Obamacare – Bail Out or Repeal?

Obamacare – Bail Out or Repeal?

The title of this Post refers to Obama’s proposal for bailout and Senator Rubio’s call for repeal. Color me skeptical or possibly cynical. However, I think the government is intending to bail out health insurance providers. Apparently, I am not the only one that believes this. Marco Rubio, Senator from Florida, writes about the same fear in an opinion editorial in the Wall Street Journal on November 19, 2013, labeled, “No Bailouts for Obama care”.

As the record unfolds on Obamacare it gets worse every day and is now considered a disaster. Let’s list some of the problems:

o The website does not work. There are errors in content and function.
Identity theft is easy per several experts that have examined the site and published their views, most notably MacAfee.

o Users are subject to a dysfunctional website. As a personal experience, I was quoted about a hundred dollars more per month on the website for “Gap” insurance than an independent price that I received on my own. I received a lower rate by getting off the site and going directly to the carrier.

o The law is illegal per four cases are in Federal Court challenging the law as reported in, “Judge Rejects DoJ Motion to Dismiss Second Suit against IRS Tax Credit Rule”, by Johnathan H. Adler, October 22, 2013, Health Care Insurance Exchanges. U.S. District Court Judge Paul Friedman denied motion to dismiss the Halbig v. Sebelius, challenging the legality of an IRS rule authorizing tax credits for the purchase of health insurance on federally run exchanges. This is one in four suits using the same challenge. To date, 34 States refuse to have exchanges; therefore, it is impossible for taxpayers to comply.

o  Congress did not intend citizens below the poverty line to be without subsidized insurance. Yet that is the result in states that refuse to expand Medicaid because the tax credits and subsidies are only available to people at or above the poverty line. This income floor for subsidy eligibility is written into the law. This is similar to the exchange problem.

o  Death panels exist in the law and the fear that they will be used exists. The elderly generally oppose the law and knowledge of the panels is becoming better known.
Obama’s broken promise that users could “keep your old insurance” if you want it shows that you cannot turn back the clock. Obama’s recent speech said that he would get insurers to take back old members is nothing but another lie. As president, he has no legal authority to do this. It would take an act of Congress. Further, large companies such as IBM have already turned their retired former employees (123,000) on to the exchanges. There is no going back for them. Specific quotes that are lies are:

#1 “If you like your doctor, you will be able to keep your doctor. Period. If you like your health care plan, you will be able to keep your health care plan. Period. No one will take it away. No matter what.”

#2 “My administration is committed to creating an unprecedented level of openness in government.”

#3 “We agree on reforms that will finally reduce the costs of health care. Families will save on their premiums…

A fundamental error was made by the Democrats in Congress. It was specifically the Democrats who are the only ones that voted for this law. Their error was that they assumed that the states would “play along” and make this law work. The states are not doing so because their constituents do not want any part of this law which is blatant “socialized medicine” – and they know it. As a result Obama has resorted to saying in his recent speech that that he would use the “risk corridor” program in that, “Though the transitional policy was not anticipated by health insurers when setting the rates for 2014, the risk corridor program should help ameliorate unanticipated changes in premium revenues. We intend to explore ways to modify the risk corridor program final rules to provide additional assistance” [emphasis added]. This is a clear statement that bailouts are intended for the insurance companies. In short, Obama’s response to the socialized Medicare fiasco and failure is simply to bail out the industry’s insurance companies. However, this puts the people directly on the hook to bail out insurance companies because he’s using our money.

Senator Rubio’s Position

Senator Rubio sees bailouts is unacceptable. He states that during the 2009 in 2010 debate, bailouts were never mentioned and today they are unacceptable. He proposes a new law that he plans to introduce on Tuesday, November 26, 2013, “I am introducing legislation that would eliminate the risk corridor provision, ensuring that no taxpayer funded bailout of the health-insurance industry will ever occur under Obama care.”
 

Summary

My view is simple. Upon review of the law, one finds that it is apparently written with one view in mind – minimize costs. I believe the philosophy is wrong. The law should have been written to maximize service within a cost constraint. An independent market system with insurance companies competing with one another for members who make choices on services that they can afford and want is the best way to reach these goals. It is called a free market system.

Investment Environment

With respect to the investment climate for the health industry, this debacle creates an environment that one must act cautious about. At this point no one knows what is going to happen. The Congress will be deeply involved into this issue most likely into the second quarter of 2014 – an election year. Something major needs to be done. Rubio proposes “repeal” that I support. Even the Democrats now recognize that they have a major albatross about their necks as they go into the 2014 elections. They are constantly reminded that that not a single Republican voted for this law.

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