Thursday, September 5, 2013

Obamacare (The Affordable Care Act)

Get Ready for Obamacare
If you buy coverage on your own, here’s what you need to know.
(By Kimberly Lankford, Kiplinger's Personal Finance, October 2013)
Three and a half years after President Obama signed the Affordable Care Act into law, its major provisions are nearly ready for prime time. Beginning January 1:

1)      Insurers will no longer be able to reject people or charge higher rates because of preexisting conditions,

2)      The premiums they charge older people will be capped

3)      Most plans won’t be able to impose annual or lifetime caps on coverage

4)      To control the cost of insuring the older and sicker, everyone—including the young and healthy—must have health insurance or face a penalty

5)      In 2014 the penalty is 1% of annual income or $95 per person (whichever is higher); the penalty increases to 2.5% of income or $695 per person in 2016.

If you don’t have health insurance through an employer—because you’re self-employed or unemployed, you work for an employer that doesn’t offer health benefits, or you simply decided to go bare— you may be eligible to receive a subsidy to help reduce your premiums. But to qualify, you have to buy a policy from your state’s new health insurance exchange. If you work for an employer that does offer coverage, you can still choose to shop on the exchanges, but you can’t get a subsidy if your employer provides “affordable” coverage. Affordable means the employee’s share of premiums for employee-only coverage is no more than 9.5% of household income. The employer’s plan must also be considered “adequate,” which means it covers 60% of the average health care costs in the area (based on a complicated actuarial calculation).

Because of the health care law’s new protections, young, healthy people won’t get as big of a break on premiums and are likely to pay higher rates than in the past. (See the Ask Kim column Health Insurance for Twentysomethings for more details.) Older people may pay less, especially if they have health conditions that jacked up their premiums. But the changes will depend on your state’s current rules, competition in the marketplace and the level of coverage you have now. (See Health Insurance Options for Early Retirees )

The majority of people, who get health insurance through an employer, won’t see much change in their coverage or how they buy it when they re-up during their employer’s open-enrollment season. Employers are unlikely to drop coverage just because the government delayed the requirement to provide insurance until 2015. Rather, expect to see cost-cutting trends continue: increases in premiums, steeper deductibles and co-payments, and shrinking provider networks. (We covered that in How Employees Can Save Money on Health Care Costs )

Buying on the exchanges

Each state will have an exchange (also called a marketplace) where you can buy health insurance and apply subsidies to reduce your premiums. The federal government is running the exchanges in 27 states, and 23 states plus the District of Columbia are running their own exchanges or operating them in partnership with the federal government. The insurers on the exchange, policy details, prices and networks will vary by state, no matter who runs the exchange. You can find links to your state’s exchange at In most states, you can buy a policy through your state’s new health insurance exchange or outside the exchange, but you can get a subsidy only if you buy on the exchange.  Starting in 2014, all individual health insurance plans must include ten essential health benefits, including:

Coverage for preventive tests


Maternity and newborn care

Emergency-room care

Prescription drugs

Plans sold on the exchanges must fall into one of five categories: platinum, gold, silver, bronze and a catastrophic policy available only to people under age 30.  Each level must meet certain actuarial requirements. A platinum policy, for example, must cover 90% of average health care costs (based on an actuarial calculation for a “standard population” in your area); a gold plan must cover 80%. But that doesn’t translate into a fixed set of deductibles and co-payments at each level. In general, you can expect the highest deductibles (as much as $6,000) and more cost sharing (such as higher co-payments and coinsurance) at the bronze level, says Ray Smithberger, Cigna general manager for individual and family plans.  As you climb the metal tiers, deductibles and cost sharing will generally be lower, but premiums will be higher. You’ll pay the highest premiums (and get the most coverage) at the platinum level. But the premiums can vary a lot within each metal level, depending on the specifics of the coverage and network. On the Maryland Health Connection, a 25-year-old nonsmoker in the Baltimore area would pay from $131 to $237 per month for the bronze plan, depending on the insurer. A 50-year-old would pay from $267 to $470 per month for the silver plan. Many insurers will offer policies eligible for health savings accounts at all levels. 

One of the biggest differences will be the size of each plan’s network, says Carrie McLean, director of customer care for When assessing your options, compare the premiums and out-of-pocket costs for the type of care you tend to use, and make sure your providers are included.  Many companies are also selling policies outside of the exchanges, which could be worth considering if you don’t qualify for a subsidy, or you qualify for only a small one. These policies must meet most of the same requirements as those on the exchanges, but they may have different networks and other small variations that can help reduce premiums. Some companies will sell policies on the exchanges in some states and off the exchanges in others. You can buy off-exchange policies directly from the insurers, through a health insurance agent (see or on a Web site, such as If you already have a policy on your own, you may be able to keep it at the current cost until the policy’s renewal date later in 2014 (a few states are requiring people to start new policies on January 1).

