by Bill Sardi
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"The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery." ~ Winston Churchill
The Supreme Court has ruled favorably on the Affordable Care Act (ACA), a 2700-page piece of legislation that will certainly raise, not reduce healthcare costs, and only pretends to help Americans live healthier.
That the uninsured will now have coverage for their health care bills via government subsidies needs to be stated differently — that hospitals, drug companies and doctors are now assured they will get paid for caring for millions of uninsured Americans. Lobbyists have prevailed in Washington DC once again, and made it look like it was a welfare program for the disadvantaged. In fact, it is a mandatory tax on the very people who can afford it least.
Sept. 12, 2008: Dover, New Hampshire Presidential candidate Obama said: “I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes. [YouTube Video]
Health care for many Americans now switches location, from the hospital emergency room to the clinic waiting room. At least healthcare consumers can expect a bit more padding in the chairs of the latter.
How It Works
The ACA subsidy (tax) program works like this. Medicaid will cover families with incomes below 133 percent of federal poverty level (FPL), which is $22,050 (2010) for a family of four. For those above the poverty level the Affordable Care Act kicks in. There is a sliding scale that requires recipients pay a minimum 4% of their annual income if family income is 150% of the FPL and 9.5% if 400% of the FPL ($3307 if making $33,075). Then whatever is not covered will be made up for by government subsidy.
The Congressional Budget Office estimates this subsidy will cost $113 billion annually by 2019 for an estimated 19 million Americans with an additional 16 million covered by Medicaid at a cost of $97 billion in 2017. It is difficult to know whether low-income families will deem a mandated percent of their income that must go toward health insurance is a benefit or a hindrance.
Every American Must Buy Or Else
While such an expansive piece of legislation is going to be difficult to translate in simple terms to the common man, the main point that may confuse Americans is that the ACA doesn't mandate that Americans now purchase health insurance from the government, it only mandates that every American purchase health care insurance from any private carrier they choose, carriers who now must meet certain government minimum requirements (spend 80% of insurance premiums on providing care, no exclusion of people with per-existing conditions, etcetera).
Another confusing aspect of the ACA is that it levies a penalty in the form of a fine if you don't purchase healthcare insurance. That "fine" is what Supreme Court Justice John Roberts ruled to be a "tax."
Polarization Of America
A most disconcerting aspect of the ACA is that it further polarizes the nation. According to a Gallup Poll, Americans are evenly divided — 46% for versus 46% against — on the Supreme Court's decision to uphold healthcare reform.
Hidden Objective: Jobs
Employment appears to be an unstated objective in the ACA, to use the healthcare industry as a platform to create more jobs. The healthcare sector is a growth area for jobs, so it is a contradiction to believe anyone is going to get healthier and need less health care while it increases the size of the healthcare workforce. Detection and treatment of disease, the existing paradigm, is at odds with health and wellness promotion.
Healthcare costs are considered part of the nation's Gross Domestic Product (GDP) when they should be considered a part of the "cost ledger" on accounting books. Sickness is now a market and any real efforts to reduce the incidence of disease will negatively affect employment and profit projections as well as the ability of the wealthy to pay for it all.
Burden Upon The Wealthy
The Affordable Care Act is not just the younger and healthier paying for the older and sicker, it is a diminishing number of wealthy individuals bearing the burden for the masses.
The ACA also levies an excise tax on wealthy individuals who can afford to purchase comprehensive "Cadillac" health insurance plans ($27,500 per family).
Wealthy individuals, the so-called "one-percent" (those who make over $250,000 a year) face increased taxes on their investments (dividends and capital gains) that will have to rise six-fold over the coming decades as projected Medicare costs rise from $500 billion/year to $3 trillion/year. The current $2.7 trillion in healthcare costs are expected to grow to $4.6 trillion by 2019. So this is just the beginning of a number of tax increases upon wealthy Americans. Long term there is no way taxes can meet the multi-trillion dollar underfunding of Medicare.
Obamacare is more care, not less, and more total cost, not less, and represents another giant wealth transfer program as the so-called wealthy bear the burden for the poor.
No One Escapes New Taxes
The ACA also levies seven new taxes on Americans who earn less than $250,000 a year. The bottom 50% of wage earners (earn less than $32,396/year) who pay only 2.25% of all collected income taxes are going to be required to buy health insurance. The Internal Revenue Service is expected to enforce ACA requirements. So from top to bottom of the income ladder, nobody escapes increased taxes.
