On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (Obamacare) into law.  The healthcare reform law is also known as the Affordable Care Act.  President Obama and Vice President Biden gave brief remarks during the signing ceremony.  Below are some of the statements and promises made by the president to the American people on that day.  My comments immediately follow the remarks.

• President Obama: “It will take four years to implement fully many of these reforms, because we need to implement them responsibly.  We need to get this right.  But a host of desperately needed reforms will take effect right away.”
  • It’s true that the administration had four years to implement the law and they still did not get it right.  We saw the disastrous results on October 1, 2013 when the online federal health exchange, Healthcare.gov, crashed immediately, leaving citizens unable to enroll on both the federal and state exchanges.  While many of the problems that consumers experienced have been fixed, several problems still remain such as the government sending data to insurers and the states. There were also problems with several state-run exchanges that are continuing today.  Interestingly, some of the states that have experienced the most problems are ones that enthusiastically embraced Obamacare.  Cover Oregon has not operated correctly since October 2013.  Maryland Health Connection has performed badly from the start and is still not working efficiently.  The Massachusetts Health Connector, ironically the healthcare exchange from which the federal healthcare reform law was modeled, has had great difficulty transferring over to Obamacare’s requirements.  How much money have these states received from the federal government to design their failed online exchanges? The federal taxpayer has provided $303 million to Oregon, $171 million to Maryland, and $180 million to Massachusetts.  Since most of the uninsured are young and healthy, imagine if that money had been used instead to provide them financial assistance to purchase health insurance in the private market, perhaps partially funding a health savings account (HSA) and the premium for a catastrophic plan?

• We later learned in a series of Congressional hearings that 40 percent of the website had not been built by October 1.  We learned the administration had been warned in March 2013 that there were problems with the website but did nothing to fix it because for whatever reason, no one in the administration seemed to be in charge to make sure the website worked end to end.  We have learned that when an official from the Department of Health and Human Services says someone has signed up, selected or enrolled in an exchange, it does not mean the person has paid their first month’s premium, the only true metric that the consumer has health insurance.  And while the administration claims the website is “working great” that is not the case.  There are thousands of erroneous entries that must be fixed manually and insurers still cannot get the premium support payments (the Obamacare subsidies) from the government.  While the administration claims approximately 4.2 million have enrolled (please re-read sentence above), we do not know how many were uninsured prior to October 1, 2013 or are replacing a health insurance plan they had but was discontinued because it did not meet Obamacare’s expensive mandates.  Based on surveys it is believed only 11 percent to 27 percent of total enrollees in Obamacare were previously uninsured.  We also do not know how many have paid their premium.  To get more factual information, the House Committee on Energy and Commerce has asked insurers to gather this information.

• President Obama: “This year, we’ll start offering tax credits to about 4 million small businessmen and women to help them cover the cost of insurance for their employees.  That happens this year.”
  • Well, maybe not.  The National Federation of Independent Business (NFIB), which represents more than 350,000 small businesses, stated in April 2010 that the IRS tax credit would have limited impact on helping small businesses because the availability of the credit is too short and too restricted.  The tax credit between 2010 and 2013 was 35 percent for an employer’s healthcare costs.  Starting this year the credit is increased up to 50 percent if the employer purchases a plan for his employees through the Small Business Health Options Program (SHOP) for the next two years and pays 50 percent of the insurance cost to qualify for the credit.  The credit amount changes depending on the number of employees the employer has and their salaries.  But the incentive lasts only two years, then it is dropped. Since employers with less than 50 employees are not required to provide insurance, it is unlikely many will participate in the tax credit scheme.  After all, why would businesses start something that will assuredly cost them a great deal more in a few years and perhaps become unaffordable.  To do so would put employers in a dubious situation where they may have to stop providing health insurance to their employees or layoff employees to meet payroll.  The Government Accountability Office (GAO) seems to back up NFIB’s prediction.  In May 2012, the GAO reported in a study that only 170,300 businesses of a possible 4 million took advantage of the credit.

