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Nobody Seems To Care About The Increases In Obamacare Taxes

Stanley Feld M.D.,FACP,MACE

There are at least two ways to balance the budget. Increase taxes or decrease spending.

If you increase spending without increasing taxes, you increase the budget deficit. If taxes are increased enough the budget deficit might be reduced.  

It was the Obama administration’s hope that if taxes were raised slowly, Americans would not notice the increases.

This is exactly what President Obama and the tax and spend Democrats are doing.

A frustrated reader writes about the slow rise but unrelenting rise in taxes.

“Here is a message from my buddy Brad.

As Jim Naybors/Gomer Pyle used to say – "surprise surprise."

Here is what happened on January 1, 2015:

Top Medicare tax went from 1.45% to 2.35%

Top Income tax bracket went from 35% to 39.6%

Top Income payroll tax went from 37.4% to 52.2%

Capital Gains tax went from 15% to 28%

Dividends tax went from15% to 39.6%

Estate tax went from 0%to 55%

Remember this fact:

These taxes were all passed only with Democrat votes, no Republicans 
voted for these taxes.

These taxes were all passed under the Affordable Care Act, aka 

The problem is taxes are at the tipping point. The rich and the middle class are now noticing the yearly tax increases. They are starting to shout, “no new taxes. Where is the value of these new taxes?”

A problem in America is an increasingly large  group of people who pay no taxes. These people have no choice but to accept government handouts to survive.

It has been reported that government handouts are equivalent to about a $50,000 a year post tax income. The entitlements blunt incentives to take the initiative and find work in order to be productive citizens.

Working people are experiencing the increased tax burden and are unhappy.

I have written a few articles listing Obamacare increases in taxes. President Obama has steadily increased taxes each year for the last six years.

The most irritating thing about the increased taxes is Americans are not getting value for their money.  All they are getting is lies and failed programs.

Administrator Marilyn Tavenner is resigning her post overseeing Obamacare just months after she admitted that the Obama White House’s highly publicized 8 million Obamacare enrollment figure was inflated by at least 1.3 million.

There is always a fall guy. It is never President Obama or his policies that are at fault. There is never full disclosure or transparency about these failed programs.

A vivid example of the lack of transparency is a recent disclosure by the budget committee about the Obama administration’s using unauthorized funds to pay for Obamacare cost overruns. Congress is supposed to authorize the use of funds according to the constitution.

Obamacare was having trouble getting insurance companies to participate in Obamacare’s health insurance exchanges. President Obama activated the government guarantee reinsurance program to subsidize the insurance industry. The goal was to induce the healthcare insurance industry to participate in the health insurance exchanges. The Obamacare reinsurance program guarantees the insurance industry that it cannot loss money in providing insurance through the health insurance exchanges.

 The Treasury Department has rebuffed a request by House Ways and Means Chairman Rep. Paul Ryan to explain $3 billion in payments that were made to health insurers even though Congress never authorized the spending through annual appropriations.

At issue are payments to insurers known as cost-sharing subsidies. These payments come about because President Obama’s healthcare law forces insurers to limit out-of-pocket costs for certain low income individuals by capping consumer expenses, such as deductibles and co-payments, in insurance policies. In exchange for capping these charges, insurers are supposed to receive compensation.

What’s tricky is that Congress never authorized any money to make such payments to insurers in its annual appropriations, but the Department of Health and Human Services, with the cooperation of the U.S. Treasury, made them anyway.

There are several other incidences of money shifting without congressional appropriation.

President Obama continually forgets that the constitution provides for three independent branches of government. They were formed in order to maintain checks and balance so one branch does not become all powerful.

The apparent disregard for the constitution is ubiquitous in the Obama administration.

If anyone is bothered by these actions by the Obama administration, please write to your representatives in congress.

If you think it is important that everyone in the U.S. should 
know these things, feel free to pass this on.

If there is value to the healthcare system with Obamacare, a debate about the need for increased funds is appropriate.

Most Americans do not like Obamacare. Most physicians do not like Obamacare. America’s budget cannot stand Obamacare.

President Obama loves Obamacare. Isn’t President Obama supposed to represent the will of the people?

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Obamacare’s New Taxes And The Middle Class

Stanley Feld M.D.,FACP, MACE

It is important to review all the taxes written into the Affordable Care Act (Obamacare). Americans are recognizing that those tax increases are being passed on to all consumers.  The middle class were not supposed to experience tax increases. The middle class is realizing it has less disposable income because of these new taxes.

Since 65% (sixty-five percent) of America’s economy is dependent on consumers discretionary spending, America is destined to further economic difficulty.

These new tax increases are timed in the hope that no one would notice them.

The increased taxes are supposed to fund Obamacare. The taxes continue to be collected even though much of the law’s implementation is delayed.

The increases in Obamacare taxes arearranged by their respective effective dates. Below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:


Taxes that took effect in 2010:

1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971.

2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113.

3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105.

4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980.

5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004.

6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399.

Taxes that took effect in 2011:

7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959.

8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959.

Taxes that took effect in 2012:

9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957.

Taxes that took effect in 2013:

10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93.


Capital Gains











*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.

11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:


First $200,000
($250,000 Married)

All Remaining Wages

Current Law

2.9% self-employed

2.9% self-employed

Obamacare Tax Hike

2.9% self-employed

3.8% self-employed

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

13. Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994

16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000

Taxes that take effect in 2014:

17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following


1 Adult

2 Adults

3+ Adults


1% AGI/$95

1% AGI/$190

1% AGI/$285


2% AGI/$325

2% AGI/$650

2% AGI/$975

2016 +

2.5% AGI/$695

2.5% AGI/$1390

2.5% AGI/$2085

 Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).Bill: PPACA; Page: 317-337

18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).Bill: PPACA; Page: 345-346

 Combined score of individual and employer mandate tax penalty: $65 billion/10 years

19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

Taxes that take effect in 2018:

20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

This “tax” is under everyone’s radar. It has never been mentioned in the traditional mainstream media. It is the tax on Seniors who are on Medicare.

