Freedoms lost by the healthcare bill and their impact

Today, Investor’s Business Daily issued a report noting the 20 freedoms we as Americans will lose as a result of the healthcare reform. I want to name a few of these and discuss the impact of them on the healthcare business and American businesses.

For employees and the general populace:

1. You are an employer and you would like to offer coverage that doesn’t allow your employers’ slacker children to stay on the policy until age 26? Tough. (Section 2714).
2. You are an employer in the small-group insurance market and you’d like to offer policies with deductibles higher than $2,000 for individuals and $4,000 for families? Tough. (Section 1302 (c) (2) (A).
3. If you are a large employer (defined as at least 101 employees) and you do not want to provide health insurance to your employee, then you will pay a $750 fine per employee (It could be $2,000 to $3,000 under the reconciliation changes). (Section 1513).
4. You are an employer who offers health flexible spending arrangements and your employees want to deduct more than $2,500 from their salaries for it? (Section 9005 (i)).

This will push more people into the health care exchanges. If a business is only fined $750 per employee per year, that is roughly equivalent to one month’s insurance premium for a family. It will be much cheaper for the employer to pay the fine than to pay for the insurance. As a result, the government will have more control over the quality of care most people will receive. As a small business owner, I would much rather pay the fine than pay the premiums. I would start a company in a country that has a low corporate tax and have that company charge me for services equal to the the difference between the fin and the premiums I would pay. This provides me the resources to use physicians who would only take cash payment or to go to a different country for medical care. I would not, as a business owner use that money to give employees a raise.

If an employer does decide to keep paying premiums for their employees, the employer will have to cut jobs to stay in business. People will lose their jobs and more will be beholden to the government for their daily existence.

For Pharmaceuticals and Medical Equipment manufacturers:

1. The government will extract a fee of $2.3 billion annually from the pharmaceutical industry. If you are a pharmaceutical company what you will pay depends on the ratio of the number of brand-name drugs you sell to the total number of brand-name drugs sold in the U.S. So, if you sell 10% of the brand-name drugs in the U.S., what you pay will be 10% multiplied by $2.3 billion, or $230,000,000. (Under reconciliation, it starts at $2.55 billion, jumps to $3 billion in 2012, then to $3.5 billion in 2017 and $4.2 billion in 2018, before settling at $2.8 billion in 2019 (Section 1404)). (Section 9008 (b)).
2. The government will extract a fee of $2 billion annually from medical device makers. If you are a medical device maker what you will pay depends on your share of medical device sales in the U.S. So, if you sell 10% of the medical devices in the U.S., what you pay will be 10% multiplied by $2 billion, or $200,000,000. (Section 9009 (b)). The reconciliation package turns that into a 2.9% excise tax for medical device makers. (Section 1405).

This plan will reduce research and development from drug companies, meaning that the drug that might cure cancer or HIV may not be developed because of the hundreds of millions of dollars a company might have to pay the government. It will also reduce research and development from medical equipment manufacturers. So that brace that could help you be productive after the accident may not be developed because the manufacturer is not able to do more R&D because of all the money they have to pay the government. Our quality of life will be diminished and people will die as a result.

For insurance companies:

1. The government will extract a fee of $6.7 billion annually from insurance companies. If you are an insurer, what you will pay depends on your share of net premiums plus 200% of your administrative costs. So, if your net premiums and administrative costs are equal to 10% of the total, you will pay 10% of $6.7 billion, or $670,000,000. In the reconciliation bill, the fee will start at $8 billion in 2014, $11.3 billion in 2015, $1.9 billion in 2017, and $14.3 billion in 2018 (Section 1406). (Section 9010 (b) (1) (A and B).)
2. You are a health insurer and you want to raise premiums to meet costs? Well, if that increase is deemed “unreasonable” by the Secretary of Health and Human Services it will be subject to review and can be denied. (Section 1003)
3. If an insurance company board or its stockholders think the CEO is worth more than $500,000 in deferred compensation? Tough.(Section 9014).

Insurance companies will go out of business. Insurance companies will not be able to stay in business due to the regulations and the monies that will have to be paid to the government. As a result, people will lose their jobs. Of this happens, it will force everyone onto government insurance, effectively creating single payer health care.

For Physicians:

1. If you are a physician and you don’t want the government looking over your shoulder? Tough. The Secretary of Health and Human Services is authorized to use your claims data to issue you reports that measure the resources you use, provide information on the quality of care you provide, and compare the resources you use to those used by other physicians. Of course, this will all be just for informational purposes. It’s not like the government will ever use it to intervene in your practice and patients’ care. Of course not. (Section 3003 (i))
2. If you are a physician and you want to own your own hospital, you must be an owner and have a “Medicare provider agreement” by Feb. 1, 2010. (Dec. 31, 2010 in the reconciliation changes.) If you didn’t have those by then, you are out of luck. (Section 6001 (i) (1) (A))
3. If you are a physician owner and you want to expand your hospital? Well, you can’t (Section 6001 (i) (1) (B). Unless, it is located in a county where, over the last five years, population growth has been 150% of what it has been in the state (Section 6601 (i) (3) ( E)). And then you cannot increase your capacity by more than 200% (Section 6001 (i) (3) (C)).

The net effect of this is bureaucratic nightmare that will drive physicians away. Since there is already a shortage of doctors, reducing the number of doctors will create a scenario where people cannot get health care.

According to the New England Journal of Medicine, anywhere from a third to a half of all practicing doctors say they would leave their profession if the President’s health care plan passes. As reported by CNS News, “a majority of physicians said health care reform would cause the quality of American medical care to ‘deteriorate’ and it could be the ‘final straw’ that sends a sizeable number” of their peers out of the field. Not only would these doctors leave their profession, but 63% would urge others to steer clear of it as well. [1]

In addition, doctors could not effective practice the art of medicine. Particularly when there is a patient with a difficult diagnosis, this health care bill will preclude doctors from doing whatever is necessary to effectively diagnose and treat the patient. They would be regulated through a set of objective standards that will limit their ability to diagnose a patient. This will effectively result in the rationing of health care and reduce the quality of life for many Americans.

NOTES:

[1] http://www.cnsnews.com/news/print/62812

Tags: Government, Healthcare