How to get a subsidy

To qualify, your modified adjusted gross income must be between 100% and 400% of the federal poverty level (400% of the federal poverty level in 2013 is about $46,000 for an individual and $94,000 for a family of four). A study by Avalere Health, a health care consulting firm, estimates that 40% of individuals who have nongroup health insurance—and 46% of people who are uninsured—will qualify. (See the Ask Kim column Who Qualifies for a 2014 Health Insurance Subsidy for a definition of modified adjusted gross income.)  The size of the subsidy is the difference between the amount you’re expected to contribute based on your income and the cost of the benchmark plan in your state. For example, if your modified adjusted gross income is $70,650 for a family of four, you’re expected to pay 9.5% of your income, or $6,712, toward the benchmark plan’s premiums. If that benchmark plan costs $12,500, you’d get a tax credit worth about $5,790, according to Families USA. (You don’t have to do the math yourself. You can calculate your subsidy with the Kaiser Family Foundation’s subsidy calculator or, after October 1, on your state’s health insurance exchange Web site.)

You can buy a plan that costs more or less than the benchmark, but your subsidy will remain the same. Anyone with income below 250% of the federal poverty level ($28,725 for an individual in 2013) can also get a cost-sharing subsidy that reduces co-payments and other out-of-pocket costs, but only for silver plans.  Subsidies come in the form of advance tax credits that reduce what you pay for a policy. When applying for the coverage on the exchange, you estimate your income for the year. The figures will be adjusted when you file your 2014 taxes. If you earn more than you reported, you may have to pay back some of the credit.


3 Key Ways Obamacare Changes Health Coverage
It will have a big impact on people with preexisting conditions, early retirees and young people.
(By Kimberly Lankford, From Kiplinger's Personal Finance, October 2013)

1) Preexisting conditions won’t matter

You can no longer be denied coverage or charged steep premiums because of a preexisting condition—or qualify only for insurance that excludes your medical condition. And you won’t have to stay in a job longer than you want to in order to keep your health benefits. If you already have nongroup coverage, you should be able to find a better deal than you have now, even if you don’t qualify for a subsidy. So check out the new options as soon as you can on October 1.  When you comparison-shop policies, see what the out-of-pocket costs would be for the types of doctors’ visits and procedures you tend to have, how much you would need to pay for your medications, and whether your doctors and hospitals are covered in the plan’s network.

Do the math to estimate whether it’s better to pay extra for a gold or platinum policy that has higher premiums but may have lower out-of-pocket costs.  If you have a policy through a high-risk pool now, find out what will happen to that coverage on January 1. The federal Pre-Existing Condition Insurance Plan will be discontinued on December 31, but some of the state programs may let you keep your current coverage, at least until your policy expires in the middle of next year. Ask your plan about your options, and see the status report at for more information.

2) Early retirees can breathe easier
Many retirees who quit their job before Medicare benefits kicked in have had to scramble to find affordable insurance. That’s especially true if they worked for an employer that doesn’t provide retiree health coverage.  In the past, early retirees with preexisting conditions tended to keep their employer’s coverage through COBRA, the federal law that requires companies with 20 or more employees to let workers stay on their health plan for up to 18 months. But COBRA coverage can be expensive because you have to pay both your share and the employer’s share of the cost (employers typically pay about 70% of the cost for employees).  You’ll still be able to keep COBRA coverage after 2014, but you may find a better deal on your own, now that you can’t be rejected or charged more because of your health. Also, premiums for, say, a 64-year-old can be no more than three times as much as they are for a 21-year-old, whether you buy coverage on or off the exchanges.

You can get the subsidy only if you buy a policy from your state exchange, and it’s a good idea to run the numbers using the tool at your exchange’s Web site to see whether you qualify. Even if you earned too much to get the subsidy while working, you may qualify after you leave your job and your income drops.  The subsidy is an advance tax credit—the money will be applied to your premiums immediately when you buy coverage on the exchanges, based on the income you’ve reported. When applying for coverage on the exchange, estimate what you expect your income will be by the end of the year, including the drop after you stop working.

Compare the cost of buying your own policy with the cost of keeping coverage through COBRA (which doesn’t qualify for the subsidies). And compare the coverage and networks. You may want to keep COBRA, even if it costs slightly more, if your doctors and providers aren’t covered under the new policies, especially if you’re currently undergoing medical treatment, says Karen Pollitz, senior fellow for the Kaiser Family Foundation.

3) Young adults may pay more

Young adults—and in many cases, parents who were subsidizing them—already got a major perk from the health care law starting in September 2010, when they were permitted to stay on parents’ policies up to their 26th birthday. That’s true whether or not you live at home, are still in school or are a dependent for tax purposes. In most cases, staying on your parents’ policy is still the best deal, especially if they already have to pay for family coverage for younger siblings.

