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ACA Fail Fractal
Budget Deal Reached, ACA Hardest Hit

The U.S. House of Representatives reached a late-night agreement on a contentious $1.1 trillion spending-and-tax bill on Tuesday, narrowly avoiding a government shutdown and setting up a vote in the chamber for Friday. Apart from proposing to lift the crude oil export ban in place since the 1970s, the bipartisan bill is notable for delaying crucial funding provisions for the Affordable Care Act, including the so-called “Cadillac Tax” on high-cost employer healthcare plans, and a tax on medical devices. The NYT:

The question of delaying important provisions of the Affordable Care Act provided a surprising area of common ground — among Republicans who have sought to dismantle President Obama’s signature health care law, and Democrats who had reservations about a tax on generous health plans. The White House and many economists have defended the “Cadillac tax” on high-cost employer-sponsored health plans as a way to reduce health costs and make the health care system more efficient.

But lawmakers said they had tentatively agreed to delay the tax, originally scheduled to take effect in 2018, by two years. Labor unions strenuously opposed the tax, saying it could lead to reductions in health benefits prized by their members.

Republicans said the package would delay what they see as harmful health-related taxes and could set a precedent for efforts to undo other provisions of the health care law.

President Obama is seen as likely to sign the spending bill, should it land on his desk, and that makes this “common ground” on opposing the Cadillac tax all the more significant. Democrats are refusing to support a key element of the Obamacare system they passed in President Obama’s first term. An important part of the law, that is, is so unpopular that not even the party that wrote the legislation wants to enforce it. This opposition could have serious consequences down the line, as the Cadillac tax helps pay for the ACA and, arguably, could reduce the country’s health care spending. The delay, especially if it is extended or made permanent, may therefore have long-term consequences for the law’s implementation and success.

There is a lot of debate about Obamacare, and the law has done both good and bad things. But the most important political fact about Obamacare today is that it is an orphan. No party really wants to sustain in its current form the system that President Obama thought would be his defining legacy achievement. If a Republican wins in 2016, and Republicans continue to control Congress, the inevitable reform will be called the repeal of Obamacare. If Democrats win in 2016, we will be talking about the reform of Obamacare.

But the law’s problems aren’t just about its unpopularity among legislators. The policies that Obamacare mandates are costing more every year, and doctors’ bills and co-payments continue to put medical care out of reach for too many Americans. If America’s health care problem is going to be fixed, the next president and the next Congress will have to go to the root of the issue: cost.

Democrats will likely try to move toward some form of a single-payer system with rationing and price controls. Republicans are likely to look for more market-based approaches. Both approaches have their shortcomings. But the need for flexibility in our medical system in order to deal with rapid technological change means that a market-based approach is the only possible route to the kind of health care system Americans need and want.

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  • Gene

    Perhaps Americans can put their money where their mouths are. Could we enforce the Cadillac tax against all registered Democrats and all donors to Democratic candidates?

    Yes, yes, I know that’s unconstitutional. Doesn’t mean it wouldn’t be fun to watch.

    • Jim__L

      Oh what fun a Trump presidency would be, by that definition…

  • Fat_Man

    “There is a lot of debate about Obamacare, and the law has done both good and bad things.”

    OK. What are the good things?

    • Boritz

      Hopefully the ‘benefits’ of ACA will one day be treated with historical accuracy.

  • Jim__L

    So once again, both parties unite in their devotion to screwing future generations of Americans by bankrupting the country.

    Although if this allows the GOP to shut down ACA through budget reconciliation, that could be a good thing.

  • Boritz

    “…a market-based approach is the only possible route to the kind of health care system Americans need and want.”

    A market-based approach is the only possible route to (fill in the blank) Americans need and want, but Americans don’t believe this and don’t vote it — with predictable and increasingly manifest results

  • Andrew Allison

    Medicare, a single-payer insurance program which sets the costs it is willing to reimburse (as do private insurance companies) and, as I recall, serves more people than are enrolled in ACA, does not ration care. Providers have the option of accepting or rejecting Medicare patients, and of accepting the Medicare reimbursement as payment in full or not. Consumers have the option of shopping for providers who do. Unlike the ACA policies, I have yet to come across a provider who does not accept Medicare patients (Medicaid is a whole different kettle of fish).

    • Dale Fayda

      My aunt, who is an internist in NYC, no longer accepts new Medicare patients. She says the reimbursements are so small and take so long to arrive that it’s not worth the time. She has been thinking about doing this for a long time, but felt bad about turning away patients. Now, nearing retirement and gradually decreasing her patient load, she’s decided not to deal with Medicare any more. Same with Medicaid.

      • Andrew Allison

        Your Aunt, like any other provider, is free to do as she sees fit. During the 11 years since I qualified for Medicare I have NEVER come across a provider who wasn’t willing to treat me. It’s a swings and roundabouts issue: Medicare patients tend to require more care than younger ones, so if a provider needs or wants volume, she grins and bears the consequences.
        As I also wrote, Medicaid (which is not insurance, but welfare) is an entirely different kettle of fish. None of which has much to do with the fact that Medicare’s overhead is 3% versus the 20-plus percent of private insurers — all of it money which is not going to providers.

