Can Obamacare Survive?

From the TYSK Insider Newsletter dated: 8 May 2010
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TEA Party protesters and the GOP are pushing the prospect of repealing all or most of Obamacare and well they should. New information – more correctly, newly revealed information – and new analysis of the provisions buried within the massive legislation should make fence-sitters and moderate Democrats agree as well that Obamacare is a monstrous disaster and needs to be relegated to ashbin of Congressional history.

This has been a very active two weeks – oil spill, flooding, stock market, Greece, etc. – and it is no surprise that the MSM and TV news ignored some of the most damning reports coming from the government’s own agencies. Naturally reluctant to report anything negative about The Øne and his healthcare scam, other news stories made a perfect cover.

This is why it is so important for those that are aware of the facts to make sure that others are made informed as well.

Three major developments occurred.

One — Richard Foster, chief actuary for the Centers for Medicare & Medicaid Services (CMS) a part of the Dept. of Health and Human Services (HHS) issued a report the title of which explains it all:

Estimated Financial Effects of the "Patient Protections and Affordable Care Act," as Amended.

The report is available here:

Two (with a kicker) — Remember that Henry Waxman, chairman of the powerful House Energy and Commerce Committee had scheduled hearings into just why major corporations had publically declared huge profit write downs? (AT&T declared a $1 Billion dollar write down alone.) Recall as well that just days before the scheduled hearing date it was abruptly cancelled? Why?

 Henry WaxmanNot only was the committee informed that the write downs were legitimate but, required under SEC regulations! In addition the report included even more damaging information. Henry Waxman, in his snit over the financial write downs, requested not just documents regarding the profit losses, he wanted every document the companies created that discussed what the bill would do to their most uncontrollable expense: healthcare costs!

Hubris has its own rewards. What was revealed by those documents was that these major companies were making plans to drop employee health care coverage and pay the Obamacare mandated fines instead. The math is simple, even a caveman can do it.

Not only is this in direct contradiction to what Barack Obama continually repeated, that if you like your current health care coverage you can keep it. It also completely shifts ALL of the calculations of what Obamacare will end up costing the taxpayers!

And the kicker… In his five page memo detailing the reason for cancelling the hearing, the fact that these large companies were planning to bailout of continuing health care coverage for their employees was withheld from the members! In fact, item III of his memo is titled, The Overall Impacts of the Health Reform Law on Large Employers Could Be Beneficial.

That is true. However, the lie of omission is that while it will benefit the companies themselves – they will see greater profits – employees will be forced into the government managed health care system AND the costs to the taxpayers will skyrocket!

The Waxman memo is available here:

ThreeForbes calls it a hidden time bomb… Section 2718 of the new legislation. (Geez, a bill with over 2,700 sections!)  

Section 2718, at a mere 802 words, goes into effect first thing next year and will have a huge impact on the private insurance market. It is the section that converts private insurers into regulated utilities by effectively placing a ceiling on their already-low profit margins. Depending on how the law is implemented by Kathleen Sebelius, the Health and Human Services secretary, it could end up driving many insurers out of business.


 Section 2718 requires that from Jan. 1, 2011, onward, MLRs [Medical Loss Ratios] in the small-group and individual markets must be above 80%, and above 85% in the large-group market. Many [insurance] companies will need to lay off employees or use other cost-cutting measures in order to meet these congressional targets. Some important services offered by insurance companies, such as 24-hour nurse hotlines and disease management programs for preventive care, are classified as administrative costs, and not medical expenses, solely because of the technicality that they are not payments to a third party. These programs, if they cannot be reclassified to count as part of the MLR, will get shut down--to no one's benefit.

Barack Obama's shell gameNow back to point one [Note, as with most things coming from the Obama administration, they throw so much ordure in the air it is difficult to focus on any one item at a time. Call it Barry’s Shell game... BS game for short.] The CMS report issued by Mr. Foster exposes:

 The analysis by the administration’s own actuary confirms why a majority of Americans opposed the legislation and why House Republicans want Foster to testify about his findings.

Foster’s analysis already has had an impact on decisions regarding one of the first programs launched under ObamaCare – the new temporary high-risk pools for the uninsured. Congress allocated $5 billion to fund the pools until 2014 when enrollees would be transferred into new health insurance exchanges.

 But Foster found that the $5 billion “would be expended during the first 1 to 3 calendar years of operation.” That means states could have to fill the funding void. Nineteen states told HHS Secretary Kathleen Sebelius, “No thanks” when she asked if they planned to run these new programs.

 Foster doesn’t stop there:

Foster warns that the cost of the health overhaul law may be much greater than advertised. It relies on more than $500 billion in Medicare cuts to help pay for the new entitlement spending. But these cuts “may not be fully achievable” because “Medicare productivity adjustments could become unsustainable even within the next ten years,” Foster wrote. Given Congress’s inability to address Medicare’s exploding costs thus far, Foster’s skepticism is justified.

The report also highlights the shaky financial footing of the new long-term care insurance program – the CLASS Act, which Sen. Kent Conrad (D-ND) has described as “a Ponzi scheme of the first order.” Foster agrees the program faces “a significant risk of failure,” resulting in “a very serious risk that the problem of adverse selection will make the CLASS program unsustainable.” At a time of ballooning deficits and record debt, he finds the program will result “in a net Federal cost in the long-term.”

Concerned you’ll be kicked off your health insurance plans due to ObamaCare? Foster’s report shows that millions of Americans will suffer just this fate. He estimates that 14 million people will lose their employer coverage by 2019 as smaller employers terminate their plans and as workers who currently have employer plans enroll in taxpayer-subsidized coverage.

Note Foster’s reference to smaller employers. He was not aware, nor was anyone that had not seen the documents requested by Waxman & Company, of the plans being laid by large employers! That was the issue mentioned in item two above. Here is a picture from an AT&T Power Point presentation explaining the math around dropping employee coverage and paying the Obamacare fine instead:

 AT&T Power Point Slide

All of the above points to the fact that once Obamacare was actually read and analyzed — and, they are still reading, folks — it will have effects even worse than the GOP and conservatives ever imagined.

  • Doctors are preparing to retire or refuse Medicare/Medicaid patients,
  • Service and care rationing is inevitable as there will be fewer providers and more patients,
  • Medicare Advantage will almost surely be eliminated,
  • Insurance company competition will decrease, not increase as promised,
  • Remaining insurance companies will be forced to raise rates, not lower them (remember, MLRs?),
  • Millions of people will lose their present health coverage and be forced onto the government’s plans,
  • Degradation in care and facilities will follow as cost-containment is implemented,
  • Taxpayers will see increases in their annual health care costs and,
  • the U.S. deficits will rise far more than projected, requiring ever greater revenue, i.e. taxes,
  • The Democrats and the MSM will continue to lie and obfuscate the facts until we are all screwed!

We're gonna be screwed

Bottom line, not a single member of Congress that voted for Obamacare should be allowed to remain in office. We warned everyone that failure to read, understand and fully discuss this massive overtaking of 1/6th of our economy and perhaps the most important issue affecting all of our personal lives would lead to dramatic and disastrous consequences.

Only by replacing enough of these congresscritters that a presidential veto can be overridden, can we repeal Obamacare and start anew with a sane and thoughtful plan for fixing the problems with health care costs without ruining the best health care system in the world.

Articles from which the above information was taken:

Link to the CMS report:
CMS/Foster analysis link:
Short summary of CMS findings:
Link to the Waxman memo:
Forbes Time Bomb link:
Companies to drop employee coverage links: and

Note: Some formatting from the original newsletter may be lost in this reprint.

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8 may 2010