Thursday, September 30, 2010

More Obamacare Follies

It seems every week more information on how the farce that is Obamacare will wreck America's health care system trickles out, something I noted in my two most recent posts on the topic here and here. Last week, in a brilliant Facebook Note, Governor Palin chronicled many of the distortions and outright lies that have characterized the Democrat takeover of the industry since the unpopular bill was passed against the wishes of the people last March. In her post she noted that, contrary to what Obama claimed, Obamacare will make it far less likely that Americans will be able to keep their current insurance plan or doctor:

Remember when the president said, “If you like your doctor, you can keep your doctor”? Not true. In Texas alone a record number of doctors are leaving the Medicare system because of the cuts in reimbursements forced on them by Obamacare! The president of the Texas Medical Association, Dr. Susan Bailey, warns that “the Medicare system is beginning to implode.”

Today Avik Roy at Forbes has written a comprehensive piece detailing one of the many ways Obamacare jeopardizes your current healthcare coverage:

Imagine if you ran a business, and one day the government told you that you would be fined if you: (1) minimized unnecessary expenses; (2) hired workers to specialize in customer service; (3) invested resources in order to ensure you wouldn’t get victimized by fraud. What would you do? Think quickly: because three months from now, this very system will be the law of the land for our nation’s health insurers.

Last Friday, the National Association of Insurance Commissioners—the association of the 50 state insurance commissioners—issued its draft guidelines for how insurers will need to calculate “medical-loss ratios,” or MLRs. The wonkiest among you will recall that the medical loss ratio is loosely defined as the dollar amount that an insurer spends on the health care of its beneficiaries, divided by the total dollar amount the insurer collects in premiums. Section 2718 of our new health care law mandates that insurance plans sold to individuals and small employers must spend at least 80 percent of their premiums on health care, and plans sold to large employers must spend at least 85 percent.

But, like everything else with Obamacare, the devil is in the details: how do you define health care? How do you define “insurance plan”? Now that the NAIC has spoken, we have a good idea of how the final regulations will look. And the news is not good: the MLR regulations are likely to lead to a significant disruption of the health insurance market, with many insurers exiting the market, driving premiums up and choices down.


The NAIC draft guidelines are open to public comment until October 4. The organization plans to submit its final recommendations to Secretary Sebelius later in the month. PPACA gives Sebelius the freedom to enact whatever regulations she likes on the MLR matter, though she is likely to accept the NAIC’s recommendations so as to avoid stoking further controversy. She is likely to wait until after the November elections to issue the final regulations, leaving insurers less than two months to radically reorder their businesses, or face crippling fines.

Residents of states whose insurance markets aren’t up to Washington’s snuff are in for a serious disruption of their health care. This situation has all the makings of a giant mess. And if a mess does indeed come to pass, let no one pull the wool over your eyes as to how and why it happened.

There is a lot of information in Roy's piece and you really need to read the whole thing to get a sense of the true nightmare Obamacare has created. Obamacare is, as Governor Palin and others have noted, a one-size-fits-all plan designed by Obama, Pelosi, and others like them who aren't qualified to run the French fryer at the local McDonalds, let alone one-sixth of the U.S. economy. In their quest to take over the entire U.S. healthcare system, Obama and company have usurped state insurance laws by replacing them with what is effectively a government monopoly. Any first year economics student understands that attempts to limit competition, as Obamacare does, inevitably results in higher prices, lower quality, and fewer choices. How anyone can be surprised that this is exactly what is happening is itself surprising.

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