health care

Obamacare Results in 47 Percent Premium Hike

by Hans Bader on October 17, 2010

in Healthcare, Insurance, Politics as Usual, Regulation

Obamacare has just led to a 47 percent increase in some health insurance premium rates in Connecticut:

The state’s largest insurer has been approved to raise health premium rates by 41 percent to 47 percent for some of its policies sold to individual buyers, in the largest price hikes yet seen in Connecticut since the adoption of national health care reform… The reason for the increases is the new federal health reform mandates, according to Anthem and the state Department of Insurance.

This is the exact opposite of what Americans were promised by the sponsors of Obamacare, which was deceptively billed as the Affordable Care Act.

Earlier, a judge in Florida refused to dismiss a constitutional challenge to Obamacare.

Obamacare includes major tax increases such as new taxes on investors and a $60 billion excise tax on health insurers that will be passed on to consumers.  It has already resulted in higher costs for major employers, and the elimination of high-quality health care plans. Insurance regulators in Connecticut had previously approved other premium increases.

The higher costs of Obamacare are one factor in why employers are reluctant to hire. Last month, 95,000 jobs disappeared as more jobs were eliminated than created in the American economy.

Judge Rejects Obama Administration’s Motion to Dismiss Challenge to Obamacare

by Hans Bader on October 15, 2010 · 1 comment

in Healthcare, Insurance, Legal, Regulation

A judge in Florida has rejected the Obama administration’s motion to dismiss challenges to Obamacare brought by 20 state attorneys general and the National Federation of Independent Business. U.S. District Judge Roger Vinson found that the attorneys general had made a plausible argument that Obamacare is in excess of Congress’s power under the Commerce Clause and in violation of the Tenth Amendment — indeed, he said it wasn’t even “a close call.”

The judge gave a green light to a challenge to Obamacare’s requirement that all citizens buy federally-regulated health insurance — the so-called “individual mandate.”  “While the novel and unprecedented nature of the individual mandate does not automatically render it unconstitutional,” Judge Vinson observed, “there is perhaps a presumption that it is.”  This means at the very least that “the plaintiffs have most definitely stated a plausible claim with respect to this cause of action.”

The judge also allowed the state attorney generals to challenge Obamacare’s Medicaid expansion provisions under the Tenth Amendment.

We earlier explained why the individual mandate contained in Obamacare is unconstitutional because it exceeds Congress’s power under the Commerce Clause. We joined an amicus brief filed by the Cato Institute supporting Virginia’s challenge in a case pending in Richmond, which you can find here. The judge in the Virginia case also rejected the federal government’s motion to dismiss the lawsuit.  Three former U.S. attorneys general, William Barr, Ed Meese, and Dick Thornburgh, also filed a brief challenging Obamacare in that case.

Briefs in many constitutional challenges to Obamacare can be found at this website.

At the ACA Litigation Blog, Brad Joondeph summarizes the Florida judge’s ruling, noting:

After laying out the competing arguments as to whether [the individual mandate, contained in Section 1501(b) of Obamacare,] is within Congress’s commerce power, he states as follows: ‘At this stage in the litigation, this is not even a close call.’ Judge Vinson goes on to explain that the individual mandate is ‘simply without prior precedent’ (p.61), and that, unlike statutes upheld by the Supreme Court in prior Commerce Clause decisions cited by the federal government (such as Heart of Atlanta Motel and Wickard), this regulation ‘is not based on an activity that [people] make the choice to undertake’ (p.63). In other words, Judge Vinson sees this as a regulation of inactivity, and thus one that is qualitatively different from prior uses of the commerce power (as augmented by the Necessary and Proper Clause). Moreover, he finds it highly salient that those regulated by 1501 (that is, all legal residents) have not taken some sort of voluntary action (such as entering the motel business, or growing wheat, for example) before being subjected to the provision’s requirement. Seeing the minimum coverage requirement in these terms, I think, is probably going about 75 percent of the way towards finding it unconstitutional. Mind you, Judge Vinson concludes by stating that he is holding only that the states have ‘stated a plausible claim.’ (p. 64). But the reasoning behind his conclusion–not to mention the modifier ‘most definitely’ that precedes it–gives one the sense that, following the coming motions for summary judgment, the odds are in favor of the court declaring the minimum coverage provision unconstitutional.

Obamacare May Force McDonald’s to Drop Health Coverage for Employees

by Hans Bader on October 1, 2010

in Economy, Health and Illness, Healthcare, Insurance, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

Michelle Malkin points out that “McDonald’s has notified the feds that it may be forced to drop health insurance for some 30,000 workers due to the Obamacare mandate.”

