The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Run Away Run Away!

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


It is no secret that the Obamacare roll out for its on-line portal to the healthcare exchanges has been a disaster.  Taxpayers are shocked to learn they have paid $394 million (according to a Government Accountability Office report) for a system that has not worked since the Oct 1 opening day.  The Obama Administration throws out numbers such as the website has had 20 million visits and over 500,000 people have filled out an application.  However, there is no exact number for the number of people who have purchased a plan.  No doubt the administration has a pretty good idea what the number is but because it is so low, they do not want to release it at this time.  They say they will do so in November.  One report shows that most of the people who now have enrolled are participating in Medicaid expansion and not in the private plans that are found on the exchanges.

We are fast approaching the blame game and fingers are starting to be pointed at anyone but themselves.  Here is an interesting paragraph from today’s New York Times concerning HHS Secretary Kathleen Sebelius and the fractured Obamacare roll out:

Republicans insist the buck stops with the secretary. But although Ms. Sebelius runs the Department of Health and Human Services [HHS], the agency directly responsible for the health care law, there are questions about how deeply she was involved in the development of the troubled Web site.

“Kathleen has the title, but she doesn’t have the responsibility or in many respects the kind of wide authority and access to the president that she really needs to make a difference,” said one person close to Ms. Sebelius and the White House, who asked to remain anonymous to discuss internal decision-making. “Everybody thinks that she’s the driving force, but unfortunately she’s not.”

When the Secretary of HHS tries to distance herself from the president’s signature legislative accomplishment, the very policy that she’s been charged with to implement, you know the healthcare plan is in deep trouble.

While most of the press is focused on the computer and software aspects of Obamacare, news is starting to trickle out what is happening beyond the technical problems.  We are starting to discover the severe policy problems with Obamacare and the effect it is having on millions of Americans.

We’ve written about this before in a prior blog and the news keeps getting worse.  Just yesterday, Kaiser Health News wrote a column entitled, “Thousands Of Consumers Get Insurance Cancellation Notices Due To Health Law Changes.”

Kaiser writes:

Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state.  Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state.  Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent…

Both Independence and Highmark are cancelling so-called “guaranteed issue” policies, which had been sold to customers who had pre-existing medical conditions when they signed up. Policyholders with regular policies because they did not have health problems will be given an option to extend their coverage through next year...

Blue Shield of California sent roughly 119,000 cancellation notices out in mid-September, about 60 percent of its individual business.  About two-thirds of those policyholders will see rate increases in their new policies, said [Blue Shield] spokesman Steve Shivinsky.”

So much for “if you like your plan you can keep it.”

More and more people are expressing shock and surprise that Obamacare is having such a bad affect on their health insurance, forcing them out of plans they liked and could afford, into plans they do not want and will struggle to pay for.  But free-market health policy gurus have been pointing out Obamacare’s flaws for years and predicting eventual collapse of the entire scheme.

Grace Marie Turner, who heads up the Galen Institute, a not-for-profit health and tax policy research organization located just outside of Washington, D.C., is one of those health policy experts.  She just wrote a column published in the National Review on Line, “Top Ten Obamacare Disasters to Come.”

She says:

President Obama’s Monday Rose Garden speech replayed the same talking points he has been using for more than three years about Obamacare, while also offering old-tech suggestions, such as telephone hotlines and paper applications, to work around the law’s disastrous website.

But enrollment in Obamacare insurance ultimately does depend upon the website’s problems’ being fixed, because the information gathered via phone calls and paper applications must be entered into massive federal government databases to check eligibility. A delay of the individual tax penalties will be inevitable if the site isn’t fixed soon; you can’t penalize people if they can’t enroll.

But eventually, software can be fixed. Obamacare’s epic policy flaws can’t.

The problems increasingly are going to be up close and personal, as people see for themselves the impact it has on their lives and pocketbooks.

Grace Marie then lists the ten disasters that Americans can expect; from price shock, not only with higher premium costs but the huge deductibles people must reach before their insurance kicks-in; to public healthcare costs exploding; to identity theft; to losing low-cost health insurance plans that people were perfectly satisfied to purchase and utilize.

One of the terrible ten to be very concerned about is what is called the “death spiral.”  For Obamacare to succeed, it desperately needs healthy, young people to sign up and pay premiums for health insurance that they will hardly use.   But the Obamacare regulations are driving up the costs for these very people.  For many, it will be less expensive to pay the fine then purchase insurance.  The ones who will be most attracted to sign up for Obamacare are the sickest Americans and if they are the largest percentage of all enrollees, premiums will sky-rocket.  This will in turn encourage even more young people not to purchase a plan.  Thus the death spiral begins.

Speaker of the House John Boehner (R-OH) just predicted today that more people will lose their health insurance due to Obamacare than those that get insurance.  Based on the numbers we see just coming out of the state of Florida, he is unfortunately on his way to being correct.

There were and still are far less expensive and better ways to help low-income people and those with pre-existing conditions to obtain health insurance than to turn over one-sixth of the economy into the government’s hands.  Robust and well-run risk pools for those with pre-existing conditions and expanding the utilization of health savings accounts, especially for low-income people, would have put the purchasing power into the hands of citizens, allowing them to shop around for the care they want and need.

We will be monitoring the continued Obamacare trainwreck as we approach January 1, 2014.  Let’s hope no one gets seriously hurt in the process.

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