicare.

The program for home-bound elderly, called Community Living Assistance Services and Supports, or Class, would help keep older people in their homes longer and reduce federal nursing-home expenses.

The provision was supported by several labor unions, which would have a chance to expand their memberships by organizing an expanded corps of home health workers.

The Congressional Budget Office warned last year that the Class program’s own benefits eventually would grow so large that it would drain the government’s finances. “The Class program would inevitably add to future deficits…by more than it reduces deficits in the near term”.

Rep. Frank Pallone (D., N.J.), chairman of the House health subcommittee and a main sponsor of the measure, said those concerns were overblown. “It’s pretty clear the way it’s been set up that it’s self-sustaining,” he said. The legislation requires the government to charge higher premiums if needed, he said.

The second program, to subsidize health-care plans that cover lots of retirees under age 65, will benefit cities and states as well as old-line manufacturing firms. The United Automobile Workers has made the federal reinsurance subsidy a top priority in recent years. Detroit’s unionized auto makers and parts makers have pushed thousands of UAW workers into early retirement as they retrenched in the past decade.

Excerpted from WSJ: Weighing the Cost of New Health Programs, MARCH 29, 2010 http://online.wsj.com/article/SB10001424052748703312504575142143632354272.html?mod=WSJ_hps_MIDDLEThirdNews

 

I’m really intrigued by the furor over the companies that have announced mega first quarter earnings charges to reflect the impact of ObamaCare.

Again, this initial flurry of write-offs is pretty cut & dry.

The accounting is straightforward: the companies have a future liability on their balance sheets — future benefit payments to retirees for prescription drugs.  That liability was being partially offset by a favorable tax treatment that’s being eliminated by ObamaCare.  So, the liability has to be restated upward by the amount of the lost tax benefits.  That’s done by a non-cash charge to the P&L that must be recognized as soon as it’s evident.

Now, Reps. Henery Waxman and Bart “Bend over” Stupak have called hearings to hassle CEOs about the write-offs.

Couple of points:

1) These write-offs aren’t new news.  The companies claim that they warned Team Obama that this would happen.

2) The write-offs are required based on GAAP — auditors won’t be able to sign off on financial statements if the lost tax benefits aren’t recognized,

3) Why do Waxman & Stupak think they can cajole or browbeat the CEOs into withholding material information from their financial statements ? 

Do they want the companies to break the law and commit securities violations ?

Even if some of the pie-in-the-sky ObamaCare savings materialize, they are completely irrelevant to this reporting requirement.

(Maybe Stupak thinks he can bag another Executive Order to cover this case).

4) What about companies that face the same situation and don’t recognize the increased future liabilities ? 

The law says they have to record the charges in the quarter that the law is enacted. 

I see shareholder lawsuits galore if they ‘forget’ and — since they are now well informed of the issue — fail to disclose a material change to their financial condition.

This is going to get interesting …

Let’s see, Obama Care is going to save everybody boat loads of money.  Well, maybe not everybody …

* * * * *
Does ObamaCare’s price tag include corporate writedowns?

We’re told this medical miracle will cost us $938 billion over 10 years.

I doubt that sum includes the toll taken this week.

AT&T said it will take a $1 billion charge related to ObamaCare.

Earlier this week, Caterpillar drew first blood (its own), taking a $100 million writedown. The heavy-metal giant provides generous drug benefits to retirees, enticed by tax-free subsidies from the feds; that program now will be taxed.

Cat’s competitor, John Deere says it will take a $150 million hit.

[On Saturday, 3M announced an $80 to $90 million charge.]

Betchya other big companies take hits, too.

That hurts their shareholders (including pension funds for workers that ObamaCare seeks to help).

And, it may prompt companies to cut back on drug benefits for retirees, all due to a new law with the opposite aim.

Excerpted from CNBC: 7 Prickly Questions for ObamaCare, 26 Mar 2010:
http://www.cnbc.com/id/36055365

Earlier this week, in my post “Dog catches bus”, I made the point that passing the law was the easy part. A couple of days later (than HomaFiles), the NYT is on the case.

Punchline: Now an administration that has demonstrated virtually no implementation capability (think stimulus, foreclosures, GITMO …) has to implement the most complex government program in history.

Keep in mind that 8 years after 9-11 — the official start of the high priority initiative to link our intelligence systems — a guy who was ratted out by his own father boarded an airplane with dynamite in his shorts … a “systemic failure”.  And we’ll get the healthcare system right ???

* * * * *

Excerpted from NY Times:  Now Comes the Hard Part, March 25, 2010

Much as the Iraq war wasn’t over when American forces conquered Baghdad, so health care reform didn’t end when President Obama signed the bill. If carrying out the legislation doesn’t get the same sustained attention that passing it did, then this week’s historic victory will lose much of its luster.

Health care reform, the most ambitious domestic policy initiative of our time, is now law.

The challenges ahead — for putting the existing plan into action — fall into four categories.

DELIVERING THE DELIVERABLES

President Obama promised that some of the benefits of reform would appear in the first year. For starters, within 90 days the Department of Health and Human Services must set up a high-risk pool as a temporary source of insurance for people who have pre-existing conditions.

Some of the new consumer protections will take effect within six months; first, though, federal officials have to translate that law into regulation.