A large number of employers may eventually eliminate health coverage due to Obamacare. As The Wall Street Journal notes:

Trade groups representing restaurants and retailers say low-wage employers might halt their coverage if the government doesn’t loosen a requirement for ‘mini-med’ plans, which offer limited benefits to some 1.4 million Americans. The requirement concerns the percentage of premiums that must be spent on benefits. . .McDonald’s and trade groups say the percentage, called a medical loss ratio, is unrealistic for mini-med plans because of high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims.

It’s not just limited-benefit plans that are disappearing. Excellent health plans that patients prize most are disappearing too.  Earlier, 22,000 seniors lost their health care plan due to Obamacare. Meanwhile, state regulators are approving premium increases due to the increased costs resulting from Obamacare.

By the way, I’m tired of mindless McDonald’s bashing. The food at McDonald’s is no more fattening than at many restaurants which charge much higher prices.  (A Big Mac is healthier than quiche lorraine.)  I lost 10 pounds while working at McDonald’s and eating mostly McDonald’s food (a man in Richmond lost 86 pounds). Yet left-wing busybodies are now using discriminatory zoning rules to block the opening of new McDonald’s franchises in places like Los Angeles, and are calling for taxes on fast food to control what people eat, as part of “healthcare reform.”

Insurance Regulators Approve Increases Based on Obamacare

by Hans Bader on September 19, 2010 · 4 comments

in Health and Illness, Healthcare, Insurance, Politics as Usual, Regulation, Sanctimony, Zeitgeist

In Connecticut, insurance rate regulators have approved hikes in insurance premiums of up to 20 percent, agreeing with insurers that Obamacare increased their costs. Some people will now pay thousands of dollars a year more as a result.

This contradicts claims made by President Obama and his aides that the new health care law would cut health care costs and bend the cost curve down.

Employers like AT&T, Caterpillar, John Deere, and Verizon have already reported major cost increases due to the new health care law.

As noted earlier, the health care law raises taxes on the middle-class and investors in future years. Obamacare will cause many harms, such as reducing life-saving medical innovation and increasing state budget deficits. It is based on accounting gimmicks that will increase the federal deficit, as even some Obama supporters have admitted — like David Brooks, who in a moment of candor called arguments for the bill ““unbelievable” and “insane.””

San Francisco’s Mayor Opposed to Alcohol Tax

by Michelle Minton on September 15, 2010

in Health and Illness, Legal, Nanny State, Personal Liberty, Regulation

It isn’t often that we get to praise politicians, but cheers to San Francisco Mayor Gavin Newsom who vowed to veto plans for an increased alcohol tax. The tax “would add about 3 cents to a 12-ounce bottle of beer, 4.5 cents to a 6-ounce glass of wine and 3.5 cents to a drink containing 1.5 ounces of hard liquor.”

The so-called “charge for harm tax,” as it has been dubbed, would be a fee levied on alcohol wholesalers and distributors. It was proposed by John Avalos, a member of San Francisco’s Board of Supervisors in order to recoup the estimated $18 million a year San Francisco spends supposedly dealing with alcohol-related problems as well as to cover health care costs.
The proposal won approval with the Board of Supervisors on Tuesday, but Newsom believes a “charge for harm” would do more harm than good, saying, “Pursuing this likely illegal new fee in this economic environment will impact thousands of businesses, cost jobs and put San Francisco at a competitive disadvantage with every other county in California.”

First, Newsom is right. This proposed tax is bad for the city and the state’s economy.

California’s wine and alcohol industry is a healthy and vital parts of the state’s economy. This, unfortunately, means it is a prime target for politicians who would rather raise taxes than cut spending.  But, while  the proposed tax may temporarily fill the coffers, it will result in those wholesalers and distributors charging restaurants, vineyards, and breweries and ultimately, consumers more.

This will result in fewer establishments, fewer jobs, less tax revenue for the state in the long-run.

Wine and beer production provide the U.S. with over 2 million jobs and represent around $60 billion in taxable wages. In California, a state known for its wine production, the stakes are particularly high. The wine industry in California provides tax revenue (about $15 billion in state and federal taxes) as well as bringing in tourists (about 20 million a year) who pour money into other parts of the economy.

The effects of increased taxes on wholesalers and distributors will ripple through the entire industry.

Second, if they charge for the harm alcohol does, are they going to pay for the benefits it also provides?

Alcoholic beverages have long been demonized in this country for the “social ills” associated with those who abuse the product. However, there are just as many if not more positive effects of alcoholic beverages that most do not consider when choosing to apply discriminatory taxes to the industry. Moderate alcohol consumption is widely associated with decreased risks of various age-related medical problems such as coronary heart disease, stroke, cancer, and cognitive disorders like dementia and Alzheimer’s disease, and a new study indicates that alcohol consumers have lower risk of rheumatoid arthritis.

