The Future Of Health Care, Implications Of Health Care Legislation, ObamaCare, Congress and Health Care, Election 2012, President Obama
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Thursday March 18, 2010
The Weekend Edition
Today’s Zinger:
The Only Score That Matters Is The Final Score
The Morning Briefing:
Since the health care insurance reform bill is front and center this week I thought I would get my crystal ball out and look into the future of health care in the United States. I know this may be a little dry reading but I wanted to get these points out before the final bill is voted on.
Yes, I believe that Congress will pass the health care insurance reform legislation. I doubt that Congress will rely on parliamentary maneuvers to get it done. It will be a clean majority vote with the slimmest of margins to win. Enough deals, bribes and intimidation will take place in the backrooms of Congress to win approval for this legislation. I would hate to be one of the Congressional holdouts this week. Waterboarding would be more humane than what they will be going through.
So the bill will pass with much fanfare and rejoicing, but what will be the short and medium term implications. Forget the political wrangling of both parties such as the Republicans screaming irresponsible and a budget buster and the Democrats lauding the success for all Americans and the bill being revenue neutral. Those choruses of political bantering don’t require much of a crystal ball. But what about the care we will receive, the taxes, the cost of care and the future of the medical industry?
In the next 10 years, much of how America views the success of this bill will be based on who wins the 2012 elections. I believe Barack Obama will win reelection and his reelection will have significant implications on the future direction of health care beyond the current insurance reform bill.
In the Short Term:
Many Americans will be pleased because in the very near future there will be a law that insurance companies can no longer discriminate against those with previous conditions that in the past has caused them to lose or never be able to attain insurance coverage.
Medicare cuts are planned for later this year. I doubt they go through. Congress will vote to delay the cuts until after the November election cycle. Much of these cuts will have little impact on medical outcomes, but Americans base their quality of care on availability and treatment offered. These are the very things that will be impacted by the cuts. In the coming few years, seniors will notice the change and the Republicans will be sure to remind them. Keep in mind that Medicare will be insolvent by 2014. These reductions of costs of Medicare and moving these funds to the general health care fund will mean that the easy cost reduction work needed to make Medicare more solvent will be over and there will be no overall reduction in health care costs. Tougher work is ahead for Medicare in terms of more cuts or higher taxes.
New taxes on goods and services will be implemented to pay for health care. Just like FDR, the administration will rely on sin taxes and not the income tax to garner new revenue without calling attention to it. Taxes on the wealthy and those with employee based insurance plans that are deemed “Cadillac plans” will begin as outlined in the health care insurance reform bill. There will be no real benefits occurring for five years. (Remember the implementation begins in four years and takes two years to roll out). There will be sufficient tax revenues stored up to meet the early years requirements of the bill. Don’t forget that the 2010 Federal Budget included $500 billion as a down payment on health care reform. Combine this with 4 years of taxes at $100 billion a year and Medicare cuts of $100 billion by implementation and you have a trillion dollar nest egg to start the program. There will be a lot of debate as to whether the bill is really debt neutral.
There will be a near term increase in the cost of care and pharmaceuticals as providers and insurance companies try to position for future cost cuts (the old raise the price before the sale to make the buyer feel good about what they got. This happened the last time health care reform was proposed). Premiums will begin to go up for those that buy insurance independently. The inclusion of the many Americans that have preexisting conditions will push the total medical outlay higher and will result in higher premiums for this group.
If you are currently in a group plan through your employer or you are a government employee or you are a union employee you will most likely experience few changes in the short run.
The medical industry will begin to reposition itself. Those providers that relied on MRI’s, CT scanners, laboratories, pain centers, etc will begin to move/sell those assets to others as this will most likely be a key area of cost reduction in the future. Some providers will stop accepting Medicare patients due to the reimbursement rate. Some doctors will plan their retirement for 2015, but not to the high rate that many predict will leave. The medical colleges will see a large increase in applications for General Practitioners and there will be legislation to enable Licensed Practical Nurses to have a greater role in primary care due to the anticipated shortage in front line medical professionals. We will probably see one of the largest labor organizing movements in history as the health care workers are targeted by the unions.
America's ranking in health will improve. Currently we are ranked by the World Health Organization as 38th in health care. It is not because of quality of care, but rather because of access to care by our citizens. With more people covered under the program, our world ranking should improve dramatically.
Medium-Term:
Now remember, this is 2014-2016 (just as this program goes into full implementation).
Many companies will opt to pay the government penalty and not provide health care to its’ workers since the penalty is cheaper than premiums. The government will have a windfall of revenue but there will be more than an offset in higher costs to provide incentives to those that will be required to buy health care. Many young people will opt out of the system and if caught pay a tax penalty. There will be a constitutional challenge (which will start in 2011) to the bill based on forced participation.
