by Dick Morris
. . . and Deductibles Are Too
But higher premiums are only part of the story. The real kicker is the high deductibles on most plans. They are a total disaster.
The New York Times noted that “for many consumers, the sticker shock is coming not on the front end, when they purchase the plans, but on the back end when they get sick: sky-high deductibles that are leaving some newly insured feeling nearly as vulnerable as they were before they had coverage.”75
A Commonwealth Fund study called the deductibles under Obamacare “daunting.”76 The deductible for a “Silver” level Obamacare plan, the most popular, is $2,951, according to the Commonwealth Fund study, more than twice the $1,217 deductible for the average employer-sponsored plan. More than half of the Obamacare plans have deductibles above $3,000. The New York Times reported that “in Miami, the median deductible is $5,000. . . . In Jackson, Miss., the comparable figure is $5,500. In Chicago, the median deductible is $3,400. In Phoenix, it is $4,000; in Houston and Des Moines, $3,000.”77
These high deductibles are the result of a trick the Obama administration played on the American people. Determined to portray Obamacare as affordable, they encouraged insurance companies to hold down premiums and recoup their high costs through bigger deductibles. But there are no federal tax subsidies to cushion high deductibles as there are with premiums. The patient has to pay the whole thing. And deductibles discourage people from getting timely care, subjecting them to risk and leading them to avoid seeking treatment.
So Obamacare is having the exact opposite effect of that intended by its sponsors. Because of high deductibles and the millions who can’t get premium subsidies, people are not getting the care they need. As people use Obamacare and face the limited choice of doctors—more limited as more doctors don’t participate—and the high deductibles, the more they come to dislike it. In a Rasmussen Reports survey in December 2015, those with direct experience with the new program say, by 2 to 1, that that the law has hurt them more than it has helped.78
At the core of objections to Obamacare is the program’s restriction of a patient’s ability to choose his or her doctor. Long dead is President Obama’s famously broken promise: “If you like your doctor, you will be able to keep your doctor. If you like your insurance plan, you can keep your insurance plan.”79
Instead, insurers are restricting patients’ choice of providers by limiting the number of doctors and hospitals they cover. Insurance plans under Obamacare have, on average, 34% fewer hospitals and doctors than policies sold outside the exchanges. The only alternative a patient has—particularly if he wants to see a specialist in whom he has faith—is to go out-of-network and face huge, uncapped out-of-pocket expenses.
Obamacare: Stupidity Reigns!
Prime among Obamacare’s goals was to lower the patient readmission rate. Administration officials said that there was a revolving door that drove up medical costs. The theory was to cut hospital reimbursement rates under Medicare and Obamacare if there was a high rate of readmission of patients who had been discharged.
The problem is that recent studies conclude that a quarter of all hospital readmissions are unavoidable. In fact, readmission may be indicative of a better level of care. Indeed, in studies by the Brisbane Cardiac Consortium and the Cleveland Clinic, readmission and mortality were inversely related—when the hospitals readmitted more patients, they succeeded in keeping more of them alive. The Heritage Foundation reported that when the Brisbane Consortium sought to “improve the process of care, the program was successful in reducing mortality rates, but, unexpectedly, readmission rates actually increased.” The study noted that “this same paradox was further noted by Cleveland Clinic clinicians in a study that showed that while the Cleveland Clinic has lower mortality rates for heart failure than the rest of the nation, its readmission rates are higher, indicating that taking better care of more patients and preventing deaths may increase readmission.”80
Even more ridiculous is the effort to improve the quality of patient care by monitoring each doctor and measuring his or her performance against national norms. The result is a blizzard of forms doctors must complete after each patient visit. It is driving doctors nuts!
The RAND Corporation undertook an extensive study in 2013 of how one key aspect of the program was impacting doctors: the Electronic Health Records requirement. To gather data—that the Feds say is to assess how to be more efficient and to recommend certain treatments over others—doctors have to spend hours and hours each day filling out forms on their computer for each patient they see.
A study by the Physicians Alliance of America found that 37% of doctors reported having to spend between one and two hours each day filling in the required information forms. Twenty percent said they had to spend two hours or more. Forty-five percent of doctors said that the record-keeping requirement cut into their productivity, and they complained that it reduced the time they could spend with each patient. One Connecticut doctor said he worked all weekend filling in the forms for the patients he had seen during the week. He said that he has to spend about 20 minutes on the forms for each patient he sees. So, he reported, he had to spend almost as much time filling in the reporting forms as seeing the patient.
Some doctors said that the fact that they had to sit down at the computer and look at the screen while talking to the patient undermined the patient’s sense that the doctor was paying attention to them. It led, they said, to the impression that all he wanted to do was to fill in the forms.
It is also becoming clear that hospitals that serve richer, healthier patients score best on the quality measurements. The outside health care services in these communities are generally better and more available. Doctors at hospitals that serve lower income areas have to cope with more problems, which show up negatively in their quality of service score. The result is that the hospitals that serve the poor have lower ratings and get less funding as “punishment,” making their care even worse. In the grand battle of Bureaucracy vs. Medicine, paperwork is winning the day!