• As for the SHOP provision and the employer mandate, the NFIB wrote a critical letter to Health and Human Services (HHS) Secretary Kathleen Sebelius of three significant changes the agency made to the law within a period of two weeks in November, 2013.  They are: the employer mandate delayed by one year; the comment period for the proposed rule on how the tax credit to small employers for purchasing health insurance will be implemented was closed; and instituted a one-year delay for online enrollment in the SHOPs.  These delays and changes simply added to businesses’ confusion with Obamacare.

• President Obama: “This year, tens of thousands of uninsured Americans with preexisting conditions, the parents of children who have a preexisting condition, will finally be able to purchase the coverage they need.  That happens this year.”
  • The president is talking about the two issues in this case.  While it is true the law made it so that insurers could not deny or restrict coverage to children under the age of 18 with pre-existing conditions, it’s unlikely that a large number of uninsured children existed in the first place.  While the president claimed 17 million children will no longer be denied access to health insurance for a pre-existing condition, Politifact.com undertook an analysis and believe the actual number was between 160,000 to 1.1 million.  Politifact.com argued that access to Medicaid or the State Children’s Health Insurance Program provided care to numerous children before Obamacare.

• The law also created a temporary risk pool from 2010-2014 for people with pre-existing conditions.  In spite of the administration’s claim that 25 percent of adults, or 65 million people suffered from a pre-existing condition, only about 78,000 signed up to participate in the risk pool by June 30, 2012.  In mid-December, about 85,000 were participating in the high risk pool.  The reality is the number of people who had no access to health insurance because of a pre-existing condition was much lower than 65 million.  Paul Roderick Gregory wrote on Oct 8, 2013 in Forbes that the number was closer to 1.5 million.  He said if the government had given each uninsurable person a $10,000 subsidy it would have been one-tenth the cost projected for Obamacare.

• President Obama: “This year, insurance companies will no longer be able to drop people’s coverage when they get sick.  They won’t be able to place lifetime limits or restrictive annual limits on the amount of care they can receive.
  • The Health Insurance Portability and Accountability Act of 1996 (HIPAA) had already provided these kinds of protections for millions of people and their health policies.  But as Tom Miller of the American Enterprise Institute and James Cappretta of the Ethics and Public Policy Center pointed out in a November 2009 article in National Review that while HIPAA worked pretty well, those in the individual market often fell through the cracks.  Instead of a trillion dollar takeover of the healthcare sector, the authors called for targeted changes to HIPAA such as allowing people to move from job-based plans into the individual market without being penalized and not allowing insurers to increase premiums to more than 1.5 times the standard rate.

• As for lifetime limits or restrictive annual limits, this another case where a regulation is driving up the cost of health insurance for everyone and limits choice for consumers.

• President Obama: “This year, all new insurance plans will be required to offer free preventive care.  And this year, young adults will be able to stay on their parents’ policies until they’re 26 years old.  That happens this year."
  • Nothing is free.  Someone has to pay the providers that give the “free” service.  The pay-for is embedded in increased premiums, higher deductibles, and narrower networks now being experienced by millions of Americans.

• There is no doubt the provision to allow young adults to remain on their parents’ health plan until they are 26 is very popular. But most parents would probably prefer that their “child” had a full-time job and that they could afford their own health insurance.  It is another sign of a stagnant, weak economy and a further Europeanization of America.

