Last week’s Des Moines Register’s editorial page takes a sardonic view of the majority of Americans (51 percent as of last week) who are opposed to the health reform law. Saying they are trashing the law they call Obamacare—a word that supporters have openly embraced because of its widespread usage—the editorial charges “if you don’t agree with the law, then don’t use anything it offers.”
Oh, if it was only that simple. While the editorial correctly notes that Obamacare is not a full government takeover of the private health sector, it is a massive exercise in federal micromanagement of private coverage that will dramatically reduce patient options.
Let’s examine a few ways the Des Moines Register says Americans could bypass Obamacare. According to the editorial, the public should find a new health plan if they have moral issues with mandated preventive services that now fund contraceptives. Hello—mandated preventive services means no insurer can back out of the requirement without paying huge fines. Heritage Foundation’s health insurance expert Edmund Haislmaier examined the penalties implemented by the Health and Human Services Department and found:
“What is clear, however, is that significant penalties could be imposed on insurers and employer health plans if they fail to comply with HHS benefit dictates. The existing federal health insurance statute—now amended by [the Patient Protection and Affordable Act] to include the new benefit mandates—contains an enforcement section that provides for fines of up to ‘$100 for each day for each individual with respect to which such a failure occurs.’ Thus, for a plan with just 100 enrollees, the potential fines could be as much as $10,000 per day.”
Obviously, insurers and employers aren’t going to risk incurring those fines, so patients don’t have coverage alternatives that exclude the mandated benefits. In fact, the only way to avoid the essential benefits would be relying on health care financing such as cash-only medical provides or individualized supplemental plans like hospital indemnity policies that aren’t regulated by Obamacare. But the idea that Obamacare allows insurers to even offer comprehensive insurance packages outside of its essential benefit mandates is false.
Another editorial assertion is that small business owners who don’t like Obamacare should not take advantage of any tax credits offered. Interestingly, the Treasury Department’s latest report showed that fewer small businesses than expected are claiming Obamacare’s tax break. The Wall Street Journal writes:
“By mid-May only about 228,000 taxpayers had claimed the small business health-care tax credit established in last year’s health-care overhaul, costing the federal government a total of $278 million in lost revenue, according to a report released Monday from the Treasury Inspector General of Tax Administration.
The nonpartisan Congressional Budget Office, the official number-cruncher for Congress, had earlier estimated that the tax break would cost up to $2 billion for tax year 2010 and $37 billion over 10 years.”
Treasury officials cited complexity in filing for the tax credit (the IRS still hasn’t pinpointed eligible businesses) for the low participation, but maybe some of those owners are already taking a stand.
The editorial manages to concede in its “challenge” that Obamacare’s individual mandate doesn’t allow uninsured Americans to simply avoid the health law. But while saying it opposes this measure, the paper concludes that Americans can choose the mandate’s penalty because it’s cheaper than paying for an average health premium. Rather than encouraging more Americans to become uninsured, the better option would be mandate-less health reform.
The rest of the editorial’s recommendations boil down to Obamacare opponents putting up or shutting up—by rejecting Medicare or other taxpayer subsidized health plans and looking to the private sector. There would be something to this argument if Obamacare didn’t impose a bureaucratic straightjacket on private coverage.
The real solution is to give patients more control over their health care dollars. Heritage has shown how consumer-driven health care policies can help more people gain coverage while handling issues like preexisting conditions, all without letting a centralized bureaucracy make health care decisions. We believe that’s something more Americans will want as Obamacare comes into full effect.
The paper could check out the Haislmaier’s speech this week at Drake University in Des Moines. He’ll better detail how Obamacare turns private health insurance into a regulated public utility.