EDUCATING THE PUBLIC

It’s one thing to create a health insurance program and quite another to get people to sign up for it. Today, many more people are eligible for Medicaid than actually enroll.

An aggressive public relations campaign to increase public knowledge and to undertake direct outreach to individuals will be necessary. While states and nonprofit organizations will play vital roles, the federal government will probably have to take the lead.

HANDLING THE INSURERS

The law creates minimum standards for what insurance covers and requires insurers to spend most of their money on actual patient care.

The states will have primary responsibility for enforcing these standards … that won’t be easy.

BENDING THE COST CURVE

Dozens of new initiatives are intended to control, or at least reduce, the cost of medical care. But most of them require work to get up and running.

There are hopes that wider use of electronic medical records can improve quality while reducing expensive duplication.

Studies show we’d save money if we stopped paying for so many treatments that don’t work (or don’t work better than the alternatives). But we can’t start paying for treatments more intelligently without better information about what drugs and procedures do work, not to mention which ones doctors and hospitals already use.

But, somebody first has to set up a standard for the records.  

The Obama administration needs to find the right people to manage these programs.

Full article:
http://www.nytimes.com/2010/03/26/opinion/26cohn.html?adxnnl=1&adxnnlx=1269576282-HyC9Y8xsjBzs0TixBx2Y1w

OK, everybody knows that under ObamaCare insurance companies will have to allow parents to cover their “adult children” until age 26:

SEC. 2714. EXTENSION OF DEPENDENT COVERAGE FOR YOUNG PEOPLE UP TO 26TH BIRTHDAY THROUGH PARENTS’ INSURANCE .
(a) In general – A group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child (who is not married) until the child turns 26 years of age. [Effective 6 months after enactment.]

The way the media is covering this aspect of the plan, there seems to be a presumption that this is a free-rider program — just add them to the policy and pay the same premium. 

I don’t think so …

If the adult-child (whatever the heck that is) were to buy their own policy, the price would probably be about $5,000. 

It’s hard to imagine that insurance companies will just give $5,000 of extended family coverage for free.

And, I can’t imagine that employers will pick up any part of the tab as an employee benefit — why should they ?

So, parents will have the opportunity to shell out $5,000 to provide each of their adult-children with health insurance.

I predict major outrage when people figure out that that this isn’t a free lunch …

* * * * *

Sidenote:

Married adult-children aren’t covered … but the statute is silent on the children of unmarried adult-children. 

Just watch this one develop …

Excerpted from CBS.com: Most Want GOP to Keep Fighting on Health Bill, March 24, 2010

A CBS News poll finds that nearly two in three Americans want Republicans in Congress to continue to challenge parts of the health care reform bill.

The poll finds that 62 percent want Congressional Republicans to keep challenging the bill, while 33 percent say they should not do so. Nearly nine in ten Republicans and two in three independents want the GOP to keep challenging. Even 41 percent of Democrats support continued challenges.

The poll’s findings suggest an improvement in perceptions of the legislation: While 37% approved of it before the vote, 42% approved afterward.

[Ken’s Take: only a 5 pt bump, and 42% is way less than a majority !]

Full article:
http://www.cbsnews.com/8301-503544_162-20001117-503544.html

The tax on union’s Cadillac heath insurance benefits doesn’t kick in until 2018.

The fat cats’ payroll tax on dividends and capital gains doesn’t start until 2013 (whew !).

But, no such reprieve for those evil tanning salons.

According to Bloomberg, indoor tanning salons must start charging customers a 10 percent tax beginning today … the first major reform of the U.S. health-care overhaul signed into law by President Barack Obama.

These guys  sure know how to go for the jugular …

* * * * *

Bloomberg, Health-Care Overhaul Changes to Start Taking Effect This Year
http://www.bloomberg.com/apps/news?pid=20601087&sid=aa32kl.M09T4

Every doctor I’ve talked to says he loses mucho money on MediCare and Medicaid patients — that shouldn’t be new news to anyone.

Some tell me that Medicaid patients are especially troublesome because they account for a disproportionate “no shows” — patients who schedule an appointment but don’t post for it.  Why ?  No skin in the game.

ObamaCare is largely funded by containing physician reimbursements on MediCare and Medicaid  … concurrent with swelling the Medicaid rolls by about 15 million people.

In the past, docs have offset their MediCare and Medicaid  losses by, in effect, charging privately insureds more.

So what’s going to happen ?  It’s pretty easy to predict:

1. The ‘natural’ proportion of gov’t insured patients (MediCare and Medicaid) will increase.
2. Docs will try to cross subsidize them by increasing privately insured rates.
3. But, ObamaCare police will cap the private insurance premiums.
4. So, docs will start restricting the number of gov’t insured patients they treat … some will stop treating gov’t insured patients all together.
5. Then, ObamaCare police will will call “foul” and mandate that all doctors must treat a minimum number of gov’t insured patients.

Just wait and see … you can smell this one a mile away (from the White House)

Here’s an interesting twist I haven’t heard from the TV pundits …

Under ObamaCare, everybody has to buy health insurance — even healthy folks who want to opt out.

If you don’t have health insurance, you get fined … most recently, I heard that the fine has been pared down to $250 annually.

How will it be enforced ?

