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ObamaCare-bailout for the failing health insurance industry

health care
A Huge Bailout for Another Failing Industry
ObamaCare as Corporatists United
by CLARK NEWHALL, MD

In an eagerly anticipated opinion on the Patient Protection and
Affordable Care Act, colloquially known as ¡°Obamacare¡¯, an unusual
alignment of justices upheld the Act nearly entirely. The crucial part
of the decision found the ¡®odd bedfellows¡¯ combination of Chief Justice
Roberts joining the four ¡®liberal¡¯ justices to uphold the ¡®individual
mandate¡¯, the section of the law requiring all Americans to buy health
insurance from private health insurance companies. The alignment is
especially strange given the lengths to which Justice Roberts had to go
to support his convoluted reasoning.

He accepted the argument that the individual mandate was
unconstitutional as an exercise of the Commerce Clause becuase it
required a commercial activity that had never hitherto existed, i.e. the
purchase of health insurance by someone who had never purchased it. He
accepted the argument that the individual mandate was unconstitutional
as an exercise of the ¡°Necessary and Reasonable¡± Clause. And he
rejected the argument that the payment of a penalty to the IRS by those
who refused to comply with the individual mandate (¡°refuseniks¡±) was a
¡°tax¡± subject to a law that says you first have to pay the tax before
you can sue for a refund.

But then he turned about and found that the money that the IRS can take
from a refusenik WAS a tax and NOT a penalty. Under that reasoning, the
¡®individual mandate¡¯ requiring everyone to buy health insurance from a
private company becomes a ¡®tax law¡¯ and therefore constitutional.

With this bizarre twisting of words, the Supreme Court has revealed the
nature of 21st century American political thought. Those who make,
interpret and enforce the laws no longer lie on the ¡®left-right¡¯
political continuum. Instead, they are in effect at ¡®right angles¡¯ to
that continuum. The ideology that drives the Supreme Court, the
political administration and the Congress is not Conservative or Liberal
but can best be described as ¡°Corporatist.¡± This is the ideology that
affirms that ¡°corporations are citizens, my friends.¡± it is the
ideology that drove the Roberts Court to the odious Citizens United
decision. it is the ideology behind a bailout for banks that are ¡®too
big to fail.¡¯ And it is the ideology that allows Congress to pass a law
like the ACA that is essentially written by a favored industry. The
Corporatist ideology allows the Supreme Court to uphold the ACA despite
the obvious and glaring consequence: forcing someone to buy health
insurance is like forcing someone to buy a used Rambler ¡ª it¡¯s a shoddy
product at an inflated price, but you must pay a tax or swallow your
anger and buy it from the smirking dealer down the street.

Why does Corporatism favor Obamacare? Because Obamacare is nothing more
than a huge bailout for another failing industry ¡ª the health insurance
industry. No health insurer could continue to raise premiums at the
rate of two to three times inflation, as they have done for at least a
decade. No health insurer could continue to pay 200 million dollar plus
bonuses to top executives, as they have done repeatedly. No health
insurer could continue to restrict Americans¡¯ access to decent health
care, in effect creating slow and silent ¡®death panels.¡¯ No health
insurer could do those things and survive. But with the Obamacare act
now firmly in place, health insurers will see a HUGE multibillion dollar
windfall in the form of 40 million or more new health insurance
customers whose premiums are paid largely by government subsidies. That
is the explanation for the numerous expansions and mergers you have seen
in the health care industry in the past couple of years. You will see
more of the same, and if you are a stock bettor, you would do well to
buy stock in smaller health insurers, because they will be snapped up in
a wave of consolidation that dwarfs anything yet seen in this country.

As I write this, I note that health industry stocks have taken a big
jump on Wall Street.

What a surprise!

Dr. Clark Newhall MD JD is Executive director of Health Justice. Please
reply to cnewhall at
cnewhall.com< http://greenhouse.economics.utah.edu/mailman/listinfo/marxism>

-----------------

FDL Fact Sheet: The Truth About the Health Care
Bill< http://firedoglake.com/fdl-fact-sheet-the-truth-about-the-health-care-bill/>

The FDL health care team has been covering the health care debate in
congress since it began in 2009. They have put together a fact sheet to
help readers sort through the myths and facts of the health care bill:
*Myth* Trut*h* *1. This is a universal health care bill.*

*
*

*The bill is neither universal health care nor universal health insurance. *

Per the CBO:

- Total uninsured in 2019 with no bill: 54 million
- Total uninsured in 2019 with Senate bill: 24 million (44%)

*2.* *Insurance companies hate this bill
*

*
*
*This bill is almost identical to the plan written by AHIP, the insurance
company trade association, in 2009. *

The original Senate Finance Committee bill was authored by a former
Wellpoint VP. Since Congress released the first of its health care bills on
October 30, 2009, health care stocks have risen 28.35%.
*3. The bill will significantly bring down insurance premiums for most
Americans.*

*
*

*The bill will not bring down premiums significantly, and certainly not the
$2,500/year that the President promised*.

