The Cost of Obamacare is Costing Less than Expected

 

The Congressional Budget Office indicates that the health insurance costs under the Affordable Care Act are less than they were previously estimated. 

            The Congressional Budget Office, CBO, is a non-partisan government organization that provides estimates for congressional use and consideration.  At the inception of the Affordable Care Act in March 2010, the CBO estimated that insurance related costs from 2015 to 2019 (i.e. the last 5 years of the 10 years estimating period) would amount to $710 billion.  This March, the CBO revised that estimate to $506 billion, a 29% reduction.  Most of this reduction comes from insurance subsidies provided by the federal government.  In 2010, the CBO estimated that by year 2015, insurance subsidies would average $5200 per person.  The CBO’s new estimate is $3960 per person in 2015.  The CBO now estimates that the total insurance subsidies over the next decade will be $849 billion.  This is $209 billion less (20% less) that the CBO’s previous 10 year estimate made in January 2015.     

            In addition, the CBO estimates that the 10 year costs of the “Expanded Medicaid” program for the poor is $847 billion, down from $920 billion of the previous estimate, an 8% decline.     

            This is good news for all of us.  What all these statistics mean is that health care insurance costs are being reduced by the Affordable Care Act.  The costs are lower because the insurance premiums are lower.  This means that individuals and businesses pay less for health care insurance than they did before.  As the White House press secretary, Josh Earnest, said “the Affordable Care Act is contributing in a very positive way to holding down the growth of health care costs.”  It also means that since the subsidies are less, the government has to spend less money to support the Affordable Care Act.  This means that the Affordable Care Act is really helping to roll back the deficit.  In fact the CBO estimates that the deficit over the next 10 years will decline from an estimate of $7.6 trillion to $7.2 trillion, a $400 billion decline.

 

         Agree with it or not, the Affordable Care Act is working.

 

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The Supreme Court has another Chance to Destroy Obamacare, How would it affect you?

          The Supreme Court has yet another chance at destroying the Affordable Care Act.  The situation is this.  A large part of Obamacare is to make health care affordable for Americans.  The plan, therefore, subsidizes premiums paid by families for their health insurance.  For example, in 2014 a family of four making $35,775 per year would not pay more than $1430 per year ($119 per month) for a silver plan.  These subsides apply to annual incomes reaching up to about $100,000 a year.  The subsides are paid for by
-          a much larger pool of participating and mostly healthy individuals
-          more frequent medical checkups to keep people healthier
-          additional taxes on those making over $200,000 per year and
-          taxes on medical devices and health care insurance companies, on expensive "Cadillac" health  care plans and on tanning salons. 

            The Patient Protection and Affordable Care Act (i.e. Obamacare) was originally written to have each state set up it own health insurance exchange.  Citizens go on-line to health care exchanges and select which plan they want, from the most economical bronze plan to the most expensive platinum plan.  Along the way though, 34 states opted not to set up their own plan, some because setting up the system was too onerous and others because they just opposed Obamacare.  The federal government then established a system where people without state plans could select an insurance plan through the federal government site, www.healthcare.gov. 

            The only problem is the exact wording of the Affordable Care Act.  The Act states that subsidies will be provided to eligible people who purchase insurance through “exchanges established by the states”.  In King v Burwell (Sylvia Burwell, Secretary of the Department of Health and Human Services) King argues that anyone who obtained health insurance through a federal exchange is NOT eligible for subsidies because they’re not “established by the state.”  Even though Obamacare clearly intended that subsidies could be provided through either a state or a federal exchange, the exact wording of the act does NOT say “or the federal government.” 

            All this turmoil and uncertainty results from conservative zealots that loath Obamacare. So if the Supreme Court decides that the federal government cannot provide subsides, here is what could happen.

1)  Five million people signed up for Obamacare from federal exchanges in 2014.  Of those, 87% or about 4.4 million people, received subsidies.  Without those subsidies, many of the lower income and healthy, generally younger people may opt out¹⁾. The numbers get worse though.  In 2015, the second year of enrollment, the estimated number of Obamacare participates is about 11.4 million and, according to E. J. Dionne of the Washington Post, ²⁾ about 8 million lower income and younger people could opt out and be without health insurance.

