Broken Promises and ObamaCare Realities

October 5, 2012

We now have 2 ½ years experience with the Affordable Care Act (ACA) or as the President wants to call it, ObamaCare. Proponents told the American public to expect many benefits from the law during the debate in 2009.

First, ObamaCare would reduce health care costs and reduce the country’s debt. The nonpartisan Congressional Budget Office (CBO) originally estimated the cost of the legislation would be $940 billion and would decrease the national debt by $100 billion over the first 10 years. These estimates were based on 10 years of taxes and only 6 years of benefits starting in 2014.

Two months ago, the CBO updated its financial projection. For the 10 years starting in 2012, the new cost estimate in $1.76 trillion and the law will continue to decrease the national debt by $100 billion. Unfortunately, these new numbers are based on an increased broad cut to Medicare from the original $450 billion to a now $716 billion cut. And this reduction in Medicare payments is virtually all on the provider side. Medicare is now paying doctors and hospitals 70 percent of what private insurance pays. Providers are reducing the number of Medicare patients they see simply because they can’t pay their overhead with these low reimbursements. ObamaCare will make access more difficult for our Medicare patients.

A further tax increase composes the remainder of the increasing cost of ACA. Taxes on all taxpayers increase from the original $490 billion to over $1 trillion in the next 10 years.

The chief Medicare actuary, Richard Foster, now estimates that with ObamaCare in place, health care spending will rise from 18 percent of our economy to 21 percent by 2020. In no way will ObamaCare reduce the cost of health care for the country.

Second, the President told Americans we could keep our present health insurance if we liked it. A recent national survey, however, found that 50 percent of small business employers and 30 percent of large employers will definitely drop or would consider dropping employee health benefits. The CBO now estimates that at least 14 million Americans will lose their employer-provided health insurance under ACA.

And because of the draconian cuts to Medicare, it is now estimated that 7.5 million seniors will lose their Medicare Advantage Plan and be forced into traditional Medicare Parts A and B.

Third, proponents of the ACA guaranteed the law would cover health insurance for every American. When the debate began in 2009, an estimated 50 million people did not have health insurance for one reason or another. In spite of ObamaCare, estimates now predict that at least 20 million people will remain uninsured.

Fourth, the American public was assured that ACA would eliminate or severely reduce waste, fraud and abuse in our health care system. Research shows that at least 10 percent and perhaps as high as 30 percent of the costs in Medicare and Medicaid (our 2 large existing government health insurance programs) go to waste, fraud and abuse. Unfortunately, there is nothing in ObamaCare that will eliminate this expensive waste.

And last, we were told that ACA would improve the quality of our health care. Decreasing access to care for our seniors in Medicare and adding 16 to 20 million more people to the bankrupt Medicaid program will in no way improve quality of health care for these patients.

ObamaCare has become increasingly unpopular since it passed 2 ½ years ago. Experience with the law and concerns about the future make this growing unpopularity warranted.


Medicare and the ACA

How will cuts to Medicare affect Medicare Advantage and the payments to Medicare providers?

The cuts to Medicare in the

The cuts to Medicare in the Affordable Care Act are, unfortunately, mostly on the provider side of the program. Physician payments are scheduled to decrease 25% this year and will gradually approach those of Medicaid (about 40% of what private insurance pays). These cuts will cause a huge political battle in Congress and may not occur. If they don't occur, taxes to pay for the ACA will skyrocket.

Medicare Advantage was originally phased out in the ACA. Last year, the President and Congress extended funding for MA, but this was only a temporary fix to get through the 2012 election. Most of us in the policy world expect Medicare Advantage will not survive and enrollees will be forced into traditional Medicare Parts A and B.

All of these cuts to Medicare in general mean less access to providers for our Medicare patients.