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Articles by Galen Institute

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Robert Samuelson: Health spending — under control? December 15, 2014

Washington Post, December 14, 2014

Has the monster of exploding health costs finally been slain? After five years of slow spending growth, it’s tempting to think so. This would be a momentous development, because rising health spending has had damaging side effects. It has reduced workers’ take-home pay, as employers devoted more compensation dollars to insurance and fewer to wages and salaries. Growing government health spending (mainly through Medicare for the elderly and Medicaid for the poor) has had a similar effect. It has squeezed other public programs.

The trend lines seem favorable. Recently, the Centers for Medicare and Medicaid Services (CMS) reported that from 2009 to 2013 annual increases in health spending averaged only 3.9 percent — well below historical experience. As recently as 2007, the gain was 6.3 percent. The result: Since 2009, health care’s share of the economy has stabilized at 17.4 percent of gross domestic product. Although that’s $2.9 trillion ($9,255 for every American), health care is no longer siphoning more resources from the economy’s other sectors.

Can this continue?

Unfortunately, experts disagree. Differing on what’s caused the slowdown, they split on how long it will last.


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Grace-Marie Turner: Obamacare Is No Friend of Small Businesses December 3, 2014

Small businesses have turned their backs on the Affordable Care Act, says healthcare expert Grace-Marie Turner, president of the Galen Institute, a public policy research organization.
“They call it the shop exchange [and] the coverage that’s offered through these shop exchanges is really substandard. It’s very expensive,” Turner said Tuesday on “The Steve Malzberg Show” on Newsmax TV.

“The government provides subsidies for small businesses to lure them into this coverage, but the subsidies themselves have a lot of very tricky thresholds.”

Turner said that for an average subsidy, the average wage of an employee has to be no more than $25,000 a year, and a small business can have no more than 25 employees to qualify for a full subsidy.

“So these very small businesses — hair dressers, garages — have to go through a lot of bureaucracy in order to qualify for these meager federal subsidies,” she said.


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James C. Capretta: How to Replace Obamacare December 2, 2014

In the 2014 midterm elections, opposition to the Affordable Care Act — i.e., Obamacare — was a clear political winner. That’s obvious from the election results themselves but also from polling that consistently finds that far more of the electorate disapproves of the law than approves of it.

It is therefore to be expected that the incoming Congress, fully under the control of the GOP, will vote on a straight repeal bill, probably very early in next session. In the House, such a bill will pass easily. But in the Senate, Democrats will control at least 46 seats in the new Congress, giving them plenty of votes to filibuster most legislation they oppose. Consequently, the most likely scenario is that the repeal legislation will die in the Senate and therefore never get sent to the president for a certain veto.

Perhaps that’s just as well, because repeal without a replacement plan is not the best long-term position for ACA opponents anyway. The ultimate goal should be enactment of a plan that is far better than the ACA, with broader and deeper public support.

The electorate is deeply uneasy about the ACA’s approach to reform, for good reasons. It cedes massive new authority over the health system to the federal government. That will lead, inevitably, to more regulation and a lowering of the quality of American health care. The law is also terribly expensive and a wet blanket on the American economy at a time when middle-class incomes are stagnant.

But that doesn’t mean the public is eager to go back to the pre-ACA status quo, which is what is implied with a bill that repeals the ACA but does not replace it. President Obama got one thing right about American health care in 2009: It needed to be reformed – just not in the way he advocated. The pre-ACA health system left too many Americans with inadequate and insecure insurance, treated individuals unfairly who bought insurance on their own, allowed too many people with preexisting conditions to fall through regulatory cracks, and inflated costs with open-ended federal entitlement programs and tax subsidies.

The ACA’s answer to these problems was to consolidate power over the entire system within the federal government. But that’s exactly why the public is so uneasy about what passed in 2010 (in addition to being unhappy with the process that was used to enact it). The door is open for ACA opponents to present an alternative vision for reform that addresses the real problems in American health care without the big-government baggage of the ACA.


