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The Affordable Care Act/The poster Child for False Advertising:Part 2

7/11/2013

13 Comments

 
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If you had your choice of any car in the world, what would it be?   Now ask yourself why don’t you have it?  For most of you, the answer to the second question is money.  Goods and resources are scarce, and as a result there is a rationing process and that process is generally money.  But what happens if a service or good is free?  This would have been the case if Nancy Pelosi and President Obama had their way with healthcare.  Both favored a plan where taxes would increase drastically, and the government would be the single payer/provider.  Since healthcare would not cost the recipient anything at point of service, what would then become the rationing process?  We need go no further than Canada and many European nations where healthcare is provided in that fashion.  The rationing process is now time.  The chart on the left is provided by the Canadian Ministry of Health and shows the wait times for various procedures.  We saw this in last month’s blog, but it is also the case in many European countries. 

Recently, one of my uncles experienced chest pains on a Thursday.  That Saturday he was in the hospital and received triple bypass surgery.  In three weeks, he was golfing.  In their book, The Economics of Public Issues, Miller et al look at healthcare in the Netherlands where the government pays for all procedures.  If you need heart bypass surgery, there is a three month wait.  During that time, nearly 15% of all patients awaiting that surgery die. In that same study, they found that diabetics wait an average of 3 months to obtain laser treatment for retinal hemorrhaging, and risk blindness; and the average wait for removal of gallbladder stones and hernia repair is from four to eight weeks. 


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You may next be asking yourself, since everyone gets healthcare for free, aren’t survival rates may should be higher?  It’s not even close.  If you look at the charts, the United States beats Europe in all forms of cancer survival rates, now and historically.  I can continue, but I believe the point has been made; back to The Affordable Care Act (the poster child for false advertising).


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What does the Affordable Care Act (ACA) do?  It increases the number of people in the system while not addressing costs.  Obamacare for business was supposed to be implemented this January 1, 2014.  All businesses with 50 or more employees had to provide insurance for their employees or face stiff penalties.  This has been postponed until 2015; their excuse was that many Republican governors had not set up statewide exchanges.  The Administration is very good at blaming everyone else for their shortcomings.  In an article in the Washington Post, a paper with a decidedly liberal bias, they reported that the Administration has missed over half the deadlines for procedures in Obamacre that should have been implemented.  As I said in a recent daily advisory, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time” (Abe Lincoln).  Who does the Obamacare administration think they’re fooling?  Obamacare was postponed for a year so the democrats don’t get killed in the mid-term elections of November, 2014.


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What are some of the other reasons why healthcare coast are so high?

            Healthcare is often times an emergency service.  In all my years as a police officer, no one who was being loaded in an ambulance ever asked what it was going to cost

            Our population is overweight.  Over 2/3’s of the population is overweight or obese.  The average adult is 25 pounds heavier now than in 1960 (CNN) and   obesity related problems are accounting for $200 billion/year in healthcare costs.

            Life expectancy is increasing and so are end of life costs.  In a recent CNN article, 90% of all an individual’s healthcare costs are in the last 3 years of their life.

            Insurance Malpractice premiums have skyrocketed and this is being passed on to the consumer.


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How will Obamacare raise premiums?  The list is too long but I’ll condense it:

            Medical claims will become more expensive because of Obamacare regulations.  The Society of Actuaries released a report concluding that medical claim cost will rise more than 30% for individual policies,  and by 2017 to more than 60% in some states.

            According to the Government Accountability office, the implementation of Obamacare will increase the federal deficit by $6.2 trillion in the long term.

            According to the Congressional Budget Office, taxes will be increased by $1trillion in the next 10 years to pay for Obamacare.     Also as a result of increased taxes and costs to businesses, there will be a loss of 800,000 jobs in this time period; 1 million according to Duke University Prof. Chris Conover.

The House Ways and Means Committee estimated that about 30% of private sector firms will drop their insurance plans and pay the less costly penalties.  These employees must now get insurance on the state exchanges where part of the premium cost will be borne by the taxpayer.  Most employer plans cover 80% of costs whereas the state exchanges are estimated to cover 70%

The mayor of Chicago, Rahm Emmanuel, Obama’s former Chief of Staff, plans to exclude retired city workers from the city’s insurance and “dump” them onto the state exchange.

And finally, Obamacare’s burdens fall most heavily on people under 25 where they can see premium increases ranging from 145% to 185%.

I can go on but you get the idea.  As I said initially, The Affordable Care Act is a lot of things, but Affordable isn’t one of them


13 Comments
Tracey Lane
7/28/2013 11:17:43 pm

Actually, I would disagree, having the insurance companies compete in the exchanges is a true market place initiative. Currently, 120 insurance cos are competing and 30 of those are new to the marketplace. Exchanges are causing healthy competition, no pun intended.

Currently, "Seventeen states have health insurance carriers that cover more than two-thirds of the individual insurance market, according to data from the Kaiser Family Foundation."

No wonder health insurance cos pay 30 million dollar salaries to their CEO.... hahahah we have been duped and taken for a ride long enough by health insurers. This gov't intervention to teach market principles is long overdue.

In NH, one insurer covers 65% of insured residents, and 90 % of the individual market: Anthem blue..... - they're laughing all the way to the bank.

Employer plans are like bad contracts that drive up price. Bring on the competition, and YES, let's fine the idiots who chose not to be insured then have a medical catastrophe and cause the taxpayer to pay for their healthcare, and with 55 million uninsured in America, that is our biggest financial drain. The average uninsured American has an iphone and ipad, but they take their chances, are not insured and expect to be taken care of in an emergency.

