Consumer Power Report #474
At a campaign stop in Des Moines, Iowa, Democratic presidential frontrunner Hillary Clinton outlined some of the key health care programs she plans to enact if elected president in November 2016.
According to a report by the Associated Press, Clinton’s plan would, among other things, “deny tax breaks for televised direct-to-consumer advertising and require drug companies that receive taxpayers’ support to invest in research and development.”
The most significant (and radical) part of Clinton’s proposal, however, is to institute a government-mandated cap on the amount of money patients have to pay out-of-pocket for prescription drugs.
As reported by Time, “Under the plan, monthly out-of-pocket costs for all patients would be limited at $250 per month for individuals, which [Clinton’s] campaign said would help up to one million Americans. She would also require pharmaceutical companies to pay higher rebates to Medicare in exchange for the federal program insuring prescriptions drugs, a measure her campaign says would save the program $100 billion.”
Some observers, including Sam Frizell at Time Magazine, have suggested Clinton’s added controls of the health care market differ significantly from the proposal to move entirely to a single-payer health care system offered by her most serious challenger, Sen. Bernie Sanders (I-VT). On the surface, that may be true. Clinton seeks to maintain the “progress,” as she put it, initiated by the Affordable Care Act (ACA) and Sanders wants to tear up ACA and establish single-payer, government-controlled health insurance right now.
In the end, however, both plans eventually end up in the same place, with the only real difference being the speed at which single-payer is instituted.
Obamacare was designed from the very beginning to slowly move the nation toward a government-controlled health insurance system, but President Barack Obama understood at the time ACA was being debated that it would be impossible to move immediately into a single-payer model. He was right. The backlash against Obamacare in 2009 and 2010 – the same backlash that led to one of the most lopsided congressional elections in history in 2010 – would have been even greater had Obama pushed a single-payer system. There was simply no way Obama could have passed a single-payer plan through Congress at the time.
Obama, throughout his career, has made his vision for moving to a single-payer plan clear. In August 2007, Obama said, “[Health care] is a two trillion dollar part of our economy and it is my belief that it’s not just politically but economically it is better for us to start getting a system in place – a universal healthcare system signed into law by the end of my first term as president and build off that system to further to make it more rational … By the way, Canada did not start immediately with a single payer system. They had a similar transition step.”
Obamacare was meant to be that “transition step.” By forcing health insurance companies to provide health insurance to those with preexisting conditions; dramatically expanding Medicaid; making millions of Americans dependent on government subsidies offered to help pay for Obamacare insurance plans, which have become increasingly more expensive due to ACA’s requirements; and forcing health insurance companies to provide specific policies, ACA makes a single-payer system inevitable.
As the government has become more involved in the health care system, costs have dramatically risen. According to a study by HealthPocket, Inc., average monthly premiums for U.S. women age 30 increased by 35 percent from 2013 to the end of 2014. Men of the same age saw premiums rise a whopping 73 percent. Rising premiums mean more Americans in the future will need to rely on government subsidies to pay for health insurance.
Businesses, especially large businesses, will choose to pay the Obamacare-instituted fine imposed on companies who do not offer quality health insurance, because it’s cheaper than actually paying for health insurance themselves. This will force more people into the Obamacare health insurance marketplace and will lead to more people obtaining government subsidies.
Millions of Americans will continue to join the Medicaid rolls, a phenomenon that’s already reaching astounding levels. For instance, in Colorado the number of additional people enrolled in Medicaid and the Children’s Health Insurance Program (CHIP) grew by 477,000 from 2013 to February 2015, an increase of 60 percent. More than one-in-five Coloradoans are now enrolled in Medicaid or CHIP. Prior to Obamacare, roughly 10 percent were enrolled.
Meanwhile, faced with rising costs and increased regulations, thousands of doctors are refusing to accept new Medicaid patients. The number of doctors accepting Medicaid patients has dropped by 10 percentage points since 2009, now sitting at roughly 45 percent, according to a survey by consulting firm Merritt Hawkins.
More Americans are now on Medicaid than ever before, health care costs continue to skyrocket, millions of people are now relying on the government to pay a portion of their health care bill, waiting times for primary care doctors continue to rise, and doctors are refusing to see additional Medicaid patients.
When confronted about all of these problems, the battle cry from Democrats will be that more government control is needed to keep greedy capitalists from gouging consumers, a strategy that will go on indefinitely until – you guessed it – consumers are going to wonder why we even bother with private health insurance companies at all. If only the government controlled costs absolutely, the system would finally work effectively.
Clinton’s proposals are just another step in that direction. She wants to cap the cost of prescription drugs because she says the costs are too great, but she totally ignores the reality that government regulations and controls are a big reason why costs are rising in all segments of the health care industry. More government control is not the answer, but you won’t hear that from Clinton, Sanders, or the vast majority of congressional Democrats.