April 15, 2009: White House press briefing White House Press Secretary Robert Gibbs, asked if the Obama tax pledge applied "to the health care bill." Gibbs: "The statement didn't come with caveats." [Press Conference Transcript]
Here is the simplest synopsis of Obamacare I can come up with:
Wait a while, bend over (required rectal exams, so says the new law), pay up (or face fines, aka "a tax"), and submit to treatment bureaucrats think is best for you, or else.
No Turning Back
While Americans picket to maintain the healthcare they now enjoy, there will be no returning to healthcare on demand. There will likely be waiting lists for cataract/lens implant operations and other non-emergent procedures.
This is because Medicare is underfunded by $25 trillion and even that figure is specious because it relies upon 165 cost-saving changes in the health care reform law, many that are unlikely to occur. The multi-trillion dollar shortfall equates to $212,500 per household, but it is far greater than that because wealthy families will have to bear most of this cost.
How Many Were Truly Uninsured?
It is not known how many Americans will opt out of Obamacare and pay the penalty tax. However, out of a population of 304 million Americans, only about 11 million (3.6%) were truly uninsured. The more broadly disseminated figure of 40 million uninsured Americans included 17 million who elected not to purchase health insurance even though they had sufficient income to buy it, and ~10 million who are "not citizens," and 25% of the uninsured already qualify for government health insurance program, and another 45% of the uninsured are only temporarily without coverage because they are in between jobs, etcetera.
That leaves ~28 million uninsured who will be coerced to buy health insurance or face onerous financial penalties, $695 a year or 2.5% of income, whichever is higher or for a family of four earning $50,000, or a family penalty of $2085.
Prior to the passes of the ACA, the 17 million uninsured Americans with adequate incomes to buy health insurance, who are likely to be generally healthy but didn't buy health insurance, probably paid an average $664/year in out-of-pocket costs for health care. Now assume these 17 million previously uninsured Americans must purchase a $2500/year health insurance plan. That would divert an estimated $32 billion from the consumer economy to the healthcare industry.
Americans may not know this, but Obamacare forces Americans to undergo more needless and problematic mammograms, colonoscopies and PSA tests under the guise these actually prevent disease or prolong survival, tests that run counter to what government preventive task forces recommend. Under Title IV, Section 4202, 4202 and 4108 the ACA mandates screenings that simply drum up more business for doctors and doesn't prevent disease from occurring in the first place. For example, I have recently written that there is only a remote chance that Americans will ever benefit from a colonoscopy.
And, under the guise of preventive care, Obamacare mandates insurance plans offer coverage for contraception, something that religious organizations have filed 23 lawsuits in 14 different states over.
Obamacare does not put a stop to the relentless promotion of vaccines. Are we to undergo hundreds of vaccinations for every strain of bacterium and virus on the planet? Other less costly and safer alternatives are at hand but underused.
Obamacare may backfire and end up causing some small businesses to lay off workers so as to get under the 50-employee point where the cost of health insurance must be borne by the employer. That 50th employee is very expensive.
The Irony Of The Disadvantaged And Obamacare
There is another irony to Obamacare. Low income Americans I speak to want Obamacare. They feel that other countries provide universal care, and they want what others have been able to afford. They want the miracle drugs, the high-tech treatments that they see others Americans receiving. They have no idea it is, for the most part, ineffective therapy. But the big rub is that Obamacare recipients will be accessing a healthcare system that is dysfunctional, overpriced and out of control. That Americans demand more unnecessary, troublesome, even deadly care is certainly misdirection. The American healthcare system, advertised as the best in the world, is far from achieving the lowest mortality rate. Obamacare further cements a dysfunctional healthcare system in place.
A statistic known as "mortality amenable to health care" measures death from various causes before age 75 that are potentially preventable with timely and effective health care. The U.S. ranks in last place among 19 industrialized countries on this measure of healthcare quality.
The culture within the practice of medicine is not going to be changed with a 2700-page document. But we have to ask, just where are the real financial incentives to practice preventive medicine rather than just give it lip service? So-called outcomes research is one thing, but getting doctors to adhere to it is another. For example, doctors still perform PSA tests when there is no valid reason to do so.
While Title IV, Section 4202 of the Affordable Care Act spells out the components of a wellness program to include nutritional counseling, physical activity plan, alcohol and smoking cessation counseling, stress management, and dietary supplements that have health claims approved by the Secretary of Health Education & Welfare, doctors simply aren't trained to provide preventive services that they often consider beneath their training. Furthermore, the fee for service system that is now in place prioritizes services that produce the most insurance reimbursement.