"The per person Medicare Insurance Premium will increase from the presentMonthly Fee of $96.40, rising to:

$104.20 in 2012

$120.20 in 2013

$247.00 in 2014."

All seniors are means tested. This means the greater your income from any source including work income, pension income, capital gains and interest or dividend income the higher the baseline premiums become.

This “tax” had been decided by a Democratic controlled congress that had not read the bill or understood all of its consequences.

These are provisions incorporated in the Obamacare legislation, purposely delayed so as not to anger seniors during President Obama’s 2012 Re-Election Campaign.

Please send this blog to everyone you know and their children. It is important for them to know that President Obama is throwing seniors under the bus.  Obamacare must be repealed.

Everyone must stay focused. President Obama is going to try to change the conversation and create a diversion to the facts.

Some of these taxes have already gone into effect. If the Republicans win the House and the Senate as well as the Presidency, Obamacare must be repealed.   

Everyone interested in America’s economic future must tell a friend to repeal these crippling taxes. President Obama has deceived Americans with Obamacare and its new taxes.  

It is time for everyone to get angry and give control of the House and Senate to the Republicans in November.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Did Obamacare Cause The Increase In Private Healthcare Insurance Premiums?

Stanley Feld M.D.,FACP, MACE

A reader of my blog received this question from one of his friends.

The reader asked me his friend’s question  “I have a question and I don’t want it to be political (as I stay away from that for many reasons).                                                                                                                                 
Health insurance is so expensive and it does not cover hardly anything. We had to get the worst plan with the worst coverage. But it was not this way 6 years ago. We could afford good coverage.   

 The question is: Did Obamacare cause this change in healthcare insurance and these problems in access to care?

A reader asked:

Which of your blogs would be the best one to show him to answer his question?

The answer to the question is YES!! I will try to explain.

If I sent all the links to your friend would be overwhelmed. There are too many to count.  I will summarize some of the major reasons Obamacare is to blame for some of the increases in private healthcare insurance premiums and the decrease in the access to care. Obamacare has led us into a financial disaster. “Medicare for All” is not the answer.

I believe the goal of Obamacare was to create greater dysfunction in the healthcare system which would lead to huge premium increases for private healthcare coverage. The public would then beg the government to adopt a single party payer system with “Medicare for all.” This has been the progressives”  goal since 1935. Do you remember Barney Frank and John Kerry saying we cannot have a single party payer system yet because we do not have the votes?

The government has not had a very successful single party payer systems record.  The VA Health Administration, the Indian Health Service, Medicare and Medicaid are all inefficient and financially unsustainable.

“Our federal government already runs three single-payer systems—Medicare, the Veterans Health Administration, and the Indian Health Service—each of which is in a shambles, noted for fraud, waste, and corruption.”

“Why would we want to turn over all of the American medicine to those who have proved themselves incompetent to run large parts of it?”

The federal government depends on healthcare insurance companies to do the administrative services for Medicare, Medicaid and Obamacare. Administrative services include negotiating payments to hospitals, nursing homes, physicians and providers on all levels.

The various healthcare insurance companies are supposed to bid for these service contracts. The insurance companies receive one global fee.  The healthcare insurance company with the contract must pay providers on a fee for service basis. The healthcare insurance companies do not have good enough data to make an accurate bid estimate.  Actuary science is not rocket science. The healthcare insurance company builds in a twenty percent cushion to the bid. If the bid was low and the healthcare insurance company that lost money Obamacare guaranteed through a complicated reinsurance formula reimbursement to the company for its loss.

Recently the government audit discovered an overpayment of $10 billion dollars to the healthcare insurance industry for Medicare Part D.

I believe there is much more overpayment in Medicare Part A, B and D because of the government bureaucracy. The government only had the money to pay 12% of the reinsurance claims of the healthcare insurance company one year. The insurance industry simply raised the premium in the private sector.

Nationwide, the Obama administration made $7.3 billion in reinsurance payments to health insurers. The reinsurance program, funded by taxes on health insurers and self-funded employer health plans, has been criticized by Republicans as a “bailout” for insurers.

The healthcare insurance industry then once again raised premiums on the private healthcare sector to make up for its losses. to

The government reinsurance payments weren’t enough in all cases. New York-based Assurant Inc. asked for a 26 percent hike in private premiums for 2016, due to high claims in Indiana, before that company decided to exit the Obamacare markets in all states.

This was typical price shifting.

Healthcare insurance companies projected that Obamacare would result in them losing money because of adverse selection. Obamacare’s increase required benefits for both public and private insurance. Obamacare’s rules included coverage for oral contraceptives for all and coverage of pre-existing illnesses among others. A sixty-year-old male does not need an insurance policy the receives oral contraceptives.

The healthcare insurance industry asked for double-digit increases in private healthcare insurance in every state. The logic was that these enrollees would pay for the loses that would occur from the Obamacare enrollees.

The government’s argument is all should pay for everyone ’s healthcare needs. These healthcare needs have increased as the population has gotten more obese and has had a rise in drug addiction. These increased healthcare risks resulted in increased actuary estimates of healthcare cost. It does not put a burden on consumers who do not act responsibly.

The increased healthcare premiums caused many employers to drop healthcare coverage for their employees. The decrease in healthcare insurance coverage added to the pressure of healthcare premium increases.

The healthcare insurance industry also plays games with the Medical Loss ratio. The result is an increase in healthcare premiums and deductibles while decreasing services. The Obamacare issued regulations that the insurance industry must dedicate 80% of the healthcare premium to direct medical care and 20 % can be used for administrative expenses for both the public government insurance and private insurance. It is the state insurance regulators responsibility to enforce the regulation.

