The Right Prescription

An Obamacare Anniversary Bridge

If not for its waivers, including the very corrupt Bridges to Reform for California, it would have no accomplishments.

By 3.23.11

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Last week Health and Human Services Secretary Kathleen Sebelius wrote an op-ed on the first anniversary of the ramming through -- I mean passage -- of Obamacare, proclaiming "Everyone prospers under health law." Unfortunately it appears that the real and immediate benefits only flow to those who play ball with unconfirmed Medicare/Medicaid administrator Donald Berwick to enact Obamacare before the 2012 election.

In that article Sebelius claims: "Just 12 months after the Patient Protection and Affordable Care Act became law, the American people are enjoying new protections, greater freedoms and lower costs."

Did anyone else miss all that, because I sure did. The new protections -- as we have heard ten million times from Obamacare supporters -- is that kids can stay on their parents' plans until they are 26 and no one can be dumped for pre-existing conditions. These are generally agreed to be good changes. But most adult children in America are already covered under existing state laws. That leaves less than 1 million people. As for pre-existing conditions? Queen Katherine claimed 129 million would be protected because that's how many people have pre-existing conditions (ranging from cancer to dandruff).

The real number? Closer to 650,000 according to House Democrats. Meanwhile only 280,000 people have signed up for coverage in federally funded insurance plans run by states for people with pre-existing conditions. The Grande Dame of HHS claimed 4-6 million Americans would prosper under this plan.

Sebelius claims "insurers are being held accountable for the way they spend consumer premiums. New rules require insurers to pay out 80 percent to 85 percent of premium dollars on health care and quality improvement efforts -- rather than marketing and executive bonuses."

The accountability is certainly there. It's just that the new rules have been -- what's the word -- waived so that millions of Americans won't lose coverage. And it's not just companies and unions seeking such "accountability." Maine got an exemption because Queen Kathy determined "the new federal spending requirement could hurt Maine's health insurance market." Now several other states with less than a dozen health insurers are following suit.

Halfway through her editorial, Sebelius exhausts her list of earth-shaking benefits (a new interactive website!) and looks into the future:

A family of four, making $55,000, could save more than $6,000 a year on health insurance in 2014. For a family making $33,000, those savings will be nearly $10,000 annually. For many American families, this means that health insurance will be within reach for the first time.

Not really. Only people who get a subsidy will see "savings" relative to the cost of insurance under Obamacare. That's about 7 percent of Americans -- about 13 million individuals, families, and single parents, many of whom already have insurance. Much of the subsidy goes to sicker and older people with the same income as healthier and younger heads of households. And as Keith Hennessey observes, 8 million Americans who make more than $44,000 a year would have to pay higher taxes, higher premiums, and receive no subsidy.

Which means that "within reach" boils down to pushing most of the uninsured into Medicaid. Sebelius promises she is willing to work with anyone to improve the law and fix what needs fixing, especially to control government spending on health care. But not when it comes to Medicaid. Many governors have asked the administration for a fixed amount of money for Medicaid in exchange for more of the "freedom" flowing like a mighty river under Obamacare. Instead, with months to go before he is forced to resign, Donald Berwick is working hard to expand Medicaid and he's spending money to do it.

Berwick won't say why money-saving block grants are off the table. Chances are he will be no more transparent about the deal he cut with California to fund its "Bridges to Reform" waiver (not to be confused with the "towering bridge" Berwick adores, otherwise known as the British health system). The waiver allows California to add 2 million people to the Medicaid program before 2014 -- and just in time for the 2012 presidential election.

Under this waiver, California gets an additional $10 billion over five years. Of that amount, $3.8 billion goes to hospitals under something called the Delivery System Reform Incentive Pool (longhand for slush fund). Another $3.3 billion goes to California' s uncompensated care fund (something that was supposed to disappear under Obamacare). Medicaid waivers are not supposed to add to federal Medicaid spending. But in this case, funding to expand coverage under the California waiver is uncapped.

Berwick will be sticking around long enough to turn on that federal spigot in addition to the $10 billion California gets for being first. Before he leaves it might be interesting to ask him and his soon-to-be ex-boss if Bridges to Reform -- an outright bribe on the order of the Cornhusker Kickback -- is an example of the kind of "anniversary gifts" Americans can expect under Obamacare.

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About the Author
Robert M. Goldberg is vice president of the Center for Medicine in the Public Interest and founder of Hands Off My H ealth, a grass roots health care empowerment network. His is new book, Tabloid Medicine: How the Internet is Being Used To Hijack Medical Science For Fear and Profit, was published last month by Kaplan.