The Taxpayers on a Bigger Hook: So much for Health Care Reform
Some see a light at the end of the tunnel as most of the health care ‘REFORMS’ are not due until after the next presidential election. We hope that the new President in 2015 will promptly conclude, and irreversibly, that the patience of the American people for corruption in the highest places has run out, and the time for dismantling the enabling law and the associated mountain of health regulations has indeed arrived. Logic dictates this, but the reality may run against logic in favor of politics, all aided and abetted by the politicians AND the insurance companies (yes!). America is hopeful that all the incumbents that accepted, unashamedly, bribes in different forms would have been retired, Nelson and Stupak especially, by the will of the people or by their own sense of shame! But this may not be enough!
Before we cork off the Champagne we must realize that the light at the end of the tunnel may well be a mirage or a freight train. We cite only two cases.
We can start, however, with some preliminary indictments. Much of the Health Care law was based on false numbers. There will be huge deficits associated with it and the taxpayers will have either to pay up or lobby to repeal the law. No matter, our grand children are forever saddled by the cost of health care up to 2015 in the form of associated, rationality-busting budget deficits.
A constant in recent political history is that what government gives, it may not be able to take away. Abortions funded by federal money may well be the first irreversible new budget item. Should OBAMA find a way to thwart the Stupak compromise this may well become another budget busting item that will spill into the streets, and Congress may not be able to reverse it. Imagine, similarly, congress trying to take away the drug benefits from seniors.
Another issue is even more ominous and is more likely to become permanent. Recently all states were faced with two choices: take the money and create your own high risk pool (exchange), or participate in an obligatory pool for the seriously ill run by the Federal government. It can safely be anticipated that the Insurance companies that were so systematically vilified by the Obama Administration, will lobby to keep either pool on the books. This allows them to permanently change the pool of clients seeking to buy health insurance by dumping as many of the undesirable candidates (those with preexisting conditions) into these pools. This will simply add large numbers to the upward secular trend in health care costs. The lobbyists for insurance companies are likely to win this battle. The life of insurance companies will become less complicated.
Politicians is their rush to do “good” and be responsive to the health care needs of the “poor” and the ‘seriously ill’ will continue to redefine the pool in a way that forces much of the health care cost of the seriously ill unto government, and allow the insurance companies to cherry pick their clientele, all in the name of ‘bending the cost curve”.
But the cost curve has already started its steep rise. The forecasts are for even faster increases. No bending!!!!!!!!!!!!!
The pools whether run by the state of the Federal government are likely to become a fiscal nightmare.
This is how they work: states that do not want to run their own exchanges may opt out. But this is not free. They will have to agree to extend “Medicaid to more of their citizens, including all uninsured persons with 133% to 200% of the poverty level”.
But states may opt out of Medicaid entirely, but their citizens cannot. They must continue to pay the Medicaid taxes no matter what the states do in terms of high risk Health Exchanges.
But providing catastrophic insurance is required. The states will receive some subsidies from the Federal government until 2015 if they are running their own exchanges. Arnold decided to do this for California. He was not thinking about the post 2015 costs. He simply was thinking about the here and now and closing the budget deficit, if only slightly.
This is the consequence of a policy that seeks to underwrite the absurd in the hope that “if things will not work out or we will simply borrow the money”. This is the deficit addiction factor.
But Arnold failed to read the fine print. The Federal government will have its hands deep into the state pockets as it will be able to impose the contents (the coverage) of the state run insurance program. No sooner than 2015 comes around plastic surgery for a person considering their face too “ugly” to sustain emotionally may well be considered a catastrophic case.
Further, the Federal government will be able not only to propose but also to dispose. States must make sure that all of their citizens have health insurance. Catastrophic insurance is clearly the most expensive, thus more likely to be a candidate for major subsidies by the state or by the Federal government. Sooner than you know the subsidies will apply to those who may well be earning over 300% of the federal Poverty Level as no one “should go bankrupt because of health care costs”.
The final results are very predictable: massive increases in health care costs with the insurance companies standing on the sideline when it comes to catastrophic care. Should those companies smile too broadly, they will be subjected to additional taxation based on the expense to premium ratios and/or have their compensation schemes ever more closely supervised, etc., all in the name of fairness.
The taxpayer will be ever more on the hook no matter the outcome of the presidential elections and no matter who will collect the taxes: the State or the Federal Government.
This entry was posted on Sunday, June 13th, 2010 at 10:33 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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