Archive for November, 2013
Many of the details of ObamaCare are buried in the implementing regulations. Recently, critics, like myself, decided to tackle the chore of scrutinizing these almost unreadable compilations of bureaucratic jargon. We were rewarded by discovering “the smoking gun” as to “what the Obama Administration knew” about Americans losing their insurance plans, and “when they knew it.”
In the preamble to the interim final ObamaCare regulations dated June 17, 2010, is the required Economic Impact statement that all Federal agencies must provide when promulgating new regulations. This impact statement reveals that Administration officials believed that, as a result of the new ObamaCare rules, 40% to 67% of INDIVIDUAL policies per year would lose their so-called “grandfathered” status and require the policy holders to get other insurance. That is to say, they would “lose the insurance that they like.”
But, contrary to Jay Carney’s downplaying assertions that less than 5% of Americans in a few individual plans will be affected, this is just the tip of the iceberg. In the same impact statement, there is an assessment of “EMPLOYER Plans Relinquishing their Grandfathered Status.” A range of scenarios is presented in table form with the percent of dropped employer plans expected to be at least 39%, but possibly going as high as 69% after just three years! Here is the table provided by the Administration in their June 17, 2010 regulation. [click to clarify/enlarge the image]
Now we haven’t reached these “2013” levels yet, due to changes, delays, and future effective dates, but a deluge of cancelled employer-based plans and required rate hikes for new plans may still loom in our near future. This is especially true in the small group health market (less than 50 employees). Oddly, whether this deluge is actually as bad as predicted may be less important than the fact that it WAS predicted. The Administration BELIEVED that this massive loss of insurance could happen, reported it in the Federal Register, and then proceeded to implement regardless of the consequences to tens of millions of Americans who they expected to be caught in this crunch!
And, beyond that, just one more thing – over the last three years the has President lied repeatedly, in speech after speech, to cover up his DHHS’s estimate, and deny that this would happen. Why did he do this? Out of ignorance? To win an election? To gain time for the system to be irreversibly implemented against the Public will?
This is a very, very serious story – not just a little blog post. To read a good account of it go to this Forbes article that challenges Jay Carney’s excuses about only a 5% impact, and, instead, estimates that 93 million Americans could lose their coverage
My own estimate of the impact is somewhat less, because ObamaCare does not require the large group market plans to meet the costly “essential health benefits” (EHB) requirements after they lose their grandfathered status. Small businesses of less than 50 employees, however, must comply with these EHB requirements, and when their current plans lose their grandfather status, it will take a toll.
I estimate that about 66% of small group health plans (the Administration’s mid-range estimate in the above chart) will lose their grandfathered status and need to comply with “EHBs” About 30 million Americans are employed by such small businesses. Only about 15 million of these employees choose to participate In their employer’s plan, but, if we assume, on average, each participant carries coverage for two individuals in their family, I estimate that as many as 20 million small business employees and their family members could lose their coverage in the near future. Add to this the number of individual plans that are already acknowledged to be lost, and we are talking about 35 million Americans potentially losing their insurance.
Since I made this calculation, McClatchy Newspapers has echoed this estimate. In fact, McClatchy estimates that from 34 million to 52 million Americans may lose their current plans. They also echo my explanation that the majority of the impact comes not from the 5% of individually insured Americans, as the President mistakenly portrays, but rather from another 10 to 15% of Americans with employer-based plans. Incidentally, McClatchy is generally viewed as an independent, non-ideological source. Their story is here – http://www.mcclatchydc.com/2013/11/07/207909/analysis-tens-of-millions-could.html
Of course, even the large group plans will be affected by losing their grandfathered status. Forbes estimates a 15% rise in premiums and copays and I estimate a much more significant rise in deductibles as the additional impact of no “maximimum lifetime benefits” starts to be felt. These increases will be on top of whatever normal inflationary increases there may be.
I urge you to read the Forbes and McClatchy articles, and then tell your friends and families what is coming if we don’t stop this disaster.
I will return to this subject in the near future with more background about how the regulations trumped the intent of the Act, and how the delay in the employer mandate could make this cancellation nightmare even worse.