The government response in 2014 depends on who wins the election in 2012. If the Republicans gain control of Congress and the Executive Branch, I do not believe there will be a major change in the bill with the exception of real tort reform, an easing of the participation requirements and greater competition. Once this bill is enacted, like all social programs, it is impossible to take anything away. Besides, there will be enough momentum towards 2014 that it would be a train wreck to radically alter the path.
If the Democrats are elected I believe there will be a change to the bill. This is based on rising premiums, rising health care costs and rising taxes. The Democrats will blame the insurance companies for these problems and push for a single payer system saying it is the only way to rein in the excesses of these insurance companies (even though it is not the insurance companies that will create the higher costs, it is the providers). If President Obama wins reelection he will say that he gave them a chance and they didn’t perform. Personally, I believe the way this bill is written will tee up this exact situation. For many Americans, this is the ultimate goal and this bill is a is a step towards achieving that goal.
The health information network, which Zinger strongly supports, will begin to roll out in a small way. Remember, when the government undertook the replacement of the air traffic control system it took 10 years to develop. I doubt the government will have the health information network fully operational for at least 10 years.
So, its 2015 and I predict that President Obama is reelected in 2012, this time in a squeaker of an election. By midterm in his second term the realities of this legislation will be felt. Remember, perception is reality. More people will be covered, cost of medical care will go up, but it will be paid by the pre-taxing of benefits since 2010 so there will be little current cost to the program. Many people will be satisfied with the outcome.
I know you will wonder why I think President Obama will be reelected since he has been one of the most polarizing Presidents in history and half the country dislikes his performance. I will save that for another article.
Long Term:
So, up to now, the government has sufficient money to pay the bills. There has been some gnashing of teeth over the changes that have occurred and the program is now fully operational. This is where things will get very interesting. The current health care bill basically punts the ball after 2018 relying on Congress at that time to enact legislation to further fund the program as all of the special deals end. Zinger will look at the long-term prospects in an upcoming article. This is as much health care as anyone can take in one sitting.
Today's ZingerToon:
Thursday March 18, 2010
The Weekend Edition
Today’s Zinger:
The Only Score That Matters Is The Final Score
The Morning Briefing:
Since the health care insurance reform bill is front and center this week I thought I would get my crystal ball out and look into the future of health care in the United States. I know this may be a little dry reading but I wanted to get these points out before the final bill is voted on.
Yes, I believe that Congress will pass the health care insurance reform legislation. I doubt that Congress will rely on parliamentary maneuvers to get it done. It will be a clean majority vote with the slimmest of margins to win. Enough deals, bribes and intimidation will take place in the backrooms of Congress to win approval for this legislation. I would hate to be one of the Congressional holdouts this week. Waterboarding would be more humane than what they will be going through.
So the bill will pass with much fanfare and rejoicing, but what will be the short and medium term implications. Forget the political wrangling of both parties such as the Republicans screaming irresponsible and a budget buster and the Democrats lauding the success for all Americans and the bill being revenue neutral. Those choruses of political bantering don’t require much of a crystal ball. But what about the care we will receive, the taxes, the cost of care and the future of the medical industry?
In the next 10 years, much of how America views the success of this bill will be based on who wins the 2012 elections. I believe Barack Obama will win reelection and his reelection will have significant implications on the future direction of health care beyond the current insurance reform bill.
In the Short Term:
Many Americans will be pleased because in the very near future there will be a law that insurance companies can no longer discriminate against those with previous conditions that in the past has caused them to lose or never be able to attain insurance coverage.
Medicare cuts are planned for later this year. I doubt they go through. Congress will vote to delay the cuts until after the November election cycle. Much of these cuts will have little impact on medical outcomes, but Americans base their quality of care on availability and treatment offered. These are the very things that will be impacted by the cuts. In the coming few years, seniors will notice the change and the Republicans will be sure to remind them. Keep in mind that Medicare will be insolvent by 2014. These reductions of costs of Medicare and moving these funds to the general health care fund will mean that the easy cost reduction work needed to make Medicare more solvent will be over and there will be no overall reduction in health care costs. Tougher work is ahead for Medicare in terms of more cuts or higher taxes.
