Retirees Are the Third Victims of Obamacare

We've already identified kids and low-income workers as groups that are being hurt by the new scheme for government-run healthcare. Now we can add retirees to the list. Gee, I wonder what happened to that promise about being able to keep your existing health plan? Here's an excerpt from a story in the Wall Street Journal.

3M Co. confirmed it would eventually stop offering its health-insurance plan to retirees, citing the federal health overhaul as a factor. The changes won't start to phase in until 2013. But they show how companies are beginning to respond to the new law... 3M illustrates that others may not opt to retain such plans over the next few years... The company didn't specify how many workers would be impacted. It currently has 23,000 U.S. retirees. ...Sen. Charles Grassley, an Iowa Republican, said that "for all the employees who were promised they'd be able to keep their current benefits after the health-care law passed, I'm worried that the recent changes we've heard about...are just the beginning."

Low-Income Workers Are the Second Victims of Obamacare

This blog already has noted that Obamacare has crippled the market for "kids only" health insurance policies. Unsurprisingly, that is just the beginning of the bad news. The latest development is that health policies designed to provide insurance to low-income workers may no longer be economically feasible. The Wall Street Journal comments.

Among President Obama's core health-care promises was that Americans can keep their current coverage if they like it. Among the reasons that a new ObamaCare squall blows in every other day is that this claim simply is not true, as people are discovering. The latest fracas was incited by Janet Adamy's scoop in the Journal this week that McDonald's Corp. may be forced to cancel its current coverage for 29,500 employees as a result of ObamaCare. McDonald's told Health and Human Services regulators that new mandates will make its plans "economically prohibitive" and cause "a huge disruption" unless it gets a waiver. ...The entire philosophical and policy architecture of ObamaCare is explicitly designed to standardize health benefits and how those benefits should be paid for. Those choices and tradeoffs will be made for everyone by Ms. Sebelius's regulators. ...Around 2.5 million consumers are covered by "mini-med" policies, most of them concentrated in low-wage industries like fast food, hospitality and retail that have large numbers of part-time or temporary workers. In the case of the restaurants, 75% of the workforce turns over every year and nearly half are under age 25. Mini-med plans are a temporary stopgap for businesses that have low margins and face high labor and health costs. But Democrats hate mini-med and other skinny-benefit plans, calling them "underinsurance." ObamaCare is meant to run them out of the market by mandating benefits, eliminating coverage caps and certain technical rules about how premiums must be spent. ...In other words, the choice is between relatively affordable coverage that isn't as generous as Democrats think it should be and dumping coverage entirely. McDonald's may eventually offer the high-cost plans that Ms. Sebelius favors, or get its waiver, but many of its less profitable or smaller competitors won't. While subsidized ObamaCare options will be available in 2014, those costs will merely be transferred to taxpayers.

Kids Are the First Victims of Obamacare

In the real world, rational people know that companies will stop selling products if they are forced to lose money. In the political world, though, common sense doesn't matter. Or at least it ranks far below other considerations, such as power, polling, fundraising, and spite. If you think I'm being too harsh, just look at what's happened since Obamacare. As the Wall Street Journal notes, the "child-only" insurance market has been decimated by a new law that allows parents to wait until children get sick before buying insurance. Needless to say, that is an open invitation to lose money, and no business (other than crony capitalism entities such as Fannie Mae and Freddie Mac) exists to throw away shareholder funds. Obama, Pelosi, and Reid probably think this is a good development, however, since they can demagogue against "greedy" insurance companies and claim that government should fully take over the health care system.

This week, almost every big insurance company in America—including Aetna, Cigna, UnitedHealth Group, WellPoint, Humana, Coventry, some Blue Cross Blue Shield affiliates and others—stopped writing "child-only" policies in the individual market. This is a niche product that parents typically buy when their employer health plan doesn't cover dependents. The exact plans vary company to company and state to state, and the insurers will still offer family policies and make good on the child-only policies that they've already sold. But most won't be writing new ones. In other words, for-profit businesses are refusing to sell products that consumers want to buy. Exact data aren't available, but the child-only market covers roughly a million kids a year. The reason is a regulation that President Obama mentions every time he talks about health care, as he did recently in Falls Church, Virginia: "Children who have pre-existing conditions are going to be covered." Insurers are now required to cover everyone under 19 when their parents apply for coverage, regardless of health status. The problem with this kind of "guaranteed issue" is that it encourages people, in this case parents, to wait until their kids are sick before seeking coverage. This drives up premiums for the healthy, encouraging consumers in turn to drop coverage, and eventually it leads to what's known as a "death spiral," the industry term for an insurer with rapidly increasing costs as a result of population changes in its coverage pool. The child-only market is a particular death-spiral risk because it is so small and unstable, which explains why so many insurers left in a stroke. The collapse of the child-only market is a preview of what will happen when guaranteed issue and the rest of ObamaCare comes on line in 2014 for adults, except then insurers will have nowhere to flee. Exiting the market will mean going out of business.