The expenses the industry wanted to be included are;

Expenses to be included in direct medical care are:

  1. The cost of verifying the credentials of doctors in its networks.
  2. The cost of ferreting out fraud such as catching physicians over testing patients or doing unnecessary operations.
  3. The cost of programs that keep people who have diabetes out of emergency rooms.
  4. The sales commissions paid to insurance agents.
  5. Taxes paid on investments.
  6. Taxes paid on premium income.

All these expenses are administrative expenses in my view and not medical expenses. If these expenses are permitted as benefit expenses, premium money available for direct medical care would decrease. The eighty percent required for direct medical care would be markedly reduced. The result would be an increase in healthcare insurance premiums.

The calculation for direct medical care helps the healthcare insurance company prove it lost money. The insurance company then applies to state regulators for a premium increase. The state regulators permit the premium increases.  If the premium increase is refused by the regulators the insurance company threatens to leave the state. The other option the healthcare insurance company uses is to decrease the insurance services and/or increase the insurance deductibles.

Another problem has developed in the healthcare insurance industry that is causing it to raise premiums and reduce services and access to care as a result of Obamacare.

Hospital systems are buying out physicians’ practices. Obamacare has put many restrictions on physician practices. It has increased practices overhead. Obamacare has decreased the ability for physicians to use their medical or surgical judgment that they have become happy to sell their practices to hospital systems. The hospital systems now have to deal with the problems of medical practice. The cost of electronic medical records, which have not added to the quality of medical care, increased many physicians’ willingness to sell their practices to hospital systems. At the moment the percentages of hospital-owned practices are up to 65% from only 17% ten years ago.

As premiums have gone up physicians have not experienced an increase in reimbursement. They have been forced to see more patients quickly to earn almost as much as before Obamacare. Obamacare has destroyed the patient-physician relationship which in my view is essential in medical care. Physicians simply do not have time to talk to patients.

Hospital systems have taken over physician populations in many communities. This gives the hospital leverage over the healthcare insurance industry. The hospital system can demand higher reimbursement because it provides all the physicians.

The large hospital systems can demand that the insurance company only use the physicians in its hospital system even if there are lower cost of care options in a community.

The result is an increase in healthcare premiums and decreased the quality of care.

All of this is the result of Obamacare. There are about ten more reasons why Obamacare has increased premiums and decreased access to care. I have left link exposed. You are encouraged to look at them to see the full explanation for some of the point I have made.

I hope this blog answers your friend’s question. :  Did Obamacare cause this change in healthcare insurance and these problems in access to care? 

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Copywrite 2006-2019

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More ACOs Rules Will Mean More Problems For Obamacare

Stanley Feld M.D.,FACP,MACE

 I have written many articles on why I believe Accountable Care Organizations (ACOs) will fail.

ACOs are critical to the success of Obamacare as are many the other programs introduced by the Affordable Care Act.

If one listens to the Obama administration’s propaganda about how wonderful Obamacare has been for the American public, one would be living in a dream world, not the real world.

Obamacare has failed on many levels. The administration believes the public will not remember the previous failures.

Here are the failed promises.

  1. You can keep your doctor if you like your doctor.
  2. You can keep your health insurance policy if you like your health insurance policy.
  3. Each family will save $2500 dollars on healthcare each year.
  4. Anyone making less than $250,000 a year will not pay one red      cent in new tax.

The failures of Obamacare

  1. Obamacare will bend the healthcare cost curve. It bent the cost   curve for the first three years because Obamacare collected new taxes without providing healthcare services until 2014.
  2. Thirty-two (32) states refused to expand Medicaid.
  3. Twenty-two (22) of 50 states signed up to have state health insurance exchanges.
  4. All of the states that developed state co-ops with federal loans are under water. Fourteen of the 22 are bankrupt now. All will be bankrupt by 2017 or 2018.
  5. Private insurance enrollment though the federal health insurance exchanges has not increased for the last 3 years. Many of the buyers of health insurance exchange insurance have pre-existing illness. The health insurance exchanges are the only available insurance.
  6. The hospital system and private practice meaningful use electronic medical records have not increased percentage wise as expected.
  7. Worthless electronic medical records have increase at high costs to medical practices and hospital systems. These electronic medical records are providing some false big data information to the government and healthcare insurance industry to generate defective policy regulations. Hospital systems and physicians benefit little from the data generated.
  8. is still not right after spending billions of dollars over budget.
  9. Healthcare insurance premiums have skyrocketed for companies providing healthcare insurance to its employees.
  10. Healthcare insurance premiums have skyrocketed for people buying healthcare insurance from the federal and the few remaining state health insurance exchanges.

The only success I have seen is in Medicaid enrollment for the poor and illegal immigrants. The access of care has not improved for tax paying people.

These are just a few of the Obamacare failures. The public would never remember there have been so many failures reading the propaganda and press releases that appear from the government in the traditional mass media.

The Obama administration’s information has blurred those failures. I sense the public does not want to know about the impending disaster in the healthcare system.

Many intelligent people ignore these facts. They keep reciting the administration’s talking points about Obamacare’s success.

ACOs were supposed to lower healthcare costs. They were supposed to provide incentives for hospital groups and private practice groups to save money by providing more efficient medical care.

If these groups did lower the cost of care they would share in the savings along with the government.

There are many ways to achieve these savings and many measurements to determine these saving.

In short, ACOs were designed to shift the financial risk of care from the government to the physicians. If the physicians didn’t hit the benchmark they would lose money. The goal was also to shift to a flat rate payment for each illness from the individual fee for service based payment system.

Physicians will get paid a flat rate for a particular illness. It means that the risk for taking care of the illness at a particular cost shifts the financial burden to physicians and not the insurance company or the government.

The gigantic defect in the system is there is no burden on the consumer nor is there an incentive for consumers to be responsible for their health or healthcare dollars.

No risk is placed on the patient for compliance with treatment advice.

