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by Mark Scaramella, February 16, 2011
Among the many problems facing Mendocino County is the skyrocketing cost and diminishing access to health insurance. On several occasions last year County officials on Low Gap Road have made reference to somehow holding out until 2014 by keeping some kind of insurance coverage for employees and retirees but trimming back the coverage and the number of people covered. Locally, Anderson Valley teachers and school staff are also experiencing steep price increases for their full-spectrum health insurance coverage.
Many local liberals and other Obama supporters continue to think that somehow Obamacare (aka “the Patient Protection and Affordable Care Act”) will bail them out and they “hope” that health care will magically become “affordable” starting in 2014.
Like former House Speaker Nancy Pelosi who famously said “We have to pass the health care bill so you can find out what is in it,” most Obamacare hopefuls haven’t read the bill. If they had, they might not be as hopeful as they seem to be.
One of the key provisions in Obamacare is a requirement — a mandate — that nearly every American citizen buy health insurance on penalty of a tax-fine. That’s right, if Obamacare kicks in as currently scheduled, you’ll be required to buy commercial health insurance if you don’t already have it — from those same insurance companies who are already jacking up prices and figuring out new ways to deny coverage.
A major monkeywrench was thrown into Obamacare last month when a Florida federal district judge named Roger Vinson declared Obamacare unconstitutional in a complaint filed by 26 states. The “defendant” was the Obama administration.
To be blunt, Obamacare, especially its “mandatory health insurance” provision, is simply unsupportable — even if the wonderful Barack Obama proposed it. It forces people to buy “junk health insurance” (as one serious critic called it) and it doesn’t offer much in the way of controls on coverage or costs.
I had to turn my microscope way up to find any decent liberal, progressive, left-wing or single-payer-advocate commentary about Judge Vinson’s recent ruling which essentially said: forcing people to buy crappy insurance is unAmerican. (Ok, Vinson didn’t call it “crappy.” I did.)
Let’s begin with former health insurance PR man turned critic Wendell Potter who wrote last year that the key provision in Obamacare — that millions of Americans would be REQUIRED to buy health insurance — was the only way the Obama administration could get the bill past the insurance companies:
“Many insurance executives were wary of such a mandate because they don't like the government mandating anything, especially those pesky state mandates that force them to include certain benefits in the policies they sell. Advocates of an individual mandate eventually brought the skeptics, including many of AHIP's [American Health Insurance Plan’s] board members, around to their way thinking by persuading them that insurers could make billions MORE [my emphasis] in profits if every American had to buy an insurance policy from them. Now you know the real reason behind AHIP's shift from neutrality on the issue to full-fledged support. It's all about the money.”
After Judge Vinson’s ruling was issued last month, occasional Marshall Auerback of newdeal.org wrote that “If we had wanted incremental improvements to HEALTH CARE there are nearly infinite combinations of small policy changes we could have pursued — without involving insurers at all. And Dems celebrating this great victory by Wall Street were both laughable and hugely disingenuous.”
Joe Firestone of fiscalsustainability.org, who obviously read the bill — as opposed to Nancy Pelosi who famously said “We have to pass the health care bill so you can find out what is in it” — remarked:
“Folks, [Obamacare] was a bad bill. It should never have been passed. Its negative elements far outweigh its positive elements. Its claim that it will cover 32 million people is nonsense. The States are broke. They can’t serve the additional people on Medicaid envisioned by the bill. That’s 15 million of the 32 million projected covered. Of the other 17 million, many will not sign on because the very rapid price increases we’ve seen from the insurance companies will make it much more “rational” for people to accept the mandate penalties or seek waivers than to actually buy the bottom level of nearly useless insurance they’re being forced to buy.
“I know this bill is marginally improving the situation for some Americans now. It’s allowing some people, mostly middle class people to keep their kids on their insurance for a few more years. And some as yet miniscule number of people have been able to get insurance through the risk pool, where insurance is allowed to be way over-priced by the provisions of the new bill. I’ve outlined why this bill should have been defeated in December 2009. The final version of the bill was virtually the same as the version I criticized last year before it passed:
“1) The bill gives almost no real help 'til 2014. In the short term, the bill does nothing about the fatalities, bankruptcies, and foreclosures that come from lack of insurance. Therefore, the very title of the bill — "The Affordable Health Choices Act" — is a lie, despite band-aids for children and young adults, because the bill doesn't get people care in the short run at an affordable price that will protect them from financial ruin.
“2) The bill guarantees price-gouging through 2014. The bill doesn't address the problem of insurance company rate increases from 2010 'til 2014. Based on how the insurance companies have always behaved, we will see insurance premium increases from 50-75% in that time frame. That will increase the average annual cost of family coverage from the current $13,375 to $20,000-24,000.
“3) The bill sells out women's reproductive choices. This is not something progressives should ever agree to, since it is a core principle of progressivism.
“4) The bill forces people to buy a defective product. After 2014, the bill forces people to buy junk insurance they can't afford from private insurers. The subsidies don't do anything about high out-of-pocket costs, which will be great enough to drive middle class people into bankruptcies and foreclosure, especially since lifetime caps are still permitted. Further, the subsidies are not high enough to make insurance affordable except in the judgment of millionaire legislators who have no understanding of middle class family budgets. Worse, there are no enforcement mechanisms for the few regulatory changes that are made. And since the bill frames health insurance as a means-tested subsidy — that is, as welfare — the already inadequate subsidies will be under constant assault by conservatives (both D and R). And all that's before the insurance companies figure out new ways to game the system.
