An avalanche of bad news 1

The essential messiness of socialist thinking is demonstrated by the Health Care Act. Obamacare was a mess in its conception, in its drafting, in its passing through Congress; and now it’s making a mess in the real world as its implementation becomes a desperate exercise in warding off disaster.

Wreckage of Obamacare is the title of an article by Grace-Marie Turner at Critical Condition, the National Review Online’s health-care blog:

The Obama administration is refusing to accept the disastrous dynamics it has set into play with its monstrous health-overhaul law.

Instead of recognizing the economic reality of what they’ve done, officials are railing at the companies and industries that are responding in perfectly rational ways to the incentive structures they have set up.

But the result is an avalanche of bad news for consumers who surely will not “be able to keep the coverage” they have:

840,000 Midwesterners to lose policies. The Principal Group announced its plans to drop health insurance from its roster of products, which the New York Times calls “another sign of upheaval emerging among insurers as the new federal health law starts to take effect.”

The Iowa-based company provides coverage to about 840,000 people who receive their insurance through an employer.

Principal is just the latest in a long list of insurers to announce plans to drop coverage. It may have done so anyway, but Obamacare undoubtedly accelerated the decision.

30,000 retail workers at risk of losing coverage — and likely millions more. The Wall Street Journal broke the story about 30,000 hourly workers of McDonald’s who are likely losing their insurance “as the law ripples through the real world.”

McDonald’s  have since been granted a one-year waiver. So have dozens of other companies, as the New York Times reports here, explaining –

“The waivers have been issued in the last several weeks as part of a broader strategic effort to stave off threats by some health insurers to abandon markets, drop out of the business altogether or refuse to sell certain policies.”

Commenting on which, Peter Wehner has a good piece here. He says, in part:

This action highlights one of the great dangers of ObamaCare, which is that every health-care decision now has to run through the federal government. Private companies have to bow before its throne, asking for waivers and massively complicating their own lives. The federal government is now in a much stronger position to pick winners and losers and rig the game. This is the kind of expansion of federal power that many people feared and warned about – and it’s happening within weeks of the law taking effect.

The waivers are also the Obama administration’s attempt to minimize the negative impact of ObamaCare less than a month before the midterm election. It’s now clear that the new health-care law was very poorly constructed and is having enormous implementation problems. To issue waivers to undo the damaging effects of a new law is a very bad sign.

The avalanche is building. Grace-Marie Turner  continues –

Millions more policies are at risk for employees of Home Depot, Disney, CVS, Staples, Blockbuster, etc., the Journal reports.

22,000 New England seniors can’t keep the coverage they have. Harvard Pilgrim announced this week that it is getting out of the market for Medicare Advantage in response to the massive cuts coming to this popular program. …

Child-only policies vanishing: HHS Secretary Kathleen Sebelius is angry with a number of insurers for announcing they plan to stop offering child-only insurance policies. But does she really not get it? If you tell companies they must sell to anyone who applies, even if the children are already sick, then it simply is not a sustainable insurance or business model.

And when one company in an area announces its plans to stop offering the policies, that creates instant adverse selection for other companies that remain in the market, setting off a cascade of dropped policies.

The cascade began just a few days after Obamacare was signed into law when AT&T, Caterpillar, John Deere, Verizon and several other large employers said the law would take a bite out of their future earnings. They were about to be hauled before the House of Representatives to explain their disloyalty until it became clear that they were likely to testify that they also are considering dropping employee coverage.

After that, we learned that retiree medical coverage was in jeopardy. Next, there was another casualty of Obamacare — the fledgling insurance company in Virginia, nHealth, that shut down after investors concluded it wasn’t possible to navigate the maze of new regulations and succeed.

And then Sebelius railed at insurance companies for explaining that the Sept. 23 mandates will indeed increase the cost of premiums for customers. …

Do they not understand that the wreckage is the result of Obamacare? This is only the beginning as thousands and thousands more pages of regulation will further disrupt virtually every aspect of our health sector.

One good effect of all this is that the failure of Obama’s attempt at socializing health care is now starkly obvious.

The Patient Protection and Affordable Health Care Act must be repealed.


  • And so it goes. I suppose the angst on the part of administration figures is genuine, but an uncharitable thought has occurred to me. We know that some of the law's proponents admitted in the period before it was passed that it was to be the fastest road to a single-payer plan–even without a “public option.” Now, let's see: What's the fastest way to make a public option necessary after all? Why, drive out the private sector providers, of course, by making it impossible for them to remain in business.

    This is not a case of a public option out-competing the private sector. For one thing, the public option isn't technically available (yet). This is a case of the government killing any alternative to its own plan. This is not free-market competition; it's a raw assertion of state power.