I have pointed out most of the defects in the ACO model in past blogs. ACOs are essentially an HMO on steroids. Hillary Clinton did not do too well in 1993 with the HMO model

ACOs do not address the problem of the high salaries of hospital administrators and healthcare insurance executives (who provide administrative services for the government). These salaries increase the cost of the healthcare system.

Last week CMS released another final rule intended to improve the way Medicare pays accountable care organizations (ACOs) in its Medicare Shared Savings Program (MSSP).

It is clear that if another final rule is made the last final rule is not working.

The hype of this new final rule is that the Obama administration has solved what many viewed as a critical flaw in the bonus structure for Medicare’s accountable care organizations.

I think the new final rule might make ACOs fail completely.

CMS spokesman said, ”Physician buy-in is critical for the long-term sustainability of the ACO program, which could play an important role within Medicare’s broader reforms to physician payments under the Medicare Access and CHIP Reauthorization Act, or MACRA.

MACRA is another poorly designed program that makes payment for physician service more difficult to understand.

MACRA could inspire physicians to quit the whole ACO enterprise.

A group of executives on the MACRA (Medicare Access and CHIP Reauthorization Act) task force said,

“The goal is to force physicians and payers determine how to most effectively tie payment to performance and value.”

“A panel of healthcare experts and organizational leaders who began adapting to value-based payment years before the Medicare Access and CHIP Reauthorization Act started fleshing out regulations talked about their programs at the event sponsored by the Commonwealth Fund.”It is obvious to me that you cannot force anyone to do anything they do not want to do. You can only provide motivation and incentive for people to do what is best for themselves from their point of view.

MACRA will not get physician buy in because it will be too restrictive, arbitrary and controlling.

So far there are only 433 Medicare Shared Savings Program ACOs. There are 3000 hospital systems that should be participating in the Obamacare’s ACO program.

Only 14% of the hospital systems are participating after 3 years.

There are many large physician practices that should be participating in the ACO program. The number of these groups are unknown.

The lack of participation is a result of the complexity of the ACOs, the inability to form a unified culture of physicians in a hospital system and the difficulty hospital systems have with pricing risk.

Pricing risk is the job of the healthcare insurance industry and not physicians or hospital systems.

The government wants to put that task on the shoulders of the physicians and hospitals.

There are two risk tracts for ACO. Tract one is called one-sided risk.

The ACO only shares in the savings and does not participate in the losses if they spend more than the benchmark costs.

Tract 2 is call two-sided risk. The ACO shares in the savings with a more generous bonus from Medicare than the bonus of the tract 1 participants but pays a penalty to Medicare if doesn’t save money or demonstrate high quality care.

Only 22 of the shared-savings 433 ACOs or 5% of the participating ACOs have chosen two-sided risk. The Obama administration’s goal is to have all 3000 hospital systems participate the two-sided risk model.

The participation rate is .7% participation rate for the 3,000 hospital system that should be participating. It is far short of the Obama administration’s goal.

I would not rate the ACO participation rate as a success after 3 years.

This absolute failure has not been acknowledged by the Obama administration or the Obamacare praise singing traditional mass media.

The new final regulations and MACRA will not fix this failure. It will only make the failure worse. I will discus both the new final rule and MACRA next time.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE


Obamacare Is Failing

Stanley Feld M.D.,FACP,MACE

The problems the Obama administration is having with Obamacare have not been in the news lately. They appear in government publications as minor policy changes or in press releases. They also appear in minor trade magazines. Little that is new has appeared in the mainstream media.

Readers of the New York Times are under the impression that Obamacare is working and is successful. The readers’ impression is that President Obama has done a great thing for the nation by getting Obamacare passed into law.

If a lie is told enough times it becomes the truth. The media is the message. All one has to do is lie to the media and the message gets through whether it is true or not.

The public’s perception of reality is not more complicated than the information fed to it whether it is true or false.

A key element in getting the message through is trust. It is my opinion, President Obama and his administration have lied to the public so much that there is a lack of trust in him and his judgment. The Republican and Democratic parties have lied to the public so much that there is a lack of trust in both parties.

It has been shown over and over again that Hillary Clinton as lied to the public. Yet, she is gathering millions of votes in her primary contests while others who have told the same lies have ended up in prison.

Black people are figuring out that the Democratic party has lied to them. The war on poverty started in 1965 and little progress has been made to eradicate poverty since then.

Why is there so much poverty and unemployment in the black community?

Why can’t black kids have a choice of public schools or charter schools in New York City? Why can’t education be a top priority?

As Leonard Cohen says, “the deck is rigged.”

I think the reason Donald Trump is running the table on votes in the Republican primaries is people do not trust politicians.

He promises to unrig the deck and make America great again. The politicians, pundits and traditional media are confused about why the public is listening to him.

The public does not trust or believe them. The public trusts Donald Trump and his promises without having objective reason.

Two significant events have occurred in the Obamacare world in recent weeks which are contributing to Obamacares further failure.

  1. President Obama caving in on the “Cadillac tax”

As part of the budget deal President Obama agreed to sign another delay in the Cadillac tax until 2020.

An Obamacare law provision levies a hefty 40 percent tax on the most expensive employer-provided insurance plans: those costing above $10,200 for individuals and $27,500 for families.

The Obama administration predicts it will generate $87 million per year in new taxes.

“If a plan cost $11,200, it would face a $400 tax — 40 percent of the amount above the threshold.”

The Cadillac insurance premium was a 100% tax-deductible expense to an employer providing a high cost healthcare insurance policy to employees.

High paid executives and some unions or union executives enjoy this high cost insurance. President Obama’s goal has been to provide a disincentive to employers from providing this type insurance.

The Kaiser Family Foundation estimates 26 percent of current plans could get hit with the tax in 2018; Towers Watson pegs it at 42 percent. This is the result of healthcare insurance rate increases.

I think it is a trick by President Obama to discourage corporation from providing healthcare insurance for their employees. The Obama administration would like to force corporate employees to buy healthcare insurance from the federal health exchanges. When the federal health exchanges fail the government could take over everyone’s healthcare insurance and dictate the terms of that insurance.

