Court hears ObamaCare appeal, study says costs will rise
Three judges on the 11th U.S. Circuit Court of Appeals will hear arguments in downtown Atlanta this morning in the most promising legal challenge to ObamaCare. This is the lawsuit filed by 26 states, including Georgia, which led a U.S. district judge in Florida to declare the federal health-reform law unconstitutional. Whatever happens in this appeal, this case is most likely headed to the U.S. Supreme Court.
(NB: I’ll be at the hearing but, because the court doesn’t allow members of the public to bring smartphones or computers inside the building, I’m not sure how soon I’ll be able to post an update.)
With good timing, the management consultants at McKinsey & Company have just released a study about the likely effects of ObamaCare based on a survey of 1,300 employers. Grace-Marie Turner, head of the free-market Galen Institute, explains in a Wall Street Journal op-ed that McKinsey believes the law is going to lead to a lot more employers dropping health insurance — and passing costs on to taxpayers — than Democrats let on when passing the law.
The survey…found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014. An estimated 156 million non-elderly Americans get their coverage at work, according to the Employee Benefit Research Institute. Before the health law passed, the Congressional Budget Office estimated that only nine million to 10 million people, or about 7% of employees who currently get health insurance at work, would switch to government-subsidized insurance.
The optimistic way to read this survey result is that the one-half of employers that say they’ll drop coverage represent smaller firms rather than bigger ones — meaning fewer than one-half of workers (and their families) would be affected. Alas, Turner writes,
Another McKinsey analyst, Alissa Meade, told a meeting of health-insurance executives last November that “something in the range of 80 million to 100 million individuals are going to change coverage categories in the two years” after the insurance mandates take effect in 2014.
Which suggests the optimistic view is unwarranted.
Turner also notes that former CBO director Douglas Holtz-Eakin last year estimated that 35 million more workers than the government forecasts will be shifted onto the ObamaCare rolls — at a cost of some $1 trillion, more than wiping out the alleged deficit reduction Democrats claimed ObamaCare would yield.
Now, imagine if the additional number is closer to 70 million or 100 million Americans: $1 trillion more could become $2 trillion or $3 trillion more.
The McKinsey study (registration required) included an explanation of why its survey showed a higher shift than other ones, including this:
Interest in these alternatives rises with increasing awareness of reform, and our survey educated respondents about its implications for their companies and employees before they were asked about post-2014 strategies. The propensity of employers to make big changes to [employer-sponsored insurance] increases with awareness largely because shifting away will be economically rational not only for many of them but also for their lower-income employees, given the law’s incentives. (emphasis added)
In other words, it seems likely that ObamaCare is not moving us toward a more equal health-insurance scenario, but toward one in which the government pays for more and more middle-income families — who will bear the brunt of efforts to keep the government’s costs down, if there are any such efforts — while companies continue to take care of higher-income folks.
Just like the president and other Democrats sold it, right?
– By Kyle Wingfield
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Visitor Agreement | Privacy Statement
© 2013 The Atlanta Journal-Constitution
118 comments Add your comment
wampum
June 8th, 2011
9:42 am
The last time the WHO ranked countries’ healthcare, in 2000, France was indeed ranked number 1.
wampum
June 8th, 2011
9:45 am
Why does lil barry make such nasty comments about people on this site whom he doesn’t agree with?
Milan Kundera
June 8th, 2011
9:46 am
If all corporations are “evil” and “immoral,” it is no wonder unemployment is so high. All of the unemployed that are spoonfed the progressive viewpoint are waiting for a government job that is absolutely pure and morally unambiguous.
Moderate Line
June 8th, 2011
9:50 am
found that up to 50% of employers say they will definitely or probably pursue alternatives to their current health-insurance plan in the years after the Patient Protection and Affordable Care Act takes effect in 2014.
+++++++++++++
Kyle could I not use the same argument against the Ryan plan. The voucher system will definitely not have the same coverage as Medicare.
Junior Samples
June 8th, 2011
9:52 am
So an employer already providing coverage for their employees are going to drop this benefit if the employees must have health insurance? Regardless of where it comes from? And lose their tax incentives for providing said benefit?
I must be missing something.
An employer is already providing healthcare as a benefit to their employees.
The new law requires the employee to have healthcare, regardless of where it comes from.
Now the employer strips this benefit.
Please explain.