But if you live in another city that isn’t covered by your parents’ network, or if your parents aren’t covering other children and have to pay a lot extra to keep you on their policy, compare the cost of buying coverage on your own. Unfortunately, healthy young adults looking for coverage on their own are likely to face some of the steepest premium increases under the new law. In most states, you can currently find policies for about $100 to $200 per month (except in a few high-cost states, such as New York). Those prices are likely to increase, although the new policies may be more comprehensive. In California, for example, a 25-year-old will pay an average premium of $250 per month for a silver policy.

Avalere Health estimates that about two-thirds of young adults (age 30 or younger) who are currently uninsured or have nongroup health insurance will be eligible for the subsidies. If you’re under 30, you can also buy a special high-deductible catastrophic policy. In California, a catastrophic policy can cost as little as $141 per month. These policies don’t qualify for the subsidies.  If you currently have your own policy—or you buy one before the end of the year—you may be able to keep it at current rates until the year-long policy term is over. Rules vary by state and insurer.

For Obama, A Frustrating Health Care Rollout
(By Julie Pace, Associated Press, 20 October 2013)

Last week, President Barack Obama gathered some of his top advisers in the Oval Office to discuss the problem-plagued rollout of his health care legislation. He told his team the administration had to own up to the fact that there were no excuses for not having the health care website ready to operate on Day One.  The admonition from a frustrated president came amid the embarrassing start to sign-ups for the health care insurance exchanges. The president is expected to address the cascade of computer problems Monday during an event at the White House.

Administration officials say more than 476,000 health insurance applications have been filed through federal and state exchanges. The figures mark the most detailed measure yet of the problem-plagued rollout of the insurance market place.  However, the officials continue to refuse to say how many people have actually enrolled in the insurance markets. And without enrollment figures, it's unclear whether the program is on track to reach the 7 million people projected by the Congressional Budget Office to gain coverage during the six-month sign-up period.

The first three weeks of sign-ups have been marred by a cascade of computer problems, which the administration says it is working around the clock to correct. The rough rollout has been a black eye for Obama, who invested significant time and political capital in getting the law passed during his first term.  The officials said technology experts from inside and outside the government are being brought in to work on the glitches, though they did not say how many workers were being added.  Officials did say staffing has been increased at call centers by about 50 percent. As problems persist on the federally run website, the administration is encouraging more people to sign up for insurance over the phone.  The officials would not discuss the health insurance rollout by name and were granted anonymity.

Despite the widespread problems, the White House has yet to fully explain what went wrong with the online system consumers were supposed to use to sign up for coverage.  Administration officials initially blamed a high volume of interest from ordinary Americans for the frozen screens that many people encountered. Since then, they have also acknowledged problems with software and some elements of the system's design.  Interest in the insurance markets appears to continue to be high. Officials said about 19 million people have visited as of Friday night.  Of the 476,000 applications that have been started, just over half have been from the 36 states where the federal government is taking the lead in running the markets. The rest of the applications have come from the 14 states running their own markets, along with Washington, D.C.

Americans seeking health coverage through the Affordable Care Act must fill out applications before selecting a specific plan. The forms require personal information, including income figures that are used to calculate any subsidies the applicant may qualify for. More than one person can be included on an application.  The White House says it plans to release the first enrollment totals from both the federal and state-run markets in mid-November.  Obama will directly address the technical problems with the health care websites Monday morning during an event in the Rose Garden, according to the White House. Officials said the president finds the glitches unacceptable and will outline for the public steps the administration is taking to address the troubles.  Obama will be joined during the event by people who have already enrolled in insurance programs through the new exchanges. The administration has not said how many people have enrolled during the first three weeks of sign-ups.

The Health and Human Services Departmente reported Sunday that it "is bringing in some of the best and brightest from both inside and outside government to .... help improve We're also putting in place tools and processes to aggressively monitor and identify parts of where individuals are encountering errors or having difficulty using the site, so we can prioritize and fix them."  An internal memo obtained by The Associated Press showed that the administration projected nearly a half million people would enroll for the insurance markets during the first month.  Officials say they expect enrollments to be heavier toward the end of the six-month sign up window.

Problems with the rollout were largely overshadowed by Republican efforts to force changes to the health care law in exchange for funding the government. That effort failed and the government reopened last week with "Obamacare" intact.  Some Republicans are now calling for the resignation of Health and Human Services Secretary Kathleen Sebelius. The White House says it has complete confidence in her. House Republicans have scheduled a hearing next week to look into the rollout problems.  White House allies say they're confident the problems are being addressed.  "There's no question the marketplace website needs some improvement," said Sen. Max Baucus, D-Mont., one of the architects of the law. "The administration needs to fix the computer bugs and I'm confident that they're working around the clock to fix the problems."


