Tuesday, March 23, 2010

Let the Party Bee-Gin!

MSNBC's Rachel Maddow gleefully laid out the rain of goodies to be expected from Obamacare. As a public service we provide some commentary and include some of the other events that will occur during the first few years of the rollout (points marked with * indicate reforms that are commonly accepted as part of less intrusive solutions):


  • Tax credits for small businesses to provide health care for their employees*. May not be sufficient to compensate for increased rates (see below).
  • Kids can stay on their parents' plan until age 26; if the increment in rates is not onerous, this could improve the financials.*
  • More money for seniors' drugs by plundering Medicare Advantage.
  • High-risk pools established.* May or may not raise rates.
  • Ban on "previous condition" denials for kids*. This is likely to raise rates.
  • Health Savings Accounts gutted; maximum HSA deduction reduced by 60%
  • Pro-abortion advocates likely to overturn "Stupak's Order".
  • Patching the Medicare provider payment reductions eats all of this year's "savings" and them some.
  • The new enormous federal healthcare bureaucracy begins to be assembled, to join all of the other federal government healthcare bureaucracies (Medicare, Medicaid, VA, Military, SCHIP, Indian Health, to name a few).
  • The IRS begins hiring its required additional 16,000 agents.
  • Pork deals to garner Congresscritters' votes explode like fiscal grenades throughout the year.
  • Student loan program converted in government monopoly, except in North Dakota. On the surface, it seems that this has nothing to do with health care. However, it is expected that the profit made on these loans, generated from the interest rate difference between borrowing and loaning, will be part of the advertised "health care savings".


  • Long-term care insurance program established; minimum 5 years of premiums required, but who is going to say no to Grandma?
  • Free preventative care for Medicare recipients. Likely to raise rates.
  • Annual $2.5B "Pay to Play" charges to drug makers begins.
  • Insurance companies must pay out 80-85% of premiums in health care expenses, or must refund difference to policy holders. Most health insurance companies have profit margins at or under 5%, so increased overhead costs to implement new federal rules and mandates are likely to lead to losses in intial years. The federal government's profit ceilings on insurance companies begins their transformation into utility companies.


  • Excise tax on medical devices begins.
  • New Medicare taxes on the "Super-Rich" (couples with incomes greater than $250K)
  • New tax on dividends and interest income.
  • Pilot programs to test "bundled care" Medicare payment programs.

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