November 6, 2013

A No-Growth Obamacare Christmas?

Filed under: Health Care,Taxes & Government — Tom @ 5:00 pm

Obama’s “signature achievement” may help bring growth to a halt even before it takes effect.

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This column went up at PJ Media and was teased here at BizzyBlog on Monday.

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As the economy’s slowdown has become more visible, retailers have become increasingly nervous about this year’s Christmas shopping season. Obamacare may soon push them into a full panic.

Signs of nervousness abound. On October 3, the National Retail Federation announced that it expects “sales in the months of November and December to marginally increase 3.9 percent” over last year, slightly above the past decade’s average. But on October 16, its consumer spending survey came back saying that “the average holiday shopper will spend $737.95 on gifts, décor, greeting cards and more, two percent less than the $752.24 they actually spent last year.”

That either means that Americans are going to make up for what they don’t spend on gifts with more everyday purchases, or that there was a serious two-week decay in prospects for the final two months of the year. I’d say the odds are with the latter.

In Greater Cincinnati, stores were already aggressively selling Christmas decorations and knick-knacks in early October. Nationally, Christmas-themed TV ads were on the air almost a week before Halloween. Furiously chasing after their pieces of a stagnant pie, both Macy’s and JC Penney announced that they will open on Thanksgiving evening for reportedly the first time in their respective histories.

The post-shutdown economic data trickling out of Washington reinforces retailers’ anxiousness. September’s retail sales, announced on October 29, were “unimpressive.” Acting as if every American’s mood hangs on the back-and-forth in Washington, the press blamed the 17 percent government shutdown, even though it hadn’t even begun, and even though very few Americans paid much attention to it until it was almost two weeks old. Sorry, guys. As was the case with the government’s jobs report released a week earlier, September’s sales were weak because the economy was already weak, and getting weaker.

ADP’s National Employment Report released on October 30 gave us an idea of how much weaker. It told us that the private sector added only 130,000 seasonally adjusted jobs in October — less than half as many as in February. It was the fourth consecutive declining result. September and August were both revised sharply downward.

Mark Zandi, the ADP report’s chief economist, said in the report’s conference call that “The government shutdown and debt limit brinkmanship hurt the already softening job market,” though he at least had the integrity to say “there’s no proof positive” to support his assertion. The Associated Press, aka the Administration’s Press, predictably failed to include Zandi’s qualifier. Anyone insisting on exercising the shutdown excuse should have to acknowledge that Senate Majority Leader Harry Reid and President Obama could have prevented or ended it by respectively passing and signing House bills which would have kept the government running. But they didn’t.

Now here comes Obamacare.

The main problem isn’t the mind-boggling incompetence in the rollout of HealthCare.gov, or the hysterical blame shifting in which the left has engaged since this “Big Dig” of IT failures debuted. In fact, HealthCare.gov’s failure has thus far softened, but will not prevent, Obamacare’s potentially crushing economic blow.

That blow will come from the millions of Americans in the individual insurance market who have learned or will shortly learn that they will have a lot less discretionary income to spend next year. That’s because Obama’s contemptuous promise that they could keep their “Acme Insurance … a high deductible catastrophic plan,” and that they “would not be required to get the better one,” was a lie. That broken promise went beyond his now well-known “If you like your plan, you can keep your plan” fiction. It specifically said, “We don’t like those plans, because we think they’re inadequate, but you can keep them anyway.”

Earlier drafts of the legislation, as Investor’s Business Daily controversially but accurately observed in July 2009, had “a provision making individual private medical insurance illegal.” It would have accomplished this by terminating any plan once it made any change whatsoever to items covered, deductibles, or copays. Perhaps in response to the firestorm IBD and others raised, that prohibitive language was not in the final bill, replaced by comforting but deceptive language about “No Changes to Existing Coverage” and “grandfathered health plans.”

In July 2010, mere months after the ink dried on the Affordable Care Act, HHS Secretary Kathleen Sebelius deliberately regulated most pre-Obamacare individual plans out of existence.