Obamacare, Failing Ahead Of Schedule
(By Ross Douthat, New York Times, October 19, 2013)

This is not the column about the Obamacare rollout I expected to write.  If you had told me, months ago, that weeks after the health care law’s coverage expansion went into effect I would be writing about the problems its launch had exposed, I would have assumed I’d be writing about rate shock, rising premiums and the disappearance of many cheap insurance plans — basically, all the problems conservatives have worried will make Obamacare a ruinously expensive failure if they play out as we fear they might.  I may be writing about those issues soon enough. But for now there is a more pressing subject: The online federal health care exchange, the heart of the Obamacare project, is such a rolling catastrophe that it may end up creating a major policy fiasco immediately rather than eventually.

This fiasco has always been a possibility, for reasons inherent in the architecture of the law. When The New Republic’s Jonathan Cohn, the most rigorous defender of the entire reform project, wrote up his “five Obamacare anxieties” in May, the first one was structural: The system’s sustainability depends on getting enough healthy people to sign up, he pointed out, and if they don’t then insurers “will have to raise everyone’s premiums,” which “could create what actuaries call a ‘death spiral’: Rising premiums prompt people to drop out, causing premiums to increase even more.”  Cohn thought such a death spiral was unlikely, and frankly so did I. Between the stick of the mandate, the carrot of subsidies and the planned P.R. blitz, it seemed as if enough Americans would sign up to at least postpone the cost problem and get the system off the ground.  But it seemed that way because it was hard to imagine the Obama White House botching the design and execution of its national health care exchange. Building Web sites, mastering the Internet — this is what Team Obama does!

Except this time Team Obama didn’t. Like the Bush administration in Iraq, the White House seems to have invaded the health insurance marketplace with woefully inadequate postinvasion planning, and let the occupation turn into a disaster of hack work and incompetence. Right now, the problems with the exchange Web site appear to be systemic — a mess on the front end, where people are supposed to shop for plans, and also a thicket at the back end, where insurers are supposed to process applications.  The disaster can presumably be fixed. As Cohn pointed out on Friday, many of the state-level exchanges are working better than the federal one, and somewhere there must be a tech-world David Petraeus capable of stabilizing And the White House has some time to work with: weeks before the end-of-year enrollment rush, and months before the mandate’s penalty is supposed to be levied.

But if the fix-it effort moves too slowly, it’s possible to envision a worst-case scenario unfolding. If the Web site doesn’t work soon, even liberals concede that the mandate would have to be delayed, because you can’t very well fine people for failing to buy a product they can’t access. And that combination — a hard-to-navigate online portal and no penalty for staying uninsured — could effectively discourage all but the most desperate customers from shopping, which in turn would create an unsustainably expensive insurance pool, driving prices up and driving people away, and potentially wrecking the entire individual insurance market in short order.  If this happens, there will be a lot of schadenfreude on the right at the spectacle of technocratic failure. But the wreck of the exchanges may actually be worse for conservative policy objectives than a more successful rollout would have been.

That’s because while conservatives think the Obamacare exchanges are overregulated and oversubsidized, they are actually closer to the right-of-center vision for health care reform than the Obamacare Medicaid expansion, which is happening no matter what transpires with So if the exchanges fail and the Medicaid expansion takes effect (and, inevitably, becomes difficult to roll back), we’ll be left with an individual market that’s completely dysfunctional and a more socialized system over all.  In that scenario, the Democratic Party would probably end up pushing, not for the pipe dream of true single payer, but for a further bottom-up/top-down socialization, in which Medicare is offered to 55- to 65-year-olds and Medicaid is eventually expanded even more.

Meanwhile, the task for serious conservative reformers — already not the most politically effective bunch — might actually become harder, because they would have to explain how their plan to build an effective, exchange-based marketplace differed from the Obama White House’s exchange fiasco.  So while Republican politicians may be salivating over a potential Obamacare crisis, the conservative policy thinkers I know are not. They’re hoping, as I’m hoping, that this isn’t as bad as it looks. The chance to say “I told you so” is always nice, but not if the price is a potentially irrecoverable disaster.


President Obama Apologizes To Americans Who Are Losing Their Health Insurance
(By Juliet Eilperin, Washington Post 07 November 2013)

President Obama apologized Thursday to Americans who are losing their health insurance despite his repeated promises that they wouldn’t, an unusual act of contrition for a president who has come under heavy criticism for misleading the public.  “I am sorry that they, you know, are finding themselves in this situation, based on assurances they got from me,” Obama said in an interview with NBC News. “We’ve got to work hard to make sure that they know we hear them and that we’re going to do everything we can to deal with folks who find themselves in a tough position as a consequence of this.” 