“5) The bill will not cover 30 million additional people, as the access bloggers and career liberals keep repeating. The subsidies are not indexed to rising insurance costs, and therefore insurance even with subsidies will become increasingly unaffordable. In my view, it's doubtful that more than 15 million will be covered. Since US population will be increasing over time, we can expect the total number of uninsured to grow over time, so even after 2014 and taking into account the 15 million additional people covered, we will still be looking at 35 million uncovered, and 35,000 fatalities per year due to lack of insurance.
“6) The mandate cannot be enforced. The IRS isn't really a very effective collector. It collects only a very small percentage of debts each year now. If there is widespread non-compliance with the mandates, the IRS won't be able to enforce them. In one way that's good. However, the IRS presence will be a constant irritant to people, and in addition, widespread non-compliance will increase the widespread disrespect and cynicism we already see with respect to our laws and their enforcement. Moreover, such enforcement as there will be cannot be done fairly or consistently.
“7) The bill does not decrease the share of GDP being spent on health care. It's now about 17.5%. If GDP averages 3% growth over the next four years, which may not be the case if we have a double-dip recession, we're looking at health care costs outrunning GDP growth by probably about 7% per year. By 2014, health care expenditures could be about 22-23% of our economy, while other nations are still at 12% or so. This will make the US even more uncompetitive in international markets than we already are.
“8) The bill facilitates the march of the American political system away from Democracy and toward Plutocracy. By failing to curb rising premium costs in the period up to 2014, the bill adds further to the income insurance companies can use to block further health care reform. So, it hurts the sustainability of health care reform and its ability to gain strength over time. This highlights another progressive core principle violated by the bill. Every bill must be evaluated in terms of its political effect on democracy, and whether or not it facilitates the evolution of American democracy toward Plutocracy. Bills, like this one, whose effects will be to weaken rather than strengthen the sustainability of democracy, ought to be opposed in principle by progressives.
“9) The political FAILout will kill real reform. In the short run, the bill makes it much more difficult to pursue real solutions to health care reform, because the elites and their enablers will whine about how hard they worked to pass this bill, and about how everyone should just wait until 2014 to see how things work out. In the longer run, the inflation in premium costs, the waiting period of four years while costs increase, and the actual experience of the system beginning in 2014, will all persuade people that it's useless to expect Government to help people with their problems. This bill is potentially a killer for progressive politics, if we let the Administration push us into the obvious wait-and-see posture that they expect from us.”
* * *
Then we looked at Judge Vinson’s actual ruling (available at find.uscourts.gov).
Most of Vinson’s lengthy judgment is a pseudo-academic lecture on the US Constitution and its history, discoursing at length on the history of the “commerce clause” and the “necessary and proper clause” intermingled with a very close legalistic reading of the “Patient Protection and Affordable Care Act.”
Vinson, a right-wing Reagan appointee who some describe as a “Tea Partier,” first concludes that the insurance mandate part of Obamacare is unconstitutional. Then, citing the fact that Obamacare has no “severability clause,” Vinson proceeds to toss the tiny baby out with the swimming pool full of bathwater.
Some conventional critics (even including Mr. Auerback) have said that the Obama administration blundered (“sloppy drafting,” said Auerback) by not including a “severability” clause in the Obamacare legislation.
Not so, says Judge Vinson. The omission was intentional.
“The defendants have asserted again and again that the individual mandate is absolutely ‘necessary’ and ‘essential’ for the Act to operate as it was intended by Congress,” said Vinson. “I accept that it is.” After some more detailed analysis, Vinson added, “In other words, the severability clause was intentionally left out of the Act.”
So Judge Vinson is agreeing with the health insurance companies that without the mandate, the health insurance business would be in trouble because they might have to provide slightly better insurance without getting millions of new customers. And we can’t have that.
Further on, Judge Vinson adds, “For the reasons stated, I must reluctantly conclude that Congress exceeded the bounds of its authority in passing the Act with the individual mandate. That is not to say, of course, that Congress is without power to address the problems and inequities in our health care system. The health care market is more than one sixth of the national economy, and without doubt Congress has the power to reform and regulate this market.”
By referring to the “health care market,” Judge Vinson is essentially ignoring single-payer style reformers and is trying to save the insurance companies from having to live with the minor reforms in Obamacare without getting billions in profits from millions of Americans who will be forced to buy (very bad) “health insurance.”
As Mr. Auerback concludes: “…a Medicare buy-in would bring the US health care system closer to the ‘ideal’ low-cost, universal (single-payer) insurance plan. Highly unlikely to occur, but if the Roberts court [i.e., the Supreme Court which most legal observers think will issue the final word on Obamacare] does force us back to square one, shouldn’t we try to get it right this time?”
Obamacare is a classic example of a bad law being worse than no law. And a judicial declaration saying that forcing people to buy bad-to-non-existent health insurance on penalty of fines is unconstitutional is good no matter what the politics of the judge are.