Why Obamacare Drives Up Costs of Healthcare—–And How!—— Part II of III

In Brief….

Obamacare adds costs to healthcare.  Also, the House Committee on Oversight and Government Reform is investigating Obamacare funding as The Department of Health and Human Services’ (HHS: Secretary Kathleen Sebelius, D-Kansas,) defunded Medicare/Advantage of 716 billion dollars to fund Obamacare before the November 6th elections, with 8.3 billion-dollar federal “Demonstration Project” bonus.  Committee member John Mica (R-FL,) calls this a blatant attempt to “buy the election.”  The GAO already has declared this shift of dollars to Medicare a “scheme,” to keep voters in the dark until after the election.


Like many citizens, I appreciate that President Obama wanted a universal healthcare plan that is fair to all Americans.  But $716 billion dollars have been defunded from Medicare/Advantage to fund Obamacare/PPACA.  (see “Oversight Presses HHS on Billion-Dollar Scheme Designed to Mask Obamacare Cuts,”  http://www.over http://www.oversight.house.gov/release/oversight-presses-hhs-on-billion-dollar-scheme-designed-to-mask-obamacare-cuts/

Here is what the White House is telling Americans about Obamacare:

  1. Obamacare will reduce the cost of healthcare;
  2. Obamacare will make good healthcare affordable for all Americans;
  3. Obamacare will save Americans money;
  4. Obamacare will ‘fix’ the broken healthcare system;

And according to many in the healthcare industry, these claims simply are not true.  Here’s why, according to Paul Howard, PhD, Director of the Manhattan Institute’s Center for Medical Progress, and his research associate, Yevgeniy Feyman http://www.foxnews.com/opinion/2012/10/09/olive-garden-serves-up-better-menu-health-insurance-options/

–The following are just a few reasons why Obamacare will cost you more (and I apologize that some of my words are direct quotes:)

  1. The costs of Obamacare will increase the cost of healthcare with many regulations and taxes that drive up the cost of insurance in the individual and small-groups.  The PPACA’s “essential health benefits” include coverage for mental health and substance abuse services, rehabilitative and habilitative services, medical devices and pediatric dental and vision care.  Great!  If you need these services… but what if you don’t?  You pay for them anyway, to cover the costs of those who do use them.  The CBO (Congressional Budget Office,) estimates that premiums will rise by close to 30% for this.
  2. PPACA limits insurers’ ability to offer lower rates to younger and healthier applicants and charge higher rates to older, less healthy applicants.  This drives up affordability, particularly to young applicants.  –This could also undermine ‘continued coverage,’ which leads to higher insurance costs to consumers.  (see part I of this blog)PPACA includes billions in taxes on insurers, drug companies, and medical-device companies—that in all likelihood will be passed on to consumers in the form of higher premiums.
  3. Congress’s Joint Committee on Taxation estimates that the insurance tax alone will add close to $400.00 annually to family premiums in 2016.  AND because the taxes require aggregate amounts to be collected from insurance companies (14-billion dollars by 2018!) then if one insurer’s payout declines, the other insurers will have to make up the difference.  This tax structure will likely cause insurers to merge—reducing competition, further driving up the cost for consumers.
  4. Even Obamacare supporters say that PPACA will drive up costs:  including former Obama administration health adviser Jonathan Gruber.  He used to advocate that PPACA “for sure” will lower costs.  Now, however, Gruber says the law will drive up individual insurance premiums by 40% in Maine and Minnesota, and by 20% in Colorado… and others speculate 85% in Ohio and 95% in Indiana.  Rates for small businesses will also be hard hit.

How exactly does Obamacare protect patients?

The Association of American Physicians and Surgeons (AAPS) supports the repeal of PPACA and the restoration of personal freedom.  (see part I of this blog.)  AAPS filed a lawsuit against the PPACA in federal court (still pending.)  http://www.aapsonline.org/hhslawsuit      Plus, they filed a motion to intervene.  (see AAPS efforts before the courts at the AAPS website and at http://www.FreeMediPedia.org)

And here’s another reason why Obamacare is unsustainable for the American middle class: because Obamacare will ultimately cost senior citizens their affordable Medicare coverage.  Read on.

The study in Part I of this blog (“Oversight Presses HHS on Billion-Dollar Scheme Designed to Mask Obamacare Cuts,”) is about a House Committee on Oversight and Government Reform (HCO) investigation into the $8.3 billion dollars that Health and Human Services Secretary Kathleen Sebilius (former D-Kansas governor,) has spent “to temporarily offset Obamacare’s controversial cuts to the Medicare Advantage program.”  (ibid: internet site.)

The following quote is the HCO’s memo’s dated 9/27/12, in which they protest the 8.3 billion dollar “bonus,” so-called, taken as a “demonstration project” fund.  The ‘demonstration project’ is cash for a governmental study on a particular policy or change to a policy, a feasibility study.  But this 8.3 billion is not to test the feasibility of Obamacare—that’s why it’s under investigation by the HCO.  The reality is that HHS and Obama have defunded the Medicare/Advantage program for 716 billion dollars to fund Obamacare: and with the start of the new fiscal year (on October 1,) to float Obamacare.  Secondly, this 8.3 billion dollar demonstration project fund is the largest demo-project fund ever spent in one time, since 1995.   And why?  Read the HCO’s quote:

“Obamacare was rushed through the House of Representatives and Senate by the Democratic majority in each chamber.  Many conceded they did not even read its entire contents…. One of those consequences is major cuts in the popular Medicare Advantage program serving seniors.  These cuts mean many seniors will lose coverage that they enjoyed prior to the law’s enactment….” 

—Chairman’s Preview Statement Committee On Oversight & Government Reform:  Mr. Jonathan Blum (Deputy Administrator and Director Center for Medicare;) Mr. James C. Cosgrove (Director, Health Care; US Government Accountability Office;)  Ms. Edda Perez (Managing Associate General Counsel; US Government Accountability Office.) http://www.gao.gov/products/GAO-12-409R




HHS defunded Medicare/Advantage’s $716-billion dollars to leave M/A with a shortfall.  The 8.3 billion dollars worth of ‘bonus,’ is a temporary stop-gap plan to pay for seniors’ M/A insurance before seniors find out that their M/A coverage is less than what they paid for before.  Once the 8.3 billion dollars are gone, (in 2 or 3 years,) senior’s will discover that they were deluded into thinking that Obamacare did NOT use M/A dollars.  This leaves Obamacare to cover young people, while Medicare/Advantage is gutted—meaning that:

  1. More seniors will have to pay higher fees out of pocket for M/A coverage;
  2. Seniors’ out-of-pocket costs (on fixed incomes,) will buy fewer healthcare services;
  3. Fewer seniors will be able to afford Medicare/Advantage, meaning fewer seniors will have healthcare coverage when they need it the most;
  4. All to pay for others’ “free” yearly pap smears and prostate screenings–  unless the non-medical ‘board’ of decision-makers decide that those expenses are too high.

The GAO reported that this defunding of Medicare to fund Obamacare is a “scheme.”  John Mica (R-FL,) House Committee on Oversight and Government Reform, now subpoenaing the White House, calls this defunding of Medicare, “buying the election.”   I’m inclined to agree.  Where do you stand?

What can Americans do about Obamacare??

Read Part III of this blog: thank you!

Get the facts…. And you decide.  


© RightOnTheTruth 2012     © Suzy Right 2012

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