Annual premiums in 2016, status quo / with bill:

Small group market, single: $7,800 / $7,800

Small group market, family: $19,3oo / $19,200

Large Group market, single: $7,400 / $7,300

Large group market, family: $21,100 / $21,300

Individual market, single: $5,500 / $5,800*

Individual market, family: $13,100 / $15,200*
*4. The bill will make health care affordable for middle class Americans.
***** *The bill will impose a financial hardship on middle class Americans
who will be forced to buy a product that they can¡¯t afford to use.*

A family of four making $66,370 will be forced to pay $8,628 per year for
insurance. After basic necessities, this leaves them with $8,307 in
discretionary income ¡ª out of which they would have to cover clothing,
credit card and other debt, child care and education costs, in addition to
$5,882 in annual out-of-pocket medical expenses for which families will be
responsible.
*5. This plan is similar to the Massachusetts plan, which makes health
care affordable.** * *Many Massachusetts residents forgo health care
because they can¡¯t afford it.*

A 2009 study by the state of Massachusetts found that:

- 21% of residents forgo medical treatment because they can¡¯t afford it,
including 12% of children
- 18% have health insurance but can¡¯t afford to use it

*6. This bill provide health care to 31 million people who are currently
uninsured.*

*
*
*This bill will mandate that millions of people who are currently uninsured
must purchase insurance from private companies, or the IRS will collect up
to 2% of their annual income in penalties. Some will be assisted with
government subsidies.* *7. You can keep the insurance you have if you like
it.** ***
*The excise tax will result in employers switching to plans with higher
co-pays and fewer covered services.*

Older, less healthy employees with employer-based health care will be
forced to pay much more in out-of-pocket expenses than they do now.
*8. The ¡°excise tax¡± will encourage employers to reduce the scope of
health care benefits, and they will pass the savings on to employees in the
form of higher wages. *

**
*There is insufficient evidence that employers pass savings from reduced
benefits on to employees.*

*
*
*9. This bill employs nearly every cost control idea available to bring
down costs.*

*
*
*This bill does not bring down costs and leaves out nearly every key cost
control measure, including: *

- Public Option ($25-$110 billion)
- Medicare buy-in
- Drug reimportation ($19 billion)
- Medicare drug price negotiation ($300 billion)
- Shorter pathway to generic biologics ($71 billion)

*10. The bill will require big companies like WalMart to provide insurance
for their employees*

**
*The bill was written so that most WalMart employees will qualify for
subsidies, and taxpayers will pick up a large portion of the cost of their
coverage.* *11. The bill ¡°bends the cost curve¡± on health care.*

*
*
*The bill ignored proven ways to cut health care costs and still leaves 24
million people uninsured, all while slightly raising total annual costs by *
*$234 million in 2019*.

¡°Bends the cost curve¡± is a misleading and trivial claim, as the US would
still spend far more for care than other advanced countries.

In 2009, health care costs were 17.3% of GDP.

**Annual cost of health care in 2019, status quo: $4,670.6 billion (20.8%
of GDP)

Annual cost of health care in 2019, Senate bill: $4,693.5 billion (20.9% of
GDP)
*12. The bill will provide immediate access to insurance for Americans who
are uninsured because of a pre-existing condition.** * *Access to the ¡°high
risk pool¡± is limited and the pool is underfunded. It will cover few
people, and will run out of money in 2011 or 2012*

Only those who have been uninsured for more than six months will qualify
for the high risk pool. Only 0.7% of those without insurance now will get
coverage, and the CMS report estimates it will run out of funding by 2011
or 2012.
*13. The bill prohibits dropping ****people **in individual plans **from
coverage when they get sick*. *The bill does not empower a regulatory body
to keep people from being dropped when they¡¯re sick.*

There are already many states that have laws on the books prohibiting
people from being dropped when they¡¯re sick, but without an enforcement
mechanism, there is little to hold the insurance companies in check.
*14. The bill ensures consumers have access to an **effective internal and
external appeals process to challenge new insurance plan decisions.** *** *The
¡°internal appeals process¡± is in the hands of the insurance companies
themselves, and the ¡°external¡± one is up to each state.
*Ensuring that consumers have access to ¡°internal appeals¡± simply means the
insurance companies have to review their own decisions. And it is the
responsibility of each state to provide an ¡°external appeals process,¡± as
there is neither funding nor a regulatory mechanism for enforcement at the
federal level. *15. This bill will stop insurance companies from hiking
rates 30%-40% per year.
*

*
*
*This bill does not limit insurance company rate hikes. Private insurers
continue to be exempt from anti-trust laws, and are free to raise rates
without fear of competition in many areas of the country.* *16. When the
bill passes, people will begin receiving benefits under this bill
immediately*

*
*
*Most provisions in this bill, such as an end to the ban on pre-existing
conditions for adults, do not take effect until 2014.** *