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Amy Goldstein:’s insurance marketplace for small businesses gets off to a slow start December 1, 2014

A year after the Obama administration temporarily shelved an unfinished part of intended for small businesses, it has opened with reports of only modest technical flaws — but with doubts that it will soon benefit the millions of workers at little companies with inadequate health insurance or none at all.

Insurance brokers are, at times, having trouble getting into their accounts and, in scattered cases, are not showing up in the computer system’s lists of local insurance professionals available to coach small businesses. More broadly, interviews with brokers and others suggest that, in the two weeks since the marketplace’s health plans went on sale for 2015, interest within the niche they are intended to help seems scant.

During the first week, that part of drew 200,000 visits, compared with more than 1.5 million people who looked at the Web site’s health plans for individuals, according to the Centers for Medicare and Medicaid Services (CMS), the branch of the Department of Health and Human Services overseeing the ­online insurance marketplaces. CMS officials would not provide figures on how many small businesses in that first week decided to offer workers coverage through the health plans created for them — or how many workers, in turn, have bought it.

But John Arensmeyer, chief executive of Small Business Majority, a group eager for this part of the marketplace to succeed, voiced a widespread view. “We are not expecting a massive surge,” he said.

The fate of the Small Business Health Options Program, known as SHOP, has attracted less attention than the part of designed for individuals who cannot get insurance through their jobs. But when Congress enacted the Affordable Care Act in 2010, the idea of providing a new breed of health plans to small companies was one pillar of the law’s strategy to usher in the largest expansion in health insurance the government had ever attempted.


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Adam J. White: Obamacare’s State of Crisis December 1, 2014

The Weekly Standard, November 24, 2014

In their final push to enact Obamacare, Nancy Pelosi urged her fellow Democrats to “pass the bill so that you can find out what is in it.” They probably should have found out first. Now they need the Supreme Court to “find” once again in their favor.

Last week, the Court announced that it will hear King v. Burwell, one of several challenges to the administration’s interpretation of a key Obamacare provision regarding health insurance markets. Unlike the plaintiffs in the Court’s last Obamacare case, National Federation of Independent Business v. Sebelius (2012), the King plaintiffs do not claim that the Constitution nullifies Obamacare. Rather, they claim that the Obama administration itself is nullifying one of Obamacare’s key provisions. They ask the Court to require the administration to enforce the act’s plain terms as written​—​and this, the law’s critics hope, may cause Obamacare to collapse under its own weight.

The case arises from Obamacare’s provision for health insurance “exchanges”​—​statewide markets for health insurance designed to enable people to obtain health insurance from a source other than employers. While the House’s version of health care legislation provided for a single nationwide exchange, the version of Obamacare that was enacted provides for the creation of an exchange for each state and the District of Columbia.

But the law does not require the states themselves to set up the exchanges​—​in fact, the Constitution prohibits the federal government from forcing states to administer a federal program. Instead, each state had the opportunity to set up its own exchange; and if it declined to do so, the federal Department of Health and Human Services would “establish and operate such [an] Exchange within the State.”

President Obama long had urged that the federal government needed to subsidize health insurance purchased on exchanges to make it sufficiently attractive to poor and middle-class consumers. But the version of Obamacare signed by the president after a flurry of legislative gamesmanship was not written in such generous terms.

The act does provide expressly for federal tax subsidies, called “premium assistance,” for health insurance purchased “through an Exchange established by the State.” But that subsidy​—​and related penalties, for in Obamacare as in life there is no free lunch​—​finds no corresponding provision for health insurance purchased “through an Exchange established by the Federal Government.” Absent such a provision, the federal government is left to argue that this provision must be construed broadly to cover all exchanges, not just state-created ones. Or, as the administration argues, the courts should treat federally created exchanges as actually state-created exchanges, with the secretary of health and human services “stand[ing] in the shoes of” the states.

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