3 Ways Obamacare’s Insurance Regulations Could Cost You

The price tag for the Affordable Care Act includes not only the additional tax dollars spent on expanding Medicaid and providing new subsidies for exchange coverage, but also the costs imposed, in the form of higher health insurance premiums, by of the law’s new regulations.

While sound health care policy would have focused on finding ways to make health insurance less expensive, the Affordable Care Act instead made it more expensive.

In total, we found that, in the median cost state, the three most costly regulations collectively increased premiums for younger adults by 44 percent, and for pre–retirement age adults by 7 percent, relative to the previously available least expensive plans.

When we examined independent analyses of the effects of the law’s new insurance regulations, we found that the three most costly ones—age rating restrictions, benefit mandates, and minimum actuarial value requirements—increased the cost of the previously available least expensive plans in a state by 41 percent to 51 percent for younger adults (the group most likely to be uninsured), and by 1 percent to 18 percent for pre–retirement age adults.

  1. Age Rating Restrictions

The Affordable Care Act limits age variation of premiums for adults to a ratio of three to one. That means an insurer is not permitted to charge a 64-year-old a rate that is more than three times the rate it charges a 21-year-old for the same plan.

Yet the natural age variation in medical costs among adults is about five to one. This means that the mandated “rate compression” forces insurers to artificially underprice coverage for older adults and artificially overprice coverage for younger adults.

Our review found that the three-to-one limitation increased premiums for younger adults by about one-third.

  1. Benefit Mandates

The Affordable Care Act requires health plans to cover a set of “essential health benefits,” as well as a list of “preventive services” for which plans are prohibited from charging enrollees any copayments.

Our review found that the law’s new benefit mandates increased premiums by an average of 9 percent.

The majority of the average premium increase (about seven to eight of the nine percentage points) was attributable to the essential health benefits requirement, with the remainder (about one to two of the nine percentage points) attributable to the preventive services mandate.

  1. Minimum Actuarial Value Requirement

Actuarial value is the share of the covered health expenses for a standard population that the plan will pay for, with the remaining share paid by enrollees through some combination of deductibles, copays, and coinsurance.

The Affordable Care Act’s minimum actuarial value requirement effectively establishes a floor, set at 60 percent, for what plans must pay toward the cost of covered services.

Thus, the higher the actuarial value, the less patient cost-sharing the plan will have on average, but the higher the plan’s claims costs and premiums will be.

Our review found that this increased the cost of the least expensive plans by an average of 8 percent. The independent analyses also found that the affected plans typically had actuarial values in the range of 50 percent to 60 percent.

That is noteworthy, as in response to complaints about the law’s higher premiums, even some supporters have suggested amending it to create a new class of plans with a 50 percent actuarial value.

 

The post 3 Ways Obamacare’s Insurance Regulations Could Cost You appeared first on The Daily Signal.

Why income beats savings in retirement

Imagine yourself far in the future. Yesterday, you celebrated your 82nd birthday! It was an enjoyable day spent with family and friends followed by a relaxing dinner with cake, ice cream, and many happy memories. But this morning you awoke to some troubling news… When you clicked on your favorite news app, you learned that […]

A Legacy of Broken Promises: Obamacare Turns 6

Obamacare, a partisan product full of broken promises, is six years old. Burdened by mounting problems, it’s not mellowing with age. Notwithstanding the president’s notorious promise, millions of Americans have lost their healthcare plans, and, for those faced with narrowing provider networks, their choice of doctors is also shrinking.

If you were eagerly awaiting reduced health insurance costs, or a reprieve from middle class taxation, or secure access to future Medicare benefits, you can forget that.

Washington lobbyists’ power and influence has grown, as Obamacare has become a poster child for the triumph of special interest politics—just as its opaque regulatory regime has become an engine of crude political favoritism.

If you were eagerly awaiting reduced health insurance costs, or a reprieve from middle class taxation, or secure access to future Medicare benefits, you can forget that.

Here are 5 serious problems plaguing Obamacare:

  1. Rising Premiums

More than six years ago President Barack Obama promised that his reform would cut typical family costs by $2,500 annually. In 2014, when the law went fully into effect, folks buying plans in the “exchanges” were rattled by rate shock.

In 13 states, premiums for 50 year-olds jumped by 50 percent or more; in 11 states, premiums for 27 year olds more than doubled. In 2015, the growth declined from the 2014 high plateau. But in 2016, double-digit increases are back.

Health pocket, a firm comparing rates and benefits, projects an average 12 percent premium increase in exchanges this year. Ordinary Americans will soon find out.