The “Cadillac tax” was suppose to go into effect in 2017 but has been previously delayed until 2018.

Lawmakers on both sides of the aisle agreed to delay Cadillac tax implementation even longer now until 2020. Some sort of political pressure has forced President Obama to sign the amendment to Obamacare. This new law will decrease the funding for Obamacare.

The traditional media has not emphasized this event leading to Obamacare’s demise.

  1. President Obama backs away from new Obamacare rules for 2017.

The execution of Obamacare by the Obama administration has not stabilized the healthcare insurance industry market as promised. In fact the federal exchange markets have become more chaotic. This is partly because of the inefficient bureaucratic structure and the lack of attraction to non-sick people, who would fund the federal health insurance plans. The healthcare insurance plans dictated by the federal government do not fit the needs of the people who would buy them. Instead, even though the health insurance plans are too expensive they attract people with pre-existing illnesses. These people have no choice.

The Obama administration’s typical response to fix unintended consequences is to create more rules and regulations. The new rules and regulations will lead to more unintended consequences.

The Obama administration just backed off of two big new. The Obama administration proposed tight physician and hospital network adequacy provisions and new standardized health plan options provisions.

The previous Obamacare rules and regulations resulted in the healthcare insurance industry’s adjusting to their loss of income by creating narrower networks of physicians and hospitals. Many of the healthcare exchange plans use HMOs only and narrow networks of hospitals and doctors as a way to keep premiums lower.

The result was a decrease patients’ access to care. CMS basically backed off of the strict network options it wanted to dictate. The Obama administration once again proved that it depends on the healthcare insurance industry to function. The healthcare industry is dictating the rules.

The goal of the Obama administration to standardize options was to make it easier for consumers to compare the various levels of healthcare plans offered in the health exchanges. The Obama administration also felt it was necessary to define the levels of basic benefits to make shopping for the most affordable plan easier.

The winner is the healthcare insurance industry. The loser is the Obama administration. The biggest losers are patients both in Obamacare and those who have private insurance.

As time goes on it is becoming clearer to everyone that Obamacare is not the success that President Obama and Paul Krugman are talking about.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

 All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE


Obamacare Is In Big Trouble!

Stanley Feld M.D.,FACP,MACE

There are so many parts of Obamacare that are failing it would be impossible to describe each failure in a single blog..

President Obama and his administration keeps telling the American people that Obamacare is working great. It is here to stay.

I cannot believe Americans believe him. I cannot believe he thinks Obamacare is doing great.

It could be true that everything is going great for him if he wants Obamacare to fail and cause hardship for millions of Americans.

At that point Americans would beg President Obama or another progressive president loke Hillary Clinton to institute a single party payer system.

A single party payer system has been Hillary’s dream since Hillarycare 1993. Now she is saying she wants a private insurance based system. The purpose of this statement is to neutralize (freeze) her free market system critics.

Once more America is being exposed to Hillary Clinton’s use of a typical Saul Alinsky tactic. The tactic in his “Rules for Radicals” is to freeze your opponent by stating his position as yours even if it is a lie.

Hillary wrote her senior Wellesley College thesis on Saul Alinsky and “Rules for Radicals”. She also became a big fan and good friend of his.

Hillary Clinton and President Obama know Obamacare is failing. They are just waiting for the tipping point. The tipping point will be when the American people say please help us and give us a single party payer system.

At that point we will hear the typical gee shucks, I guess we will have to try a single party payer system.

A single party payer system will be a bigger financial and patient care disaster than what we have now.

The data on the first week of applications for Obamacare’s was announced to the rave reviews by the Obama administration.

Since few pay attention to the actual numbers President Obama can get away with the lie.

The CBO predicts 19 to 21 million will sign up for Obamacare for 2016. The administration estimates they are going to have 9.1 to 11 million enrollees for 2016.

The Obama administrations estimate is 30% lower than the announce 13 million enrollees in 2015. In reality only 9.7 million enrollee paid for healthcare insurance through 2015. Of those 9 million only 6.5 million kept their insurance premiums current for the entire year.

The quoted the Obama administrations claim that 595,590 filled out applications to get price insurance quotes. Only 8% of the reported applicants or 47,243 paid their first month’s premium for 2016.

These numbers are not a cause for celebration unless you want to misinform the public by claiming a successful first week enrollment.

Let’s do the math. The enrollment period for 2016 is from November 1st until December 31st 2015 or eight and one have weeks with four major holidays, Veterans Day, Thanksgiving, Christmas and New Years.

Let us the assume all 600,000 that filled out applications will pass the application requirements and pay their assigned premium for each month. Let us also assume the average weekly application rate is 600,000 per week for the 81/2 weeks. The grand total enrollees would be 5.1 million enrollees for 2016. This is 4.5 million less paid enrollees than in 2015.

There was an attrition rate 2% a month in 2015. President Obama extended the enrollment period several times to get more people to sign up.




  Microsoft ExcelScreenSnapz 2014 458

It is clear that President Obama’s victory laps celebrating the success of Obamacare is unwarranted.

However the media is the message. He controls and manipulates the media. It would have been much easier to provide Medicaid and CHIP coverage to the poor outright than destroying the healthcare system with changes that are not working.

The final enrollment for 2014 was 6,338,622 not over 13 million. The final enrollment for 2015 was 9,736,350 and not over 13 million. This is a net gain of 3.5 million new paying enrollees in 2015.

This year the Obama administration estimates that 9 million will purchase insurance through the health insurance exchanges. At the present rate only 5.1 million will purchase insurance for 2016 at the end of the enrollment period December 31, 2015.

The CBO’s estimate was 19-21 million paid enrollees.

It does not represent a very successful net gain when the government publishes that there are 34 million uninsured Americans. No one knows if the 90 million unemployed Americans are counted in the number uninsured.