        • Dale Fayda

          I just gave you first-hand evidence of providers not accepting Medicare. Despite what your personal experience may have been, this practice is very common and is becoming even MORE so: http://www.oregonlive.com/finance/index.ssf/2015/10/medicare_2015_more_doctors_rej.html

          http://kff.org/medicare/issue-brief/primary-care-physicians-accepting-medicare-a-snapshot/

          http://www.forbes.com/sites/merrillmatthews/2015/01/05/doctors-face-a-huge-medicare-and-medicaid-pay-cut-in-2015/

          http://www.aapsonline.org/index.php/article/opt_out_medicare/

          http://blog.ehealthmedicare.com/2015/01/why-some-doctors-dont-accept-medicare/

          According to the GAO, Medicare fraud amounts to multiple tens of billions of dollars every year. In 12 – 15 years of normal operation, that close to a TRILLION DOLLARS of just waste! This one program alone has wasted untold TRILLIONS over the course of its lifetime thus far. Moreover, I don’t believe a single word the government tells us about Medicare’s overhead costs and pretty much anything else connected with the financial viability of this failing entitlement. Not only is the Federal government chronically dishonest about the state of its pet programs, it also generally has no clear idea of what’s going on there internally.

          And this is what you’re selling to us as the “cure all” for the American healthcare system? Seriously?

          On a larger note, you may be OK with being a helpless supplicant of the failing welfare state, but I’m not. If I could, I would gladly opt out Medicare and Social Security tomorrow and keep my tax money where it belongs; in my pocket, to do with as I see fit.

          • Andrew Allison

            Your links demolish your argument, e.g. from the first one “Nationwide, 91 percent of non-pediatric doctors say they take new Medicare patients, according to an analysis of 2012 government survey data by the Kaiser Family Foundation, a Washington, D.C.-based policy research organization. Only 2 percent of seniors reported problems finding a provider when they needed one.”
            From the second, 14% of private insurance companies refuse new patients vs. 21% for Medicare. Etc.
            This is obviously an issue in which logic and reason have no part.

          • Dale Fayda

            My links clearly demonstrate the trend of providers accepting FEWER new Medicare patients, a trend which will only accelerate with the new reductions in reimbursement rates to providers.

            My links also show an appalling amounts of fraud and waste in the Medicare program, to the tune of (60) billion in 2014 alone. Care to dispute that point? Between Medicare, Medicaid and the VA, the Federal government WASTES over $100 billion each and every year. That’s roughly a TRILLION dollars of taxpayer money in a decade! And that’s not what these programs’ total cost, but strictly a low-ball estimate of the pure waste. Yet your solution is to double-down on this debacle and to shove (mandate?) everyone into this financial and medical black hole? No, thank you!

            Would you also care to dispute the Politico story which confirms the government’s own calculations that Medicare is set to run out of funds by 2030? Considering how galactically wrong the Federal government has been about its cost projections about EVERY ONE of its major programs, I’d say that’s a very optimistic projection, wouldn’t you agree?

            Every time the government twitches its horny tail, a financial disaster ensues. Every single time. Its track record in financial management has been one of unimaginably colossal failure, with the external debt and unfunded entitlement liabilities so large, as to be essentially un-payable. And your solution to the healthcare crisis the government “wizards of smart” have brought about is to give them the power of life and death over every one of us? A pox on that!

        • Dale Fayda

          Here are a few more interesting tit bits about your beloved Medicare: http://www.politico.com/story/2015/07/date-for-medicares-insolvency-remains-2030-120490

          http://www.prnewswire.com/news-releases/3-things-driving-medicare-bankrupt-300163922.html

          http://thefederalist.com/2015/07/31/medicare-medicaid-same-problems-50-years-ago/

          Looks like it’s going to tank right about the time I hit my retirement age! Oh, joy!

          And if this isn’t enough for you, here a link to the GAO report for 2014: http://www.gao.gov/assets/680/671021.pdf. (60) billion dollars in Medicare fraud in 2014 alone! Still sounds like a good plan to you?

        • Dale Fayda

          And last, but by no means least…

          Even Obama, the poster boy for “big, benevolent government” said that Medicare is unsustainable: http://www.dailykos.com/story/2009/01/16/684783/-Obama-Says-Medicare-Is-Unsustainable. Is he wrong? If he is, why would he say that?

          Considering that Democrats would rather set themselves on fire than admit that one of their precious government programs is not “working”, that’s a pretty strong admission, don’t you think?

          • Andrew Allison

            Medicare is unsustainable for the same reason ACA is, namely the risk pool is less healthy than the population at large. Medicare-for-all (or ACA-for-all) would fix that and bring the benefits of the 10-to-1 difference in overhead between private and public insurance.

        • Jim__L

          AA, Medicare actually pays MORE per capita in fees and administrative costs than private insurance does. Healthy people don’t need nearly so much in payouts, but their accounts still need to be handled.

          Medicare is NOT more efficient than private insurance.

          • Andrew Allison
          • Jim__L

            No. That article does not quote *per capita* expenses. Medicare is NOT more efficient per capita.

            And please stop paying any attention to anything Barbara Boxer says. She has been voted “Stupidest congressperson” quite a number of years running by a poll of congressional staffers.

          • Andrew Allison

            I share your opinion of Senator Boxer, but the link is to politifact.com, which fact-checked her statement and found that she was about right wrt Medicare but that for the private overhead was only 10 times higher, not 15 as she claimed [grin]

          • Jim__L

            My statement was very specific. Medicare spending on overhead is HIGHER PER CAPITA, making it less efficient than private insurance. The article you cite is about overhead vs.overall spending, which is not the same thing.

            It’s easy to reduce overhead cost ratios by simply opening the money spigots. This is one reason why Medicare fraud is so widespread, and why Medicare is helping bankrupt the country.

          • Andrew Allison

            Not so, see http://cnsnews.com/news/article/medicaid-and-medicare-enrollees-now-outnumber-full-time-private-sector-workers. Not that it’s relevant to a discussion of overhead, i.e. the cost, as a percentage of “income” not spent for care.

          • Jim__L

            It is relevant to the discussion of the efficiency of the Medicare administration.

            Government is not all that efficient, and the data you cite is misleading on that point.

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