Is Less Care A Bad Thing?
Because of health rising healthcare costs and a weak economy one Kaiser Health survey showed that 35% of respondents had to resort to using home remedies or over-the-counter drugs instead of going to see a doctor. But isn't self-care a positive goal? Does more doctoring promote the measureable endpoints of quality healthcare, namely lower mortality rates? The low US ranking among national mortality rates is shameful and suggests less doctoring may be more desirable.
To back that up, an analysis of labor strikes over a period of nearly three decades where doctors ceased providing everything except emergency services reveals a strikingly consistent decline in death rates! Less doctoring saves lives.
Among 1 billion physicians' office visits in 2008, many millions were deemed by doctors to be avoidable or unnecessary if patients were oriented towards self-management of their health using over-the-counter (OTC) medicines and dietary supplements.
The survey asked doctors and patients this question: When you experience minor ailments such as headache, fever, colds or upset stomach, what do they do? About eight in ten consumers said they relied upon OTC medicines whereas only two-thirds of doctors utilized OTC remedies. Just over six in ten consumers said they use dietary supplements whereas only one in four physicians said the same. One in five consumers said they use alternative treatments versus only five percent of physicians. These are the same doctors that are supposed to be leading the way in healthcare reform. It is no wonder healthcare costs so much. This kind of common sense medicine is not included in the language of the Affordable Health Care Act.
A difficulty posed by embarking upon a road where less care equates with better health is vulnerable to cries of rationing. Yet it is clear that half of the US population spends little or nothing on health care while 5 percent of the population spends almost half of all healthcare dollars. Fifty percent of the US population accounts for only 3% of overall US medical spending ($664 per person annually) versus 5 percent of the population that spends 17 times more per person ($11,487 per person). It is presumed most of these are less healthy citizens smoke tobacco, have poor diets and over-imbibe alcohol and are more likely to be found in low-income groups.
Obamacare addresses preventive care in language spelled out in the Affordable Healthcare Act document. But frankly, smoking cessation programs have been a disappointment. One study showed it costs $6204 to achieve one successful "quit" among smokers. While health insurance premiums are higher for smokers, it is cheaper for employers to pay for the insurance than incur the cost of smoking cessation programs.
Few patients who have faced life-threatening cardiac events adhere to dietary recommendations. That's when life is threatened, so you can imagine how many patients make lifestyle changes for non-life threatening problems like diabetes.
While the Affordable Care Act provides $200 million in grants to allow small businesses to implement wellness programs, a report issued by the National Institute For Healthcare Reform concludes that "wellness programs are just too uncertain to justify broad taxpayer-supported subsidies." This is an agency of the US government basically saying an aspect of Obamacare won't work and will be a waste of money.
It will cost more, not less
Healthcare insurance is the single strongest factor that determines whether Americans access doctor's offices or outpatient clinics. One survey shows more than half (57%) of Americans age 18-64 without health insurance never attended a doctor's office or outpatient clinic compared to 1 in 4 (23.7%) who were covered by public-only health insurance, 1 in 10 (9.5%) who had Medicare and 1 in in 15 (6.5%) with private insurance coverage. Programs to increase insurance coverage will surely increase utilization of healthcare services.
More Can Be Accomplished Without Obamacare
It's possible more can be done outside of Obamacare to reduce healthcare expenditures and improve the health status of Americans. For example, Marion Nestle, a professor of nutrition, says America will not solve its diabesity epidemic through promotion of self control. Nestle says American food companies must alter the food chain to offer more nutritious foods, particularly to lower income groups that exhibit a greater percentage of chronic disease. It is clear that something happened to the American population at large in the 1980s, and that was when high fructose corn syrup and iron-fortified, sugary breakfast cereals became popular. Whatever did happen to the American food chain, it disengaged the signal for satiation and Americans began eating larger portions of food en masse.
A short treatise entitled "Eight Ways To Reform Health Care Without A Government Takeover" is available online and worth a quick read.
Point Your Finger At Congress
While some Americans may want to throw tomatoes at the Supreme Court, it is Congress that passed this legislation. As Supreme Court Chief Justice John Roberts said: "We do not consider whether the act embodies sound policies. That judgment is entrusted to the nation's elected leaders. It is not our job to protect the people from the consequences of their political choices."
When the underclasses figure out Obamacare is a not what they anticipated, who knows what follows?