Unaffordable care act

All anyone hears is the Obama administration’s reasons our taxes, and insurance premiums are going up, while our insurance coverage is going down. The Obama administration is blaming the healthcare insurance industry and Republicans.

President Obama has used, with the help of the mainstream media, the Saul Alinsky tactic to freeze opponents by shocking them with unsustainable factoids.

 The Avalere Health consultancy’s analysis of 2015 signup data showed surprisingly weak ObamaCare enrollment at modest income levels. At between 150% and 200% of the poverty level, just 41% of those eligible signed up for coverage. The number falls to 30% among those between 200% and 250% of the poverty level.

 In 2016 President Obama is going to penalize people that do not have healthcare insurance.

It’s now clear that the actual impact of ObamaCare’s individual mandate tax penalty will be far worse than the benign intent that the Obama administration claimed.

“What we’re talking about is a penalty for the few people who will refuse to buy health insurance — even though they can afford it — and who expect the rest of us to pick up the tab for their care,” a September 2009 White House defense of the individual mandate states.”

Reality should be coming into focus by now for the average American taxpayer and the poor. Obamacare is ripping everyone off.

The mandate’s primary impact will be to compel low-income households to buy bronze coverage with deductibles of up to $6,850 per adult that are well beyond their capacity to afford.

Even after these poor people pay the $6,850 deductible they have a 40% deductible on the rest of the billing.

Who said poor people are too stupid to handle their own money and be responsible for their healthcare dollars?

They are smart enough to know the government is ripping them off.

George  Shore101  3 months ago

If the Obama administration and Democrats love the poor why did they force the poor to purchase something they can not afford and then penalize them for not being able to afford it?

It is a horrible thought to think President Obama is working to make the poor poorer and make the healthcare system fail the American people.

It looks like he is. His plan to replace it with a single party payer system will result in a bigger failure.

Why are Republicans just standing around doing nothing? Why don’t they publicize my Ideal Medical Saving Accounts?

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE


President Obama: “Obamacare is driving Down the Federal Budget Deficit”

Stanley Feld M.D.,FACP,MACE

In July 2015 in a speech on the economy at American University, Barack Obama  made the following statements.

The cost of “health care is now the single-biggest factor driving down” the federal budget deficit.”

The American public is tired of listening to President Obama’s lies, mostly lies and half truths.

Politifact analyzes many of President Obama’s statements of fact and grades them with Pinocchio’s and scores these statements.


President Obama’s statements by ruling

  • True               119         (21%)   (119)
  • Mostly True   149          (26%)  (149)
  • Half True       151          (27%)  (151)
  • Mostly False    67         (12%)    (67)
  • False                70          (12%)   (70)
  • Pants on Fire     9             (2%)   (9)


Total                                    100%          565

Politifact determined that President Obama was telling the whole truth only 21% of the time.

He was mostly truthful 26% of the time. We have seen these mostly true statements over and over again.

A recent example is that he has not seen the private agreements in the Iran Nuclear Deal. He has not seen the agreement in writing but he has heard about it as John Kerry heard about it.

I consider this an act of deceiving the American public.

Half true, Mostly false, False and Pants on fire classifications add up to 53% of the time President Obama has used the bully pulpit of the President Of the United States to deceive the American people.

If you add the 26% of the mostly true statements to the rest of the deceptions you get an astonishing 79% of the time an attempt has been made to deceive the American public.

This brings me to President Obama’s statement at American University. “Obamacare is driving Down the Federal Budget Deficit”

Politifact gave this statement a mostly true.

The statement is mostly false in my opinion. The devil is always in the details. President Obama has mastered the details of deceptions.

“Partly because health care prices have been growing at the slowest rate in nearly 50 years, the growth in what health care costs the government is down,” Obama said in a speech about the economy last week at the American University.

The budget deficit is a result of revenue generated as compared to expenses. If a government spends more money than it takes in it has a deficit. The size of the deficit is a function of the deficit over the revenue. A deficit reduction from one year to another is that percentage difference one year to another. It is a percent and not a real amount.

A deficit reduction can result from many factors. One very important influence on the deficit is an increase in revenue resulting from an increase in Obamacare taxes. There has been a tremendous increase in taxes resulting from Obamacare. The effective tax rate as I have shown previously as a result of Obamacare is up to 50%.

Another influence on the deficit is a decrease in spending.

Medicare spending has decreased as a result of a very clever maneuver by the Obama administration. It claims it has increased reimbursement by around 2%.

Originally Medicare would pay 80% of the allowed reimbursement and the patients would be responsible for 20% of the fee allowed. The allowed fees have decreased. Fees previously allowed have been changed to non allowed fees.

Physicians’ claims for services might be for $200. Medicare might allow $80. Medicare would pay $64 and the patient or his Medigap coverage would be responsible for $16.

This has not changed. However the percentage of the claim allowed has been reduced and patients without Medigap insurance are responsible for the difference.

This is in addition to Medicare premiums and deductibles increasing yearly. Medigap premiums have also increased yearly.

Medicare recipients are experiencing greater out of pocket costs. Many cannot afford the cost and are not going to get medical care.

This has two potential effects. Office visit claims are reduced and Medicare payments are reduced. It decreases the deficit but could result in a sicker patient. Patient cannot afford the out of pocket expenses.

The result is Medicare experiences a decrease in the percentage it affects the federal deficit.

It could result in a valid decrease in office visits or an increase in sicker patients and higher Medicare expenses.

Obamacare might have helped decrease the resulting government deficit but it could result in increased spending in the future.

It did not result in better quality care.

All of this is very difficult for a casual observer to follow. Meanwhile, President Obama has established the media message that Obamacare is working to decrease the budget deficit.

Then pundits like Paul Krugman, can ridicule opponents of Obamacare for saying Obamacare will fail.

President Obama uses an argument that is a half-truth. However, it does not represent real numbers. He uses percentages.

