Obama SCARE: The Frightening Truth

Obama SCARE: The Frightening Truth

ObamaCareFacts.com officially states that the Affordable Care Act (ACA) was signed into law by President Barack Obama on March 23, 2010, and was upheld by the Supreme Court on June 28, 2012. The overarching goal of this mandated insurance plan is to give more Americans access to affordable, quality health insurance and reduce growth in healthcare spending, thereby improving the quality of life of individuals and lowering their overall financial risk due to illness. By having more individuals insured through a mandated insurance plan, more Americans will have better access to quality care, live healthier lives, and lower their overall financial risk due to illness. These are well intentioned goals, and on the surface, seem like inarguable goals we should all get behind. 

The law’s fundamental coverage requirements includes the following provisions to make coverage more “affordable”: allowing young adults to stay on their parents plan until age 26, preventing insurance companies from making unjustified rate hikes and  excluding life-time/annual limits. To improve the “quality” of coverage, the law requires all insurers to include people with pre-existing conditions and provide “free” preventive services such as yearly check-ups, immunizations and screenings, as well as essential healthcare benefits (emergency care, hospitalization, prescription drugs, maternity, & new born care.) Heck, I would love to see all American families with these benefits.

The complexities of the roll-out and implementation of ACA, however, indicate that Americans are skeptical, that those who were responsible for making it law are now running from it, especially in the 15 democratic Senate seats up for reelection in 2014.  Could it be that Americans are now concerned about unintended consequences, and/or costs (both implicit and explicit) as many of the roll out provisions are now in the forefront? Even small businesses, the heart and soul of our economy, are running for cover. Small businesses recently made their voice clear in the Public Opinion Strategies survey of more than 400 businesses this past September and October.  An overriding 64% stated that Obama Care will have a negative impact on their business and only a dismal 1 in 12 agreed with the President that the law will help their business. Could the “Leading Indicators” be signaling a government bureaucracy run amok?

Leading indicators are key metrics that allow analysis of vital information that will help prognosticate outcomes in the future, i.e. building permits for new private housing units or the S&P 500 for investor expectations and performance of the future economy.  I call it foreshadowing.  A plan, whatever it may be, must have implementers in order to see sustainable success just as investors must be “bought in” to an investment opportunity before contributing capital.   The ACA has had a rocky start which has resulted in record low presidential approval ratings, a majority of Americans in doubt, and questionable projected costs that could destabilize our nation’s already weakened balance sheet.  Here is a snap shot of a few key “leading indicators” that I believe makes a case for escalated concern and enormous miscalculations in cost. 


Confidence/Trust:  Obama Care itself and/or glitches.

The law itself has issues.  Judging by the newsworthiness of this topic, Americans feel like they were duped by fraudulent promises that they could keep their current insurance and healthcare provider if they desired.  At the time when the healthcare debate was in full throttle, many Americans liked their existing policies.  President Obama knew he had to reassure that group in order to get the bill passed.  The promise below by President Obama has caused recent unrest and anger among representatives across both aisles and received unprecedented attention in the press after it became apparent that many Americans will be forced to change their current insurance policy due to the mandates in the law.

Verbatim quote July, 2009, by President Barack Obama: 

“If you like your doctor, you will be able to keep your doctor.  Period.  If you like your health care plan, you will be able to keep your health care plan. Period.  No one will take it away.  No matter what.”