  1. Burdensome Taxes

The president promised that he would not sign a tax increase on the middle class. But, the bulk of Obamacare’s gaggle of taxes (more than $832 billion over the next ten years) is passed onto middle class individuals and families-either directly or indirectly.

This includes the taxes on insurance, drugs and medical devices, and even the 40 percent excise tax on “high value” health plans. The Congressional Budget Office (CBO) says that as many as 20 percent of all workers could be impacted by that excise tax in 2025. And even the new 3.8 percent Medicare payroll tax on “rich” persons making over $200,000 a year, will, over time, reach 80 percent of all taxpayers, as the Medicare Trustees report.

And speaking of taxes, the president boldly insisted that the individual mandate penalty—which he opposed while running for office—was not a tax.

His lawyers argued that it was a tax. In 2012, the Supreme Court agreed with the president’s lawyers. No matter. CBO says that 69 percent of the penalty will be paid by persons making less than 400 percent of the federal poverty level, or $47,080.

  1. The Taxpayer Subsidy Mess

The law’s health insurance subsidy program is a mind-numbing mess. If you make more than $47,080, you don’t get a taxpayer subsidy to offset your rising premium costs. And if you do, you might not get the right amount and end up indebted to the feds. In 2014, an estimated 50 percent of exchange enrollees owed money back to the government.

  1. Breathtaking Deductibles

If you make more than $29,425, the Obamacare deductibles can be breathtaking. Single persons buying a low-cost “bronze” plan can face an average deductible of roughly $5300, and for the next cheapest “silver” plan, the average deductible is $2500. Job-based plans, by contrast, have a deductible of about $1000.

Beg your boss to keep that plan you like.

  1. Medicare Payment Cuts

The president insisted that the law’s Medicare payment cuts would not harm seniors. But the Medicare Trustees, responsible for reporting on the program’s financing, tell a different story:

“By 2040, simulations suggest that approximately half of hospitals, 70 percent of skilled nursing facilities and 90 percent of home health agencies would have negative total facility margins, raising the possibility of access and quality of care issues for Medicare beneficiaries.” (emphasis mine.)

What We’re Left With

Six years ago former House Speaker Nancy Pelosi, D-Calif., told America that if we passed Obamacare we would find out what was in it “away from the fog of the controversy.”

We sure did. Today, taxpayers are forced to fund abortion, while federal officials are obsessed with violating Americans’ personal freedom of conscience and restricting their religious liberty.

The president’s broken promises have multiplied over the past six years and now we’re faced with rising costs, bigger middle class tax bills, and a partisan product bedeviled by boondoggles, design flaws and unworkable provisions. In 2017, we can, and must, do better.

 

The post A Legacy of Broken Promises: Obamacare Turns 6 appeared first on The Daily Signal.

In 5 Charts, How Obamacare Has Worked the Past 6 Years

Six years ago Wednesday, President Barack Obama signed the Patient Protection and Affordable Care Act into law. Since then, Americans have seen their premiums increase, a dozen nonprofit insurers have closed their doors and the number of people on the Medicaid rolls has expanded.

Americans nationwide have both praised and cursed the law since the federal and state-run exchanges launched in October 2013.

Many credit the president with giving them access to coverage—the result of Obamacare’s provision prohibiting insurers from denying coverage based on preexisting conditions. Others, meanwhile, have reported high premiums and deductibles, with the cost of their coverage increasing annually.

And for some, the cost of premiums has increased enough to leave them choosing between paying for insurance or paying the fine and going without.

Here are five graphs charting Obamacare’s six-year history.

1) The Cost of HealthCare.gov

Obamacare’s implementation in October 2013 came with the launch of HealthCare.gov, the federal health insurance exchange.

Just six people successfully signed up for health insurance on HealthCare.gov on Oct. 1, 2013, because of massive glitches and failures with the site. In the months that followed the disastrous launch, the Republican-led House of Representatives held numerous hearings to determine why the Obama administration decided to launch the website.

The Department of Health and Human Services fired CGI Federal, which was originally tasked with building HealthCare.gov, after the website’s launch and signed a new contract with Accenture to rebuild the exchange.

Though the Obama administration hasn’t formally said how much HealthCare.gov cost the taxpayers, Department of Health and Human Services Secretary Sylvia Mathews Burwell said last May that the website cost $834 million. Similarly, a report from the Department of Health and Human Services Inspector General put the cost of the exchange at $800 million.

An analysis by Bloomberg Government, though, put the total cost at $2.1 billion. Bloomberg Government took into account budgetary costs for the Internal Revenue Service and other government agencies, as well as contracts reworked to pay for the website.