Well, the bill adds over 15,000 IRS agents to police it.

[Analytical note: that means that the new agents have to nail about 6 million scofflaws each year just to cover their comp & benefits … each agent will have to find and nail about one each day]  

This morning, I heard a Congressional shill say that each year — as part of the 1040 process — people will be asked if they are in compliance with law and have health insurance.

If they answer yes, they are asked to provide substantiation.

If they answer no, they have to pay the fine.

Isn’t that self-incrimination?  Isn’t that protected by the 5th amendment ?

If this process works ok for ObamaCare, why not extend it to other areas of the law ?

For example, ask people if they have complied with all speed limits when driving. If they self-incriminate, fine ’em.

Maybe ObamaCare has uncovered a whole new way to raise revenues and offset the deficit …

Right from Stupak’s office … note the date (March 19, 2010) … At least he waited 2 days until he switched his vote from no to yes …  for chump change compared to what Dodd, Landrieu, and the SEIU got … gezz Bart, if you’re going to sell your soul, at least go for some serious money.

Fool me once, shame on you.

Fool me twice, shame on me.

What about the 3rd, 4th, 5th times ?

Doesn’t Bart Stupak learn ?

To refresh your memory:

• Back in November, pro-life Rep. Bart Stupak scored what he thought was a victory and the House passed an amendment to its ObamaCare bill limiting the use of tax-payer funds for abortions.
• But, immediately after the vote, pro-choice Dems expressed confidence that “controversial language on abortion would be stripped from a final healthcare bill” via legislative maneuvering.
• Then , House Dem leadership told Stupak and his pro-life buddies to take a hike …  because  liberal Dems want the government to fund abortions.
  https://kenhoma.wordpress.com/2010/03/15/why-is-stupak-surprised-that-his-amendment-was-trashed/

Sunday, to get Stupak to vote yes on ObamaCare, the President promised to issue an Executive Order that, in effect, restores the Stupak Amendment to the final bill — after the fact.

Well, a couple of potential bumps in Bart’s road:

1. The President has to do what he promised … hmmm.
2. Some legal pundits are saying that the Executive Order has little or no force — the passed law will prevail in high courts
3. A President can rescind an Executive Order at any time

This time when Lucy pulls the football away, Stupak will have no one but himself to blame.

He’ll deserve to feel more ‘stupid’ than ‘Stupak’.

The trillion dollar ObamaCare program gets funded roughly half through MediCare cuts — mostly elimination of Medicare Advantage — and half from tax hikes, including …

• A .9% increase in Medicare payroll taxes on couples with income of more than $250,000 a year.
• Extension of Medicare payroll taxes (3.8%) to unearned income: dividends, interest, and capital gains.
• A 10% excise tax on customers of indoor tanning salons.
• Additional fees on insurance companies, pharmaceutical companies and medical device manufacturers, including $33 billion over ten years on fees on drug makers
• A tax on individuals without qualifying coverage, maximum penalty set at 2.5% of income
• An excise tax on high-premium insurance plans, equal to 40% of premiums paid on plans costing more than $27,500 annually for a family, starting in 2018
  http://online.wsj.com/public/resources/documents/st_healthcareproposals_20090912.html

* * * * *

Ken’s Qs:

1) Since I’ve been TurboTaxing my 2009 taxes, I’m curious: Is the magic $200,000 / $250,000 Gross Income, Adjusted Gross Income, or Taxable Income ?  That makes a big difference, and I haven’t seen a single reference clarifying it.  Anybody know ?

2) If some body hits the $200,000 / $250,000 kill point, is is all income taxed at the higher rate, or just marginal income above that rate ? Anybody know ?

3) How can a serious piece of legislation single out tanning salons for extinction — and let the Beverly Hills facelift doctors run free ? (Rhetorical question)

4) I’m still eager to see the 15,000 new IRS agents running around repo’ing big screens from folks who don’t have health insurance ?

5) If the reconciliation bill doesn’t get thru the Senate — does Obama’s deal with the unions — giving them a pass on the Cadillac plans — vaporize ?

This is going to get very interesting as folks understand the implications …

Rarely can I pair two of Grandma Homa’s bromides together …

The dog has, indeed, caught the bus.

I think that Team Obama will soon realize that they accomplished the easy part of their healthcare takeover: getting the lemmings to pull the voting levers.

Now, they have to implemented the largest government program in recent history.  This, from an administration that has shown no implementation capability at all.  Think stimulus; mortgage / foreclosure programs; cash for clunkers, caulkers, etc.; GITMO closing; underwear bombers ratted out by parents.

The only aspects of the program that I can imagine getting implemented are the tax hikes and the elimination of MediCare Advantage since they only require swipes of a pen.