  • CBO estimated last year that up to 20 million Americans could lose their current coverage under Obama Care.  Other projections predict 35 million or more
  • Obama Care requires health insurance coverage satisfy certain criteria, such as providing preventive services, in order to be offered in the market place. 
  • According to an article in the Economist on Nov 2, 2013: “Health plans in place before it [ACA] became law in 2010 are exempt, unless they are revised.  However, even small changes count, so a lot of people are affected. For example, Independence Blue Cross, an insurer in Philadelphia, has 24,000 customers in plans that do not meet Obama Care’s standard; Florida Blue has 300,000.”
  • To further illustrate the impact of the disingenuous presidential promise, it has been recently revealed that the White House was aware as early as June 2010 that an estimated 40 to 67% of the 14 million Americans who purchase health insurance in the individual market would be dropped by their insurers. Millions of people have already received cancellation notices, and many are finding that replacing their policy will involve much higher prices. 
  • Even former President Clinton, who championed the law, went on record in an interview November 12th, 2013, by stating that the President should “honor your commitment”. In an attempt to resolve this issue, the House approved a bill on November 15th, to let insurance companies sell health plans that had previously been cancelled due to Obama Care regulations. The bill passed 261-157. Thirty-nine Democrats crossed over to support the GOP=backed legislation. Many feel this is merely a cosmetic gesture that will have no real impact on fixing the issue. According to a recent report by Fox News, Health and Human Services Secretary Kathleen Sebelius told a Senate panel she didn’t believe a retroactive change allowing insurers to sell cancelled policies “can work very well since companies are now in the market with an array of new plans. Many have actually added consumer protections in the last 3 ½ years.” 

Was the President telling the truth or just trying to get the law passed?  If the White House knew about the potential for policy cancellations in June, 2010, then why did the President make false promises? Politicians lie often.  We are used to it. The consequence is clearly making the Affordable Care Act less  favorable by the minute. 


Technical disaster- Federal Exchange website debacle: 

“HOLD me accountable for the debacle,” Kathleen Sebelius told Congress on October 30th. “I am responsible.”  Mrs. Sebelius, Barack Obama’s health secretary when questioned about the debacle that involved the Oct 1st, 2013 roll out of the federal exchange website.  Those who are not insured through their employer or through a government program such as Medicare or Medicaid, with a few exceptions, must obtain insurance or pay a penalty.  A key provision in the law mandates that a market place be created through either state or federally run healthcare exchange websites that allow for rate comparisons and government subsidies for those who qualify.  Only 14 states have decided to run these exchanges at the state level while 36 states have left this duty to the federal government.  The website was essentially nonfunctional and is now a hot topic that has spurred concerns about the ability of the federal government to get the basics of the law right, such as the website exchanges. 

  • More than just a website glitch, the technical disaster points to ineptitude in mismanagement with far reaching implications.  Not only is the confidence in the Federal Government’s ability to perform in question, the ACA law is not achievable without new enrollees, primarily healthy individuals who would not otherwise purchase health insurance.  This demographic is fundamental to the viability of the law.  If they do not “perform” by signing up, then there is very little in shared costs that ultimately will subsidize the more expensive policies- the key to making ACA function as it stands today.  Even with a perfectly running exchange, CBO has projected that the health care overhaul will leave 31 million people uninsured, and about 6 million of these will pay penalties.
  • Progress report:  The administration had a target of 800,000 sign-ups nationwide in the first two months, and the Congressional Budget Office has projected that 7 million people will enroll through 2014. How did they fare?  In the first two days after the launch, a whopping 248 people signed up via the exchanges. Twelve state-run insurance exchanges reported 49,100 enrollees, ONLY 3% of the 1.4 million projected for those exchanges.
  • The website will be fixed over time but is there more to the story? Is this a harbinger of how the implementation of the Affordable Care Act will proceed?  


Costs- Obamacare: Can the nation afford it? 

There are literally no comparisons to current rates. That is, [the Department of Health and Human Services] has chosen to dodge the question of whose rates are going up, and how much. Instead they try to distract with a comparison to a hypothetical number that has nothing to do with the actual experience of real people. —Douglas Holtz-Eakin, President, American Action Forum[1]

In March of 2010, when the partisan bill was rammed through congress, it was reported that the bill would cost $938 billion (over ten years).  Exactly one year later, 2011, the CBO changed their estimate to $1.44 trillion. Guess what happened in the 2012 report?  If you guessed a new estimate of $1.76 trillion, doubling the original estimate, you would be spot on.  A majority of the spending occurs after 2014 and recent estimates for FY 2014-2023 rise to $2.6 trillion in costs for this time period.  I’ve included just a few CBO analytics that may not be so apparent in the populous media and should help shed some light on how the numbers play out. 

