Oregon and other states to pay dearly for ‘Affordable’ health care

Sen Doug Whitsett

by Sen. Doug Whitsett

We are now more than six years into the presidency of Barack Obama. The products of his signature redistribution-of-wealth programs are becoming all too apparent, with devastating consequences for states like Oregon that rushed to be among the first in the nation to implement them.

President Obama promoted the 2010 federal Patient Protection and Affordable Care Act to the public as a critically needed program to provide health care insurance to the poor. He claimed that its execution would reduce the cost of delivering medical care; thereby, making it affordable for every American.

So how is that working?

Obama said last week that “the law is working better than we expected and actually ended up costing less than people expected.” Incredibly, he made those comments in the state of Tennessee, where three of the largest insurers are requesting insurance premium increases next year. Those increases will be 36.3 percent for BlueCross BlueShield, 18 percent for United Healthcare and 11 percent for Cigna Humana. Community Health Alliance Mutual is requesting a 32.8 percent increase for one line of insurance and Time Insurance Company is requesting a 46.9 percent increase for another.

This recent Associated Press article discusses the impacts of the Medicaid expansion included in the Affordable Care Act on the future budgets of several states.

Kentucky, for example, revised its Medicaid cost estimate from $33 million to $74 million for the 2017 fiscal year. That cost could climb to as high as $363 million by 2021.This more than ten-fold cost increase appears to be anything but affordable for anyone.

The article also states, that starting in 2017, Oregon will have spent the nearly $2 billion it received in federal aid to serve as an Obamacare pilot program. It quotes the Senate co-chair of the budget-writing Ways and Means Committee as stating that Oregon’s share of the Medicaid budget may cost an additional $500 million between 2017 and 2019.

That sharp cost increase has two primary causes. According to Oregon Health Authority officials, Medicaid enrollment has already increased by about 200,000 more than was predicted in the fall of 2014. Further, the federal government only agreed to cover the costs of the Medicaid expansion until 2017. The State’s share of the Medicaid budget is likely to rise from 6.2 to 10 percent by the year 2020. Decreasing the federal contribution to 90 percent will increase the Oregon contribution share by nearly two-thirds.

Those escalating costs to Oregon taxpayers were covered in another article.

Oregon officials originally estimated that 222,700 people would sign up for coverage as part of the Medicaid expansion. The official figure is now estimated to be 386,000. Even that figure continues to escalate and may be based on the flawed 2014 estimate.

A 2013 report assumed that the expansion would cost the state $217 million in 2017-19, substantially less than the $369 million it is now projected to cost. That change in assumptions represents a 70 percent cost increase. The Senate Co-chair’s estimate represents a potential 130 percent cost increase.

Obamacare’s prices continue to surge elsewhere across the country. This year, health insurance premiums averaged double-digit increases. Projected cost escalation is even higher for next year. Nearly every state has multiple insurance plans that are requesting rate increases of 10 percent of more, according to information posted on www.healthcare.gov.

For instance, premiums for Health Management Organizations (HMOs) are predicted to be 19 percent more expensive. The premiums for Exclusive Provider Plans are expected to increase by 20 percent. The average premium in 2016, for all health insurance plans, is estimated to skyrocket by 14 percent!

At least part of the enormous escalation in premium costs is caused by the anticipated termination of two Obamacare tax subsidies provided to health insurance companies. Currently, taxpayers are bearing the cost of “risk corridors” for patients who spend more on health care than providers predicted. Taxpayers are also heavily subsidizing the most costly patients through a “reinsurance” program. According to the Center for Medicare and Medicaid Services, these two subsidies artificially lowered Obamacare health insurance premiums between 10 and 15 percent last year. Consumers will be responsible for the full premiums when these two subsidy programs end at the end of 2016.

People who are not covered through a job, a spouse or another government-funded program are eligible to purchase insurance through an Obamacare exchange. About three-fourths of those who are eligible for the full income tax subsidy that provides essentially free health care insurance have enrolled in the program. However, among those who are not eligible for fully tax-subsidized insurance premiums, the percentage of individuals and families participating nosedives.