To ObamaCare supporters: I don’t want to hear any whining from you, you got what you wished for …

The trillion dollar ObamaCare program gets funded roughly half through MediCare cuts — mostly elimination of Medicare Advantage — and half from tax hikes, including …

• A .9% increase in Medicare payroll taxes on couples with income of more than $250,000 a year.
• Extension of Medicare payroll taxes (3.8%) to unearned income: dividends, interest, and capital gains.
• A 10% excise tax on customers of indoor tanning salons.
• Additional fees on insurance companies, pharmaceutical companies and medical device manufacturers, including $33 billion over ten years on fees on drug makers
• A tax on individuals without qualifying coverage, maximum penalty set at 2.5% of income
• An excise tax on high-premium insurance plans, equal to 40% of premiums paid on plans costing more than $27,500 annually for a family, starting in 2018
  http://online.wsj.com/public/resources/documents/st_healthcareproposals_20090912.html

* * * * *

Ken’s Qs:

1) Since I’ve been TurboTaxing my 2009 taxes, I’m curious: Is the magic $200,000 / $250,000 Gross Income, Adjusted Gross Income, or Taxable Income ?  That makes a big difference, and I haven’t seen a single reference clarifying it.  Anybody know ?

2) If some body hits the $200,000 / $250,000 kill point, is is all income taxed at the higher rate, or just marginal income above that rate ? Anybody know ?

3) How can a serious piece of legislation single out tanning salons for extinction — and let the Beverly Hills facelift doctors run free ? (Rhetorical question)

4) I’m still eager to see the 15,000 new IRS agents running around repo’ing big screens from folks who don’t have health insurance ?

5) If the reconciliation bill doesn’t get thru the Senate — does Obama’s deal with the unions — giving them a pass on the Cadillac plans — vaporize ?

This is going to get very interesting as folks understand the implications …

This guy hits the nail on the head …

Do Democrats realize that we really have crossed the Rubicon?

In the future when the Republicans gain majorities (and they will), the liberal modus operandi will be the model — bare 51% majorities, reconciliation, the nuclear option, talk of deem and pass, not a single Democrat vote — all ends justifying the means in order to radically restructure vast swaths of American economic and social life.

Is someone unhinged at the DNC?

They just blew up any shred of bipartisan consensus when their President polls below 50%, the Democratically-controlled Congress below 20%, and health care reform less than 50%.

Usually unpopular leaders and their unpopular ideas seek the shelter of minority rights and prerogatives.

What will they do when they are in the minority—since they’ve entered the arena, boasted “let the games begin” and shouted “by any means necessary”?

We’ve Crossed the Rubicon
http://pajamasmedia.com/victordavishanson/weve-crossed-the-rubicom/2/

All the pundit chatter is that the healthcare vote is a lock this afternoon.  The logic, Pelosi wouldn’t be calling the vote is she wasn’t certain to muster 216 votes.

Well, last fall, they took TARP to the floor for a vote — believing that they had the votes.  The outcome: it lost.  [See the article below to jog your memory]

Of course, TARP was modified slightly and a second vote was taken.  It passed.

The difference with ObamaCare: if it loses today, any structural modifications will have to go through normal legislative channels — not the hood-winking reconciliation process.  No way it wins straight up.

I put the odds of passage at 80-20 … but want to be on the record, just in case the long odds hit

* * * * *

September 30th, 2008

TARP unexpectedly voted down by US House yesterday

Yesterday the US House of Representatives unexpectedly turned down by a fairly small margin the Troubled Asset Rescue Plan (TARP) put forth by the Treasury.

This quite remarkable twist of events, with all the world watching, has left investors highly uncertain about what comes next.

It is still possible that an amended version of the bill could be brought back to the floor.

At this stage, it is not clear whether major concessions will be necessary, or whether minor changes to the bill would be enough to secure the incremental (mostly Republican) votes necessary for passage.

http://www.mrforex.org/2008/09/30/tarp-unexpectedly-voted-down-by-us-house-yesterday/

Punchline: Mitt Romney — the former Massachusetts governor — enacted something very similar to the Obama health plan. It isn’t working well.  Costs are up, folks are gaming the system, and people with insurance can’t get in to see doctors. Uh-oh.

* * * * *

Excerpted from WSJ: The Failure of RomneyCare, March 16, 2010

The Bay State is suffering from what the Massachusetts Medical Society calls a “critical shortage” of primary-care physicians.

As one would expect, expanded insurance has caused an increase in demand for medical services. But there hasn’t been a corresponding increase in the number of doctors.

As a result, many patients are insured in name only: They have health coverage but can’t find a doctor.

Fifty-six percent of Massachusetts internal medicine physicians no longer are accepting new patients.

For new patients who do get an appointment with a primary-care doctor, the average waiting time to see a doctor is 44 days.

As Dr. Sandra Schneider, the vice president of the American College of Emergency Physicians, told the Boston Globe last April, “Just because you have insurance doesn’t mean there’s a [primary care] physician who can see you.”

The difficulties in getting primary care have led to an increasing number of patients who rely on emergency rooms for basic medical services. Emergency room visits jumped 7% between 2005 and 2007.

Officials have determined that half of those added ER visits didn’t actually require immediate treatment and could have been dealt with at a doctor’s office — if patients could have found one.

* * * **

The promise that getting everyone covered would force costs down also is far from being realized.

One third of state residents say that their health costs had gone up as a result of the 2006 reforms.

A typical family of four today faces total annual health costs of nearly $13,788, the highest in the country. Per capita spending is 27% higher than the national average.

Insurance companies are required to sell “just-in-time” policies even if people wait until they are sick to buy coverage. That’s just like the Obama plan.

There is growing evidence that many people are gaming the system by purchasing health insurance when they need surgery or other expensive medical care, then dropping it a few months later.

