Michael Tanner: The pain begins



Courtesy Photo

Michael Tanner

Editor's note: This story has been corrected to show that it originally appeared in the New York Post. The incorrect newspaper was listed.

Last week, six months since Congress passed the Patient Protection and Affordable Care Act, President Barack Obama was celebrating the signature achievement of his administration.

It was a lonely celebration: Few Democratic candidates are willing to talk about the health care bill — except the ones running ads to remind the electorate that they voted against it.

Still, the president spoke before a group of state insurance regulators, while a coalition of labor unions and liberal activist groups organized rallied across the country. They focused on some of the new law’s more popular provisions, many of which started on the six-month anniversary — while ignoring the mandates, taxes and rationing that will come later. Indeed, the provisions they tout come with asterisks that they didn’t mention.

For example, starting now, parents will be able to keep their children on the parents’ insurance plan through age 25. But that doesn’t come for free. The Department of Health and Human Services estimates that doing so will cost an estimated $3,380 a year per child. And since employers are balking at picking up the added cost, the parents themselves will have to foot the bill.

Similarly, as of now, insurers can no longer impose lifetime or annual limits on benefits or refuse coverage to children with pre-existing conditions. One can argue that these new rules are the best way to deal with thorny issues, but no one can claim that insurers will do these things out of the goodness of their hearts.

There’s no such thing as a free lunch. If you’re going to require insurers to cover more expensive customers and provide more benefits, it’s going to cost more — and those costs are going to be passed on to customers in the form of higher premiums. When New York implemented many of these same insurance rules in 1983, premiums increased by nearly $500 per policy — resulting in nearly 500,000 New Yorkers dropping their insurance.

Already this fall, we’re seeing premiums jump as much as 9 percent nationally next year, especially in the individual and small-group markets. Some customers are seeing hikes of 20 percent or more. And a significant portion of this increase is directly traceable to the new rules.

It also may get harder to find insurance. For example, several major insurers have just announced they will no longer sell “child only” insurance plans — because they can’t afford to comply with the new pre-existing condition rule.

The president highlighted projections that health care reform eventually will provide coverage to some 30 million more Americans. He didn’t note that that’s years off — or that roughly half of those newly insured are merely being dumped into the Medicaid system, with all its problems in access and quality.

You also didn’t hear much about the fact that the government’s own actuaries now have concluded that the health care law actually will increase health care spending, contrary to the president’s promises before the bill passed. Nor did you hear that outside experts now predict that ObamaCare will cost as much as $2.7 trillion in its first 10 years of actual operation, adding more than $350 billion to the deficit during that period despite massive new taxes.

At least Obama didn’t repeat his old refrain, “If you have insurance today and you like it, you can keep it.” That’s because it’s getting harder and harder to find anyone who can keep their current insurance plan.

For example, we’ve now learned that college students receiving limited-benefit policies via their universities won’t be able to keep those. (I guess it’s a good thing they’ll be able to go back on their parents’ plan.) Similarly, at least a million seasonal workers will lose their plans because they fail to meet the government’s new benefit requirements.

In fact, a memo leaked from Obama’s Health and Human Services Department estimated that as many as two-thirds of all businesses and 80 percent of small businesses will be forced to change their plans to comply with the government’s new rules. And roughly half of seniors who now participate in Medicare Advantage will be forced out of those plans and back into traditional Medicare.

Still, as we reach this six-month milestone, there is one thing about health-care reform that we can celebrate. According to the latest Rasmussen poll, 61 percent of Americans want the law repealed.

The president didn’t mention that, either.

Michael D. Tanner is a senior fellow at the Cato Institute and author of “Bad Medicine: A Guide to the Real Costs and Consequences of the New Health Care Law.” He was a member of the Health Care Panel at the 2010 Steamboat Institute Freedom Conference. This op-ed also appeared in the New York Post.


sledneck 6 years, 6 months ago

A year ago the statists realized there was no way to have single payer without this incremental step. Throwing health insurance and healthcare into further chaos in order to force total government control was the intention of this bill. It will probably work.

The same government that "runs" DMV, Amtrack and the Post Office will soon control my healthcare. Worse, drug companies incentive to find new medical cures and treatments to prolong life will eveporate.

Pissed? Me? Why should I be Pissed?


David Hill 6 years, 6 months ago

As a small business owner with less than 10 employees we have just seen our health care premiums increase almost 20% from last year and our deductible increase from $1,000 to $1,500. No wonder 61% want the law repealed.


seeuski 6 years, 6 months ago

They can't hide from the facts and the truth is what us Americans are getting a dose of. Our only chance for survival as a viable Country is to take back the House this November and defund this piece of crap law. Spread the wealth back to those that earned it.


pitpoodle 6 years, 5 months ago

Very good letter, Mr. Tanner. You have my vote.


Troutguy 6 years, 5 months ago

Health care premiums have gone up 120% over the last decade. So, if the GOP takes back the house and repeals Obama's health care plan, do we go back to the status quo, where premiums seem to have risen just as much then as now? Health care premiums were going up at an unsustainable rate long before Obamacare, and look to keep going up with Obamacare. What's the solution? (and don't recycle the tort reform idea as the cure-all. While it should be part of health care overhaul, it only accounts for 2-3% of total health care spending).


trump_suit 6 years, 5 months ago

What about the Health Insurance Increases that small companies incurred in 2004, 2005, 2006, 2007, and 2008? Are they all related to "Obama Care" also?

