Obama OMB Director: Healthcare Takeover Will Cause Dropped Coverage, “Unsustainable” Costs

July 7, 2011

Bad News and Broken Promises Continue to Pile Up From Democrats’ Healthcare Takeover

Obama’s own former OMB director, Peter Orszag, last week noted that the Democrats’ government takeover of healthcare could lead employers to drop workers from their healthcare plans, forcing those workers into government-run plans and causing costs to “spiral.”
This criticism follows recent reports that the government takeover of healthcare will dump over 3 million middle class people into Medicaid, a program intended for the poor, leading to a further deterioration in the quality of care those on Medicaid receive.
Nancy Pelosi famously said Democrats would have to pass their government takeover of healthcare so we could “find out what’s in it.” Now Americans are finding out, and all they see are bad news and broken promises.

BACKGROUND:

Yet another former Obama official joined the chorus of criticism of the Democrats’ government takeover of healthcare last week as former OMB director Peter Orszag published a piece in Foreign Affairs arguing that the law could lead employers to drop high-risk workers from their plans and cause costs to “spiral”:

FORMER OMB DIRECTOR PETER ORSZAG: “[Employers] could start dropping high-risk workers by designing health plans that encourage these employees to purchase insurance on the exchanges. This is a legitimate concern. If employers altered their plans, this could create a spiral effect, in which those employees buying insurance on the exchanges would be disproportionately high-risk patients, raising premiums and defeating the purpose of risk sharing. The cost to the federal government of subsidizing coverage in the exchanges, in turn, could become unsustainable.” (Peter R. Orszag, “How Health Care Can Save or Sink America,” Foreign Affairs, July/August 2011)

This criticism follows reports last week that the government takeover of healthcare will dump more than three million middle class people into Medicaid, a program intended for the poor. The effect will be a further deterioration in the quality of care for those already on Medicaid and those forced into Medicaid by the government takeover of healthcare:

DUE TO GOVERNMENT HEALTHCARE TAKEOVER, “SEVERAL MILLION MIDDLE-CLASS PEOPLE [WILL] GET NEARLY FREE INSURANCE MEANT FOR THE POOR”: “President Barack Obama’s health care law would let several million middle-class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed. … Up to 3 million more people could qualify for Medicaid in 2014 as a result of the anomaly.” (“A Glitch in ObamaCare Could Give Middle Class Insurance Intended for Poor,” Associated Press, 6/21/2011)

“AS NUMBER OF MEDICAID PATIENTS GOES UP, THEIR BENEFITS ARE ABOUT TO DROP” AND FEDERAL FUNDS RAN OUT LAST WEEK: “The Obama administration injected billions of dollars into Medicaid, the nation’s low-income health program, as the recession deepened two years ago. Themoney runs out at the end of this month [June], and benefits are being cut for millions of people, even though unemployment has increased.

“From New Jersey to California, state officials are bracing for the end to more than $90 billion in federal largess specifically designated for Medicaid. To hold down costs, states are cutting Medicaid payments to doctors and hospitals, limiting benefits for Medicaid recipients, reducing the scope of covered services, requiring beneficiaries to pay larger co-payments and expanding the use of managed care.” (Robert Pear, “As Number of Medicaid Patients Goes Up, Their Benefits Are About to Drop,” The New York Times, 6/15/2011)

“CALIFORNIANS FACE CUT IN MEDICAID BENEFITS”: “At the height of the recession, Congress threw millions of Americans a lifeline. It boosted federal funding for Medicaid by $100 billion to play for medical care for the down and out.

“But no one expected unemployment to be this high, this long. Now, the extra Medicaid money runs out tonight. … But with the temporary infusion of federal funds to Medicaid running out, California is taking a $4.8 billion hit. So like most states California is scrambling to reduce costs: cutting services; capping doctors visits at seven a year; cutting doctor’s payments; raising patients’ co-payments $5 for office visits; $50 for emergency rooms; $100 to $200 a day for hospital stays. You might not think that’s much.” (Bill Whitaker, “Californians Face Cut in Medicaid Benefits,” CBS Evening News, 6/30/2011)

CHILDREN WITH MEDICAID FACE LIMITED ACCESS TO CARE DUE TO PROVIDER REIMBURSEMENT CUTS: “Children with Medicaid are far more likely than those with private insurance to be turned away by medical specialists or be made to wait more than a month for an appointment,even for serious medical problems, a new study finds.

“Lower payments by Medicaid, delays in paying and red tape are largely to blame, researchers say. …

“Sixty-six percent of those who mentioned Medicaid-CHIP (Children’s Health Insurance Program) were denied appointments, compared with 11 percent who said they had private insurance, according to an article being published Thursday in The New England Journal of Medicine.

“In 89 clinics that accepted both kinds of patients, the waiting time for callers who said they had Medicaid was an average of 22 days longer.”(Denise Grady, “Children on Medicaid Shown to Wait Longer on Care,” The New York Times, 6/15/2011)

Nancy Pelosi famously said Democrats would have to pass their government takeover of healthcare so we could “find out what’s in it.” Now Americans are finding out, and all they see are bad news and broken promises:

MAJORITY CONTINUES TO SUPPORT REPEAL OF GOVERNMENT HEALTHCARE TAKEOVER: 53% FOR REPEAL. (“Health Care Law,” Rasmussen Reports, 7/4/2011)

AP/GfK POLL: 46% OPPOSE HEALTHCARE LAW, ONLY 36% SUPPORT. (AP-GfK, 6/16-20/2011)

CNN: 56% OPPOSE GOVERNMENT HEALTHCARE TAKEOVER. (CNN, 6/3-7/2011)