Sign-up for Obamacare exchanges falls to only 41 percent among those whose income is between 151 and 200 percent of the federal poverty line. Participation continues to plummet to 30 percent as earnings increase between 201 and 250 percent of the poverty level, to 20 percent for those earning between 251 and 300 percent of the poverty level, and to 16 percent for those earning more than 301 percent of the federal poverty level.

People are choosing to absorb the significant tax penalties for not purchasing insurance, rather than to pay the exorbitant cost of insurance through the Obamacare exchanges. In fact, according to the federal Health and Human Services agency, only about one-third of the eligible people are currently participating.

In short, those who allegedly cannot afford health insurance are receiving free coverage, while most of the rest are going without insurance, because they cannot afford the premiums.

Moreover, the Obamacare model is based on an incorrect assumption of monumental proportions. It assumes that younger people will pay more for health insurance premiums in order to subsidize older people who generally use more medical care. But the fastest growing segment of Obamacare enrollees is the lower-income younger generation. Instead of paying in an excess of funding, that cohort is taking money out of the system by accessing essentially free medical insurance. The scheme is fiscally unsustainable.

Obama took office just as the deep economic recession was officially ending. According to the Congressional Budget Office, since that time our nation is experiencing the slowest economic recovery in more than a century. In my opinion, Obama’s vigorous anti-capitalism and redistribution of wealth polices have been a major factor in curtailing the recovery in the United States.

In contrast, during the same period, the global spread of free-market capitalism has lifted tens of millions of families out of poverty in other nations.

Obamacare is at the heart of his anti-capitalism agenda. It is designed to nationalize more than 40 percent of our free market economy by ultimately creating a single-pay medical care system funded by American taxpayers. The sad truth is, his agenda is working.

Its provisions are forcing the rapid consolidation of health care insurers and providers into mega-corporations willing and able to bend to federal decrees. Subsequent steps will include folding the entire health insurance sector under the control of federal agencies, as he has already accomplished with student loans and with home mortgages through Fannie Mae and Freddie Mac.

The final step will be to complete the unionization of the entire medical care provider workforce. In the end, the federal government will have total control of the 40 percent of our economy that is currently providing health care, as well as employing that entire workforce as public employees who are required to belong to public employee unions.

To me, the message is clear!

A free society owes every citizen the chance to work, to compete, to innovate and the opportunity to succeed. The Obama administration’s redistribution of wealth earned by others, ultimately, benefits no one.

Senator Doug Whitsett is the Republican state senator representing Senate District 28 – Klamath Falls

  • Jack Lord God

    You know, I am fine with the fact that in five years Obamacare doubled my premium. I am also fine with being in the group of people hardest hit by the act – self employed non group purchasers. However I really think it should be totally legal to smack anyone in the face who says “just apply for subsidy” whenever I bring up the fact that somebody always has to pay for this crap and it usually winds up being small business owners.

  • Moby

    I only know one thing. They raised my pay at work so I had to ask for reduced hours…otherwise I was going to make too much money for getting my health care free…and my food stamps…and all the other stuff I am getting for free. Don’t wanna lose it….can’t afford to lose it…so I am pretty happy now…work fewer hours, still make enough for the extras I enjoy (booze, movies, dancing, eating out, etc.) and I can still get the freebies from the losers who keep working 50-60 hours a week. LOSERS!!!!

    • nothinginparticular

      you go Moby!!!

    • Gobble D

      Hmm, wonder what Ron Swaren might think of your brilliant abscess-ment. Then there’s Eric Blair waiting in the winks.

  • NAFTA Refugee

    The Oregon Health Plan blows. I’ve heard this from patients, from healthcare workers, and now recently from an ex employee of the state agency that runs it. Turns out their going through a layoff cycle in middle management. Wonder when that Kitzhaber vs Oracle lawsuit begins. Or was special K lying about that too?

  • Bob Clark

    The public employee unions are expecting taxpayers to pickup the “health Cadillac” tax for them when it goes into effect the next year or so. Instead, I should think it only fair public employees they themselves pay this Cadillac tax given their allegiance to Obummer and his Socialist leaning policies.