Milan Kundera
June 8th, 2011
9:52 am
WHO? The same organization that claims cell phones are a possible cause of cancer when the incidence of brain cancer has not tracked the increase of cell phone use? WHO, indeed.
Lil' Barry Bailout
June 8th, 2011
10:01 am
In WHO’s ranking of healthcare systems, quality of care was a secondary consideration after how parasite-friendly the system is.
Douglas
June 8th, 2011
10:10 am
OK Junior, I’ll take a stab at it. From a purely economic sense it would be more profitable to the company to drop their health insurance coverage. They would be charged $2,000 penalty per employee for not providing coverage. Whereas most employee plans cost much more than that per insured.
Also, on a related note. I currently pay $200 per month for a high deductible health insurance plan. I am covered for a catastrophe but otherwise pay out of pocket. I understand that the president said if I like my plan, I will get to keep it. However, under the president’s plan only full coverage plans will be offered at a much higher cost than $200 per month. (I am 52 years old.) Where is that extra money I will have to pay going? I bet it’s to cover the uninsured, and will I be getting to keep my current plan as the president promised?
Glenn
June 8th, 2011
10:17 am
@ Lil Barry
My wife is Norwegian . Norway is quite prosperous . I haven’t met anyone in Oslo that would take our system over theirs . They have cheap insurance . They were just ranked first in healthcare just not by WHO . When we go there the number of people who are afraid to come here because of the health costs should something happen is pretty bothersome . They all travel alot . They get 6 weeks of vacation a year . Thats neither here nor there . Just a different living. Their winters are just brutal and long .
wampum
June 8th, 2011
10:21 am
Why does wanting access to affordable healthcare make people “parasites”? Why shouldn’t access to healthcare be a factor in rating countries?
Kyle's really a nitwit
June 8th, 2011
10:21 am
Kyle – you are either infinitely more bereft of a working brain than I thought, or you never bothered to actually read the McKinsey article. Much easier to just parrot Republicrazy propaganda, huh?
Don't Tread
June 8th, 2011
10:23 am
This administration has done nothing but lie to us. The Democrats need to be impeached for violating their oath of office. They really could care less about the Constitution.
Hopefully the SC shoots this thing down in flames when it eventually gets there.
Bart Abel
June 8th, 2011
10:25 am
RE: “…at a cost of some $1 trillion, more than wiping out the alleged deficit reduction Democrats claimed ObamaCare would yield.”
Correction. The Democrats so not “claim” that the health care law would save $1 trillion dollars. The Congressional Budget Office (CBO) made this determination and they did so, in part, by analyzing how employers would react to the law.
Personally, I trust the non-partisan CBO more than I trust the free-market Galen Institute/WSJ interpretation of of McKinsey study that the rest of us can’t read.
Lil' Barry Bailout
June 8th, 2011
10:29 am
Glenn, I think it’s important to recognize when comparing health outcomes with Norway that those folks are much more physically fit and active than your average American-Idol-watching Obama voter.
Lil' Barry Bailout
June 8th, 2011
10:31 am
We DO have universal access to healthcare. What the Obozo receptacles want is access to other peoples wallets. Parasites.
marty
June 8th, 2011
10:38 am
Kyle
The answers to affordable health care are all around us.
Canada, France, Austria, Australia, Japan, Spain, New Zealand, U.K., South Korea, and Finland, to name but a few have 3 things in common:
1) They all have some form of single payer health service.
2) They spend between 35% and 55% less than the US
3) They all have longer live expectancy
Write a column explaining this away. It should be fascinating
Del
June 8th, 2011
10:46 am
Oh the unintended consequences. Wait maybe it was an intended consequence and those who predicted that ObamaCare was a stealth strategy for a single payer plan were correct.
Halftrack
June 8th, 2011
10:47 am
Why are you journalist now just waking up. Obummercare is a real bummer for the private sector and small businesses. The Country is in a steep nose dive and will get worse as time goes toward full implementation. Our best hope is the Courts ruling it unconstitutional.
Douglas
June 8th, 2011
10:50 am
Many factors go into life expectancy ….. not just quality of health care. Things like infant mortality, life style choices, traffic deaths, crime deaths, etc that vary from country to country.
The other countries may spend less, but you get what you pay for: rationing, lower quality end of life treatment, and longer waits for treatment.