Graphic: Kelsey Lucas/Visualsey

2) Obamacare’s 2014 Enrollment Numbers

According to the Obama administration, 9.25 million consumers enrolled in coverage in 2014 on the federal and state-run exchanges. An analysis of enrollment figures conducted by Ed Haislmaier, a senior research fellow in health policy studies at The Heritage Foundation, and Drew Gonshorowski, a senior policy analyst at The Heritage Foundation, found that the majority of those enrollees qualified for Medicaid under Obamacare’s loosened eligibility requirements.

Graphic: Kelsey Lucas/Visualsey

3) Obamacare’s Failed Co-Ops

The Affordable Care Act allowed for the creation of consumer operated and oriented plans, or co-ops, that were intended to inject competition into areas where consumers had few choices. The Centers for Medicare and Medicaid Services awarded $2.4 billion in start-up and solvency loans to the 23 co-ops that were eventually created.

Now, 12 of the 23 co-ops that opened their doors in 2013 have shuttered, and Republicans in Congress are questioning whether the taxpayers will see the $1.2 billion loaned to those failed insurers repaid.

Graphic: Kelsey Lucas/Visualsey

4) Obamacare’s 2015 Enrollment Numbers

Earlier this month, the Centers for Medicare and Medicaid Services announced that nearly 8.8 million Americans had “effectuated” coverage at the end of 2015, meaning they were paying their health insurance premiums.

The agency praised this number as a sign of Obamacare’s success in expanding access to coverage.

However, health policy experts noted that there was a significant drop in the number of consumers who selected plans at the start of 2015—11.69 million—when compared to those who continued paying their premiums through the end of the year—8.78 million.

Graphic: Kelsey Lucas/Visualsey

5) Insurer Participation in Each State Declined

Though Obama credited the Affordable Care Act with expanding access to health insurance and increasing competition among insurers, insurer participation in each state and the District of Columbia found that participation in the exchanges declined from 2015 to 2016.

When compared to 2015, 22 states and the District of Columbia have fewer insurers offering coverage on the exchanges in 2016. Just 10 states have more insurers offering coverage on Obamacare’s exchange.

Among the states that saw insurer participation decline from 2015 to 2016, the number of choices consumers have on the state-run or federal exchanges varies.

In Alaska, for example, just one insurance company is selling insurance to consumers in the state for 2016.

In Colorado, though, consumers can choose from eight different insurers selling coverage on the exchange this year. Both states saw fewer insurance companies selling coverage from 2015 to 2016.

Find out how many insurers are selling coverage in your state here.

Graphic: Kelsey Lucas/Visualsey

The post In 5 Charts, How Obamacare Has Worked the Past 6 Years appeared first on The Daily Signal.

Obamacare Mandate Would Make ‘Hypocrites’ of Catholic University, Its President Says

The head of one of the nation’s most prominent Catholic universities said in an interview with The Daily Signal that Obamacare is at odds with the institution’s mission by mandating coverage of contraceptives and abortion-inducing drugs in health plans.

Requiring such insurance coverage in violation of deeply held religious beliefs “makes hypocrites of us,” John Garvey, president of the Catholic University of America, said in the interview.   

“It would be a very sad day if America, in such a brief time, were to abandon its commitment to religious freedoms,” Garvey said.

The Supreme Court will hear oral arguments Wednesday in Zubik vs. Burwell, the name for several related cases challenging the regulation imposed by the Department of Health and Human Services.

>>>Little Sisters of the Poor Case Heads to Supreme Court

Catholic University, located in Washington, D.C., is one of many religious organizations petitioning for relief from the so-called contraceptive mandate’s requirements in the consolidated case being heard during Holy Week. Garvey said he will attend the proceedings.

Under Obamacare, formally known as the Affordable Care Act, most health insurance plans must cover contraceptives and abortion-inducing drugs without cost sharing.

Organizations that object to the mandate for religious reasons are required to notify HHS and provide contact information for their health plan insurer or third-party administrator.

The insurers or third-party administrators then provide the coverage required at no cost to insured employees.

The HHS regulation under Obamacare requires dissenters to cooperate in “an act that we view as sinful,” Garvey told The Daily Signal. “We’re helping somebody to do what we view as wrong.”

He noted that Pope Francis held Mass at the university on Sept. 23, 2015—exactly six months to the day before the scheduled arguments.

“The message that he preached at his Mass on that day was that religion is important,” Garvey said, adding:

In the course of his visit, he made the point that religious freedom is important, not just to protect our teaching, but also that we should go out into the world and proclaim the gospel.