Some Massachusetts safety-net hospitals that treat a disproportionate number of lower-income and uninsured patients are threatening bankruptcy. They still are treating a large number of people without health insurance, but the payments they receive for uncompensated care have been cut under the reform deal.

Full article:
http://online.wsj.com/article/SB10001424052748703625304575115691871093652.html?mod=djemEditorialPage_h

Punchline: First, the Mayo Clinic in Arizona stopped accepting Medicare patients.  Now, Walgreens drugstores across the state of Washington won’t take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

Isolated instances or the start of a trend ? I’ll bet trend …

* * * * *

Excerpted from Seattle Times: Walgreens – no new Medicaid patients, March 17, 2010

Effective April 16, Walgreens drugstores across the state won’t take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a “continued reduction in reimbursement” under the state’s Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.

Walgreens follows Bartell Drugs, which stopped taking new Medicaid patients last month and Ritzville Drug Company in Adams County announced in November that it would stop participating in Medicaid.

Doug Porter, the state’s director of Medicaid, said Medicaid recipients should be able to readily find another pharmacy because “we have many more pharmacy providers in our network than we need” for the state’s 1 million Medicaid clients.

Fred Meyer and Safeway said their pharmacies would continue to serve existing Medicaid patients and to take new ones, though both expressed concern that the reimbursement rate is too low for pharmacies to make a profit.

Washington was reimbursing pharmacies 86 percent of a drug’s average wholesale price until July, when it began paying them just 84 percent.

“Washington state Medicaid is now reimbursing pharmacies less than their cost of participation,” said Jeff Rochon, CEO of the Washington State Pharmacy Association.

Pharmacies that continue to fill Medicaid prescriptions at the current state reimbursement rate are “at risk of putting themselves out of business altogether,” he said.

Full article:
http://seattletimes.nwsource.com/html/localnews/2011367936_walgreens18m.html

Next to “systemic risk” — which loosely translates to “don’t hold anybody accountable” … my top hair-pulling buzz-phrase is “deficit neutral” … which loosely translates to “there’s a tax increase even bigger than the spending increase” …  clever word-smithing that has people’s eyes largely off the flood of new and increased taxes.

From IBD, 15 reasons why a government takeover of the finest medical system in the world makes no sense at all:

1. The people don’t want it!

This should have some bearing on decision-making.  In the latest Rasmussen poll, 53% opposed Obama’s reform while 42% were in favor. More than four in 10 “strongly” opposed; just two in 10 “strongly” favored. This jibes with other surveys.

2. Doctors don’t want it!

A survey of 1,376 practicing physicians found that 45% of all doctors would consider leaving their practices or taking early retirements if the proposed reforms became law … nearly 30% said they’d quit the profession under the plans being considered.

3. Half the Congress doesn’t want it!

Not a single Republican backed the health care bill that cleared the Senate on Christmas Eve 60-39.  The lone Republican “aye” in the House has since switched to “no.”  Adjusting for reps who are no longer in Congress, the House vote today at 216-215 in favor.

Note: Members of Congress have already exempted themselves from whatever they inflict on us.

4. People are happy with the health care they’ve got!

Polls show that 84% of Americans have health insurance and satisfaction rates average 87%.

5. It doesn’t even cover all the people they set out to cover!

Supporters of government-run health care say there are as many as 47 million Americans — 9 million to 10 million of them illegal aliens — without medical insurance. The plans, however, will put only 31 million of the uninsured under coverage.

6. Costs will go up, not down!

Democrats say their plans will cost less than $1 trillion over the first decade, but independent analysts put the cost at $2.5 trillion over the first 10 years.

7. Real cost controls are nowhere to be found!

The Democrats are offering no meaningful tort reform that will help push down the high malpractice insurance premiums that are a burden to doctors and their patients. Nor are they considering any other cost-saving provisions, such as allowing the sale of individual health plans across state lines or easing health insurance mandates.

8. Insurance premiums will rise, not fall!

One goal of nationalizing health care is to lower costs, to bend the spending curve downward. Yet, as Democratic Sen. Dick Durbin acknowledged Wednesday, that won’t be the case.

“Anyone who would stand before you and say, ‘Well, if you pass health care reform, next year’s health care premiums are going down,’ I don’t think is telling the truth,I think it is likely they would go up.”

9. Medicare is already bankrupting us!

The Medicare trust fund, which has unfunded obligations of $37.8 trillion, will be insolvent in 2017.

10. There aren’t enough doctors now!

Last month, 26% of physicians said they had been forced to close, or were considering closing, their solo practices. Providing coverage for an additional 31 million Americans when the number of doctors is shrinking won’t improve our health care.

11. The doctor-patient relationship will be wrecked!

The latest IBD/TIPP Poll, taken just last week, found that Americans, by a wide 48% to 26% margin, believe the doctor-patient relationship will decline if the Democrats’ plan is passed.

12. Medical care will also deteriorate!

IBD/TIPP has also found that 51% of Americans believe care would get worse under government control. … 72% disagreed with administration claims that the government could cover 47 million more people with better-quality care at lower cost.

13. Rationing of care is inevitable!

Health care is not an unlimited resource and must be rationed, either by the individual, providers or government. In Britain and Canada, where the government does the rationing, medical treatment waiting lists are sometimes deadly and quite often excessively long.

