(Jim Clark) – The Obamacare law turned one year old last week, and Nevada Policy Research Institute observed the occasion by bringing CATO Institute Senior Fellow Michael Tanner from Washington, DC, to both Las Vegas and Reno to enlighten the faithful on what to expect as the law’s provisions gradually become effective. The CATO Institute is a Libertarian think tank. Tanner did an excellent job of distilling the essence of the 2,500-page bill of which former Speaker Nancy Pelosi said: “We have to pass this bill to find out what’s in it.” The essential parts are:
The Individual Health Insurance Mandate: By 2014 you will have to furnish evidence of a policy that meets the government’s requirements. As President Obama promised, existing policies are grandfathered unless…you make any change whatsoever to it, including changed deductibles, dropping pregnancy coverage after your wife turns 50, or any new members are added to a group plan.
The Employer Mandate: By 2014, employers must provide health insurance coverage that meets government specifications or pay a fine of $3,000 per uninsured employee.
New Insurance Regulations: The Obamacare law mandates that insurers must keep dependents on their parents’ health care policy until age 26 (this is expected to cost between $3,300 and $3,400 per year per kid). Policies can no longer have lifetime or annual caps on coverage. Health insurance companies now have a minimum loss ratio: They must pay out 80% of premiums received in benefits. Another new regulation is the “guaranteed issue” rule: Health insurers cannot deny coverage based on preexisting medical conditions. A significant new requirement is that health insurers must charge everyone the same premium regardless of age or gender; the effect of this will be to lower premiums charged to the aged and sick and substantially increase premiums to the young and healthy. A Rand Corporation study estimates that the new regulations will result in overall premium increases of 17%; however, the Counsel for Affordable Health Care estimates the increases to be between 75% and 90%, so hang on to your wallets.
State Insurance Exchanges: The law mandates that each state set up an insurance exchange, which is supposed to function like an over-the-counter market for health insurance products. Under the law, if states take no action, the federal government will step in and do it for them. This is prompting some states, such as Nevada, to get it done and not trust the feds. Mr. Tanner pointed out that this could cause a problem, especially among the states, including Nevada, who are suing to have the law declared unconstitutional. He points out that under the U.S. Supreme Court “structures in reliance” doctrine, if every plaintiff state establishes an exchange, the Court may uphold the law even if it deems it unconstitutional because so many arrangements sprang up during the period before the case reached the high court.
Subsidies: Of the estimated 50 million uninsured prior to the law, 47% of them will be dumped into Medicaid and the states will have to pay for them. The Congressional Budget Office estimates that by 2029 there will still be 23 million uninsured, which makes one wonder if the whole exercise was worth it. We’re still going to have jam-packed ERs.
The CATO Institute studied the costs involved, and for the 10-year period 2014 to 2023, the law will cost $2.7 trillion dollars, or approximately 900% of our gross national product. The Massachusetts health care law is the prototype of Obamacare and, according to the New York Times, costs are skyrocketing out of control in the Bay State.
How about going back to good, old-fashioned cash-and-carry?
(Jim Clark is President of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee. He can be reached at firstname.lastname@example.org )