Studies also show that social interaction is more important to ones health than quitting smoking or losing weight. While it isn’t a requirement, much of modern social interraction is organized around the consumption of alcohol: drinks after work, dance clubs, football games and beer, a backyard barbeque. Alcohol isn’t necessary for social interaction, but there’s a reason they call it the social lubricant.

The point is, alcohol doesn’t make stupid people do stupid things. If someone chooses to get drunk and behave in a risky way, that is their choice and no fault of the farmer, bar, or retailer who sells them the bottle.

Whether the net effects of alcohol consumption are negative or positive, it shouldn’t be the government’s role to apply discriminating taxes one industry because it deems the effects “undesirable.”

Note: image via wortblog.blogspot.com

Two Health Care Unions Battle Each Other for Members

by Ivan Osorio on September 13, 2010 · 2 comments

in Economy, Employment, Labor

Voting began today in one of the most disputed union elections in recent years. The contest pits the powerful Service Employees International Union (SEIU) against the upstart National Union of Healthcare Workers (NUHW), which was created last year by former officials of a SEIU affiliate in Oakland, California. At stake are 44,000 at Kaiser Permanente health care facilities throughout Northern California.

SEIU’s national leadership placed its Oakland affiliate, United Healthcare Workers-West (UHW), in trusteeship in January 2009, alleging “financial wrongdoing” by then-UHW President Sal Rosselli. In response, Rosselli accused then-SEIU President Andrew Stern of using trusteeship to forcibly seize his local and merge it with a scandal-ridden Los Angeles-based local, whose president, Tyrone Freeman, had stepped down amid serious corruption allegations.

SEIU suffered a loss to NUHW in Southern California in January, so the current contest is major test for SEIU’s new national president, Mary Kay Henry, who took over from her notorious predecessor Andy Stern last May. Henry seems committed to this fight, and for good reason. She worked alongside Stern during his tenure as president, and helped to implement some of his more controversial policies, including his efforts to create a handful of giant mega-locals, through mergers such as the one imposed on SEIU’s California health care affiliates.

Union power struggles are nothing new, and, as in most, the dispute between SEIU and NUHW has its share of egos. But this fight also centers on the future of unionism in the private sector, where organized labor is a fading force. To revive unions’ sagging private sector numbers, SEIU, under Stern’s leadership, has pursued a strategy of increasing union “density,” which entails increasing the number of union members in the overall workforce to gain greater clout in negotiations. This often has meant compromising on contract terms to lessen employer resistance.

Rosselli, by contrast, has preferred to drive a hard bargain to gain the best contract terms for existing members, even while trying to organize new ones. Throughout this conflict, Henry worked alongside Stern to pursue the goal of greater “density,” which Rosselli has derided as “organizing workers for the sake of numbers.”

Whichever strategy wins out, it’s safe to say that the leaders of SEIU and NUHW can agree on at least one thing: support for the so-called Employee Free Choice Act (EFCA), which can help both their goals. EFCA’s card check provision would both allow unions to organize members more easily by effectively eliminating the secret ballot in organizing elections, while its binding arbitration provision would allow union negotiators to drive a harder bargain in the expectation that after 120 days a federally appointed arbitrator could step in to impose an agreement that is bound to be no worse for the union than management’s final offer.

Voting ends on October 4 and the vote count begins two days later. This is a contest well worth watching.

For more on SEIU, see here, here, here, and here.

Missouri Voters Overwhelmingly Reject ObamaCare’s Individual Mandate in Referendum

by Hans Bader on August 4, 2010 · 2 comments

in Economy, Health and Illness, Healthcare, Insurance, International, Legal, Nanny State, Personal Liberty, Politics as Usual, Regulation, Sanctimony, Zeitgeist

“Missouri voters on Tuesday overwhelmingly rejected a federal mandate to purchase health insurance, rebuking President Barack Obama’s administration and giving Republicans their first political victory in a national campaign to overturn the controversial health care law passed by Congress in March.”  The referendum passed easily by a 3-to-1 margin, with nearly 73 percent of the vote.

On Monday, a federal judge let Virginia’s attorney general challenge ObamaCare as unconstitutional, refusing to dismiss a lawsuit challenging its mandate to buy health insurance. The Obama Administration says it can force people to buy insurance or other products under the federal government’s power to regulate interstate commerce, and punish them with tax and other penalties if they do not. Under Obama’s logic, every American could be forced to buy a car in order to spur interstate commerce in automobiles. The judge was skeptical of this logic, noting that “never before has the Commerce Clause . . . been extended this far,” and “no reported case” has ever “extended the Commerce Clause or Tax Clause” to punish “a person’s decision not to purchase a product.”