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John Tommasi
7/29/2013 10:40:38 am

I am my advisory from 7/25.
This keeps getting better and better. Under Obamacare (my June & July blog topics), all adults with incomes below 138% of the poverty level ($15,850 for an individual and $32,500 for a family of 4) were to be covered by medicaid; and those with incomes between 138% and 400% of the poverty level would receive a stipend from the government to cover part of the cost of their health insurance (do the math, 400% of $32,000 is $96,000). However, as a result of a recent Supreme Court ruling, the court left it up to the states whether they would expand medicaid or not. There are over 20 states that have not and according to the Urban institute, there could be up to 6.5 million low income people without insurance; not only can't these 6.5 million afford it, they won't be covered under medicaid, and if they don't get health insurance they will have to pay the tax (penalty) for not having it. This is what happens when Congress(democrats, it was a purely partisan vote) pushes through a 2700 page bill without doing there due diligence.

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Tracey Lane
7/29/2013 11:48:10 pm

It's difficult to speak to the Stupidity of right wing states, but they will come around when other states prove that exchanges are working to insure the populous which brings down overall state costs.

"Maryland’s insurance commissioner said Friday that the expected new rates for residents who will need to buy insurance starting Oct. 1 are up to 33% lower than expected, and that coverage for a 21-year-old non-smoker could cost as little as $93 a month.

In Connecticut, insurer HealthCT announced plans that would drop an average of 36% from its original proposal in the individual market. And Nevada will sell plans to young adults to cover catastrophic health situations for less than $100 a month.

A Department of Health and Human Services report released this month showed that silver health exchange plans — the lower-cost plans that uninsured people are more likely to buy — are an average 18% lower than anticipated in the 11 states the department studied."

The scare tactics of the right to prevent the implementation of the Affordable care act is only to be expected... so much fear of gov't and the unknown... enough to try and ruin progress. John, you really should get off this bandwagon and look at it from a purely economical and effective way to get America insured, which will in turn make everyone better off !

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John Tommasi
7/30/2013 12:07:17 am

There are most definitely false scare tactics but not in my blog. Everything I say is based on fact and widely accepted economic theory. Simply put, the Affordable Care Act will dramatically raise health care costs, lower the quality of service, cost the American workers over trillions of dollars, increase wait times and contribute towards unemployment.

Tracey Lane
7/30/2013 12:15:05 am

The GBO and GOA are already backing down from grossly misleading estimates that serve to enhance and back up scare tactics. It's in the news...

The state exchanges will serve to lower all insurance costs due to competition. Businesses therefore will be better off and hospital costs will eventually lower when they're not stuck with the bills from all the uninsured.

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John Tommasi
7/30/2013 12:25:02 am

http://www.politifact.com/virginia/statements/2013/jun/17/morgan-griffith/morgan-griffith-says-gao-estimates-obamacare-will-/
Tracy you're the one who is engaging in scare tactics. The attached link shows that is anything but the case. Your rhetoric is just that. I won't be responding to any more of your posts unless they are backed up by facts/figures and sources.
http://www.theblaze.com/stories/2012/07/11/estimated-cost-of-obamacare-is-now-2-6-trillion-nearly-1-7-trillion-more-than-obama-promised/
here's another site, more liberal
http://www.huffingtonpost.com/2012/04/03/gao-obamacare-national-debt_n_1399895.html
and here's yet another
The only country where Obamacare will do what you say is Fantasy Land

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Tracey Lane
7/30/2013 12:23:32 am

The GBO and GOA are already backing down from grossly misleading estimates that serve to enhance and back up scare tactics. It's in the news...

The state exchanges will serve to lower all insurance costs due to competition. Businesses therefore will be better off and hospital costs will eventually lower when they're not stuck with the bills from all the uninsured.

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Tracey Lane
7/30/2013 12:23:58 am

The GBO and GOA are already backing down from grossly misleading estimates that serve to enhance and back up scare tactics. It's in the news...

The state exchanges will serve to lower all insurance costs due to competition. Businesses therefore will be better off and hospital costs will eventually lower when they're not stuck with the bills from all the uninsured.

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Lowell Riverhawk
7/30/2013 01:09:21 am

Hey Tracy. Where did you learn Economics? University of Leningrad.

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John Tommasi
7/30/2013 07:39:46 am

and this article is from today on CNBC
http://www.cnbc.com/id/100921864

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Tracey Lane
7/30/2013 08:33:20 am

Virginia? You suggest I read any titillating, fear-mongering article from Virginia!
If you wish to keep the status quo in America where the impoverished and sick get arrested to get healthcare on the tax payer dime then go ahead - think that way.
If one uses the macro equation, one can estimate the savings of a myriad of costs and benefits, just relying on numbers right now is not academic. Though the GAO has realized their estimates have been less than reliable, given the nature of a completely new, innovative, competitive health insurance marketplace that is currently subject to the political agendas of some governors and senators.

Health is a public good whether you believe it or not. I don't care if you don't reply, I care that you have health insurance.

john tommasi
7/30/2013 09:38:25 am

that's why I included 3 different web sites 4 if you look at todays advisory/update it was from CNBC today

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john tommasi
7/30/2013 09:39:31 am

and if I'm not mistaken the state of Virginia voted for Obama last election

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    John Tommasi is a retired Senior Lecturer of Economics & Finance from Bentley University and  the University of New Hampshire.

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