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Health Policy Matters

Friday, November, 12, 2010

80 to 100 Million Could Lose Current Coverage

By Grace-Marie Turner

An analyst from McKinsey & Company knocked the socks off insurance company executives yesterday when she told them the new health law will bring “fundamental disruption to the health care economy” — so much so that “something in the range of 80 to 100 million individuals are going to change coverage categories in the two years post-2014.”

They will lose their employer coverage, move into exchanges, or go on to Medicaid. This would be an extraordinary disruption that will cause widespread outrage.

Allisa A. Meade of McKinsey didn’t stop there in saying the markets are going to be upended. She told the meeting of America’s Health Insurance Plans in Chicago on Thursday that the health law also will create a subset of 30 to 40 million people who could be called an “outlaw market” of Americans who choose not to buy coverage and to pay a tax penalty instead.

According to Congressional Quarterly, “Meade said that population is likely to be healthier and wealthier than other Americans and that it might offer an economic opportunity to plans to sell low-cost products.

“It’s not clear, however, to what extent such plans would be permitted under the law. Another potential concern would be a possible stigma attached to selling plans to people who do not comply with the health law,” John Reichard of CQ reported.

This is unbelievable! Is ObamaCare going to create a nation of outlaws?

McKinsey also predicts many employers will drop coverage because it will make more economic sense to pay a penalty that is lower than the cost of providing coverage. Depending upon how many do, the individual market for health insurance could grow by up to 300 percent. Whatever actually happens, Meade said companies in essence must start from scratch in their individual insurance divisions because that market will change so dramatically.

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It was about health care! It has been astonishing that Democrats still refuse to acknowledge the message the voters sent in last Tuesday’s election. Over and over, they say that health care really wasn’t that much of an issue. Soon-to-be-ex-Speaker Nancy Pelosi says that voters are just mad because they don’t have jobs.

But even Democratic pollster Pat Caddell said health care was key to his party’s loss of at least 60 seats in the House. He told FOX News: “The economy, as important as it was, was not the decisive factor this election. Health care was,” he said.

“It is...health care [that] killed them,” Caddell continued. “The American people found this a crime against democracy... they want it repealed, and this issue is gonna go on and on.”

What will Republicans do next year? They know they are staring squarely into President Obama’s veto pen, so they are preparing measures that delay, defund, and begin to dismantle the legislation.

Members of Congress are trying to forestall the wreckage to:

  • Isolate and repeal piece-by-piece many of the unpopular ObamaCare provisions, such as the mandate that all Americans purchase government-approved insurance.

  • Form coalitions with conservative Democrats to build veto-proof majorities to get rid of the worst of the worst in this law.

  • Push to give states maximum flexibility in how they comply. The new governors elected November 2, as well as many of those already in office, will become valuable allies as the march toward repeal unfolds.

The administration is working to develop regulations to push through the law’s mandates as quickly as possible, and Congress will be showcasing the worse of these regulations and working to stop them.

As Republicans try to stall implementation of the law, they must simultaneously articulate their own solutions to the very real problems in our health care sector.

Once the American people understand this law in vivid detail and see the unfolding consequences, the movement for repeal will continue to grow.

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A bit of good news: Congressional Quarterly reports that an HHS official has signaled the Utah Health Exchange model could meet the test for a federally-approved exchange.

Joel Ario, the HHS official who is overseeing the creation of health insurance exchanges under the health overhaul law, signaled Wednesday that guidance his office will release “within a few weeks” will encourage states to experiment with the menu of plans they will offer.

Speaking to the AHIP meeting in Chicago, Ario noted two different types of exchanges that illustrate opposite ends of the spectrum in terms of the menu of plans offered: Utah and Massachusetts. He suggested that the guidance will permit both approaches.

I believe the important thing for states is to set up exchanges that work for them and not try to conform to the federal straightjacket. The lightly-regulated Utah Health Exchange gives them a model to create a marketplace for insurance that can be purchased with pre-tax dollars and that allows portability, and that provides the cost advantages of group purchasing for small businesses and individuals.

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Amicus Brief: Senate Republican Leader Mitch McConnell is filing a friend-of-the-court brief in the multi-state lawsuit, led by Florida, challenging the constitutionality of the health overhaul law.

Sen. McConnell argues in his brief the requirement that nearly all Americans buy insurance “dramatically oversteps the bounds of the Commerce [Clause] which has always been understood as a power to regulate, and not to compel, economic activity.” He also argues that if the mandate is deemed constitutional, there will no longer be any real limit on Congress’ power to regulate citizens’ activity.

He invites other legislators to join him in the amicus filing — a move that will demonstrate to the courts that the legislative branch also has serious, serious problems with the law.

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Hallelujah! And on a cultural note, this is our absolute FAVORITE video of the week: More than 650 choral singers surprised shoppers at Macy’s in Philadelphia on Oct. 30 with a magnificent performance of Handel’s Messiah. Here’s the link. You will love this. What a great country this is!

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CLIP OF THE WEEK

What Does a Republican House Mean for Health Care Reform?

In this NewsHour video, Jim Capretta and others discuss the recent election and health reform, and the possibility of repealing the health law.
Watch now >>

NewsHour

 

HEALTH REFORM

Repealing Obamacare and Getting Health Care Right
Nina Owcharenko, The Heritage Foundation, 11/09/10

When the Doctor Has a Boss
Anna Wilde Mathews, The Wall Street Journal, 11/08/10

Chief Human Resource Officer Concerns with the Patient Protection and Affordable Health Care Act
HR Policy Association, 10/08/10

How Obamacare Burdens Already Strained State Budgets
Lanhee Chen, The Heritage Foundation, 11/10/10

Beyond Repeal and Replace
Thomas P. Miller, Forbes.com, 11/03/10

Should States Establish Obamacare Insurance Exchanges?
John R. Graham, National Review Online: Critical Condition, 11/09/10

PRESCRIPTION DRUGS

Look Out, Your Medicine Is Watching You
Ben Hirschler, Reuters, 11/08/10

Puerto Rico Raises Taxes and Promises Tax Cuts
Merrill Matthews, Forbes: Right Directions, 11/09/10

Scaring Seniors: The AARP Drug-Price Reports
American Enterprise Institute, 11/09/10

The Effect of the March Health Legislation on Prescription Drug Prices
Congressional Budget Office Letter to Rep. Paul Ryan, 11/04/10

Puerto Rico’s epic tax blunder
Sally Pipes, The Daily Caller, 11/09/10

Avastin vs Lucentis: One Step Closer to Cost Rationing?
Merrill Matthews, Forbes: Right Directions, 11/11/10

MEDICARE

Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline
Congressional Research Service, 11/03/10

How To End The Doctor Dance
Investor’s Business Daily, 11/11/10

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