14. Private health insurers will be destroyed!

Added mandates and price controls will force many insurers to simply get out of the health plan business because it will no longer be profitable.

15. It’s probably unconstitutional!

One way to help bring down the number of uninsured is to demand that those without coverage buy health plans.  Constitutional scholars say any such mandate would likely draw a legal challenge.

Sourced from IBD: Why Health Bill Makes No Sense, 03/12/2010
http://www.investors.com/NewsAndAnalysis/Article.aspx?id=527217

Punchline: Buyers, beware: President Barack Obama says his health care overhaul will lower premiums by double digits, but check the fine print.

Note: from the left-leaning AP, not FNN.

* * * * * 

Excerpted from Associated Press: Fact Check Premiums would rise under Obama plan, Mar 16, 2010

Visiting a Cleveland suburb this week, the president described how individuals and small businesses will be able to buy coverage in a new kind of health insurance marketplace, gaining the same strength in numbers that federal employees have.

“You’ll be able to buy in, or a small business will be able to buy into this pool,” Obama said.

“And that will lower rates, it’s estimated, by up to 14 to 20 percent over what you’re currently getting. That’s money out of pocket.”

And that’s not all.

Obama asked his audience for a show of hands from people with employer-provided coverage, what most Americans have.

“Your employer, it’s estimated, would see premiums fall by as much as 3,000 percent,” said the president, “which means they could give you a raise.”

A White House press spokesman later said the president misspoke.

* * *

Premiums are likely to keep going up even if the health care bill passes, experts say.

If cost controls work as advertised, annual increases would level off with time. But don’t look for a rollback.

Instead, the main reason premiums would be more affordable is that new government tax credits would help cover the cost for millions of people.

Listening to Obama pitch his plan, you might not realize that’s how it works.

“There’s no question premiums are still going to keep going up. There are pieces of reform that will hopefully keep them from going up as fast. But it would be miraculous if premiums actually went down relative to where they are today.”

The statistics Obama based his claims on come from two sources. In both cases, the caveats got left out.

An analysis by the Congressional Budget Office found that large employers would see premium savings of at most 3 percent compared with what their costs would have been without the legislation. That would be more like a few hundred dollars instead of several thousand.

The claim that people buying coverage individually would save 14 percent to 20 percent comes from the same budget office report. But the presidential sound bite fails to convey the full picture.

The budget office concluded that premiums for people buying their own coverage would go up by an average of 10 percent to 13 percent, compared with the levels they’d reach without the legislation. That’s mainly because policies in the individual insurance market would provide more comprehensive benefits than they do today.

The premium reduction of 14 percent to 20 percent that Obama cites would apply only to a portion of the people buying coverage on their own — those who decide they want to keep the skimpier kinds of policies available today. The president usually alludes to that distinction in his health care stump speech, saying the savings would accrue to those people who continue to buy “comparable” coverage to what they have today.

And, those costs would only go down if, in fact, swarms of currently healthy uninsured young people join the risk pool — reducing average payouts and spreading insurance company overhead costs.

Full article:
http://news.yahoo.com/s/ap/20100317/ap_on_bi_ge/us_health_overhaul_fact_check

Punchline: the uninsured already receive about 50 percent to 70 percent of the care of the insured from hospitals, clinics and doctors

* * * * *
Excerpted from Newsweek: The Illusion of ‘Reform, March 15, 2010

You probably heard that insuring the uninsured will dramatically improve the nation’s health.

The uninsured don’t get care or don’t get it soon enough. With insurance, they won’t be shortchanged; they’ll be healthier. Simple.

Think again.

Expanding health insurance would result, at best, in modest health gains.

Why ? 

• many uninsured are fairly healthy — about two-fifths are between 18 and 34;
• some are too sick to be helped;
• some have problems rooted in personal behaviors — smoking, diet, drinking or drug abuse; and
• the uninsured already receive about 50 percent to 70 percent of the care of the insured from hospitals, clinics and doctors.

* * * * *

Whatever their sins, insurers are mainly intermediaries; they pass along the costs of the delivery system.

In 2009, the largest 14 insurers had profits of roughly $9 billion; that approached 0.4 percent of total health spending of $2.472 trillion.

This hardly explains high health costs.

Full article:
http://www.realclearpolitics.com/articles/2010/03/15/obamas_health_proposal_is_the_illusion_of_reform.html

Story line:

(1) Dems tout that the AMA supports ObamaCare.  But, the AMA represents less than 25% of doctors, and has a vested interest — they get paid millions by the government to manage “treatment codes” used for reimbursements.

(2) The NEJM surveyed the broader base of doctors and concluded: “A very dramatic decrease in the physician workforce could become a reality as an unexpected side effect of health reform.”

(3) Specifically, almost half of primary-care physicians said that they would either want to leave medicine or that they would be “forced out” by the changes to the system.

(4) The “changes” they cite: more regulations, gov’t coming between them and patients, lower reimbursements, continuing threat of junk law suits.