As NBC News correctly described Sebelius’s treachery:

… the Department of Health and Human Services then wrote regulations that narrowed that (grandfathering) provision, by saying that if any part of a policy was significantly changed since that date — the deductible, co-pay, or benefits, for example — the policy would not be grandfathered.

… the administration knew that more than 40 to 67 percent of those in the individual market would not be able to keep their plans, even if they liked them.

… most consumers in the individual market will not be able to keep their policies.

Despite what NBC wrote, the plan changes involved didn’t even need to be “significant” as a normal person would understand the word. Changes in deductibles as low as $5-$10 could and did bury many supposedly grandfathered plans.

Middle-income and upper middle-income professionals and self-employed persons comprise much of the individual market. They are now being forced to choose between either purchasing far more expensive coverage through their state exchanges containing coverage they neither want nor need, or doing without health insurance entirely and paying a tax penalty. Additional millions of Americans who have chosen to be uninsured until now are facing the same choices. In California alone, according to the state’s Covered California exchange, this will affect about 2.7 million people who will receive no Obamacare subsidies to cushion the impact:

CalHealthInsIndivMarketImpact

A March outside study commissioned by Covered California estimated that average monthly Silver and Bronze plan premiums for affected individuals across all age groups would be $450 and $386, respectively. That’s supposedly a 20 percent average increase for those who are currently insured, and $386 to $450 the currently uninsured haven’t been spending at all.

People who know they will have to spend hundreds of dollars extra every month on health insurance starting next year won’t wait until next year to sharply curtail their spending. They’ll start the minute they learn the bad news, taking billions away from November and December retail sales. Meanwhile, those who will supposedly be saving money on health care thanks to subsidies won’t change their spending habits until the lower premiums take effect in 2014.

It would only take $4 billion in reduced monthly spending by affected individual plan households each month with a Keynesian multiplier of 1.75 to clip a half-point from the nation’s $1.4 trillion monthly gross domestic product — and most forecasts for fourth quarter GDP were at 2 percent or below even before the ADP report and a recent dive in consumer confidence were known. There is also an undetermined number of people in “small group employer plans” who are seeing their plans terminated, and whose impact will only compound the damage.

Suddenly, thanks to the accumulated effect of years of poor economic policy choices combined with the sticker shock of Obamacare, no GDP growth in the fourth quarter is within the realm of possibility.

Merry Obamacare Christmas.

Trace Gallagher at Fox: Insurance Cos. in Calif. Had to Cancel Non-Compliant Policies to Be in State Exchange

On Megyn Kelly’s Fox News Channel show last night, reporter Trace Gallagher countered the Obama adminstration’s attack on Stage Four cancer patient Edie Littlefield Sundby, whose Sunday evening Wall Street Journal op-ed on her individual plan’s termination in California has garnered major attention. Ms. Sundby wrote that she has not found an available insurance plan option which will cover visits and treatments from both her current oncologist and her current primary care doctor.

In the process of addressing the White House’s reference to a far-left Think Progress report which tried to pin the blame on Ms. Sundby’s carrier — as if that addresses the obvious failures of her Obamacare options, which it obviously doesn’t — Gallagher dropped a bombshell. Covered California, the formerly Golden State’s Obamacare exchange, mandated as a condition of participation that any insurance company wishing to offer plans there had to cancel all existing individual policies in the state which did not qualify under Obamacare’s strictures, i.e., they could not have any grandfathered plans (video is here full transcript is here; bolds are mine):

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AP: ‘Venezuela’s Health Care System in Collapse’; Will Rest of U.S. Press Report It?

The Associated Press has published a great but disturbing story. Given the frequent and deserved grief yours truly administers when the wire service lets its readers, listeners, viewers, and subscribing news organizations down, it seems only fair to acknowledge fine work when it does occur. The real question is, in the politically charged U.S. health care environment, whether the AP’s subscribers and other media outlets aware of Frank Bajak’s Wednesday morning report will acknowledge its existence, and adequately relay the horrors contained therein.

