Consumer Power Report #240

Published September 24, 2010

Welcome to the Consumer Power Report!

Six months ago this week, President Barack Obama signed the Patient Protection and Affordable Care Act into law. Since then, the debate over health care reform has not lost any steam – in fact, it has become more contentious each day. With an astonishing amount of regularity, Obama’s health care house of cards continues to crumble. As John Goodman at the National Center for Policy Analysis pointed out, this kind of thing should be expected when government makes too many promises that it cannot possibly keep.

With the six-month anniversary, health policy experts have had plenty of time to analyze the data from Obamacare, and the overall verdict has not been good. Even former President Bill Clinton, who said Obamacare eventually would become very popular with the American people, has had to back away from his prediction.

But this is the trap President Obama and Democrats in Congress set for themselves. The arrogance of assumption made them blind to the fact that promises made when altering one-fifth of the economy cannot possibly be kept. There are just too many moving parts.

Health care reform always will be a contentious issue in the United States, mostly because as Americans we want and strive for the best. However, it seems to escape our elected leaders that health care is an industry that constantly evolves, and through that evolution the stakeholders adapt in order to provide affordable quality care. Government-provided goods and services have never been able to adapt to changing moods, trends, or demographics – Medicare is a perfect example. Yet Congress and President Obama have thrust upon us this new law that makes things worse for physicians, consumers, small business owners, and seniors. The Heritage Foundation has done a great job of identifying the negative effects the law will have on all these groups.

– Peter J. Fotos, director of government relations, The Heartland Institute



The Heartland Institute has just released The Obamacare Disaster, a new policy study by Peter Ferrara. This study is a comprehensive review of Obamacare and a careful appraisal of its likely effects. It is the second report by the author on Obamacare, the first being a critique of bills still being debated by Congress in August 2009.

Most of the Obamacare law’s provisions, except its tax increases, do not go into effect until 2014. As Ferrara writes, “So what follows is like a visit from the ghost of Christmas Future, shadows of what will be, but do not have to be, if we will change it.”

SOURCE: The Obamacare Disaster


Drug reimportation – allowing Americans to purchase drugs from other countries – has been an issue for years, but safety concerns have kept it on the back burner. Roger Bate from the American Enterprise Institute wrote earlier this month that international drug markets should not gloss over the safety concerns that have been raised by consumers and physicians. By ignoring safety issues in the international market, these countries will lose market share in the pharmaceutical industry.

SOURCE: Wall Street Journal; USA Today


When it comes to health care, we are dealing with a finite amount of resources where changing one aspect can dramatically alter another. As The New York Times reports, federal officials negotiated with insurance companies offering Medicare Advantage plans to keep premiums down even though more benefits will be offered. As a result, insurers will make up their loses by increasing premiums for the non-Medicare crowd. All of this comes at almost no added cost to the federal government … but that won’t last long.

Once premium subsidies begin in 2014 for health plans offered in the state-run exchanges, federal officials will be negotiating rates for those plans as well, and the result will be massive premium increases for non-subsidized health care plans. Ultimately, this will lead to more individuals losing their private coverage, forcing them into government-subsidized plans, creating even higher budget deficits.

SOURCE: New York Times


When hospitals compete, you live (even in Great Britain)! This is the theme of a new report from the National Bureau of Economic Research that says competition among hospitals in the National Health System in Great Britain results in higher quality without raising the cost of care. Hat tip to Devon Herrick at the National Center for Policy Analysis whose recent blog post contains a link to the full study.

SOURCE: John Goodman’s Blog


The mid-term elections are only six weeks away and by all accounts, Republicans are going to make massive gains in the House and Senate.

As the old saying goes, “with great power comes great responsibility.” If Republicans take control of one or more houses of Congress, they must be ready to lead. More importantly, they must be ready with bold ideas that will put this country back on track. Very few Members of Congress are willing to spell out their visions for the future of America, but those who have should be given the proper support to sell their ideas to the American people.

According to polling data, independent voters are likely to hand the keys back to Republicans, but they should understand that it is the absence of leadership by President Obama and the Democrats that has led to this moment. In this day and age, accountability means a lot, and this opportunity can just as easily be taken away from Republicans in 2012 as it will be taken away from Democrats in November.

SOURCE: Wall Street Journal