Monday, July 30, 2012

Obamacare falling short already

The unintended, convoluted and costly consequences of President Barack Obama’s signature health care law are about to be realized. Obamacare was rushed through Congress in 2010 despite almost no one knowing what the 2,700-page law provided, apart from a vague promise to make health care more affordable and accessible.

This week, the Congressional Budget Office said that, because the U.S. Supreme Court, in ruling last month to validate most of the Affordable Care Act, allowed states to opt out of the law’s expansion of Medicaid, about 3 million fewer people will end up insured than originally estimated. This is guesswork because the CBO admits no one knows how many states will opt out. We believe many, if not all, states controlled by Republican legislatures and governors will opt out.

That news arrived about the same time a study was released showing about one in 10 U.S. employers plan to drop health coverage for workers in the next few years as Obamacare’s provisions go into effect. The consulting company Deloitte found 9 percent of companies expect to stop offering coverage, and another 10 percent are uncertain they will continue. Last year another firm, McKinsey & Co., said up to 30 percent of employers would “definitely or probably” stop offering insurance after 2014.

Obamacare’s perverse disincentives make it less costly for companies to pay fines for not providing health insurance than to pay health insurance premiums.

The bottom line? The new health care law already is on the road to providing fewer Americans health insurance coverage than promised despite a vast expansion of Medicaid, the federal health insurance program for the poor, into the middle class, on top of giving employers incentives to drop coverage for their workers.

This combination is a far cry from making health care more affordable and accessible.

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