 

2) Most of those who drop health insurance are from the 34 non-participating states.  These are predominately Republican states.

3) With the younger, relatively healthy people not participating, the majority of the participants would be in poor health and require more medical treatment.  However, without insurance, hospital and doctor payments would drop and medical fees would have to increase in order to compensate.  An economic forecast by the RAND Corporation projects that medical fees would increase by 47%, while enrollment in individual health care insurance market would decline by 70%³⁾.  This too would occur predominately in Red states which did not develop exchanges.

4) People without insurance are reluctant to go to the doctor.  The result is many preventable diseases (e.g. asthma, heart problems, high blood pressure, diabetes, and cancer) will not be detected until late in the disease development when the prognosis is not good and the cost of treatment is higher.  Before Obamacare, the American Journal of Public Health reported that about 44,800 people were dying unnecessary each year due to lack of insurance ⁴⁾.  In addition, lack of pre-natal care results in higher infant mortality rates.  The National Vital Statistics Bureau reports that about 25,000 infant deaths result each year from inadequate prenatal care ⁵⁾.  And again, the increase in death and disease will predominately occur in Republican states.

5) The expanded Medicaid program that provides healthcare for those earning less than 138% of the Federal Poverty Level, (about $33,000 for a family of four in 2014) would continue for those 25 states that opted to participate in the program.  The other 25 states refused to participate in expanded Medicaid, even though the federal government will pay almost all of the costs.  The 25 states not participating in the expanded Medicaid is, you guessed it, mostly Republican states. 

So the end result of a Supreme Court decision to uphold King’s complaint is that part of the nation would be receiving huge Federal subsides for health insurance and the remaining states could receive near nothing.  Secretary Burwell told Congress that the administration knows of no legal action it could take to “undo the massive damage to our health care system that will be caused by an adverse decision.”⁶⁾

In closing this article, I quote Ted Cruz’s statement to the International Union of Firefighter on Tuesday March 10 in Dallas, Texas:

“Five years ago reasonable minds could have differed on whether this was a good idea, but today, seeing millions of American who’ve lost their jobs, who’ve been forced into part time work, who’ve lost their health care, who’ve lost their doctor — it is the essence of reasonableness, it is the essence of pragmatism to acknowledge this thing isn’t working. We need to repeal it and start over.”

I think it is the essence of reasonableness for the states to have joined Obamacare.  Thank goodness Cruz doesn’t work for NASA.

 

1) Fortune.com, “The Supreme Court’s decision on health care subsidies – what you need to know,” by Laura Lorenzetti, March 3, 2015.

2) The Week, “Obamacare’s looming legal showdown’, March 56, 2015
3) Fortune.com, “The Supreme Court’s decision on health care subsidies –
4) Wilper, Andrew P.; Woolhandler, Steffie; Lasser, Karen E.; McCormick, Danny; Bor, David H.; Himmelstein, David U. (December 2009). "Health insurance and mortality in US adults." American Journal of Public Health 99 (12): 2289–2295. DOI:10.2105/AJPH.2008.157685. PMC 2775760. PMID 19762659.
5) National Vital Statistics Report, Vol. 59, No. 6, June 29, 2011
6) www.csmonitor.com/USA/Justice/2015/0304/supreme-court-could-obamacare-ruling-destroy-health-insurance-for-millions             

Did you know the patron saint of Ireland, Saint Patrick, wasn’t Irish and other tidbits

“Top of the morning to ya” on this fine but chilly Saint Patrick’s Day.  Did you know the patron saint of Ireland, Saint Patrick, wasn’t Irish; he was born in Roman Britain in the 4^th century.  His father was a church deacon and his grandfather was a priest in the Christian Church.  At the age of 16, Patrick was kidnapped and taken to Ireland were he served as a shepherd.  After six years, Patrick escaped and returned to Britain where he became a priest.  Eventually though, he returned to Ireland to convert the Celtic pagans population, who worshipped the sun and pagan figurines, to Christianity.