• President Obama: “And this year, seniors who fall in the coverage gap known as the doughnut hole will start getting some help.  They’ll receive $250 to help pay for prescriptions, and that will, over time, fill in the doughnut hole.  And I want seniors to know, despite what some have said, these reforms will not cut your guaranteed benefits.  In fact, under this law, Americans on Medicare will receive free preventive care without co-payments or deductibles.  That begins this year.”
  • Medicare cuts were a discussion topic in the 2012 election and have reappeared this year due to some decisions made by the Obama administration.  Avik Roy discussed the cuts to Medicare in an October 2012 Forbes article.  For example, money is being shifted to help pay for the tax subsidies for younger people who enroll in Obamacare and it is used to beef-up the Medicare Part D benefit by slowly closing the “donut hole,” or coverage gap, which only affects approximately 6 percent of the senior population.  The reduction in Medicare is also used to provide “free” preventative care for seniors.  Roy says, “according to the Congressional Budget Office, for every $500 the law spends on preventive services and prescription drugs, it cuts the rest of Medicare by $7,385. That’s a cut-to-spending ratio of nearly 15 to 1.” Of course, cutting payments to providers can make it difficult for them to serve their patients. That is why many doctors limit the amount of Medicare patients they see; their practice would not survive otherwise.  If seniors have difficulty accessing care, that is a form of a benefit cut.

•  More than $200 billion will be cut from the Medicare Advantage (MA) program, the managed-care version of Medicare.  About 28 percent of seniors utilize MA as opposed to the traditional fee-for-service Medicare.  While Congress has expressed angst about the cuts, the reductions are authorized in Obamacare.  Sally Pipes of the Pacific Research Institute said in an April 2013 Forbes article that billions will be slashed from MA over the next ten years and that it will cause seniors to leave the program.  Pipes says this was always the goal of Obamacare’s authors because MA “relies on private insurers to deliver health benefits” and “it’s never been popular with lawmakers who would prefer that the government exert total control over seniors’ health care.”  She said MA provides more services than traditional fee-for-service Medicare, such as dental and vision care.  According to Pipes, a study “recently found that Medicare Advantage programs can provide the same level of benefits as conventional Medicare for 13 percent less.”

• President Obama: “This legislation will also lower costs for families and for businesses and for the federal government, reducing our deficit by over $1 trillion in the next two decades.  It is paid for.  It is fiscally responsible.  And it will help lift a decades-long drag on our economy.  That's part of what all of you together worked on and made happen.”
  • The most recent Congressional Budget Office score for Obamacare is $1.5 trillion over ten years.  This is almost double the price tag of $848 billion over ten years that Obamacare was suppose to cost.  Plus, the Centers for Medicare and Medicaid Services (CMS) recently announced it might extend Obamacare’s “risk corridors,” a mechanism that requires taxpayers to bail out insurance companies if they lose too much money in the exchanges.  If implemented, this will certainly drive up Obamacare’s costs even further.  Unfortunately, this is a likely scenario as it appears too many sick people and not enough healthy, young people are participating in the exchanges.  A possible result if this trend continues is the “death spiral” of the exchanges.

• As for a drag on our economy, Obamacare certainly is not helping.  The nation is experiencing one of the weakest recoveries in the last 50 years.

• All indications are that healthcare costs will increase, not fall, for most businesses and families.

And of course, President Obama promised Americans could keep their healthcare plan if they liked it – period.  We were told we could keep our doctor too and that insurance premiums would go down in price by an average of $2500 a year.  Just the opposite has happened.

Several parts of Obamacare have been delayed such as the employer mandate; allowing non-compliant Obamacare health insurance plans to continue for an additional two years, conveniently allowing them to survive past the 2014 elections; and exempting unions from the re-insurance fee or tax to name just a few.  The Galen Institute has a list of 37 changes to Obamacare, many of them implemented illegally.  One may ask, if Obamacare is so great, why are so many major changes being made without Congressional approval?  The answer is the problems with Obamacare never were just the website; the problems have always been with the law's policies and design.  We are now seeing these problems come to fruition.

According to recent polling data, a majority of Americans disapprove of Obamacare and as time goes on, this number will likely grow.  Already, a special election for a Congressional seat was fought over Obamacare and the proponent for the law lost.  Will this same result carry into the November congressional elections?  That is the calculus that is going on inside the political parties today.

Obamacare’s fourth birthday is a day few celebrated.