And what we understand him to have been saying was that we ought to live the way we talk. And that’s exactly what we’re trying to say to our students, and that’s exactly what this set of regulations makes it impossible for us to do.

The university president said the institution he leads isn’t interested in preventing students or employees from acquiring contraceptives or other devices, drugs, or services that the Obamacare mandate would force it to provide.

“We’re just saying that it shouldn’t be our obligation to pay for them, because we view them as wrong, but people are free to do as they want,” Garvey said.

The Supreme Court is expected to release a decision in June.

Garvey, who is also an attorney admitted to the Supreme Court bar, said the Feb. 13 death of Justice Antonin Scalia may have a significant impact on the outcome. Scalia, a Catholic himself, was perhaps the court’s most conservative justice.

The university is exploring what actions it may take if the ruling is not in its favor, Garvey said.

If the court reaches a split 4-4 decision, he said, it is possible the justices may affirm one of the lower case decisions saying religious organizations must comply, without releasing their own opinion. Or they may wait until a ninth justice is appointed, confirmed, and seated to break the tie.

“I’ve been wrong so often that I’ve given up predicting what the court is going to do. But we certainly hope that they see it our way,” Garvey said.

Garvey said the Constitution and the federal Religious Freedom Restoration Act, a bipartisan measure designed to guarantee protections for deeply held religious beliefs, are on the university’s side:

It would be a very sad day if America, in such a brief time, were to abandon its commitment to religious freedoms. The Constitution protects it, which was one of the reasons so many of our parents, grandparents, forebears, came to this country.

Garvey described controversy over legal protections for religious believers, including Indiana’s decision to pass a watered-down Religious Freedom Restoration Act at the state level, as a “sad development.”

“I personally think that what we’re seeing in most of the fights we have about religious liberties these days is conflict over a sexual agenda that was formulated in my own childhood and has taken on almost a kind of religious fervor,” Garvey, 67, said.

John Vivian, president of the university’s student organization, the Saint John Paul II Guild of Catholic Lawyers, told The Daily Signal that some of the group’s members are “going to be camping out and attending the oral arguments” at the Supreme Court.

Vivian, a law student, said not upholding religious freedom can be a “slippery slope, to not just infringe on people’s individual freedoms and their other constitutional rights, but also it can grow into large-scale persecution.”

He added:

It’s certainly much larger than just Catholics being opposed to contraceptives. It really has to do with, you know, protection of constitutional liberties.

The post Obamacare Mandate Would Make ‘Hypocrites’ of Catholic University, Its President Says appeared first on The Daily Signal.

6 Broken Obamacare Promises

The Affordable Care Act is six years old today, but there is little reason to celebrate.  Here are six broken promises and lies made by President Barack Obama and his ally, Rep. Nancy Pelosi. D-Calif., about the law–which are six good reasons Congress should blow out the birthday candles and repeal it once and for all.

The post 6 Broken Obamacare Promises appeared first on The Daily Signal.

Obamacare Was Going to Lower Health Care Costs. What Actually Happened.

Hawking the Affordable Care Act (ACA) six years ago, President Barack Obama said, “Every single good idea to bend the cost curve and start actually reducing health care costs [is] in this bill.”

Team Obama projected that their version of health care reform—replete with the bells and whistles of “investments” in health information technology, health care delivery and payment reforms—would translate into big cost reductions for individuals, families and businesses. In his iconic health care “talking points”, the president said that the “typical” family would see a yearly $2500 savings in their health costs.

Has Obamacare Reduced Costs?

Those family cost savings, of course, have not materialized.

In year six, even with lower than anticipated enrollment in the health insurance exchanges and the refusal of 21 states to participate in the law’s Medicaid expansion, the health care cost curve is still on an upwardly mobile trajectory.

It is fueled by sharp increases in both public and private health care spending.

Centers for Medicare and Medicaid Services data show that total per capita health insurance spending will rise from $7,786 in 2016 to $11,681 in 2024. Looking at the future of employer-based health insurance costs, the Congressional Budget Office (CBO) projects that job-based premiums are poised to increase by almost 60 percent between now and 2025.

Obamacare’s cheerleaders have allowed their exuberance to outrun their supply lines. Medicare trustee Charles Blahous best summarized the problem:

“Given how the ACA’s advocates touted the law as ‘bending the cost curve down and reducing the deficit’ while occasionally in the same sentence crediting it with expanding coverage to ‘more than 94 percent of Americans’, many Americans could be forgiven for not understanding that those two goals were in conflict.”

