Obamacare 2012/ Year in Review

At year’s end, the media revisit the preceding twelve months ; the deaths, the dramas and the politics.

Notably absent from most reviews of 2012 was any mention of Obamacare. The media didn’t discuss it and more curiously, neither did the Democrats. But Obamacare was newsworthy in 2012 and I want to give it the attention it deserves.

The president campaigned for Obamacare while claiming (repeatedly) it would cut family health insurance premiums up to $2500 by the end of his first term.  Kaiser released a study in September that measured our progress toward that goal. It indicated that annual premiums increased, on average, $3065 between Obama’s election in November 2008 and summer 2012. Every state expects to see rate increases of similar scale in 2013 and 2014. Some states, like California project far higher increases. Nowhere will premiums fall.

Proponents of Obamacare usually treat challenges to their economic projections as akin to treason. But the numbers came into question on other occasions in 2012. No item on the Obamacare agenda was questioned more persistently than the financial viability of the Class Act. The Class Act was designed to provide $50-100 per diem payments to disabled and elderly subscribers.The payments would purchase home-based personal care services.

The president’s own debt commission recommended that it be repealed. On October 7, 2011, Secretary of HHS, Kathleen Sebelius acknowledged that design flaws made the program unsustainable,  ultimately  leading to repeal in February 2012. Sally Pipes wrote about this program extensively and predicted this outcome.

As the year ended, eighteen Democratic senators appealed to Senator Reid for a rescission or postponement of the of the 2.3 percent medical device tax. It is important to note that this is a tax applied to gross revenue, not net profit. It resembles a sales tax. It gets collected without regard to profit. Opponents of Obamacare in 2009 noted that the tax would harm competitiveness and impede research and development, the very position Democrats now take. Yet it is only now, after passage and before implementation, that Democrats have developed reservations.

No one believed that Obamacare was going to result in lower premiums or that the Class program was financially sustainable. No one truly believed that the medical device tax would be a windfall for manufacturers. The tortured logic that supports this conclusion is we have created 30 million new customers through Obamacare and the resulting revenue increases will make the tax easy to absorb.

Politicians profess to believe things they know to be untrue to pass legislation. Later they back away without an ounce of shame. The fight over Obamacare only ends if the Republicans phone it  in.