American Elephants

New Year, New Health-Care Changes. by The Elephant's Child

Happy New Year.  Some provisions of ObamaCare kick in today.  New taxes on drug makers, lower prescription-drug costs for seniors and restrictions on tax-free medical savings accounts begin today.  About 20 preventative health services including mammograms, colorectal cancer screenings and smoking cessation services will be free for people on Medicare.

Parents can keep a child on their insurance plan up to their 26th birthday.  Medicare recipients who fall into the coverage gap known as “the donut hole,” whose costs fall between $2,840 and $6,448, will get a 50% discount on branded prescriptions.  Seniors with annual incomes above $85,000 for individuals and $170,000 for couples will get a smaller subsidy.

Pharmaceutical manufacturers will face a $2.5 billion levy that will be distributed according to sales volume for the year.  The industry worries that the tax will eat into the budget for finding new drugs.

Medical savings accounts have been one of the truly successful reforms of recent years.  Companies who have turned to that program have found it not only saves money, but encourages participants to watch their own costs.  Naturally ObamaCare plans to eliminate them.  The “donut hole”  for Medicare recipients has helped to bring in the drug benefit at a lower-than-expected cost.  Although the program had help for those who could not afford prescriptions during that period, it encouraged recipients to ask for generics when possible and ask their doctors for lower cost drugs when they were available.  That really helped to bring down costs, as it was designed to do.

The trouble with having so many members of Congress who have spent their lives in government, means all too often that they simply do not understand the free market.  New taxes on drug makers will mean either higher prices on drugs or smaller budgets for research and development.  New free services mean higher costs for Medicare.  Lower reimbursement to doctors for Medicare patients means fewer doctors will accept Medicare, and the doctor shortage will soon be dire.

The debate over repealing ObamaCare or defunding it will become much more politicized.  The Congressional Budget Office (CBO) will come out with more accurate estimates of costs.  By law, the CBO is able to estimate costs only for those specific things they are asked to consider.  They cannot tell their congressmen that their whole program is bunk and costs way too much if that is not the information requested.  Which means we get estimates that are not what they should be.  The CBO is the servant of Congress.

The president clearly intends to accomplish a great deal by regulation, executive orders and agency actions.  He has so far been willing to go far in pushing the envelope of what is possible legally and ethically.  He won, he reminds us, and he is the president.  His conception of what he is entitled to do is surprising to some of us.  It is going to be an interesting year, and we’ll have to keep track of the fine print.

Happy New Year! by American Elephant
January 1, 2011, 9:03 am
Filed under: Pop Culture | Tags: , ,

From all us elephants to all of you, we thank you for being part of our herd, making our year so bright, and may God bless you and yours with an exceedingly happy, healthy, and very prosperous new year!

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