The Issue to Defeat Hillary
The failure of Obamacare is a dagger poised to strike Hillary Clinton. Remember, before there was Obamacare, there was Hillarycare. In 1993, the newly minted First Lady sought to pass a program very similar to Obama’s Affordable Care Act (ACA). Even as Obamacare is falling apart, Hillary—with predictable self-righteousness and stubbornness—is doubling down on its failures, promising to “strengthen” the program.
Her plan to solve the ills of Obamacare is to play, on a grander scale, the shell game that Obamacare has been playing with the American consumer: Hide the costs and pretend that they don’t exist. Are consumer’s burdened by high premiums? Hillary would “solve” the problem by empowering state insurance regulators “to block or modify unreasonable health insurance rate increases.”81 Of course, that would drive health insurers to refuse to cover Obamacare patients, just as UnitedHealth is already doing. But Hillary is still charging ahead. It is so much easier to pretend that high premiums stem from “unreasonable” charges by greedy hospitals and insurance companies than to admit that they come from the fact that only the sickest and the oldest are signing up for Obamacare and the rest of the uninsured would rather pay a fine than participate. Or that the high costs are driven by the broad and unnecessary range of medical and psychological services Obamacare insists be covered.
Are the deductibles under Obamacare stopping people from getting treatment? Simple! Hillary would just require all health plans to ignore required deductibles and give patients three doctor’s visits for illnesses without charging deductibles. Fine. But doctors will still charge for the patient visits. They won’t work for free. Hillary proposes to make the insurance companies eat the costs. Won’t that drive insurance premiums up higher to cover the extra costs? Of course it will.
But Hillary won’t let the premiums increase, she says. So won’t that drive more insurance companies to refuse to participate in Obamacare? Don’t ask annoying
questions! After all, the purpose of deductibles is to limit overuse of medical services so insurance companies can still afford to offer coverage. Hillary’s proposal will flood providers with unnecessary patient visits and push insurance companies out of Obamacare. Then she says she would limit all out-of-pocket spending by chronically ill patients for drugs to $250 per month. Fine. Well and good. But all that does is drive up premiums to pay for the extra cost.
How is Hillary going to pull off limiting out-of-pocket drug charges and requiring doctor visits with no deductible while not allowing insurance companies to raise rates “unreasonably?” Like a person sleeping with a blanket that is too small for her, plans like Hillary’s pull the blanket up to cover her neck but leave her feet uncovered. No matter how she tries, she’ll never cover everything with a too-small blanket. And with excess utilization flooding the system and doctors limited in what they can charge, won’t that drive doctors out of Obamacare?
Of course it will. The basic problem of Obamacare won’t be solved by Hillary’s plan; it will be worsened. How can you cover 10 million more people without more doctors? The only real way to lower costs is to educate and turn out more doctors. By increasing the demand without raising the supply, Obamacare is forcing costs up when it should be holding them down. Inevitably, Hillary will go to a single-payer system. Forget the insurance companies. Let them die. Go to a system where the government pays everything. Socialized medicine. That’s her real objective, but she can’t admit it.
But that begs the question of how you keep doctors in the system. Answer: Force them to stay. Make it illegal to go outside it. Government medicine or no medicine. If doctors want to practice their healing arts or if patients want care outside the government system, that’s too bad. That would be illegal, just as it has been for years in Canada (although the Canadians are increasingly showing some needed flexibility). That’s the end product of Hillary’s plan to “strengthen” Obamacare, and it’s where she always wanted to go in the first place. Her way or the highway.
Many will assume that Obamacare is dying a natural death. Even Hillary can’t put all the pieces of this medical Humpty Dumpty together again. But she won’t have to. If we make the colossal mistake of electing her, she will force us into collective socialized medicine. No choice of doctors. No choice for doctors. All decisions are made in Washington.
CHAPTER 4
Throw the Left Hook!—Destroy the Obama/Hillary Base
We must go group by group to weaken, undermine, and ultimately convert the elements of the Obama/Hillary coalition. We can’t ignore them and focus only on increasing the turnout of our own base. African Americans, Latinos, young people, single women, and gays—we must go to each group and explain why Donald Trump is more relevant to meeting their needs than are Obama or Hillary. We won’t convert them to a conservative ideology. But we can use the ways in which Obama and Hillary have failed them to harvest their votes. Throw the left hook!
Winning the White Working Class
“The Republicans are the party of the rich and the Democrats represent the poor and the middle class.” This viewpoint, fundamentally ingrained in popular wisdom for over a hundred years is wrong. Just plain wrong.
On the one hand, the Republican Party has become divided between its Wall Street/establishment wing and its more populist Main Street/Tea Party elements. The fierce Republican nominating contest of 2016 and the majority that lined up behind antiestablishment candidates like Trump, Cruz, Carson, and Paul demonstrates the depth of this split. The new Republicans are set on breaking up the big banks and limiting their powers and privileges, while the establishment wing of the party is linked to Wall Street at the hip. The Republicans who won the battle for the party’s soul and spirit in the 2016 primaries have more in common with the Occupy Wall Street demonstrators than with the board members of the big banks.