  • In 2012, CBO increased its estimated revenue from penalty pay outs from the uninsured from $34 billion to $45 billion and from $81 billion to $96 billion for employers, respectively. That means $141 billion in “savings” is expected from collecting penalties. 
  • Slow economic recovery has consequences.  This adjustment means more Medicaid recipients than what was originally projected (raising the outlook from $627b to $795b) which lowered the “exchange” subsidy allocation from $777b to $681b. 

Obama care will leave many people paying more for their health insurance. The healthcare.gov website is learning to crawl, with additional data trickling in. However, based on information already released by HHS, states, and insurance plans, the claims of savings on premiums for the average participant is a fantasy. —Drew Gonshorowski is a Policy Analyst in the Center for Data Analysis at The Heritage Foundation.

This is a complex bill with many moving parts.  Even the brightest and smartest economist, healthcare wonks and political pundits can’t get their heads around the economic impact of this law or its many unintended consequences.  Nancy Pelosi literally took this challenge to heart and saw no benefit in reading the bill before it was passed.  According to her, you should pass it to see what’s in it.  She wasn’t exactly wrong.  Thanks to her wisdom, we are getting that opportunity to see “what’s in it” and so far the American public has enormous concerns.  

I am no expert in law or the legal process but I do know that confidence is vitally important and, therefore, essential in efficiently getting a job done.  It is the key foundation attribute that allows for other propelling attributes such as perseverance, courage, and sacrifice to come into play.  Major change, such as sweeping healthcare legislation, requires these attributes.  Without confidence, ambiguity ensues followed quickly by demoralization.  The ACA is a problem for the American people and the administration knows it.  Poll after poll is proving it.  It is also a problem for majority of healthcare providers who do not believe in it in its current form.  I call these two groups the key implementers of the ACA plan.  The American people must believe in it or else the young and healthy who are currently uninsured will not sign up. They must. The law requires it or one must pay a penalty. Penalties, as noted above, are “cost containers” in this bill which lowers the overall cost according to the CBO.  BUT if they don’t sign up at critical levels, the law will need additional funding or fall flat.  If it falls flat, where would the additional funding come from? More than likely premiums will become more expensive as a result of the terrible enrollment trends. Better stated:  what information do we have that suggests this group will sign up at levels that will allow the law to be economically viable?  I’ve yet to find any relevant information that addresses that possibility. 

In addition, the law’s complexity completely misses or forgets about the important issue of healthcare access. It is now a fact that there is an enormous physician shortage in the U.S. that is being blatantly ignored.  Of those physicians who are in clinical care today, many are looking to change professions, retire early, or move out of clinical care according to numerous surveys sighting the ACA as the primary factor.  Physicians are also intentionally minimizing their Medicaid/Medicare encounters at a growing rate. This negative trend is growing and it is solely due to the unviable fee schedule associated with the government sponsored insurance programs. The law adds many more individuals to the pool and calls that “insurance” or “access to care”!  How can you have a successful system where a majority of the “implementers” are saying “no thank you”? This does not mean that Americans don’t want affordable, accessible healthcare for all.  As a physician, I do too.  It just means that we are skeptical and are having a hard time “buying in” to the feasibility of our nation’s stated goals under the ACA rules. A growing number of Americans, myself included, are rapidly losing confidence in the possibility of ACA working. Our citizens are quickly realizing that the U.S. government, including the Democrats who pushed it through, is not capable of implementing this law successfully. There is little data that suggests it is economically feasible, or that it will provide access to “quality” healthcare at a savings to the average participant as promised.


Article written by:
CEO, Onyx M.D.

*UPDATE*:  Since this is such a hot topic in America right now, we have dedicated our next blog to present an opposing view on Obama Care, one that is more supportive of the bill. We appreciate all of your informative comments and encourage you to educate others on your point of view. We look forward to this friendly debate. 

Read an opposing view by guest writer, Dr. Kian Modanlou-"The Affordable Care Act: Wait for It"

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