The president said he had asked his staff to see whether there was an administrative fix to preserve insurance for some Americans who may have lost their coverage and do not qualify for subsidies that would make new policies affordable.  “I’ve assigned my team to see what we can do to close some of the holes and gaps in the law,” he said, “because, you know, my intention is to lift up and make sure the insurance that people buy is effective — that it’s actually going to deliver what they think they’re purchasing.”   A White House official, who spoke on the condition of anonymity, said the president’s policy team has been investigating the possibility of an administrative solution since the problem surfaced as a significant issue late last month.

The problem has arisen for those who buy insurance on the individual marketplace, a number that totals between 12 million and 15 million people. About half of those are probably being adversely affected by the Affordable Care Act, the aide said.  Presidents rarely say “I’m sorry” in public, even when acknowledging missteps. Obama’s most recent unvarnished apology came in February of last year when he told Afghan President Hamid Karzai that he was sorry for the involvement of U.S. service members in the burning of copies of the Koran, an incident that provoked widespread protest in the country at a delicate time in the war and in his own reelection campaign.
Thursday’s apology, coming at a time when the president and his administration are under intense criticism over the rollout of the health-care law, highlights the extent to which it has become a political liability for the White House. On Tuesday, President Obama’s approval rating dipped below 40 percent for the first time in two years, according to a daily tracking poll by Gallup.  The fact that Obama had said repeatedly that insured Americans would not have to change plans has become a new line of attack for congressional Republicans and an Internet meme, as news organizations have strung together video clips of the president’s comments on the subject over the past four years.  In a speech before the American Medical Association in June 2009, for instance, Obama said: “If you like your health-care plan, you’ll be able to keep your health-care plan, period. No one will take it away, no matter what.”

The disconnect between Obama’s assurances and the reality for some consumers emerged last month as a flood of people learned that they could not keep plans they had signed up for on the individual market. Although this group represents a small fraction of the total number of insured Americans — about 5 percent — their stories garnered national attention and provided fodder to opponents of the law.  On Thursday, for example, the conservative group Americans for Prosperity launched a $1 million ad campaign targeting four House members, including two Democrats who voted for the health-care law. One ad criticizes Rep. Ann Kirkpatrick (D-Ariz.) for helping make the law a reality. “Now Arizonans are losing the health-care plans they love,” the narrator says. “The doctors they love. And millions remain uninsured.” 
Obama defended the law several times over the course of the NBC interview, saying many of the people now receiving cancellation notices were in “subpar plans” and would probably benefit from new options — although they aren’t able to see them now because of continued problems with the Web site  “The majority of folks will end up being better off, of course. Because the Web site’s not working right, they don’t necessarily know it right” now, he said. “Keep in mind that most of the folks who . . . got these cancellation letters, they’ll be able to get better care at the same cost or cheaper in these new marketplaces.”  And although the president apologized for the fact that “we weren’t as clear as we needed to be in terms of the changes that were taking place,” he only did so after Chuck Todd, NBC’s chief White House correspondent, pressed him on the point.
Over the past two weeks, the president and his aides have emphasized that the cancellations stemmed largely from decisions by insurers, rather than from the law.  In a speech in Boston on Wednesday, Obama said that letting people keep their plans “was part of the promise we made” but that part of the law’s purpose is to help consumers upgrade their plans. On Monday night, he suggested that the promise really applied only to people who bought their plans before the health-care overhaul was enacted.  Several insurance officials, who asked to remain anonymous because of the sensitivity of the issue, said in interviews that the way the regulations were written after the law’s passage gave them little choice but to issue the cancellations. They said that the old policy could continue in effect only if very few changes were made and the price remained about the same.

The White House official said the president — who spent more than two hours Wednesday meeting with Democratic senators who are concerned about the law’s implementation — felt responsible for the effect on both the Americans now being adversely affected and “for the people who voted for it.”  Republicans such as Senate Minority Leader Mitch McConnell (Ky.) voiced little sympathy for the president after his interview aired Thursday.  “If the president is truly sorry for breaking his promises to the American people, he’ll do more than just issue a half-hearted apology on TV,” McConnell said in a statement. “A great place to start would be to support the [Wisconsin GOP Sen. Ronald H.] Johnson bill that would allow Americans to do what the president promised in the first place: keep the plan they have and like.”

