Ethics & Public Policy Center

The More We Learn, The Worse It Gets

Published in ObamaCareWatch.org on June 8, 2010



This week, we learned that the Obama administration is orchestrating a $125 million propaganda campaign to sell the recently enacted health-care law to the public. That effort will be funded by labor unions and other groups from the Democratic political orbit. It comes on top of the misleading government mailer sent to the nation's seniors, at the expense of taxpayers, touting the supposed benefits of ObamaCare for the elderly. On Tuesday, the president himself will join the fray again to make the sales pitch, this time promoting the colossal waste of taxpayer money associated with $250 per senior bribes to be issued this summer and fall.

The problem the White House has, however, has never been insufficient public relations spin. The problem is the substance. Americans care deeply about their health care, and they have seen right through the Democratic rhetoric on ObamaCare from day one. They know that it is a poorly conceived experiment, built on the flawed assumption that the problems in U.S. health care can be solved with heavier regulation, subsidization, and micro-management from Washington, D.C.

In Medicare, the results of the new law will be disastrous. ObamaCare will cut payments to the private insurance component of the program (called Medicare Advantage, or MA) by nearly $200 billion over ten years. The chief actuary of the program says this cut will eventually drive 7 million seniors — many with low-incomes — out of the plan they would prefer to enroll in. And it will mean thousands of dollars in benefit reductions for every MA enrollee, beginning next year. These seniors won't be silenced with patronizing and one-time checks. In addition, the new law imposes arbitrary price cutting for all manner of Medicare services, which the chief actuary says will harm access to care by forcing scores of institutions to stop taking Medicare beneficiaries.

Last week, we learned that the National Association of Insurance Commissioners (NAIC) has postponed issuing guidance on the ill-conceived “medical-loss ratio” requirement in the new law because, as passed by Congress, it will cause massive and unnecessary disruption to millions of current insurance enrollees. One estimate is that 1 to 2 million people with individual insurance will lose their coverage if the requirement is imposed because national insurers will be forced to exit the market to avoid large business losses.

The president has said repeatedly that Americans will get to keep the insurance they have today if they like it. But that's quite clearly not going to be the case. Douglas Holtz-Eakin, of the American Action Forum, has released a new study that shows some 35 million Americans will get bumped from job-based coverage under the new law and be forced into the new government-managed system. That's because the massive new subsidies promised by the government will make dropping insurance unavoidable for thousands of employers. He also predicts the migration out of employer plans will drive up the overall federal costs dramatically, adding another $500 billion over ten years to the costs projected by the Congressional Budget Office for the bill.

Perhaps that why CBO's Director, Doug Elmendorf, is saying that the federal government's health costs are still unsustainable, even after passage of the new law, despite repeated presidential promises that ObamaCare would solve our budget problems by painlessly “bending the cost curve.”

The truth is, the more we learn about ObamaCare, the worse it gets. It's filled with budgetary gimmicks and flawed assumptions that will bankrupt the U.S. treasury. Its taxes will force deep cuts in employment in the medical device and other industries. Restaurants and other employers will have strong incentives to avoid hiring workers from low income households in order to lessen the burden from the law's mandates and penalties. It will disrupt insurance for millions of Americans who are perfectly happy with the coverage they have today. And the government's clumsy cost-cutting efforts will undermine the quality of American medicine.

Most Americans already instinctively understand all of this. But it's also clear that the administration and its allies will spend millions trying to persuade them that up is down when it comes to health care. We have launched this web site to set the record straight. ObamaCareWatch.org pulls together all of the best evidence and analysis about the legislation, as well as relevant news items and commentary, in an accessible and searchable format for anyone to use as they need to. Our aim is to provide Americans with the facts so that they can hold those who sponsored and passed ObamaCare accountable for what they have done.

James C. Capretta is a fellow at the Ethics and Public Policy Center. 

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