Watching ObamaCare Unfold (Or Maybe Unravel)

Americans will remember the oft-repeated promise made by Obama in 2008, whereby health insurance premiums for American families would be cut by $2500 within his first term. Presumably, he based this contention on a memo written for his campaign in May 2007 by three well-regarded experts from Harvard: David Blumenthal, David Cutler, and Jeffrey Liebman.

As they stated:

Combining all of these effects—from improved health IT, better disease management, reduced insurance overhead, reinsurance, and reduced uncompensated care —under our “best-guess” assumptions, we estimate that businesses will save $140 billion annually in insurance premiums. The typical family will save $2500 per year.

In reality, you would be hard-pressed to find anyone whose premiums have decreased. Rather, according to the latest annual Kaiser Family Foundation employee health benefits survey, premiums for employer-provided family coverage rose $3065—a 24% increase from 2008 to 2012. Looking only at the period after ACA became law, premiums spiked 9.5% in 2011 and climbed another 4.5% in 2012.

Amazingly, the Harvard dons fell for the ridiculous notion that deploying more health IT would be some sort of transformative and revolutionary process; as if putting medical records on computer instead of in file folders would somehow save billions of dollars all by itself. Quoting again from the memo…

Greater use of information technology is one key to a more efficient health care system, along with incentives to use that technology wisely. The RAND Corporation conservatively estimated that significant investment in health IT could save $77 billion per year.

The Harvard dons relied heavily on an article published in the September/October 2005 issue of Health Affairs entitled “Promoting Health Information Technology: Is There A Case For More-Aggressive Government Action?” This article was one of seven described as “related documents” in the now infamous RAND report I discussed in a recent column. I say “infamous” since the report is now being disavowed by RAND itself and was paid for by companies that stood to—and did—make billions off the health IT push.

Notably, the same author names (including RAND stalwarts James Bigelow, Anthony Bower, and Roger Taylor) keep appearing in these documents, as these supposedly independent researchers cite themselves and each other. I don’t think that’s what we mean by “peer review.”

Our Harvard Veritas boys save the best for last, as they conclude their memo with this gem: “Thus, we believe that the Federal financing for the Obama health plan will be available using already-identified sources of revenue and without new taxes on the overwhelming majority of U.S. taxpayers.”

Unfortunately, Kathleen Sebelius and her HHS—the principal player in America’s ObamaCare funding consortium—have announced they will charge insurers a 3.5 % fee for using ObamaCare exchanges to sell their product—an estimated $100 billion to HHS over the next 10 years.  The fee is buried in 373 pages of new draft regulations written, of course, by the HHS.

What other surprises will be in store for insurers and their insureds now that the election is over? More importantly, how much will other HHS add-ons cost the REAL source of ObamaCare revenue–the American taxpayer?

Photo credit: criticalbias.org (Creative Commons)

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