Seven Falsehoods About Health Care: Big Myths About The Debate
(By Brooks Jackson, Viveca Novak, Lori Robertson and Jess Henig,, Aug 14, 2009)

So much for a slow news month. August feels like campaign season, with claims on health care coming at us daily. Does the House bill call for mandatory counseling on how to end seniors' lives sooner? Absolutely not. Will the government be dictating to doctors how to treat their patients? No. Do the bills propose cutting Medicare benefit levels? No on that one, too.  But on the other hand, has Congress figured out how to pay for this overhaul? Not yet. Or will it really save families $2,500 a year as the president keeps claiming? Good luck on that one, too.  In this article we offer a run-down of seven falsehoods we've taken on recently, with some additional updating and research thrown in.

False: Government Decides What Care I Get (a.k.a. they won't give grandma a hip replacement)
This untrue claim has its roots in the American Recovery and Reinvestment Act of 2009 (the stimulus bill), which called for the creation of a Federal Coordinating Council for Comparative Effectiveness Research. The council is charged with supporting and coordinating research that the government has been funding for years into which treatments work best, and in some cases, are most cost-effective. Supporters of this type of research say it can provide valuable information to doctors, improving care and also lowering cost.  Betsy McCaughey, a former Republican lieutenant governor of New York (and now a professing Democrat), wrote in an opinion piece that the government would actually tell doctors what procedures they could and couldn't perform. The claim took off from there, popping up in chain e-mails and Republican press conferences. It's not true. The legislation specifically says that the council can't issue requirements or guidelines on treatment or insurance benefits:

American Recovery and Reinvestment Act of 2009 : Nothing in this section shall be construed to permit the Council to mandate coverage, reimbursement, or other policies for any public or private payer. … None of the reports submitted under this section or recommendations made by the Council shall be construed as mandates or clinical guidelines for payment, coverage, or treatment.
As for the health care bills themselves, the House's H.R. 3200 sets up a center to conduct and gather such research within the Agency for Healthcare Research and Quality, an entity the CBO called "the most prominent federal agency supporting various types of research on the comparative effectiveness of medical treatments." Like the stimulus legislation, the bill states that: "Nothing in this section shall be construed to permit the Commission or the Center to mandate coverage, reimbursement, or other policies for any public or private payer.''  The Senate Health, Education, Labor and Pensions Committee bill (not yet released in its entirety) calls for a similar center that "will promote health outcomes research and evaluation that enables patients and providers to identify which therapies work best for most people and to effectively identify where more personalized approaches to care are necessary for others," according to the summary of the bill.  This claim also stems from a fear that the U.S. will institute a system like that of the U.K., where the government provides and pays for health care. But none of the bills now being debated in Congress call for such a system, and the president has said he doesn't want nationalized or single-payer health care, as we've said several times.

False: The Bill Is Paid For
At least, it isn't paid for yet.  President Obama has repeatedly said that a health care overhaul "will be paid for" and that he won't sign a bill that isn't deficit-neutral. But neither the House bill nor the Senate HELP Committee bill meets that criteria. According to the nonpartisan Congressional Budget Office and Joint Committee on Taxation, the House bill as introduced would add a net $239 billion over 10 years to the deficit, while the HELP Committee bill racks up more, $597 billion over 10 years. Obama has also said he has "identified two-thirds of those costs to be paid for by tax dollars that are already being spent right now." But "identified" is the operative word. These savings are estimates and whether around $650 billion (about two-thirds of the cost of health care over 10 years) can be saved remains to be seen. Most of the money would come from Medicare, but cuts in payments to insurers and practitioners aren't popular measures that move easily through Congress.  So the big questions remain. Will the president break his promise and sign a bill that piles up hundreds of billions of additional debt? Will the legislation have to be scaled back to cost less, and perhaps cover fewer of the uninsured? Who will pay additional taxes? Can pain-free reductions in other government programs be found?
False: Private Insurance Will Be Illegal
In July, Investor's Business Daily published an editorial in which it claimed that H.R. 3200 would make private insurance illegal. But IBD was mistaken. It was citing the part of the bill that ensures people with individually purchased coverage don't have to give up that coverage unless they want to.  Under the House bill, people who want to buy new individual, nongroup coverage will have to purchase it through a new health insurance exchange. They can still buy private insurance – the exchange, in fact, would offer a range of private plans, in addition to a new federal health insurance option. However, those who were already buying their own insurance before the bill went into effect – about 14 million Americans – will have their plans grandfathered in. The part of the bill IBD cites doesn't forbid insurers from issuing new plans. It says that new individual plans will not be considered grandfathered, and will have to be purchased through the exchange.