Obama’s health care law will reduce lifesaving medical innovation, raise taxes, drive up insurance premiums, break many campaign promises, and increase state budget deficits.  It  will jeopardize the quality of medical care, while imposing restrictions that failed when tried at the state level.  It ignores advice from doctors and federal experts, and lessons from countries with universal health care, about how to keep costs down.

It imposes many middle-class tax increases, such as taxes on uninsured individuals, on cosmetic surgery, on medical devices, and on certain health care plans.  It also increases taxes on many investors and imposes marriage penalties.

It also contains many penny-wise, pound-foolish provisions.  It spends money on frills like “cultural competency,” while cutting spending on crucial things like anesthesia.

The health care legislation also contains potentially unconstitutional racial preferences for minority applicants, and lower standards for treatment of patients in predominantly-minority institutions.  These drew criticism from the Civil Rights Commission.

Understanding the Health Care System

by Ryan Young on July 29, 2010 · 7 comments

in Deregulate to Stimulate, Economy, Healthcare, Insurance, Regulation

One of the worst parts of the current health care system is its sheer complexity. Because most of the payments are made by third parties, the paperwork burden is enormous. Co-pays, deductibles, ever-shifting networks, and so on.

Unfortunately, that complexity is about to get a lot worse because of this year’s health care bill. Check out this flow chart (right) of what the health care system will look like once Obamacare is implemented. You can also download a PDF version of the chart that allows you to zoom in more closely. It’s worth taking a few minutes to look at all the agencies and bureaucracies in greater detail.

This chart was released by Rep. Kevin Brady, a partisan Republican. But whatever your politics, you should be wary of any scheme as grandiose as Obamacare. This represents a re-ordering of one sixth of the American economy.And not only is the government tasked with making this flow chart flow smoothly. It is also tasked with fighting two land wars in Asia. With delivering the mail. With developing new energy technologies. With overhauling the nation’s entire financial system. No organization can do all those things and do them well. Doesn’t matter how talented and well-meaning the people behind it are. It is beyond the limits of anyone’s ability to plan.

As Dan Mitchell points out, real health care reform would have just two parties to most transactions: buyer and seller.

There are two other things I’d like to see. One is that health insurance should not be linked to your job. Under both the current system and Obamacare, if you lose your job, you lose your insurance at exactly the time you need it most. This can be done by treating employer-provided insurance exactly the same as individual insurance in the tax code. Employer-provided insurance is currently given special treatment.

Real reform would also fundamentally change the way we use health insurance. The purpose of insurance is to insure against unexpected risks. Your annual physical does not fit that description. Having insurers pay for routine, expected expenses is like using your auto insurance to pay for a tank of gas and a car wash. No wonder premiums are so high. Health insurance isn’t really insurance. It’s pre-paying for your health care. And it also has one whopper of a principal-agent problem that explains a large portion of why health costs are so shockingly high.

“Basic needs” need to be regulated, say Dems

by Fran Smith on April 22, 2010

in Healthcare, Insurance, Nanny State, Odds & Ends, Personal Liberty, Regulation

Reason’s Ron Bailey, in an “I told you so” article today, points out that Senate Democrats are poised to support a bill that would give the federal government the power to regulate insurance rates.  He was referring to a NYT article – buried on page A12 — that said that Senator Tom Harkin, the chairman of the Senate health committee, was going to push for a bill, possibly one introduced by Senator Dianne Feinstein, that would give the Secretary of Health and Human Services the power to block rate increases “found to be unreasonable.”

Here’s what the California senator had to say about her bill:

Mrs. Feinstein said her bill would close what she described as “an enormous loophole” in the new law. And she said health insurance should be regulated like a public utility.

“Water and power are essential for life,” Mrs. Feinstein said. “So they are heavily regulated, and rate increases must be approved. Health insurance is also vital for life. It too should be strictly regulated so that people can afford this basic need.”

Looks like the Dems are really pushing their agenda to expand the list of “basic needs” that the federal government has to regulate – read that as take over. Better check out Maslow for what comes next.

Regulatory Problem, Regulatory Solution?

by Ryan Young on April 1, 2010

in Health and Illness, Healthcare, Regulation

A dying patient in the UK’s NHS made the news after nurses refused to bring him a glass of water, despite his repeated begging. He died soon after of pneumonia. It really is a terrible story.

Had that poor soul lived in Arizona, he might not have had that problem. In that fine state, it is against the law to refuse someone a glass of water if you have any to spare.

As the U.S. slowly but surely hands its health care sector over to government, and NHS horror stories repeat themselves on this side of the Atlantic, this may become a more pressing issue than one would expect.

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