            The story goes that Saint Patrick used the three leafed shamrock (not a four leafed clover) as a symbol to explain the “holy trinity” to the pagans.  The green shamrock, the plush green of the island and the song “wearing of the green” celebrating Irish nationalism, all contributed to the green Irish tradition.  Although a popular and mysterious myth, Saint Patrick did not drive the snakes out of Ireland.  Sorry to disrupt your fantasy, but there are no snakes in Ireland, it’s too cold.  Perhaps, St. Patrick driving the snakes from the island may be symbolic of his work to convert the pagans.  

            As strange as is seems, St Patrick’s Day celebrates the death of Saint Patrick who died on March 17.  In 1903, St. Patrick’s Day became an official holiday in Ireland.  At first the day was celebrated as a religious holiday.  In 1931, the first St. Patrick’s Day parade in Ireland was held in Dublin.  The very first St. Patrick’s Day parade though was not held in Ireland.  It was held in New York City in 1762 before the Revolutionary War.  The parade was held to celebrate Irish immigrant’s role in American culture.

            Through the ages, of course, the religious significance of the holiday has declined and been replaced by, one may say, more festive occasions of food and beer, especially the famous Irish stout, Guinness.  But here, once again, the traditional food in America, of corn-beef-and-cabbage is not Irish.  The traditional Irish cuisine on St. Paddy’s day is boiled bacon, like a boiled ham.  The American tradition of corn-beef-and-cabbage came about from American immigrants who collected cheap beef brisket and cabbage to cook for a special meal.

            So today on St. Patrick’s Day, even though the holiday is fraught with misconceptions, you may rest assured that millions of people are celebrating in Argentina, Canada, Great Britain, Japan, Malaysia, Montserrat, Russia, South Korea, Switzerland and the United States.  And among all the millions who will watch a St. Paddy’s Day parades all over the world, the shortest is in  Drepsey, Cork, Ireland being 100 yards, between two neighbor bars.

Senate Sabotages Iran Nuclear Negotiations

You may not be aware that the Constitution gives the authority to negotiate treats solely to the President of the United States.  The Senate’s role is to pass (or not) a “resolution of ratification” for the treaty with a 2/3 majority.  The Senate’s action yesterday by 47 Republican Senators interfering with negotiations on Iran’s nuclear development activities is not only unprecedented and egregious but also counter productive.  It effectively aligns the US Senate with those in Iran who also do not want a treat, it undermines US negotiations and US allies (Britain, France, Germany, China and Russia) who are also involved in the negotiations.

            Those 47 Senators apparently have forgotten that in negotiations there is give and take.  They apparently believe that all US demands should be met without regard for Iran’s position.  Nobody wants Iran to develop nuclear weapons (except maybe Iran).  However to tell Iran they can have no nuclear power capacity at all is like saying “You cannot have electricity”.  Nuclear power can be used peacefully to produce electricity.  The uranium involved in power generation though is significantly different than that involved in bombs.  Uranium in bombs is highly enriched; the uranium in power plant is much less enriched.  That means that naturally occurring uranium consisting almost entirely of Uranium 238 (U238), must be replaced with U235, a different isotope.  Uranium 235 can fission (break apart) and release a lot of energy, U238 cannot.  To make a bomb, the uranium must be almost entirely U235.  Replacing U238 with U235 involves using high speed centrifuges that spin at tremendous speeds.  This process can separate the uranium isotopes and it is possible to gather U235 in preference to U238.  It requires many centrifuges to do this because the separation is performed in stages, each stage having a slightly higher concentration of U235.  You can therefore determine the amount of enrichment by counting the number of centrifuges involved in the process.  Also at the end of enrichment, you can measure the amount of U235 in the end product.  So it is very possible to determine Iran’s level of enrichment by thoroughly inspecting the enrichment process.  I suspect that this inspection process is the crux of the negotiations going now, Iran does not like US inspections.

            But look at the alternatives to negotiating an agreement.  If we negotiate an agreement, Iran will be prevented from developing nuclear weapons.  If we don’t reach an agreement, Iran could continue to enrich uranium which could product a bomb.  If they pursue a bomb, US reactions would be limited largely to some sort of military action.  This puts not just the US, but all of our allies and the entire world closer to a real all-out war.  Fighting three wars at once, ISIS, Afghanistan and Iran, all at once is not what we need.

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