Obamacare cannot deliver the impossible (even if it were good public policy­— and it isn’t).

The True Costs of Obamacare

Courtesy of the Affordable Care Act, public spending is outpacing private spending. For 2015, the Congressional Budget Office reports that the federal government spent a total of $936 billion on health programs (for example, Medicaid, Medicare, and the Affordable Care Act), a 13 percent increase over the 2014 level.

For 2015, the Congressional Budget Office reports that Medicare spending increased almost 7 percent, the fastest rate of growth since 2007; and, over the period 2013 to 2015. They also report that Medicaid spending alone jumped by 32 percent.

Bigger Government Does Not Make Healthcare Cheaper

Medicaid is the fastest growing component of America’s poorly performing welfare state. Many Affordable Care Act advocates applaud the government’s increasing role in American health care as an indisputably good thing, but that does not bend the notorious “cost curve” downward. Nor does it guarantee value for the dollars expended, even if, as the president says, the Affordable Care Act has incorporated “ every single good idea” to do so.

Health care delivery and payment reforms—value based purchasing, pay for performance, accountable care organizations (ACOs)—are among several strategies enacted in the Affordable Care Act to bend the cost curve downward.

But in 2010, the Congressional Budget Office declared that most of these initiatives would have little if any effect on health spending. In 2012 they completed a more detailed evaluation found limited success, but most of the “value-based” initiatives to be largely unimpressive as a source of savings.

In their operations to date, only about half of the Medicare accountable care organizations (ACOs) have yielded savings. The best that can be said, thus far, is that the jury is still out on the Affordable Care Act delivery reforms.

From roughly 2003 through 2013 there was indeed a general decline in health spending. But, obviously, Obamacare didn’t deliver that; the economic slowdown mostly did.

Concerning the recent slowdown in Medicare spending, the Congressional Budget Office (CBO) observed that:

“… very few of the ACA’s provisions had been implemented in any substantial way, making it difficult to attribute much of the slowdown to the effects of specific provisions of that law.”

Obamacare Is Not the Solution

Make no mistake. With the Affordable Care Act, the president and his allies in Congress have, in fact, armed themselves with some big, sharp cutting knives. The law calls for sustained payment cuts to the popular Medicare Advantage program. It also has scheduled some big Medicare payment reductions over the next ten years for hospitals, nursing homes, home health agencies and even hospice care programs.

These are painful prescriptions. The Medicare trustees report that, if policymakers really go through with these Affordable Care Act provisions, 50 percent of America’s hospitals, 70 percent of the nation’s nursing homes and 90 percent of the nation’s home health agencies will be operating in the red in the next 24 years. This, the trustees say, will jeopardize seniors’ access and quality of care.

The Affordable Care Act’s payment reductions and price controls are not the right solution to the health care cost problem.

Congress and the next administration are going to have to focus laser-like on the continuing problem of health care costs. They should take decisive steps to level the playing field, harness the benefits of real market competition among plans and providers to control costs. They should also unleash genuine consumer choice to secure real value for health care dollars. America is not going to control costs and secure better value and higher quality care through bigger bureaucracy and central planning. Next year, lawmakers must produce a much better legislative product.

The post Obamacare Was Going to Lower Health Care Costs. What Actually Happened. appeared first on The Daily Signal.

Obamacare Was Going to Lower Health Care Costs. What Actually Happened.

Hawking the Affordable Care Act (ACA) six years ago, President Barack Obama said, “Every single good idea to bend the cost curve and start actually reducing health care costs [is] in this bill.”

Team Obama projected that their version of health care reform—replete with the bells and whistles of “investments” in health information technology, health care delivery and payment reforms—would translate into big cost reductions for individuals, families and businesses. In his iconic health care “talking points”, the president said that the “typical” family would see a yearly $2500 savings in their health costs.

Has Obamacare Reduced Costs?

Those family cost savings, of course, have not materialized.

In year six, even with lower than anticipated enrollment in the health insurance exchanges and the refusal of 21 states to participate in the law’s Medicaid expansion, the health care cost curve is still on an upwardly mobile trajectory.

It is fueled by sharp increases in both public and private health care spending.

Centers for Medicare and Medicaid Services data show that total per capita health insurance spending will rise from $7,786 in 2016 to $11,681 in 2024. Looking at the future of employer-based health insurance costs, the Congressional Budget Office (CBO) projects that job-based premiums are poised to increase by almost 60 percent between now and 2025.