In addition, many of the costs of Obamacare such as the web site and the website navigators are left out of the real costs of healthcare.

Other costs are left out of deficit reduction analysis such as the direct cost to the consumers and the direct loss of revenue to providers.

“Since the Affordable Care Act was first proposed, policymakers have been debating its potential effect not just on health care but on the economy as a whole. The bill effectively increases some types of spending, reduces other types and increases some taxes.”


Growth in national health spending, which had dropped to historic lows in recent years (deficit reduction), has snapped back and is set to continue at a faster pace over the next decade, federal actuaries said last week.

Senator Ron Johnson, member of the budget committee, discusses the real present and future costs of Obamacare. He also discusses President Obama’s misleading promises about Obamacare. Senator Johnson gives us a real understanding of the Obama administration’s manipulation of the facts.

Obamacare is a bad deal. It is destroying the medical profession. It is destroying the economy and America’s chances for economic growth.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone


The Defects In Obamacare

Stanley Feld M.D., FACP, MACE

We live in an era of sound bites driving opinions rather than details driving opinions. The devil is always in the details.

The defects in Obamacare are too numerous to count. President Obama provides the traditional mass media with sounds bites leading to false conclusions.

The sound bites are misleading. Many of the sound bites are lies. One such sound bite is Obamacare is working and therefore does not need changing.

He and the Democrats keep the discussion on the sound bites level and do not dig into the real issue. President Obama even keeps the details away from congress the very people he is dependent on to pass the bill.

President Obama kept the facts and details about Obamacare away from the congress and the people. He is now doing it with the Trans-Pacific Partnership (TPP).

The Trans-Pacific Partnership (TPP) is a proposed regional regulatory and investment pact. Just as with Obamacare, President Obama expects congress to vote in favor of a pact they have not debated and have not had an opportunity to read the details in the final bill.

It is another one of those bills where the administration is telling the congress and the American people you have to pass the bill in order to see what is in it.

Americans are tired of his lack of transparency and lies. They do not trust President Obama anymore.

Congress should never make the same mistake they made with Obamacare. If they do all Americans should rally to throw all the bums out.

The devil is always in the details.

United States Senator Ron Wyden (D-OR) said,

   “Congress is being kept in the dark as to the substance of the TPP negotiations, while representatives of U.S. corporations—like Halliburton, Chevron, PHRMA, Comcast, and the Motion Picture Association of America—are being consulted and made privy to details of the agreement. […]

More than two months after receiving the proper security credentials, my staff is still barred from viewing the details of the proposals that USTR is advancing. We hear that the process by which TPP is being negotiated has been a model of transparency. I disagree with that statement.[98]

President Obama and the speaker have told us it is good pact for the country’s economy. Senator Cruz is right. “Don’t vote for something whose details you do not know.”

There are many defects in Obamacare. One major defect is that it is not affordable to consumers, the federal government or state governments. When fully implemented the cost of healthcare to the federal government will be at least 50% of our GNP not the 23% of GNP predicted. Twenty three percent is bad enough.

Federal and State taxes will have to be increased to cover all medical care entitlement costs.

President Obama keeps telling us that Obamacare is working. He says it is here to stay.

The reality is Obamacare is an unworkable and costly failure in multiple areas including the health insurance exchanges,, insurance premiums and deductible costs, the development of Accountable Care Organizations, maintenance of employer insurance and more.

Americans deserve a better system than Obamacare.

It is impossible to cover all of the harmful details of every category in one blog. 

It is disingenuous for President Obama to claim, in his repeated sound bites, that there is no need to change anything in Obamacare because Obamacare is working fine.

The real cost of Obamacare to consumers (especially taxpayers), the federal and state governments and the economy have not been disclosed nor are they transparent.

The real costs start to leak out with stories about how the costs affect consumers and their lifestyle.

This usually leads to the sound bites that it will be better to have a government single party payer system.

The underlying defect is that this system leads to consumers being dependent on government and not responsible for themselves. Government changes rules on a whim. Consumers do not have options. This is a road to serfdom.

After the Affordable Care Act kicked in, a 52-year-old sales and marketing entrepreneur reported his monthly health-insurance premium to cover himself and his family grew to $848 from $513. Like others, he wasn’t happy about it. “It’s taking a lot out of pocket,” he said.”

He is one of millions of Americans who earn too much to qualify for government subsidies on policies purchased through the federal insurance exchange. He was in favor of Obamacare before he realized Obamacare’s effect on reality.

 Obamacare requires insurance companies to offer insurance policies with broad coverage and greater protection against catastrophic medical costs. It also requires coverage on illnesses and conditions such as pregnancy and birth control coverage for people who do not need this coverage.

Obamacare was supposed to save every family $2,500 a year. It costs families more than $2,500 dollars a year. It was not supposed to affect anyone making less than $250,000 per year.

It is true that many of the above a not taxes. However it is a cost burden on consumers making less than $250,000 a year.

Others, making less than $50,000 a year, receive complete or partial government subsidies. This is what is meant by redistribution of wealth. It is a significant cost burden on consumers making $50,000 to $250,000 dollars a year.

Everyone remembers President Obama promising that Obamacare will not cost families making less that $250,000 one dime.

Obamacare premiums have become unaffordable to people earning less than $50,000 per year as well.

Obamacare’s goal was to cover everyone with broad insurance coverage and greater protection against catastrophic medical costs.

Yet, only 10 million out of 330 million are covered by the exchanges. Each enrollee in the exchanges also has high deductibles. These deductibles can be as high as $6,000 a year.

Many of the insurance companies claim they will be losing money after the government’s health insurance industry subsidies disappear in 2016.

These companies will leave the Obamacare federal health exchanges reducing competition. This in turn will increase premiums further and make premiums more unaffordable.

Another detail overlooked is enrollees are poorer, sicker and older. The pool is not diluted by younger, healthier and richer. The result is more expensive insurance rates.