    • Rahjah S. Boom-Botoxba

      FX immediately if not sooner – and, KISS-off the freebee piles, sic, [hemorrhoids} w’ a g’day onto a slow boat shrift bound for Fantasy Island and into the arms of d’oh holy foremost!

  • HBguy

    Small business owner here. I provide health insurance to my employees. Since 2010, Here in Oregon my rates have stabilized, and last year they went down.
    One thing Sen. Whitsett omitted here in his analysis was that there are now over 6 million people with insurance than before. So we are getting something for the extra cost. More health care.
    And, as far as low/middle income people not buying insurance and paying the tax….well, they weren’t buying insurance before anyway, so at least now they are contributing to the cost of the care they get when they go to the ER, and I don’t have to absorb quite as much of their irresponsible behavior by way of even higher premiums as the insurance companies pass those costs onto those of us who pay insurance.
    Frankly, I’d love it if I didn’t have to decide on my employees health care coverage. And I look at countries like Denmark, which spends half as much on health care and has a healthier population, and think….why not? The Danes can choose their own doctors. They all contribute for their healthcare through a payroll tax. They all chip in and are all covered. And it costs half as much.
    Stupid Danes.

    • Left Wing Exposo Beans

      Wait a monument? Are you butt knot a subscriber of left wing socialist healthcare ID’s descending in tour upon udder peepholes dray poop-on others pocket stocks, infinitum?

    • redbean

      The extra cost is giving us more insurance products that fail to meet consumers’ needs. This is to be expected since consumers aren’t in charge of this faux “marketplace.” Insurance doesn’t guarantee care because paying premiums (subsidized or not) is only part of the equation – don’t forget deductibles, out-of-pocket costs, care restrictions, etc. These factors prevent insured people from getting the care they need.

      No one knows if those paying the uninsured penalty are actually making up for their own or others’ ER use. Straight-forward ER insurance, either for hospitals or individuals, would’ve been a better idea. True emergencies are rare and thus appropriate for insurance products to cover.

      Anyway, the hoped-for decrease in ER usage has yet to emerge because overuse of the ER isn’t about scarcity of other options. It’s going to take time for the “new and improved” health-care system to train patients in lowered expectations and more self sufficiency, as in, “Take 2 aspirin and call me in the morning.”

      International comparisons of health-care quality and spending are tempting; we imagine we can obtain the same results simply by copying the same payment and care-rationing structures. No one thinks the Danes are stupid, but they have a smaller, more culturally homogenous population than we do – and it matters.

      If individual states in the US were truly free of the federal leviathan, they could creatively experiment with solutions on a workable scale.

      • HBguy

        More homogenous. People say that like its a proved truism. I have no idea why that would make a difference, and frankly, places like Denmark are becoming much more diverse.
        Choice. 60% of Americans get their health insurance through work. They don’t have many choices. My employees have few choices either before or after the ACA was enacted.
        And, if consumer choice would fix the health insurance system, why didn’t it before the ACA.
        Products consumers want. Yes the ACA doesn’t allow companies to sell $30/month Health insurance” that basically doesn’t cover anything and is a complete rip off.
        Don’t get me wrong, the ACA is by no means perfect. But from a small business owners perspective who provides health insurance to employees (without the tax credits some businesses get) it seems to have stabilized the market and costs here in Oregon.

        • Gobble D

          Hark the herald HB guy blings with all that govermentium appliqués.
          Confucius sways – buy his pot and next in odor is a New Whorld Odor of stupor scatology. Ha!

          • HBguy

            Have you ever run a business? Ever had to decide for your employees how to deal with increased medical costs, coverages, co-pays employee contributions and how that all relates to pricing, budgeting, salaries, total compensation and profits? Why should private employers have to manage the healthcare for 60% of our population? No one pays me to do it for them, and it’s totally unrelated to the service we offer.
            And letting everyone get their own insurance? Great. Then most people would end up unsured and those with insurance would see rates go through the roof.
            Reality is a lot more complicated than theory. And people who think this is a conservative/liberal argument are fools. It should be a decision based on the realities.
            But there is apparently no political advantage in reality.

          • Gobble D

            Sorely, you appear alchemizing in a vat of fools told the lead won’t hurtch-cha-cha-chaaaa, much!