Whether it is implemented now, as Sanders proposes, or 15 to 20 years from now, which is the logical end result of the plan put into place by Obama and now endorsed and expanded by Clinton, the end result is the same: a socialistic, European-style single-payer health insurance system that will lead to longer wait times, more premature deaths, higher costs, and a reduction in the quality of care.
— Justin Haskins
IN THIS ISSUE:
DOZENS OF MERGERS AMONG HOSPITALS AND MEDICAL PRACTICES IS SIDE EFFECT OF OBAMACARE
Five years after the Affordable Care Act helped set off a health-care merger frenzy, the pace of consolidation is accelerating, transforming the medical marketplace into a land of giants.
The trend is under a new spotlight now, as Congress zeroes in on the competitive and cost impact of proposed deals that would collapse the health-insurance industry’s top five players into just three massive companies, each with more than $100 billion in annual revenue. …
The supersizing, which hasn’t been slowed so far by signals of regulatory concern about health-care consolidation, reflects efforts by companies in both industries to gain the scale and heft to succeed amid changes unleashed or accelerated by the health law. Those include growing pressures to constrain costs, and new forms of payment that require providers to meet efficiency and care-quality goals. Health systems are adding hospitals, doctor practices and a range of other services that enable them to manage all of a patient’s care. And each industry is bulking up to amass leverage in contract negotiations against the other.
SOURCE: By Anna Wilde Mathews, The Wall Street Journal
WORKERS INCREASINGLY BURDENED BY RISING HEALTH CARE COSTS
American workers saw their out-of-pocket medical costs jump again this year, as the average deductible for an employer-provided health plan surged nearly 9% in 2015 to more than $1,000, a major new survey of employers shows.
The annual increase, though lower than in previous years, far outpaced wage growth and overall inflation and marked the continuation of a trend that in just a few years has dramatically shifted healthcare costs to workers.
Over the past decade, the average deductible that workers must pay for medical care before their insurance kicks in has more than tripled from $303 in 2006 to $1,077 today, according to the report from the nonprofit Kaiser Family Foundation and the Health Research & Educational Trust.
That is seven times faster than wages have risen in the same period.
SOURCE: By Noam N. Levey, Los Angeles Times
U.S. PAID HEALTHCARE.GOV CONTRACTOR $4 MILLION TO FIX ITS OWN MESS
The U.S. government paid the main healthcare.gov contractor $4 million to correct defects of the botched site and withheld only $267,420 of what it owed the company, according to a new federal audit.
The report on the Centers for Medicare and Medicaid Services (CMS) and its contract with CGI Federal is to be published today by the Health and Human Services Office of Inspector General. It is the latest in a series of audits critical of federal oversight of the private companies that built the insurance marketplace at the heart of Obamacare. Although CMS replaced the contractor a few months after healthcare.gov’s meltdown in 2013, the agency had little power to recover the money it spent trying to fix the site.
SOURCE: By John Tozzi, Bloomberg Business
STUDY SHOWS ENTHUSIASM FOR INCREASED GOVERNMENT HEALTH CARE SPENDING HAS DECLINED DUE TO OBAMACARE
The Affordable Care Act has eroded support for federal health care spending among not just Republicans but also among Democrats and independents, a Johns Hopkins University study has found.
Before the 2010 passage of the law widely known as Obamacare, up to 86 percent of Democrats thought too little was being spent on health. At the same time, about two-thirds of all independents and Republicans also supported increased health care spending.
But after the law was enacted, Republican support for more federal health care spending dropped 25 percent, while support among Democrats dropped about 12 percent, and support from independents dropped by as much as 15 percent.
SOURCE: By Jill Rosen, The Hub at Johns Hopkins
CALIFORNIA BALLOT INITIATIVE WOULD INCREASE INCOME TAXES TO PAY FOR HEALTH CARE PROGRAMS
On Monday, a coalition of health and youth advocacy groups proposed a ballot initiative to expand and make permanent income tax increases on California’s highest earners to help fund several health care and education programs, the Sacramento Bee’s “Capitol Alert” reports. …
The proposed ballot initiative seeks to extend increased income taxes under Proposition 30, which were set to expire at the end of 2018. However, the measure would allow Prop. 30’s sales tax increase to expire in 2016, as scheduled.
Like Prop. 30, the proposed ballot measure would: Increase taxes for couples earning at least $580,000 annually; and Impose higher tax rates for “super-earner” couples that earn more than $2 million per year.
According to “Capitol Alert,” the plan would generate an estimated $10 billion in revenue annually, with: 50% of the generated funds going to K-14 education; and 40% of the generated funds being used to increase provider reimbursements under Medi-Cal, California’s Medicaid program.
SOURCE: California Healthline
Justin Haskins is the director of the Socialism Research Center and editorial director at The Heartland Institute.