Six months from the date of passage, children could not be excluded from
coverage due to pre-existing conditions, though insurance companies could
charge more to cover them. Children would also be allowed to stay on their
parents¡¯ plans until age 26. There will be an elimination of lifetime
coverage limits, a high risk pool for those who have been uninsured for
more than 6 months*,* and community health centers will start receiving* *
money.*
*
*17. The bill creates a pathway for single payer.
*

*
*
*Bernie Sanders¡¯ provision in the Senate bill does not start until 2017,
and does not cover the Department of Labor, so no, it doesn¡¯t create a
pathway for single payer.*

*
***Obama told Dennis Kucinich that the Ohio Representative¡¯s amendment is
similar to Bernie Sanders¡¯ provision in the Senate bill, and creates a
pathway to single payer. Since the waiver does not start until 2017, and
does not cover the Department of Labor, it is nearly impossible to see how
it gets around the ERISA laws that stand in the way of any practical state
single payer system.
*18 The bill will end medical bankruptcy and provide all Americans with
peace of mind.*

*
*
*Most people with medical bankruptcies already have insurance, and
out-of-pocket expenses will continue to be a burden on the middle class. *

- In 2009, 1.5 million Americans declared bankruptcy
- Of those, 62% were medically related
- Three-quarters of those had health insurance
- The Obama bill leaves 24 million without insurance
- The maximum yearly out-of-pocket limit for a family will be
$11,900< http://stabenow.senate.gov/healthcare/Patient_protection_section.pdf>(PDF)
on top of premiums
- A family with serious medical problems that last for a few years could
easily be financially crushed by medical costs* *

*Cost of premiums goes up somewhat due to subsidies and mandates of better
coverage. CBO assumes that cost of individual policies goes down 7-10%, and
that people will buy more generous policies.

*Documentation:*

1. March 11, Letter from Doug Elmendorf to Harry Reid
(PDF< http://cbo.gov/ftpdocs/113xx/doc11307/Reid_Letter_HR3590.pdf>
)
2. The AHIP Plan in
Context< http://wonkroom.thinkprogress.org/2008/12/03/ahip-context/>,
Igor Volsky; The Max Baucus WellPoint/Liz Fowler
Plan< http://emptywheel.firedoglake.com/2009/09/08/liz-fowlers-plan/>,
Marcy Wheeler
3. CBO Score< http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf>,
11-30-2009
4. ¡°Affordable¡± Health
Care< http://emptywheel.firedoglake.com/2009/12/27/affordable-health-care/>,
Marcy Wheeler
5. Gruber Doesn¡¯t Reveal That 21% of Massachusetts Residents Can¡¯t
Afford Health
Care< link to emptywheel.firedoglake.com,
Marcy Wheeler; Massachusetts Survey
(PDF< http://www.mass.gov/Eeohhs2/docs/dhcfp/r/survey/08his_access.ppt>
)
6. Health Care on the Road to
Neo-Feudalism< http://emptywheel.firedoglake.com/2009/12/15/health-care-on-the-road-to-neo-feudalism/>,
Marcy Wheeler
7. CMS: Excise Tax on Insurance Will Make Your Insurane Coverage Worse
and Cause Almost No Reduction in
NHE< link to fdlaction.firedoglake.com,
Jon Walker
8. Employer Health Costs Do Not Drive Wage
Trends< http://seminal.firedoglake.com/diary/23487>,
Lawrence Mishel
9. CBO Estimates Show Public Plan With Higher Savings
Rate< http://www.nationaljournal.com/congressdaily/cda_20090925_6347.php>,
Congress Daily; Drug Importation Amendment Likely This
Week< link to www.politico.com,
Politico; Medicare Part D
IAF< http://www.missouriprovote.org/Docs/MedicarePartD_IAF.pdf>;
A Monopoloy on Biologics Will Drain Health Care
Resources< link to www.thelancetstudent.com,
Lancet Student
10. MaxTax Is a Plan to Use Our Taxes to Reward Wal-Mart for Keeping Its
Workers in Poverty< link to emptywheel.firedoglake.com,
Marcy Wheeler
11. Estimated Financial Effects of the ¡°Patient Protection and
Affordable Care Act of 2009,¡± as Proposed by the Senate Majority Leader on
November 18, 2009, CMS
(PDF< http://www.politico.com/static/PPM110_091211_financial_impact.html>
)
12. ibid
13. ibid
14. ibid
15. Health insurance companies hang onto their antitrust exemption, Protect
Consumer Justice.org< link to www.protectconsumerjustice.org
16. What passage of health care reform would mean for the average
American< link to fdlaction.firedoglake.com,
DC Examiner
17. How to get a State Single Payer Opt-Out as Part of
Reconciliation< link to fdlaction.firedoglake.com,
Jon Walker
18. Medical bills prompt more than 60 percent of U.S.
bankruptcies< http://www.cnn.com/2009/HEALTH/06/05/bankruptcy.medical.bills/>,
CNN.com; The Patient Protection and Affordable Care Act Section©\by©\Section
Analysis (PDF< http://stabenow.senate.gov/healthcare/Patient_protection_section.pdf>