New taxes on goods and services will be implemented to pay for health care. Just like FDR, the administration will rely on sin taxes and not the income tax to garner new revenue without calling attention to it. Taxes on the wealthy and those with employee based insurance plans that are deemed “Cadillac plans” will begin as outlined in the health care insurance reform bill. There will be no real benefits occurring for five years. (Remember the implementation begins in four years and takes two years to roll out). There will be sufficient tax revenues stored up to meet the early years requirements of the bill. Don’t forget that the 2010 Federal Budget included $500 billion as a down payment on health care reform. Combine this with 4 years of taxes at $100 billion a year and Medicare cuts of $100 billion by implementation and you have a trillion dollar nest egg to start the program. There will be a lot of debate as to whether the bill is really debt neutral.
There will be a near term increase in the cost of care and pharmaceuticals as providers and insurance companies try to position for future cost cuts (the old raise the price before the sale to make the buyer feel good about what they got. This happened the last time health care reform was proposed). Premiums will begin to go up for those that buy insurance independently. The inclusion of the many Americans that have preexisting conditions will push the total medical outlay higher and will result in higher premiums for this group.
If you are currently in a group plan through your employer or you are a government employee or you are a union employee you will most likely experience few changes in the short run.
The medical industry will begin to reposition itself. Those providers that relied on MRI’s, CT scanners, laboratories, pain centers, etc will begin to move/sell those assets to others as this will most likely be a key area of cost reduction in the future. Some providers will stop accepting Medicare patients due to the reimbursement rate. Some doctors will plan their retirement for 2015, but not to the high rate that many predict will leave. The medical colleges will see a large increase in applications for General Practitioners and there will be legislation to enable Licensed Practical Nurses to have a greater role in primary care due to the anticipated shortage in front line medical professionals. We will probably see one of the largest labor organizing movements in history as the health care workers are targeted by the unions.
America's ranking in health will improve. Currently we are ranked by the World Health Organization as 38th in health care. It is not because of quality of care, but rather because of access to care by our citizens. With more people covered under the program, our world ranking should improve dramatically.
Medium-Term:
Now remember, this is 2014-2016 (just as this program goes into full implementation).
Many companies will opt to pay the government penalty and not provide health care to its’ workers since the penalty is cheaper than premiums. The government will have a windfall of revenue but there will be more than an offset in higher costs to provide incentives to those that will be required to buy health care. Many young people will opt out of the system and if caught pay a tax penalty. There will be a constitutional challenge (which will start in 2011) to the bill based on forced participation.
The government response in 2014 depends on who wins the election in 2012. If the Republicans gain control of Congress and the Executive Branch, I do not believe there will be a major change in the bill with the exception of real tort reform, an easing of the participation requirements and greater competition. Once this bill is enacted, like all social programs, it is impossible to take anything away. Besides, there will be enough momentum towards 2014 that it would be a train wreck to radically alter the path.
If the Democrats are elected I believe there will be a change to the bill. This is based on rising premiums, rising health care costs and rising taxes. The Democrats will blame the insurance companies for these problems and push for a single payer system saying it is the only way to rein in the excesses of these insurance companies (even though it is not the insurance companies that will create the higher costs, it is the providers). If President Obama wins reelection he will say that he gave them a chance and they didn’t perform. Personally, I believe the way this bill is written will tee up this exact situation. For many Americans, this is the ultimate goal and this bill is a is a step towards achieving that goal.
The health information network, which Zinger strongly supports, will begin to roll out in a small way. Remember, when the government undertook the replacement of the air traffic control system it took 10 years to develop. I doubt the government will have the health information network fully operational for at least 10 years.
So, its 2015 and I predict that President Obama is reelected in 2012, this time in a squeaker of an election. By midterm in his second term the realities of this legislation will be felt. Remember, perception is reality. More people will be covered, cost of medical care will go up, but it will be paid by the pre-taxing of benefits since 2010 so there will be little current cost to the program. Many people will be satisfied with the outcome.
I know you will wonder why I think President Obama will be reelected since he has been one of the most polarizing Presidents in history and half the country dislikes his performance. I will save that for another article.
Long Term:
So, up to now, the government has sufficient money to pay the bills. There has been some gnashing of teeth over the changes that have occurred and the program is now fully operational. This is where things will get very interesting. The current health care bill basically punts the ball after 2018 relying on Congress at that time to enact legislation to further fund the program as all of the special deals end. Zinger will look at the long-term prospects in an upcoming article. This is as much health care as anyone can take in one sitting.
Today's ZingerToon:
Posted by ZK at 3/18/2010 8:50 AM 
Categories: Finance, Federal Budget, Legislation, Congress, Social Issues, Health Care, Taxes, Supreme Court, Obama Administration
Categories: Finance, Federal Budget, Legislation, Congress, Social Issues, Health Care, Taxes, Supreme Court, Obama Administration
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