If our system is so bad, why do many from other countries desire to come here for treatment?
Obozonomics
June 8th, 2011
11:00 am
DeborahinAthens, if YOU know anything about health insurance you would know that it is a problem that the government created so they could ”solve” the “problem”. There is ONE thing that would lower costs across the board, open up states to ALL healthcare plans. Competition will lower costs. Right now each state has maybe 3 or 4 providers for that state that is not fostering competition at all. Look at what our congress, senate and house get to choose from over 300 different plans, that is because Washington DC is a exempt from state laws keeping out other insurers. You should be able to take your healthcare across all states borders and when you change jobs… But our wonderful government has made interstate commerce rules that prevent that. Change one law and the cost will go down….
Pedro
June 8th, 2011
11:05 am
The DCCC is attempting to convince their loyal base that the evil Republicans, led by Paul Ryan, are attempting to end Medicare. They have sent out emails directing their followers to their brand new Medicare Action Center web site complete with talking points, key facts, letter templates, canvassing kits, and a schedule of upcoming Republican townhall meetings and encouragement to “Tell Republican Members of Congress to keep their hands off the Medicare benefits”.
We have already discussed the Democrats lie that despite enrolling 10,000 new baby boomers into the program the Democrats claim they can magically maintain the Medicare program as is with no reform. Now the main stream media may finally may be starting to report the truth. The St. Petersburg Times Politifact has given the DCCC a FALSE rating on their claim that Republicans and specifically Representative Robert Hurt R-VA5 voted to end Medicare and raise health care costs by voting for the House Republican budget and a Pants on Fire rating for its claim that “Seniors will have to find $12,500 for health care because Republicans voted to end Medicare.”
Politifact stated that the DCCC knows their claims are false but their incredible desire to scare seniors outweighs the need to be truthful and the DCCC is extremely misleading.
marty
June 8th, 2011
11:13 am
As to Douglas’s comment, “why do so many desire to come here for treatment”
Check out point 2 of this economic blog. Actually the whole article including comments is informative
http://theincidentaleconomist.com/wordpress/in-defense-of-canada/
UGA1999
June 8th, 2011
11:19 am
Isnt this EXACTLY what the Repubs said would happen if the Obamacare bill passed?
UGA1999
June 8th, 2011
11:22 am
Why is it so hard for the Dems to listen?
Drifter
June 8th, 2011
11:45 am
Most Republicans and some Democrats don’t want the cost of healthcare to go down. They pretend to be on the side of the consumer, but they’re really owned by the AMA, the drug companies and/or the health insurance companies. From most of what I read, France has the best health care in the world. We pay 50% more for healthcare (as a percentage of GDP) than they do, we don’t cover everyone and we get poor results. At some point, you have to pull your head out of the sand and say maybe we could learn something from people who are doing it better.
wampum
June 8th, 2011
11:49 am
UGHA1999: “Why is it so hard for the Dems to listen?”
To whom, the Rebublicans? Who have been right about sooo many things this decade?
marty
June 8th, 2011
11:56 am
Why is it so hard for Dems to listen to Rush and Sean? It so much easier than researching the problem.
Dearie
June 8th, 2011
11:57 am
I like Brian’s 9:32 a.m. suggestion of individual cradle to grave insurance, and Obozonomics 11:00 a.m.suggestion to open up states to ALL healthcare plans. Competition will lower costs.
I am still waiting for a defense of President Obama statement “You can keep your existing insurance” – When we have now found out it is not true. Is this a “mis-speak” or a lie?
Kyle wrote an excellent piece on 6-14-2010 titled “Surprise! “You can keep your coverage is not so truthy”. How did Kyle know a year ago???? I guess he read the Library of Congress transcript of the bill instead of just listening to President Obama’s explanation….
fair and imbalanced
June 8th, 2011
11:59 am
Kyle is anti Obama?
wampum
June 8th, 2011
12:02 pm
In other news, the rhetoric is heating up between the Bachmann and Palin camps. Can you say catfight? Pass the popcorn! Could I have mud with that?
THE "REAL" TRUTH
June 8th, 2011
12:07 pm
I see someone has decided to use my blog ID @ Truth 8:54 AM, NOT a fan of the CAIN, ask him about his dealing with an energy company where he was in charge of employee investing, can you say ENRON??