False: The House Bill Requires Suicide Counseling
This claim is nonsense. In an appearance on former Sen. Fred Thompson's radio show, McCaughey also enthusiastically pushed the bogus claim that the House bill will require seniors to have regular counseling sessions on how to end their lives:

McCaughey, July 16: The Congress would make it mandatory … that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner, how to decline nutrition, how to decline being hydrated, how to go into hospice care … all to do what's in society's best interest … and cut your life short.
This is a misrepresentation. What the bill actually provides for is voluntary Medicare-funded end-of-life counseling. In other words, if seniors choose to make advance decisions about the type of care and treatments they wish to receive at the end of their lives, Medicare will pay for them to sit down with their doctor and discuss their preferences. There is no requirement to attend regular sessions, and there is absolutely no provision encouraging euthanasia.  Of course, seniors who talk to their doctors about end-of-life care might well choose to discuss what types of life-saving treatment they wish to refuse. That choice has been federally guaranteed for almost 20 years. Euthanasia, on the other hand, is legal in only three states, making it even more unlikely to be a major part of the federal health plan.

False: Families Will Save $2,500
Proponents speak constantly of holding down rising medical costs. As recently as May 13, the president said legislation plus some voluntary measures by the private sector "could save families $2,500 in the coming years – $2,500 per family," echoing a claim he made countless times on the campaign trail last year.  Don't start spending that $2,500 just yet.  For one thing, Obama isn't actually promising to reduce health care spending below current levels, only to cut the rate of growth in spending. And even that is proving to be far tougher to accomplish than Obama led voters to believe. We've already mentioned that the Congressional Budget Office says "savings" in Medicare spending resulting from the House bill would fall short of what is needed to pay for two-thirds of its cost, which is Obama's goal. And those savings come only in what the government pays, not in what families pay.  Squeezing more savings, even from Medicare, is proving difficult. On July 17, Obama's lead man on the subject, Office of Management and Budget Director Peter Orszag, wrote to congressional leaders seeking legislation setting up an independent agency, the Independent Medicare Advisory Council (IMAC). It would be made up of health care experts with the power to make a package of annual changes in the amounts Medicare would pay to doctors. The president must either approve or disapprove the entire package as offered; if he approves, it goes into effect unless Congress passes a joint resolution stopping it. But when CBO took a look, it estimated that the new agency would save a total of only $2 billion over the next decade.  As for saving $2,500 for families, as opposed to saving money for the government, the CBO's letter, signed by Director Douglas W. Elmendorf, said:
CBO: [E]xperts generally agree that changes in government policy have the potential to significantly reduce health care spending—for the nation as a whole and for the federal government in particular—without harming people's health. However, achieving large reductions in projected spending would require fundamental changes in the financing and delivery of health care.
As an example of the "fundamental" changes that might do the trick: CBO suggested moving away from the current system of paying doctors and hospitals for performing medical procedures and paying them instead a fixed fee per patient or some other payment based on "value." Another CBO suggestion: "higher cost-sharing requirements." So far we don't see those ideas in the bills being considered.

False: Medicare Benefits Will Be Slashed
The claim that Obama and Congress are cutting seniors' Medicare benefits to pay for the health care overhaul is outright false, though that doesn't keep it from being repeated ad infinitum.  The truth is that the pending House bill extracts $500 billion from projected Medicare spending over 10 years, as scored by the Congressional Budget Office, by doing such things as trimming projected increases in the program's payments for medical services, not including physicians. Increases in other areas, such as payments to doctors, bring the net savings down to less than half that amount. But none of the predicted savings – or cuts, depending on one's perspective – come from reducing current or future benefits for seniors.  The president has promised repeatedly that benefit levels won't be reduced, reiterating the point recently in Portsmouth, N.H.:

Obama, Aug. 11: Another myth that we've been hearing about is this notion that somehow we're going to be cutting your Medicare benefits. We are not.
Is he wrong? Not according to AARP, by far the nation's largest organization representing the over-50 population. In a "Myths vs. Facts" rundown, AARP says:

AARP: Fact: None of the health care reform proposals being considered by Congress would cut Medicare benefits or increase your out-of-pocket costs for Medicare services.

To be sure, Obama hasn't always thought that Medicare "savings" could be accomplished without actual cuts in benefits. Last fall, his campaign ran two television ads accusing Sen. John McCain of wanting "a 22 percent cut in [Medicare] benefits." The basis for the ads was a newspaper article in which a McCain aide said the Arizona Republican would cut Medicare costs. But the aide said nothing about cutting benefits, in fact quite the contrary. We called the claim "false" when Obama made it against McCain, and it's still false now when Obama's critics are making the same accusation against him.
False: Illegal Immigrants Will Be Covered
One Republican congressman issued a press release claiming that "5,600,000 Illegal Aliens May Be Covered Under Obamacare," and we've been peppered with queries about similar claims. They're not true. In fact, the House bill (the only bill to be formally introduced in its entirety) specifically says that no federal money would be spent on giving illegal immigrants health coverage:
Nothing in this subtitle shall allow Federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States.

Also, under current law, those in the country illegal don't qualify for federal health programs. Of interest: About half of illegal immigrants have health insurance now, according to the nonpartisan Pew Hispanic Center, which says those who lack insurance do so principally because their employers don't offer it.

