Wednesday, March 23, 2011

One Year Later: STILL Bad for Consumers

Today the Administration and Democrats in Congress are focusing on the health care law’s “Bill of Rights,” which they claim grants consumers important protections.  Unfortunately, in many cases the law’s provisions will harm, not help, consumers, by raising premiums and impeding access to coverage, including for individuals with pre-existing conditions:

A Broken Presidential Promise – And Higher Premiums for Families:  The supposed benefits being touted by the Administration do not come without costs – and those costs are being passed on to consumers in the form of higher premiums.  In recent months, insurance carriers have cited the regulations implemented to date as raising premiums by one to nine percent; many small businesses have reported total premium increases of 20, 40, even up to 60 percent or more.  The non-partisan Congressional Budget Office agrees on the law’s impact on premiums, concluding that individual health insurance premiums will increase by $2,100 per family as a result of the law.  Candidate Obama promised to cut insurance premiums by an average of $2,500 per family, but the legislation he signed into law has already had the opposite effect.

Losing Current Coverage:  According to the Administration’s own estimates, its onerous regulations will force half of all employers – and as many as 80 percent of small businesses – to give up their current coverage within the next two years.  While President Obama claimed that “the government is not going to make you change plans under health reform,” the regulations his Administration drafted admitted that “after some period of time, most plans will relinquish their grandfathered status,” meaning American workers will lose the coverage they have now and become subject to more costly federal requirements.

Child-Only Policies Disappearing:  While Democrats have trumpeted the ban on pre-existing condition limitations for children that took effect in September, that provision has actually REDUCED access to insurance for many children.  In fact, insurers have stopped selling child-only health insurance policies in 19 states as a result of the law.  This severe unintended consequence could portend further adverse impacts when the law’s major insurance provisions become effective in January 2014.

Seniors Pay Higher Premiums – So Drug Companies Can Benefit:  The Administration has touted the $250 rebate checks and drug discounts provided to seniors in the Medicare Part D “doughnut hole.”  However, more than nine in ten Medicare beneficiaries will not receive these supposed benefits.  Moreover, more than 17 million seniors participating in Medicare Part D will face higher premiums, largely as a result of the “rock-solid deal” the pharmaceutical industry struck behind closed doors with President Obama and Congressional Democrats.

Seniors Left Out – So AARP Can Benefit:  While the Administration claims the health care law will protect individuals with pre-existing conditions from insurance company “abuses,” seniors were left out of the law’s supposed protections.  In fact, the law exempts Medigap supplemental insurance policies from the prohibitions on pre-existing condition exclusions, so that AARP can continue to impose waiting periods on seniors, as it does currently.  Perhaps unsurprisingly, AARP – which spent millions promoting a health care law notoriously unpopular among seniors – generates a substantial portion of its revenues from the sale of these lucrative Medigap policies exempt from the law’s “consumer protections.”

“Freedom” through Government Forced-Insurance?  The Administration claims the health care law is “giving Americans more freedom in their health care choices.”  In reality, though, the law forces Americans to buy a product – government-defined health insurance – for the first time ever.  This constitutionally dubious intrusion gives the federal government massive new powers, thus eroding individual freedom.