* * * * *

Details:

According to a survey published in the latest issue of the New England Journal of Medicine:

• Nearly one-third of all practicing physicians may leave the medical profession if President Obama signs current versions of health-care reform legislation into law …  If a public option were included in the legislation, the number jumps to 45.7%.
• 46% of primary-care physicians said that they would either want to leave medicine or that they would be “forced out” by the changes to the system.
• A majority of physicians said health-care reform would cause the quality of American medical care to “deteriorate” and it could be the “final straw” that sends a sizeable number of doctors out of medicine.

“Many physicians feel that they cannot continue to practice if patient loads increase while pay decreases.”

The survey shows that many doctors already find their situations difficult:

• 36% said that they would not recommend medicine as a profession to others, regardless of whether health-care reform passes;
• 27% would still recommend medicine as a career, but not if the current reform proposal passes.
• In total, 63 percent of doctors would not recommend the profession after health-care reform passes.

96 percent of the physicians surveyed  favor of health reform, in some form or fashion … but relatively few are in favor of the current legislation.

* * * * *

But the AMA says doctors are in favor …

Congressional Democratic leaders ,have said that doctors favor the bill and are part of an “unprecedented coalition” of doctors rooting for its passage. The claim is based on the American Medical Association’s endorsement of the legislation in Congress.

According to the Bureau of Labor Statistics, in 2008 there were 661,400 physicians and surgeons within the United States. Of that number, 250,000 are members of the American Medical Association (AMA) — and nearly 100,000 of those are medical students.

Full article:
http://cnsnews.com/news/article/62812

* * * * *

Key Findings from thePhysician Survey: Health Reforms Potential Impact on Physician Supply and Quality of Medical Care
New England Journal of Medicine, Mar. – Apr. 2010 

Physician Support of Health Reform in General

• 62.7% of physicians feel that health reform is needed but should be implemented in a more targeted, gradual way, as opposed to the sweeping overhaul that is in legislation.
• 28.7% of physicians are in favor of a public option.
• 3.6% of physicians prefer the “status quo” and feel that the U.S. health care system is best “as is.

Health Reform and Primary Care Physicians

• 46.3% of primary care physicians (family medicine and internal medicine) feel that the passing of health reform will either force them out of medicine or make them want to leave medicine.

Health Reform, Public Option, and Practice Revenue/Physician Income

• 41% of physicians feel that income and practice revenue will “decline or worsen dramatically” with a public option.
• 30% feel income will “decline or worsen somewhat” with a public option.
• 9% feel income will “improve somewhat” with a public option, and 0.8% feel income will “improve dramatically” with a public option.

Health Reform, Public Option, and Physician Supply

• 72% of physicians feel that a public option would have a negative impact on physician supply, with 45% feeling it will “decline or worsen dramatically” and 27% predicting it will “decline or worsen somewhat.
• 24% of physicians think they will try to retire early if a public option is implemented.
• 21% of physicians would try to leave medicine if a public option is implemented, even if not near retirement age at the time.

Health Reform and Recommending Medicine to Others as a Career

• 36% of physicians would not recommend medicine as a career, regardless of health reform.
• 27% would recommend medicine as a career but not if health reform passes.
• 25% of physicians would recommend medicine as a career regardless of health reform.
• 12% would not recommend medicine as a career now but feel that they would recommend it as a career if health reform passes

Source:“Physician Survey: Health Reform’s Impact on Physician Supply and Quality of Medical Care,”
The Medicus Firm, http://www.TheMedicusFirm.com

Story line:

(1) Dems tout that the AMA supports ObamaCare.  But, the AMA represents less than 25% of doctors, and has a vested interest — they get paid millions by the government to manage “treatment codes” used for reimbursements.

(2) The NEJM surveyed the broader base of doctors and concluded: “A very dramatic decrease in the physician workforce could become a reality as an unexpected side effect of health reform.”

(3) Specifically, almost half of primary-care physicians said that they would either want to leave medicine or that they would be “forced out” by the changes to the system.

(4) The “changes” they cite: more regulations, gov’t coming between them and patients, lower reimbursements, continuing threat of junk law suits.

* * * * *

Details:

According to a survey published in the latest issue of the New England Journal of Medicine:

• Nearly one-third of all practicing physicians may leave the medical profession if President Obama signs current versions of health-care reform legislation into law …  If a public option were included in the legislation, the number jumps to 45.7%.
• 46% of primary-care physicians said that they would either want to leave medicine or that they would be “forced out” by the changes to the system.
• A majority of physicians said health-care reform would cause the quality of American medical care to “deteriorate” and it could be the “final straw” that sends a sizeable number of doctors out of medicine.

“Many physicians feel that they cannot continue to practice if patient loads increase while pay decreases.”

The survey shows that many doctors already find their situations difficult:

• 36% said that they would not recommend medicine as a profession to others, regardless of whether health-care reform passes;
• 27% would still recommend medicine as a career, but not if the current reform proposal passes.
• In total, 63 percent of doctors would not recommend the profession after health-care reform passes.

96 percent of the physicians surveyed  favor of health reform, in some form or fashion … but relatively few are in favor of the current legislation.

* * * * *

But the AMA says doctors are in favor …

Congressional Democratic leaders ,have said that doctors favor the bill and are part of an “unprecedented coalition” of doctors rooting for its passage. The claim is based on the American Medical Association’s endorsement of the legislation in Congress.