The story is about what’s left of Venezuela’s “free” healthcare system. It’s in shambles. The headline reads like it might be “only” doctors who say so, but Bajak’s content says otherwise. Readers here need to go to the full report, because the excerpts which follow of necessity convey only a small portion of how awful things are, including indications that the country is moving ever closer to becoming another Cuba:

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AP’s Initial Report From Obama’s ‘You Can Keep It If It Hasn’t Changed’ Speech Ignored That Statement

The Associated Press’s initial coverage of President Obama’s attempt to “reinvent history,” the term used yesterday by the National Journal’s Ron Fournier, is instructive. Monday evening, Obama claimed that his core “you can keep your (health care) plan” guarantee — made dozens of times from 2008 through 2012 — was only relevant “if it (your current plan) hasn’t changed since the law was passed.”

Let’s look how the AP’s Nedra Pickler — or perhaps the White House correspondents’ pool reporter, if Team Obama limited press access — wrote things up (HT to NB commenter Alfred Lemire) immediately after Obama’s speech (6:34 p.m. report after a speech which began at 5:58 p.m.):

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Wednesday Off-Topic (Moderated) Open Thread (110613)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.

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Arguably the biggest news coming out of Tuesday’s elections was the election of former hospital executive Mike Duggan in Detroit, whose vast majority African-American voters disproved the notion that they will always vote in lockstep for “one of their own” in a race between a black candidate and a white candidate. The next question is going to be: “Will the city’s black-dominated political establishment be as mature as the voters?” I wish I could be optimistic about that.

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Prayers for Oklahoma Senator Tom Coburn, who announced yesterday that he has had a recurrence of prostate cancer.

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An initiative to spend another $1 billion on public schools in Colorado went down in flames (66% to 34%) last night (HT Twitchy). For some reason, New York City Mayor Michael Bloomberg and Bill Gates each spent hundreds of thousands of dollars supporting the losing side.

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Pethokoukis: “Actually, America doesn’t have a trillion-dollar infrastructure crisis.”

Well, okay, but our sense of priorities is pathetic. We spend too much on public transportation and light rail with miserably low ridership and obscene cost overruns, and too little on highway projects like the Brent Spence Bridge rebuild in Cincinnati, which should have been done at least fifteen years ago.

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Ah, what does he know? “St. Louis Fed President: Shutdown ‘Not That Big a Deal’ for Economy.” Especially because it was only a 17 percent shutdown.

Positivity: Court unanimously overturns block on Texas abortion law

Filed under: Health Care,Life-Based News,Positivity — Tom @ 6:00 am

From Austin, Texas:

Nov 1, 2013 / 05:26 pm

Texas pro-life advocates have claimed victory after a federal appeals court unanimously reinstated state rules that require abortion doctors to have admitting privileges at nearby hospitals.

“Legislators worked so hard to pass House Bill 2 because they are not only concerned about protecting the unborn, but also about women going to abortion clinics with sub-standard conditions and unsanitary equipment,” Elizabeth Graham, director of Texas Right to Life, said Oct. 31.

The U.S. Court of Appeals for the Fifth Circuit on Oct. 31 reinstated a provision of an abortion law that requires abortion doctors to have admitting privileges at a hospital within 30 miles of their clinic.

The appellate court’s ruling overturned the decision of U.S. District Judge Lee Yeakel, who had ruled Oct. 28 that the provision was unconstitutional and issued a permanent injunction against it.

Abortion backers claimed the law was unconstitutional and could stop abortions at as many as 13 of the state’s 36 licensed abortion providers, including those in Fort Worth and five other major cities, where doctors have not yet secured hospital privileges.

However, the appellate court said Texas will likely succeed in defending the case on its merits. It ruled the provision does not impose an “undue burden” on the legal right to an abortion and serves a legitimate state interest in regulating doctors, the New York Times reports.

While the court said the provision might increase the cost of abortion access and decrease the number of physicians who can perform abortions, it noted that the U.S. Supreme Court has previously ruled that this is not reason enough to invalidate a law. …

Go here for the rest of the story.