Congressional Budget Office. Letter to Rep. Charles B. Rangel. 17 Jul 2009.
Congressional Budget Office. Letter to Sen. Edward M. Kennedy. 2 Jul 2009.
U.S. House. "H.R. 3200." (as introduced 14 Jul 2009.)
Agency for Healthcare Research and Quality. "Advance Care Planning: Preferences for Care at the End of Life." Mar 2003.
"AARP Responds to Health Reform Scare Tactics." Press release. AARP 24 Jul 2009.
Keyserling, Jon. Interview with 29 Jul 2009.
Patient Self-Determination Act. 42 USC 1395cc.
Collins, Sara. Interview with 21 Jul 2009.
"It's Not an Option." Editorial. Investor's Business Daily. 15 Jul 2009.
Orszag, Peter. Letter to House Speaker Nancy Pelosi. Office of Management and Budget. 17 Jul 2009.
Congressional Budget Office. Letter to Rep. Steny Hoyer. 25 Jul 2009.

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Obamacare Oil Spill
(By Joel Achenbach,, 15 November 2013)

The Obamacare mess reminds me of the BP oil spill, in part because everything reminds me of the BP oil spill, including what’s going on  this season with the Gators. They lost to Vanderbilt! At home! This is just not done. There are supposed to be safeguards, backups, contingency plans, and other mechanistic, technocratic systems that stop such disasters before they can unfold.  But back to Obamacare: Clearly the website was one of those single-point failures you always hear about. Like the Deepwater Horizon blowout preventer not sealing the well. (President Obama misses the days when he only had to worry about easy problems, like a gushing well at the bottom of the Gulf of Mexico.)

Critics will say that there’s much more that’s wrong with Obamacare than just a balky website, and I’ll get to that in a second. What’s certain is that the technical flaw with the website undermines the extremely delicate process at the heart of the Affordable Care Act, which is the enrollment of millions of relatively young and healthy people into these new insurance exchanges. The harder it is to navigate that site, the more likely it is that only the truly desperate, the extremely sick, the terminal ill and the actually dead will stick with the process long enough to get enrolled.

Question: Did anyone in the highest levels of government countenance even the possibility that the website might not be functional?  Or did everyone — including Obama — simply assume that technical people, those geeky folks, would make all that stuff work?  Did anyone imagine failure?  To fail to imagine failure is a failure of imagination. (Something like that.)

Just as deepwater drilling is inherently risky, so is a major reform of the health care industry. Some call that social engineering, as a pejorative. But the existing system, pre-Obamacare, was its own form of social engineering, one that left tens of millions of people uninsured or underinsured. The Obamacare critics see the ACA as monstrous socialist over-reach, but I seem to recall that ACA had roots at the Heritage Foundation, that it conspicuously earned buy-in from private stake-holding industries, including insurers who saw a whole new pool of customers, and that it wasn’t what the liberals and Bernie Sanders (an actual socialist) wanted, which was a single-payer plan. Hey, maybe single payer would have worked much better!

This new system may yet work, but it won’t work if the people in Washington decide that their highest priority is to limit the political damage of the disastrous roll-out.  Complex systems fail in complex ways, and sometimes can’t be readily fixed. Obama yesterday offered an administrative fix, of sorts, to let people with canceled insurance policies renew them for another year, but that’s really just calling in the skimmers to deal with the oil slick rather than sealing the well (sorry to be so stuck on this metaphor! Someone call a shrink…). No wonder the insurance companies reacted unhappily (see the Sarah Kliff story on Wonkblog) to the president’s announcement: The exchanges need more people to enroll, and this move works directly against that goal.

As long as I’m mired in this oil spill concept: I was amused to see the lede of the Glenn Thrush story that’s in the debut Politico magazine. Thrush writes, “President Barack Obama even credits Chu with solving the 2010 Gulf oil spill, claiming that Chu strolled into BP’s office and ‘essentially designed the cap that ultimately worked.’ On the Achenblog I deconstructed and harrumphed about that Obama comment at the time he made it. By sending Chu to “fix” the BP oil spill, Obama demonstrated that he believes that smart people can achieve almost anything. Take the smartest guy in the Cabinet (Nobel Prize!) and get him to go down there and plug that well, even if he didn’t know a darn thing about petroleum engineering. And Obama apparently thought that that’s exactly what happened (incorrect).

The government didn’t have the ability to plug that well. The industry had to do it. And my guess is that Obama is going to have to work very closely with the insurance industry — awkward though that may be — to create viable exchanges. Otherwise this whole thing is likely to be kaput.  [Update: Obama has called insurance industry bosses to the WH for a meeting this afternoon, Politico reports.]



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