On the other hand, the Democratic Party has embraced Wall Street with gusto, relying increasingly on its financial largesse and protecting its interests in Congress. It’s just that the old adage that Democrats are for the poor and Republicans for the rich hasn’t been updated. To get the white working-class vote, we need to bring them up-to-date.
In the past, we could use the tax issue to get their votes. But Obama has outflanked us on the tax issue by differentiating between those who make more than $250,000 and the rest of us. Even as he regularly crosses the line and taxes us all, he still has managed to blunt taxation as an issue, undoing the good work of Ronald Reagan.
And Obama has succeeded brilliantly in substituting class for race among whites even as he doubles down on racial rhetoric among his black base. By getting blue-collar whites to resent rich whites more than poor blacks, he has cancelled out the policies Richard Nixon used to augment the GOP base.
We must accept what Obama has done and move on by explaining to the working class how the establishment Democratic Party, represented by Obama and Hillary Clinton, is no friend of theirs. America’s working class has not seen its household income rise—adjusted for inflation—since 1985. While it briefly ticked up during the Clinton years, the Great Recession and Obama’s policies have snuffed out the gains. So while the US economy, as noted, expanded by 30% since the middle of the Reagan years, net median family income has remained absolutely flat.
There are two major reasons the poor are getting poorer or at least not getting richer: trade with China and immigration. On both issues, the Democrats are taking a position against the interests of the working class and Republicans, led by Donald Trump, are lining up on the other side.
Trade: Bring the Jobs Home
Even the labor unions—as sycophantic as they always are toward the Democratic Party—can’t stomach the trade deals America has been making lately.
That’s why Donald Trump has attracted so much working-class support. He rightly attacks the trade agreements as bad deals, conceived by idiots and negotiated by weak bureaucrats.
“Who is our chief negotiator (in Japan)?” the Donald asked. “Essentially it is Caroline Kennedy. I mean give me a break. She doesn’t even know she’s alive.”1 Trump has shattered the post–World War II American political consensus that free trade is necessary and good. The governing class abused the patience of the American worker as he saw his job being exported under generous trade deals. Often bought off by the very foreign interests with whom they were negotiating, our trade representatives gave too much away and lost the confidence of the American worker.
Beginning with President Clinton’s hard sell that led to the ratification of NAFTA, Democratic politicians have found it more and more difficult to get their base to accept the premise that freer trade means more prosperity. They are opting out of the consensus that has animated American foreign policy for the past hundred years. Why? Because they see that American manufacturing jobs are disappearing due to unfair trade competition from China. This rapid erosion of our blue-collar jobs is more responsible than any other factor for the income stagnation of the American working class.
Since 1979, we have lost 7,231,000 manufacturing jobs in the United States—37% of our total manufacturing employment. At the same time, the real (inflation-adjusted) median household income of Americans who have completed high school but not gone on to college, has dropped from $56,395 to $40,701—a drop of $15,694, or 27.8%.2 No longer are our Democratic friends willing to follow their leaders to support trade deals. The idea that free trade will bring prosperity is falling flat in the face of the obvious evidence of Chinese chicanery and the equally apparent refusal of a Democratic president to confront it. Free trader or not, Adam Smith would never have found these one-sided trade deals acceptable.
China Cheats
The Economic Policy Institute puts the blame for this job loss where it belongs, on trade. The Institute reported, “The United States lost 5 million manufacturing jobs between January 2000 and December 2014. There is a widespread misperception that rapid productivity growth is the primary cause of continuing man
ufacturing job losses over the past 15 years. Instead, as this report shows, job losses can be traced to growing trade deficits in manufacturing products prior to the Great Recession and then the massive output collapse during the Great Recession.”3
The biggest trade deficit is with China. Apologists in both parties say that China has a lower labor cost and naturally makes more money selling to us than buying from us. But China’s edge in labor costs is more than offset by the cost of transporting goods from there to here, especially at times of high energy prices. It is not greater efficiency or lower labor costs that give China its advantage so much as its artificial currency manipulation (i.e., cheating).
China undervalues its own currency, the yuan, by about 25% so that Chinese products are 25% cheaper in US stores and American goods are 25% more expensive in China.
China’s huge trade deficit, brought about by its massive cheating, increased by over half on Obama’s and Hillary’s watch. When they took office, China had a deficit of $229 billion with us. Now it is $367 billion.
Everyone understands that the United States has been hemorrhaging jobs to China ever since Bill Clinton let Beijing into the World Trade Organization (WTO). Clinton promised America that admitting China would be a win/win for Americans. But the opposite has been the case. It’s been a great deal for China, but a terrible one for us. And yet no politician has the courage to take on China. Congress passed a law requiring the president to cite any nation that manipulates its currency to gain unfair trade advantage. Each year, he is required to make a finding on whether or not China is a currency manipulator.
And for each of the eight years, including during Hillary’s tenure at the State Department, our government has refused to cite China as a currency manipulator, even though virtually all the job loss to Beijing comes about precisely because of its currency shenanigans.