Kyle, if 50% of employers drop coverage altogther to their employees, and “pass” that coverage on to its employees..” what then are the employees paying for? In that statement, it means that the employer will KEEP the money they had earmarked for the employees coverage, right? They would pay into the State required Worker’s Compensation program, but of course WC claims would decline because NO employee could afford insurance on their own. (Given the lack of raises employees should be getting). Further, even if a 1 or 2% bump in pay were to occur, premiums are astronomical. So, “Obamacare,” as you and the rest of the Righties like to term it, would make more Americans “buy” insurance thus transferring the risk and lowering costs. (That’s how insurance works [and yes, I am a licensed agent]). However, because the insurance carriers set the criteria, they wil carry most until a serious situation occurs then deny coverage and drop the insured. (How else do they make billions?).
So, short of a nationalized, single payer, program, middle America (those of us who work and pay their bills) and the poor 9those of us who work and used to be able to pay their bills) will just have to suffer. (Please note there was no mention of illegal persons, this crap affects AMERICANS first) The other option is too come up with an alternative that continues to allow insurance companies to limit the care and maximize the premiums paid to them. WTH??
You RepubliKKKans will kill us and destroy the country in the process. Seriously.
Independent
June 8th, 2011
12:09 pm
Stranger – “Greta and Debra – I’m already forced to pay for food stamps for +/- 47 mil, so might as well force me to pay for their health care too.”
Uh – you already do, as well as illegal aliens and irresponsible young healthy people who suddenly get sick – all through hospitals passing their costs on to YOU.
ed
June 8th, 2011
12:09 pm
To be consistent we need to implement single-payer for all or eliminate medicare/medicaid and throw seniors/poor/disabled to the wolves at bluecross, aetna, kaiser, et al…..
Susan
June 8th, 2011
12:12 pm
Lil’ Barry Bailout, I didn’t care for Pres. Bush, but I would never denigrate him in a public forum the way you denigrate Pres. Obama. My mother taught me to respect people even when I disagreed with them because I could learn from differing opinions. I really can’t learn anything from you because you are so disrespectful in your name-calling and hateful attitude.
I will say this: until you have lived in another country and experienced its healthcare system, I really don’t think you can make judgments about its system being worse or more expensive than ours. When I went to Spain with a group of students a few years ago, one young woman got sick. We took her to a Madrid hospital emergency room around 11:00 at night where she was treated and released with no payment required. Furthermore, her prescription for an antibiotic was much cheaper than it would have been here in the states. I was very impressed with the care she received, but I know that one experience doesn’t explain everything about European healthcare.
I believe that under our current system, we pay for the healthcare of the “parasites” through our medical bills every time we visit a doctor or a hospital or pay a premium or pay our federal and state taxes. Why, then, not let the “parasites” help pay for their own policies?
I believe that large corporations and businesses control our government to the extent that Congress is nothing more than their valet service. If they (corporations, etc.) do not get their way, they simply say they will send their jobs overseas or they will raise their prices or they will refuse services or they will otherwise make the public pay a price. Whatever they do, they will protect their huge profit margins and low tax status. I would very much like for Congress to stand up to them and say for once, “No, you will not determine our laws and you will not take your business out of the country without paying a HUGE financial price, such as a HUGE tax rate. ” Corporate executives are so accustomed to a lavish lifestyle that I just bet they will figure out a way to maintain that lifestyle and cooperate with government. And if they can’t do it, then they will have to find another country to tolerate them.
I guess I’m a dreamer, though. The very thought that business (the health insurance business for sure) would work WITH government instead of against it is just too novel, oops, sorry, according to some, just too “socialistic, fascist or Marxist” to ever work.
Junior Samples
June 8th, 2011
12:12 pm
Douglas,
That doesn’t make sense. The employer is providing healthcare as a benefit. It wasn’t required. Benefits are in place to keep employees, not lose them. Employee turnover is far more expensive than keeping them with incentives.
Independent
June 8th, 2011
12:14 pm
Douglas – ” From a purely economic sense it would be more profitable to the company to drop their health insurance coverage. They would be charged $2,000 penalty per employee for not providing coverage. Whereas most employee plans cost much more than that per insured.”