According to the Bureau of Labor Statistics, in 2008 there were 661,400 physicians and surgeons within the United States. Of that number, 250,000 are members of the American Medical Association (AMA) — and nearly 100,000 of those are medical students.

Full article:
http://cnsnews.com/news/article/62812

* * * * *

Key Findings from thePhysician Survey: Health Reforms Potential Impact on Physician Supply and Quality of Medical Care
New England Journal of Medicine, Mar. – Apr. 2010 

Physician Support of Health Reform in General

• 62.7% of physicians feel that health reform is needed but should be implemented in a more targeted, gradual way, as opposed to the sweeping overhaul that is in legislation.
• 28.7% of physicians are in favor of a public option.
• 3.6% of physicians prefer the “status quo” and feel that the U.S. health care system is best “as is.

Health Reform and Primary Care Physicians

• 46.3% of primary care physicians (family medicine and internal medicine) feel that the passing of health reform will either force them out of medicine or make them want to leave medicine.

Health Reform, Public Option, and Practice Revenue/Physician Income

• 41% of physicians feel that income and practice revenue will “decline or worsen dramatically” with a public option.
• 30% feel income will “decline or worsen somewhat” with a public option.
• 9% feel income will “improve somewhat” with a public option, and 0.8% feel income will “improve dramatically” with a public option.

Health Reform, Public Option, and Physician Supply

• 72% of physicians feel that a public option would have a negative impact on physician supply, with 45% feeling it will “decline or worsen dramatically” and 27% predicting it will “decline or worsen somewhat.
• 24% of physicians think they will try to retire early if a public option is implemented.
• 21% of physicians would try to leave medicine if a public option is implemented, even if not near retirement age at the time.

Health Reform and Recommending Medicine to Others as a Career

• 36% of physicians would not recommend medicine as a career, regardless of health reform.
• 27% would recommend medicine as a career but not if health reform passes.
• 25% of physicians would recommend medicine as a career regardless of health reform.
• 12% would not recommend medicine as a career now but feel that they would recommend it as a career if health reform passes

Source:“Physician Survey: Health Reform’s Impact on Physician Supply and Quality of Medical Care,”
The Medicus Firm, http://www.TheMedicusFirm.com

Ken’s Take: Didn’t anybody smell a rat when Natoma Canfield — the uninsured leukemia letter-writer — couldn’t appear with Obama because she was getting treatment  … at the Cleveland Clinic no less.

Turns out that:

(1) she is getting healthcare (which is different from health insurance)

(2) she is being treated by the prestigious Cleveland Clinic

(3) The Cleveland Clinic says not to worry about the bills …

(4) … because, Natoma already qualifies for Medicaid. 

(5) She hasn’t bothered to sign up … probably too busy writing letters

* * * * *

Excerpted from WTOP / AP: Woman championed by Obama eligible for aid, March 16, 2010

A woman championed as the Obama administration’s emblem for health care reform does not have to choose between her home and her health, according to officials at the Ohio hospital where she is being treated.

With a self-reported annual income of about $6,000, Natoma Canfield is a prime candidate for financial aid in the form of Medicaid – the federal health care program for low-income and disabled people – and charitable assistance.

And the Cleveland Clinic said it has no intention of putting out a lien on Canfield’s house — or letting the billing process interfere with her treatment.

“It appears that I think she’ll be fine,” said Lyman Sornberger, the hospital’s executive director of patient financial services. “By nature of the fact that she was not early on rejected by either program, that’s a key indicator that she will most likely be eligible.”

Despite the grim reality of Canfield’s fight against cancer, hospital officials say it’s not the case that she can have either a home or her health.

Like any patient who walks through the Clinic’s doors without medical coverage, Canfield was immediately assigned an adviser to help assess whether she was eligible for financial aid, hospital officials said.

Canfield said Tuesday that she had just met with her adviser in her hospital room before undergoing a round of chemotherapy in the afternoon.

“I will have to apply for Social Security disability and then something called Medicaid,” she said.

Asked whether she had understood what Medicaid was, she said: “I heard of it but I didn’t really realize what it was.”

Full article:
http://wtop.com/?nid=106&pid=0&sid=1913750&page=1

Punchline: If universal coverage makes appointments harder to get (and it will !), emergency room use may increase. That’s called an unintended consequence.

* * * * *
Excerpted from Newsweek: The Illusion of ‘Reform, March 15, 2010

How often have you heard the emergency-room argument?

The uninsured, it’s said, use emergency rooms for primary care. That’s expensive and ineffective. Once they’re insured, they’ll have regular doctors. Care will improve; costs will decline. Everyone wins.

Great argument.

Unfortunately, it’s untrue.

A study by the Robert Wood Johnson Foundation found that the insured account for 83 percent of emergency room visits, reflecting their share of the population.

After Massachusetts adopted universal insurance, emergency room use remained higher than the national average, reports an Urban Institute study.

More than two-fifths of visits represented non-emergencies.

People said it was “more convenient” to go to the emergency room or they couldn’t “get (a doctor’s) appointment as soon as needed.”

If universal coverage makes appointments harder to get, emergency room use may increase.

Full article:
http://www.realclearpolitics.com/articles/2010/03/15/obamas_health_proposal_is_the_illusion_of_reform.html