“ HHS was saying that it needed about 40 percent of the exchange policies to be purchased by people age 18-35 to keep the exchanges financially stable. It was 28 percent in both 2014 and 2015, according to HHS data. The CBO had projected about 85 percent of exchange enrollees to be subsidized, falling toward 80 percent as enrollment grew; instead, that number is 87 percent and actually rose slightly from 2014.”

According to a study last year by the National Bureau of Economic Research, people who bought silver and bronze plans on the federal and state health insurance exchanges saw total premiums and out-of-pocket payments rise an estimated 14% to 28% higher than pre- Obamacare premiums and out of pocket expenses.

Obamacare is not fulfilling any of President Obama’s sound-bite promises.

His claim that Obamacare is working well and does not have to change makes absolutely no sense.

If one tells a lie enough times it becomes eventually becomes the truth.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Double Digits Increases In Obamacare Insurance Rates Proposed

Stanley Feld M.D.,FACP,MACE

Thirty-seven states refused to setup Obamacare State Health Insurance Exchanges. Thirty-seven states refused because of the expected cost burden to those states and citizens. States are required to balance their state budgets. Most states have deficits and do not have balanced budgets. Obamacare’s requirements would simply add to their budget deficits. States would be forced increase state taxes.

The 37 states felt that the Obamacare State Health Insurance Exchanges were an attempt, by President Obama, to decrease the federal cost burden and shift it to the states.  

It was also a states’ rights issue.

None of those states felt that Obamacare State Health Insurance Exchanges could work and not become an increased cost burden.

The Supreme Court ruled in 2012 that states have the right under the constitution to refuse to create a State Health Insurance Exchange.

In June 2015 the Supreme Court will rule on King vs. Burwell.

Can the Federal Health Insurance Exchanges subsidize applicants the same way State Health Insurance Exchanges can subsidize applicants.

The law’s language is specific. The Obamacare law specifically states that only the State Insurance Exchanges can subsidies applicants.

The Obama administration media manipulation machine is already spinning the truth in case the Supreme Court rules against the federal government.

Eight million people will lose their subsidy. There are 330 million people in America. There are as many people uninsured in 2015 as there were before the law was enacted. In five years we are no closer to the promise that Obamacare would provide universal care.

Obamacare is failing because it is a bad law in many respects.

The essence of the Obama administration’s spin is that if the Supreme Court rules against the government the cost of insurance will escalate to unaffordable levels for Federal Health Insurance Exchange purchasers.

Subsidies that made insurance plans affordable face a crucial test with decision expected in June.

The truth is the cost of healthcare premiums are going to skyrocket for Obamacare applicants because the only people who signed up have pre-existing illnesses and had to buy insurance or the very poor because their insurance was fully subsidized.

 The adverse selection and the financial accounting rules for the healthcare insurance industry allow them to raise the premiums.

President Obama’s subsidies for Obamacare premiums expire in 2016.


Megan McCardle writing in Bloomberg says;

Insurance companies have been bullied by the Obama administration into keeping rates as low as they are, even though they can't make any money.

For sheer survival, most companies will begin to charge enough so they at least don't lose any money, or leave the exchanges altogether.

For those of you who have followed my blog carefully, you know President Obama has provided the healthcare insurance industry a subsidy in order to get them to participate. It guarantees that it cannot lose more than 2% of its expected profit.

The insurance industry determines its expected profit.

The insurance company subsidy is about to expire. The guarantee in Obamacare, of not losing any money, is going to evaporate. In addition, only the sickest and poorest people have obtained insurance from the federal and state health insurance exchanges. The federal and state exchanges have lost a great deal of money.

These losses are slowly being revealed.

The State Health Insurance Exchanges are starting to publish their losses at the same time the healthcare insurance industry is reporting their potential losses for next year. Those potential losses are reflected in the proposed premium increases.

Moda of Oregon says that its claims were 139 percent of revenue.

CareFirst of Maryland says claims were 120 percent of revenue.

Tennessee told the Wall Street Journal it lost $141 million on exchange plans last year.

 State of New Mexico says it lost $23 million on revenue of $121 million.

 The states that signed up for the State Health Insurance Exchanges are losing money. Maybe the states that did not sign up were right. It would be a financial burden on those states.

The clause in the law permits only those states having a health insurance exchange to provide subsidies to their applicants. It excludes all others, including the federal government.

The only question the Supreme Court has to consider is, can the federal health insurance exchanges provide subsidies to applicants according to the law as written?

The law was written to encourage states to create health insurance exchanges. It did not include the provision of subsidy to applicants for  federal health insurance exchanges.

If the federal exchange would be permitted to provide subsidies, the law should be amended by congress.

A Republican congress would have to amend the law.

Obamacare is an apparent disaster to consumers, insurance providers, hospitals and physicians.

The majority of Republican are calling for Obamacare’s repeal.

It is unlikely that a Republican congress will change that provision in the law.

The “States only provision” in the law has backfired on President Obama and those states creating health insurance exchanges.

The cost of setting up and administering this new bureaucracy was enormous. The healthcare insurance offered by Federal and State Health Insurance Exchanges were either too expensive for healthy or young consumers or had too many unnecessary benefits for those consumers.

The only consumers who signed up were people who were too sick to be able to buy private insurance or too poor to be able to buy insurance without being subsidized.

Those consumers comprise 85% of the applicants. The result has been an adverse selection pool.

If the Supreme Court rules against President Obama he is going to say that private insurance does not work. The federal government must create an entitlement to everyone.

The result will be socialized medicine with the federal government being the single party payer controlling rationing of care, access to care and the cost of care to consumers.

I believe it will make healthcare coverage even worse than it is now.

Why no one is considering my concept of consumer driven healthcare with my ideal medical saving account is beyond me.

Rather than making consumers actively responsible for their health, healthcare dollars and healthcare, we are on the road to making them passive recipients of their healthcare.

America is going to be further down the Road to Serfdom.

 The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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