For the last 50 years, employers have chosen to give insurance to their workers? Why? From a purely economic standpoint, it would have made a lot more sense NOT to provide insurance and tell the employee to buy it on the open market. Companies provide insurance as a perq in order to attract the best talent. Hardly any of the best employees would work for one company when a competing company would also give them health benefits. So it would not make any sense for employers to suddenly drop their employees’ coverage. They might go up somewhat on premiums to cover the increases in required benefits (what’s new, premiums have been increasing forever).
Independent
June 8th, 2011
12:19 pm
LBB – “Like every other government-run system, it is slow and low quality.” Sounds just like my local hospital. Last time I was there my wife finally walked me out and took me to another hospital because after 4 hours they had not seen me yet. And people die there from appendix mistakes.
ed
June 8th, 2011
12:22 pm
Conservatives sold us fear in the shape of a mushroom cloud (Condi) to start a WAR of choice/aggression to feed the war machine. Now their selling fear to line the pockets of corporate America. Break the chains of conservative lunacy, it’s time for a 2nd American revolution. Viva la revolucion…
Douglas
June 8th, 2011
12:24 pm
Why, then, not let the “parasites” help pay for their own policies?
The “parasites” even under the president’s plan won’t pay, or will pay very little. They will be subsidized by charging people like me much more than I pay now for insurance.
Also, they will continue flocking to the emergency room as they do now. Being covered by insurance won’t make a difference. It’s the convenient thing to do.
Junior Samples
June 8th, 2011
12:37 pm
Douglas,
Additionally, if an employer drops health care from their benefits package, they’ll need to increase salary to keep the same employees. Therefore pay more in payroll taxes, instead of keeping the existing tax breaks. It doesn’t add up.
Lil' Barry Bailout
June 8th, 2011
12:45 pm
Susan: I really can’t learn anything from you because you are so disrespectful in your name-calling and hateful attitude.
——–
You need to learn to be more tolerant.
Lil' Barry Bailout
June 8th, 2011
12:47 pm
Keep your laws off my healthcare, fascist Obozo receptacles.
wampum
June 8th, 2011
1:20 pm
LBB: Strong and bitter words indicate a weak cause.
gm
June 8th, 2011
1:29 pm
I know idiots like you love it when the ins companies stick to you: cost have been rising the last 15 years, at least we have a President trying to do something for the 30 million with no coverage at no fault of their own.
When selfish, un Americicans like yourself and your family members lying on your back and have no where to turn, your satan party of Rep will change your mind then.
Douglas
June 8th, 2011
1:31 pm
Junior,
The tax breaks are not near enough to offset the difference in the $2000 penalty for not insuring a worker and the cost of insuring the worker.
People won’t leave their jobs because jobs are scarce, and if enough employers drop coverage, there won’t be anywhere else to go even when/if the job market improves.
gm
June 8th, 2011
1:37 pm
Lil’ Barry Bailout
idiots like you love it when the ins companies stick to you: cost have been rising the last 15
years, at least we have a President trying to do something for the 30 million with no coverage at no fault of their own.
When selfish, un Americicans like yourself and your family members lying on your back and have no where to turn, your satan party of Rep will change your mind then.
THE "REAL" TRUTH
June 8th, 2011
1:39 pm
@Obozonomics 11:00 AM –
And IF YOU KNEW ANYTHING about insurance, you’d realize that each state operates independently. There is no Federal oversight of state run insurance programs. So the “myth” about “opening it up to purchase insurance across state lines…” fails because it cannot be regulated and their are no mandates in place to govern it. TEACHING POINT: If you live in Georgia and say you found a program in Wyoming you actually could find higher premiums due to the lack of population there. Insurance is based on numbers. The more that buy in, the lesser the premium due to th transfer of risk. Based on that, larger metro areas “should” offer the more attractive rates, uhhh, no, because now you have a larger opportunity of insureds to experience more costly treatment. That’s a nuts and bolts explanation, but that is how it essentially works.
So selling across state lines, even if you could, WOULD NOT WORK!!
Lil' Barry Bailout
June 8th, 2011
1:40 pm
If you don’t have health insurance, it most definitely IS your own fault.
Lil' Barry Bailout
June 8th, 2011
1:42 pm
After health insurance, what other products will the parasite class be demanding that the productive purchase for them?
Lil' Barry Bailout
June 8th, 2011
1:45 pm
gm, costs are going UP under your Idiot Messiah, there’s been no slowdown.
Idiot Messiah: Fail.