Tuesday, September 24, 2013

Obama Sells PPACA at CGI

The interchange between Presidents Clinton and Obama was sold this way by the White House (USA Today) :

The president and ex-president Clinton "will engage in a conversation about the benefits and future of health care reform in America and access to quality health care around the globe," said White House spokesman Jay Carney.
The Daily Beast commented on the surreal nature of our public stage:

Could the dialogue about the new health-care law get any more surreal? On one television network, Texas Republican Ted Cruz drones on and on about the evils of Obamacare, and on another, Democratic Presidents Obama and Clinton do their best to sell a skeptical American public on the new health-care law, sounding a bit like the Home Shopping Network as they put in a plug for people to go online to HealthCare.gov and sign up for coverage.
PPACA is surreal on other fronts.  Many corporate over-65 retiree health insurance plans are effectively going defined contribution when companies shift over-65 retirees from their employee group plans to individual Medicare Advantage plans through a private exchange.  This moves retired workers insurance from group plans to individual plans, the exact opposite of what Clinton and Obama stated in their interview.

Obama explained how pooling risk eliminates the expensive cost-shifting when emergency rooms provide care and pass the costs along. He also acknowledged raising taxes—gasp—on higher-income Medicare recipients and on so-called Cadillac plans, which has labor unions in a tizzy, and reducing the subsidies for Medicare Advantage plans.
If the feds are reducing subsidies for Medicare Advantage plans and employers cap their contribution, who does that leave to pick up future increases?  It's the over-65 retired worker.

Obama's statement about pooling risk eliminating expensive ER cost shifting is nonsense.  Pooling risk shares expensive ER costs across a larger group of people.  Benefit design and utilization controls eliminate expensive ER costs by making them the responsibility of the individual for any inappropriate use.

Health care coverage, employer and government provided, is marked by tremendous complexity.  The labyrinth of rules and procedures one must navigate to get coverage is the first hurdle.  The rabbit hole deepens when one needs to access emergency care, see a doctor or obtain a pharmaceutical.  Make a mistake and the penalty can be no coverage. 

Employers simply don’t like to be told they have to provide coverage, and people don’t like to be told they have to have coverage, he said.

Recently released Census data shows employers covering a smaller percentage of Americans.   If employers covered Americans as the same rate under President Clinton (1997), nearly 30 million of the currently uninsured would have coverage today. 

President Obama gave employers an extra year to meet any commitments.  He extended the date employers have to comply with PPACA to January 1, 2014.  The law allows employers to not provide coverage and pay a penalty.  The penalty is a fraction of the amount spent by employers offering a health insurance benefit to workers.

The simple act of dumping employer sponsored health insurance would be a financial boon to the C-Suite in executive incentive compensation.  This is the world we live in, where leaders, corporate and political, lie to people.

PPACA set up the acceleration of the great employer health insurance shedding, already well underway.  It also rejiggered the health care table for private equity underwriters (PEU's) to make billions buying and selling health care companies.  Think KKR and HCA, Cerberus and Caritas Christi Health System, Gentiva and Capstar's Harden Healthcare, CCMP Capital Partner's sale of CareMore to WellPoint.

Obama's White House Health Reformer had PEU origins and returned to her PEU roots after her public service.  Look for Nancy-Ann DeParle's Consonance Capital to lever PPACA to great profit.

Oddly, Nancy-Ann continued to receive private equity distributions from previously undeclared investments while serving in the Obama White House.  No conflicts here.  As P.T. Barnum would say "Move on the to Great Egress." 

Update 9-25-19:  PPACA Report Card:  Employers shifted costs to employees via higher deductibles and increased co-pays.   PPACA has not helped make healthcare more affordable.  It has made a lot of money for the PEU boys. 

Update 4-3-22:   The average health insurance premium more than tripled for a family plan since PPACA passed in 2010.  Cost curve bent but in the wrong direction.  Concave went convex.