I too run a small business that has employed between 2-5 employees since 1999. Health care costs have been driven so high for my business that it is simply impossible to offer. Because I am a cancer survivor I have been quoted business policies as high as $3000 per month with less than average coverage. Try offering that to your employees. Without joining the group as an owner they will not cover my business at all. What exactly are my options as a business owner?

Sorry your premiums went up in 2009 and will again in 2010 and 2011, but I think it is time to peel back a few layers and quit blaming Obama for that. It was going on long before he even ran for President and the increases this year are no larger than they would have been had we elected McCain. (No smaller either)


sledneck 6 years, 5 months ago

But listen to what you guys are saying. It's "no worse under Obama". Well its's no better either. And if it's no better here are a few thoughts to ponder. (real solutions)

  1. Put the government in charge of the Sahara desert and in 2 years there would be a worldwide shortage of sand. Every one of you knows that in your heart. When proffit is driven from the system there will be no incentive for drug companies to find new cures like the one that saved your life Trump, or the one that saved mine 4 years ago. I would be dead today if not for modern medicine. Modern medicine does not happen because people get up in the morning and want to help others; it happens because they want a proffit and helping others leads to that outcome. Government will kill new medical breakthroughs.
  2. More medical breakthroughs mean more stuff for insurance to cover, hence more costs. Shouldn't we be glad these things are part of our world? Our great grandfathers had no problem paying insurance but they dropped dead of simple diseases at young ages.
  3. Americans have to wake up and realize what INSURANCE is. If people expected their auto insurance to cover the things they expect of their medical insurance it (auto) would be a problem too. We don't expect our car insurance to pay for new tires, brakes or oil changes. If we would accept responsibility for our own lives and rely on health insurance ONLY for emergencies or extreme situations then our health insurance would be affordable.
  4. All insurance companies should be allowed to do business in all states. It's the same government that seeks to take over healthcare that keeps that from happening. September 11 conspiracy theories get traction from people who can't see one here. Go figure.
  5. Tort reform, including switching the entire American legal system to a "loser pays" system would save us a heck of a lot more than 3%. Probably closer to 25%. This too is something that doesn't happen because of government. In this particular case it IS democrats who are in the pocket of the ambulance chasers.
  6. Insurance companies should be forced to carry and give new insurance to people with existing conditions (like mine or Trumps). I get calls all the time from companies selling insurance. I tell them my condition and then laughingly ask "so you still wanna insure me???" They ALL hang up immediately. This needs to stop.

We could make these changes and see marked improvement in our healthcare. And we don't need our retarded big brother running the whole damned system to accomplish it, So let's flush the politics and the "but Buuuuuusssssshhhhhh started it" crap and get on with it. If it's not any better with government help lets get the hell out before government screws this up too. Pleeeeease?? My life really does depend on it!!


housepoor 6 years, 5 months ago

You are right trump our cost of insurance has gone up 15-25% for over 7 years straight all while we've been forced to increase our deductables, but this year the increases are do to Obama care?? I don't blame Bush or Obama but at least Obama has attempted to something!!! Doing nothing is exactly what the insurance co want? They want to repeal it without offer any other solutions....it's a joke.


mtroach 6 years, 5 months ago

Sledneck makes some fine points add campaign reform to get our elected officials out of the pockets of big business and maybe our government would work for the good of the citizens instead of corporate america.


Cooke 6 years, 5 months ago

Sled – Some really interesting points. I do have a problem with one in particular though, #3. If insurance doesn’t cover out routine stuff as well as our big stuff, aren’t we inviting more big stuff? Most people cannot afford to pay the outrageous fees that even routine visits, lab works and blood works cost. If I stop getting my PSA levels checked, aren’t I much less likely to catch cancer at an earlier, therefore much more treatable level? Then, aren’t my costs, and the costs to my insurance provider going to be much higher?
Obamacare may not be the answer, but our system, while certainly staffed by the best technology, doctors, and nurses, was functionally broken long before 2008.


Jeff_Kibler 6 years, 5 months ago

Cooke - Lately I've read that PSA tests and mammograms may not be that useful. Go figure. My sister-on-law was diagnosed with a stage zero breast cancer. I was unaware of stage zero! My Dad had aggressive prostate cancer. They're both OK.

When I have blood work done, the PSA is about $15. That's about the only thing my insurance company covers with no deductible.


Jeff_Kibler 6 years, 5 months ago

Correction: "sister-in-law"

Steamboat Pilot Web Master: Could you allow folks to edit their own comments?

It's fairly common on other web sites these days.


Troutguy 6 years, 5 months ago

Sled- #6 is actually in Obamacare. Pre-existing conditions can no longer be denied by insurance companies. I fall under this category, having had heart surgery that corrected the problem, but am considered high risk because of this. So, there is a little good that did come out of this health care overhaul.


sledneck 6 years, 5 months ago

There are some silver linings in every dark cloud. Even under Stalin some particular item probably improved. But when we console ourselves by saying "a little good came from this" what we are really saying is that it was unfruitful on the whole.

Cooke, I understand the idea of preventative maintainance. I agree with the concept. However, some of this harkens back to the simple fact that we can not continue to expect insurance that is designed to bridge catastrophic gaps to be used instead for said preventative maintainance. For example, a homeowners insurance company will NEVER pay a homeowner to cut a tree before it falls on his house, no matter how strongly it is leaning toward the home. Furthermore, most won't pay to remove the tree from the roof when it falls; only to fix the roof that was damaged. We accept that for our homes but refuse to accept it for our bodies. That's our perrogative but logic compelles us to acknowledge the difference and the adjusted costs.


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