Obamacare’s cheerleaders have allowed their exuberance to outrun their supply lines. Medicare trustee Charles Blahous best summarized the problem:

“Given how the ACA’s advocates touted the law as ‘bending the cost curve down and reducing the deficit’ while occasionally in the same sentence crediting it with expanding coverage to ‘more than 94 percent of Americans’, many Americans could be forgiven for not understanding that those two goals were in conflict.”

Obamacare cannot deliver the impossible (even if it were good public policy­— and it isn’t).

The True Costs of Obamacare

Courtesy of the Affordable Care Act, public spending is outpacing private spending. For 2015, the Congressional Budget Office reports that the federal government spent a total of $936 billion on health programs (for example, Medicaid, Medicare, and the Affordable Care Act), a 13 percent increase over the 2014 level.

For 2015, the Congressional Budget Office reports that Medicare spending increased almost 7 percent, the fastest rate of growth since 2007; and, over the period 2013 to 2015. They also report that Medicaid spending alone jumped by 32 percent.

Bigger Government Does Not Make Healthcare Cheaper

Medicaid is the fastest growing component of America’s poorly performing welfare state. Many Affordable Care Act advocates applaud the government’s increasing role in American health care as an indisputably good thing, but that does not bend the notorious “cost curve” downward. Nor does it guarantee value for the dollars expended, even if, as the president says, the Affordable Care Act has incorporated “ every single good idea” to do so.

Health care delivery and payment reforms—value based purchasing, pay for performance, accountable care organizations (ACOs)—are among several strategies enacted in the Affordable Care Act to bend the cost curve downward.

But in 2010, the Congressional Budget Office declared that most of these initiatives would have little if any effect on health spending. In 2012 they completed a more detailed evaluation found limited success, but most of the “value-based” initiatives to be largely unimpressive as a source of savings.

In their operations to date, only about half of the Medicare accountable care organizations (ACOs) have yielded savings. The best that can be said, thus far, is that the jury is still out on the Affordable Care Act delivery reforms.

From roughly 2003 through 2013 there was indeed a general decline in health spending. But, obviously, Obamacare didn’t deliver that; the economic slowdown mostly did.

Concerning the recent slowdown in Medicare spending, the Congressional Budget Office (CBO) observed that:

“… very few of the ACA’s provisions had been implemented in any substantial way, making it difficult to attribute much of the slowdown to the effects of specific provisions of that law.”

Obamacare Is Not the Solution

Make no mistake. With the Affordable Care Act, the president and his allies in Congress have, in fact, armed themselves with some big, sharp cutting knives. The law calls for sustained payment cuts to the popular Medicare Advantage program. It also has scheduled some big Medicare payment reductions over the next ten years for hospitals, nursing homes, home health agencies and even hospice care programs.

These are painful prescriptions. The Medicare trustees report that, if policymakers really go through with these Affordable Care Act provisions, 50 percent of America’s hospitals, 70 percent of the nation’s nursing homes and 90 percent of the nation’s home health agencies will be operating in the red in the next 24 years. This, the trustees say, will jeopardize seniors’ access and quality of care.

The Affordable Care Act’s payment reductions and price controls are not the right solution to the health care cost problem.

Congress and the next administration are going to have to focus laser-like on the continuing problem of health care costs. They should take decisive steps to level the playing field, harness the benefits of real market competition among plans and providers to control costs. They should also unleash genuine consumer choice to secure real value for health care dollars. America is not going to control costs and secure better value and higher quality care through bigger bureaucracy and central planning. Next year, lawmakers must produce a much better legislative product.

The post Obamacare Was Going to Lower Health Care Costs. What Actually Happened. appeared first on The Daily Signal.

Little Sisters of the Poor Case Heads to Supreme Court

The Supreme Court will hear oral arguments this week in a group of cases challenging the Obamacare requirement that non-profit employers offer their employees health care coverage that includes Plan B, ella, and other potentially life-ending drugs and devices, contraception, and sterilization.

The challengers in the consolidated cases, captioned Zubik v. Burwell, include the Little Sisters of the Poor, Priests for Life, East Texas Baptist University, Southern Nazarene University, Geneva College, the Archdiocese of Washington, D.C., and other religious charities.

The Government’s Mandate

Notably, the government is imposing its mandate on groups like the Little Sisters of the Poor, who care for the elderly poor, but is exempting large corporations like Exxon and Pepsi Co.

Notably, the government is imposing its mandate on groups like the Little Sisters of the Poor, who care for the elderly poor, but is exempting large corporations like Exxon and Pepsi Co.

They aren’t required to include these drugs and devices in their health plans because they’re grandfathered under Obamacare. Small businesses are also exempt from this mandate. The government has even acknowledged the mandate could conflict with religious beliefs and has formally exempted houses of worship.

