March 22, 2011

March 22, 2011 | Factsheet on Health Care

Obamacare One Year Later: Why America Needs Full Repeal Now

Raising Costs, Fewer Options

  • Higher Premiums: Requiring insurance plans to have certain benefits inevitably raises the cost of providing insurance, which is passed onto policyholders. Regence Blue Cross/Blue Shield in Oregon cited Obamacare for 3.4% of its 17.1% rate increase, while Celtic Insurance Company of Wisconsin and North Carolina said half of its 18% rate jump was because of Obamacare mandates.
  • Dropped Child-Only Plans: Obamacare’s requirement that insurers who sell child-only plans offer coverage without considering pre-existing conditions had unintended consequences. Insurers in at least 34 states have dropped child-only insurance plans, and 20 states no longer have child-only plans sold in their insurance marketplaces.
  • Will I Get to Keep My Plan? Despite assurances that health insurance plans wouldn’t change, there have been several reports of confusion and inconsistent rulings regarding the “grandfathering” status for current health plans. The federal government has enormous power to arbitrarily select policies it deems in violation of the law. So far, the Administration has estimated that anywhere from half to 80% of small-employer plans, up to 67% of large-employer plans, and up to 67% of individual plans won’t be grandfathered in by the end of 2013.

Total Obamacare Taxes, By Year Waivers, Waivers, Waivers

  • A Rash of Waivers: Federal regulations on mini-med plans, which offer limited annual health benefits, resulted in a multitude of companies, unions, and organizations seeking waivers. These allow employers to opt out of the provision that they offer health plans with “essential benefits” that don’t have annual limits on coverage. To date, more than 1,000 waivers have been granted—the largest going to the United Federation of Teachers Welfare Fund, a public-sector union with 351,000 enrollees.
  • And More Waivers: Many state insurance commissioners have also applied for waivers to opt their states out of the medical-loss-ratio requirement. This dictates to insurers how much of their premiums must be used to pay out claims and make quality improvements. The rule is expected to reduce the oversight work that insurers do to prevent fraud and abuse from occurring. Plus, the medical-loss-ratio requirement could further destabilize the market, driving insurers out of the small-group and individual markets.

A Shell Game

  • More Bailouts: More than 5,000 plan sponsors were approved to receive federal funds to provide early-retiree benefits to workers. Of the total $535 million paid out to date, almost $300 million has gone to government plans, with a union health benefit program getting the largest allotment of $58 million. This is one more program that shifts costs of unsustainable promises onto federal taxpayers.
  • Unpopular High-Risk Pools: Prior to Obamacare’s passage, 35 states had high-risk pools. Obamacare pushed states to create new high-risk pools, which the Administration expected would enroll 375,000 Americans by the end of 2010. But as of February, approximately 12,500 people (a scant 3% of that estimate) had signed up for coverage.

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