The Becket Fund for Religious Liberty estimates that the government has effectively exempted the health plans of 1 in 3 Americans from the coercive rule.

Yet the Obama administration insists that organizations like the Little Sisters of the Poor, a group of nuns that beg for funds for the elderly they serve and their own food, comply with the mandate or face $70 million per year in government penalties.

A Suitable Accommodation?

After religious organizations objected to the mandate, the Obama administration created an alternative enforcement mechanism that it claims is an “accommodation.”

The regulations require employers to notify the Department of Health and Human Services of their religious objection to providing such coverage in writing and provide contact information for their health plan insurer or third-party administrator.

The government then uses that notification as authorization to force coverage of drugs and devices that violate the employers’ beliefs using their existing health plan infrastructure. The government says that without the employers’ active participation in this scheme through the notice provisions, it cannot legally take over their plans as just described.

The government thinks this scheme satisfies the employers’ religious beliefs because the notification initiates the process of insurers and third-party administrators providing the mandated coverage at no cost to the insured. But the Little Sisters of the Poor and many other religious employers disagree.

They refuse as a matter of conscience to accept this mechanism because coerced subsidies were only part of the original mandate’s problem. If the federal government required employers to dispense these drugs and devices from a vending machine in their employee lounge it would be no answer for the government to say “don’t worry, we’ll pay for the added cost.”

Similarly here, the Little Sisters and other religious employers would still play an indispensable part in the machinery that provides potentially life-ending drugs and devices through health plans and infrastructure that they are paying for and providing to their employees.

Several federal appeals courts have reviewed cases challenging these regulations brought by Christian colleges and ministries such as Catholic Charities, Priests for Life, and the Little Sisters of the Poor. These religious employers maintain that the Obama administration’s regulations violate the Religious Freedom Restoration Act, a federal law that bars the government from substantially burdening the free exercise of religion.

The government may overcome this prohibition only if it can show that the burden is the least restrictive means of furthering a compelling interest.

Burwell v. Hobby Lobby

If this sounds familiar, that’s because the Supreme Court decided a similar case in the summer of 2014. In Burwell v. Hobby Lobby, the Court held that certain for-profit employers—such as the closely held family-run craft store chain—could not be forced to violate their religious beliefs by paying for potentially life-ending drugs and devices as part of their employee health insurance plan.

The majority opinion, written by Justice Samuel Alito, pointed to the “accommodation” offered to non-profit, religious employers as proof that the government could advance its asserted interest in providing women with free contraception while not trampling the religious beliefs of employers. The Court did not, however, address whether the alternative could still pose a substantial burden.

Zubik v. Burwell

Now the Court is presented with that very issue in Zubik v. Burwell. From the challengers’ perspective, the regulations impose a substantial burden by forcing them to engage in conduct that will trigger morally objectionable health care coverage, thereby making them complicit. If they refuse to comply, they face ruinous fines.

They see the “accommodation” regulations as “merely … another way to violate their religion.” But the government says the Little Sisters and other religious employers are mistaken about their role in the process.

The Obama administration maintains that it is federal law—not the employers’ act of signing a form—that leads to the provision of drugs and devices.

If that were the case, why, then, does the government continue to insist that these employers provide written notice on pain of millions of dollars in fines when the government already knows beyond any doubt that they object? Because the government says that it requires the Little Sisters and others to act in cooperation with the government’s scheme and that’s precisely the problem.

While nearly all the appeals courts that have looked at the issue have ruled in favor of the administration, the U.S. Court of Appeals for the Eighth Circuit noted that the government must “come forward with evidence that the contraceptive mandate and the accommodation process are the only feasible means to distribute cost-free contraceptives to women employed by religious organizations and that no alternative means would suffice to achieve its compelling interest.”

Indeed, there are plenty of other ways for the government to provide no-cost contraception directly to women who want it—without hijacking employers’ health plans and trampling on religious freedom.

In the Hobby Lobby decision, the Court discussed the possibility of the government directly providing or paying for these drugs and devices while allowing employers to obey their consciences.

The government already does this under Title X for many low-income women. Thus, if the Court holds the administration to the high standard laid out by the Eighth Circuit, it may be a herculean task for the administration to prove the “accommodation” regulations are the only way to ensure that women have access to free contraception.

Impact of Scalia’s Passing

It’s worth pointing out that the Little Sisters and other challengers lost a likely ally with the sudden death of Justice Antonin Scalia. He voted in the majority in Hobby Lobby. With only 8 justices currently on the Court, the decision could end up as a tie vote of 4-4. Generally speaking, when there is a tie at the Supreme Court, the lower court ruling stands. In most cases, that’s not ideal for parties appealing a lower court ruling. But in this situation, a tie vote would mean that the circuit split remains since the Eighth Circuit broke ranks with the other circuit courts, which issued erroneous pro-administration decisions.

President Barack Obama’s nominee to the Supreme Court, D.C. Circuit Chief Judge Merrick Garland voted against rehearing one of these cases when it was pending before his court.

In Priests for Life v. U.S. Department of Health and Human Services, a 3-judge panel ruled for the government, calling the accommodation process “a bit of paperwork.” When Priests for Life asked the full D.C. Circuit to rehear the case, Garland voted against rehearing it. This was over the protest of Judge Janice Rogers Brown, who explained why the 3-judge panel got it wrong:

“What amounts to ‘facilitating immoral conduct’ … or ‘impermissible cooperation with evil’ … are inherently theological questions which objective legal analysis cannot resolve and which ‘federal courts have no business addressing.’”

You don’t have to agree with any of the organizations before the Court or share their beliefs to recognize that the government should not be able to force Americans to set aside their deeply held beliefs simply because they step outside the four walls of a church to serve the poor, heal the sick, or educate the next generation.

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Why Obamacare Premiums Are Climbing All Over US

On the third year of the Affordable Care Act exchanges, it is becoming more apparent that the promises of cost saving and premium reduction may only be reserved for people that are able to capture the most subsidies.

For example, plans increased rates by 25.1 percent in Kentucky, 14 percent in Ohio, and nearly 11 percent in Michigan.

Exchange premiums are climbing all over the country. For example, plans increased rates by 25.1 percent in Kentucky, 14 percent in Ohio, and nearly 11 percent in Michigan. In Idaho, the largest insurer, Blue Cross of Idaho, had a rate increase of 23 percent. Some plans, as is in the case of New Mexico, had to pull from the exchanges due to high costs. For the country as a whole, through modelling at the Heritage Foundation, we estimate that a premium increase of roughly 15 percent is in order for 2016.

The main reason many insurers are raising premiums this year is because they are experiencing higher than expected costs.

This update implies that the people that are currently signed up in the plans were less healthy than what was anticipated by the company when calculating what to charge for premiums last year.

This also shows, as pointed out by senior research fellow at the Mercatus Center Brian Blase, that the mandate may not be having the expected effect on enrollment. Additionally, some plans are utilizing a narrow network model, which is less flexibility on doctors or providers, to keep premium increases low.

While this year’s experience with the Affordable Care Act exchanges has been worse than expected, it is important to remember that the Affordable Care Act had already drastically increased premiums for individual health insurance.

For 2014, in the state of Tennessee, premiums for a 27 year old on the exchanges cost 70 percent more than what that person would have paid previously. In 2015, premiums would increase another 18 percent for that individual, in a year that was billed as one including “modest” increases.

For a 50 year old, premiums increased by 31.6 percent in 2014 and 9.8 percent in 2015. In 2016, the premium increases for younger adults is similarly larger than the rest of the population. While many will point to the subsidies as a reason premiums are not rising quickly for many individuals in the exchanges, it is important to note the effect higher costs have on discouraging enrollment from people that have higher incomes.

These people won’t get as much of a subsidy, and subsequently, shopping in the exchanges isn’t nearly as appealing. The fact remains that these subsidies still have to be funded, and at an increasing rate.

This behavior in the markets in not some glitch or temporary effect. Heavily regulating insurance plans in these markets has led to large increases in premiums. There are several examples, but three factors contribute greatly to increasing premiums.

The Affordable Care Act restricts age specific pricing to a ratio of 3 to 1. This means that Obamacare doesn’t allow prices to vary between someone who is 18 and someone who is 64 by more than 3 times the medical cost. The naturally variation in medical costs across the ages is, however, at least 5 times. This restricts the amount a person can be charged directly for their expected costs.

The Affordable Care Act requires health plans to cover a set of “essential health benefits,” as well as a list of “preventive services” for which plans are prohibited from charging enrollees any copayments.

This leads to increased costs by making many plans pay for benefits that individuals do not need or utilize. Finally, the Affordable Care Act’s minimum actuarial requirement establishes a floor for what plans must pay toward the cost of covered services. The law standardizes this into metal tiers. Plans under 60 percent no longer exist.

The Affordable Care Act was sold as something that would lower the cost of healthcare to millions of Americans. The only thing that another year of premium increases, now once again accelerating, proves is that the promise becomes harder and harder to believe.

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