Gangster Government in Action

Even though I've been in Washington for 25 years, I still get nauseated by the predatory behavior of the looters and moochers. The latest example of disgusting behavior is from the Secretary of Health and Human Services, who is engaging in Hugo Chavez-style threats to block insurance companies from raising rates in response to the new costs imposed by Obamacare. Michael Barone's column and a Wall Street Journal editorial capture the odious nature of this banana republic stunt. Here's part of what Barone wrote:

"There will be zero tolerance for this type of misinformation and unjustified rate increases." ...Secretary Sebelius objects to claims by health insurers that they are raising premiums because of increased costs imposed by the Obamacare law passed by Congress last March. ...Sebelius has "zero tolerance" for that kind of thing. She promises to issue regulations to require "state or federal review of all potentially unreasonable rate increases" (which would presumably mean all rate increases). And there's a threat. "We will also keep track of insurers with a record of unjustified rate increases: Those plans may be excluded from health insurance Exchanges in 2014." That's a significant date, the first year in which state insurance exchanges are slated to get a monopoly on the issuance of individual health insurance policies. Sebelius is threatening to put health insurers out of business in a substantial portion of the market if they state that Obamacare is boosting their costs. "Congress shall make no law," reads the First Amendment, "abridging the freedom of speech, or of the press." Sebelius' approach is different: "zero tolerance" for dissent. The threat to use government regulation to destroy or harm someone's business because they disagree with government officials is thuggery. Like the Obama administration's transfer of money from Chrysler bondholders to its political allies in the United Auto Workers, it is a form of gangster government. ...Sebelius and the Obama administration...want to stamp out negative speech about Obamacare. "Zero tolerance" means they are ready to use the powers of government to threaten economic harm on those who dissent.

Here's a blurb from the WSJ:

The White House was always going to blame insurance companies for any cost increases, even when its own policies cause them. Witness Kathleen Sebelius's Thursday letter to America's Health Insurance Plans, the industry trade group—a thuggish message even by her standards. The Health and Human Services secretary wrote that some insurers have been attributing part of their 2011 premium increases to ObamaCare and warned that "there will be zero tolerance for this type of misinformation and unjustified rate increases." Zero tolerance for expressing an opinion, or offering an explanation to policyholders? They're more subtle than this in Caracas. ...This is nasty stuff and an obvious attempt to shift political blame for rising insurance costs before the election. It's also an early sign of life under ObamaCare, when all health-care decisions are political and the bureaucrats decide who can charge how much for a service or product.

The Joy of Government-Run Healthcare

Here's some horrifying news from the United Kingdom, where the government-run healthcare system allowed 239 patients to die of malnutrition in 2007. Another 8,000-plus entered the system for malnutrition and actually deteriorated.

In 2007, 239 patients died of malnutrition in British hospitals, the latest year for which figures are available. A wag might say it must be the English cuisine. But the real roots of this tragedy lie in Britain's government-run medical system, which tells us something about what we might expect from ObamaCare in the years ahead. A British charity, Age U.K., has been seeking for years to raise awareness of the issue. Yet despite increases in screening, training and inspection programs, the problem has only gotten worse. The charity reports that in 2007-2008 148,946 Britons entered hospitals suffering from malnutrition and 157,175 left in that state, meaning that hospitals released 8,229 people worse-off nutritionally than when they entered. In 2008-2009, that figure was up to 10,443. The problem is not a lack of food. Hospital malnutrition mostly affects the elderly or otherwise frail, who often need individualized mealtime assistance. Spoon-feeding the elderly may not seem like the best use of a nurse's time, but for some it may literally be a matter of life and death. Yet the constant scarcities created by government medicine, along with the never-ending drive to trim costs, has led the National Health Service to give nurses additional responsibilities and powers in recent years. Inevitably, this leaves them with less time to make sure patients are getting fed.

No system is perfect, so the point of this post is not to assert that there is something especially inhumane and/or incompetent about the British system. Instead, the real lesson is that doctors and hospitals generally try to please the people paying the bills. In government-run systems, that means appeasing politicians. This doesn't preclude good patient care, but it does mean that other factors may have too much of an impact on decisions. In a market-based system, though, medical professionals have a greater incentive to focus on patients.

I should also say that this is not an endorsement of the American system, which also suffers from the third-party payer problem. In part, this is because of direct government financing, but also because of excessive use of insurance caused by government-created distortions.

Government-Created Third-Party Payer Is the Number One Problem in America's Health Care System

John Goodman of NCPA has a great article about how the current healthcare system is heavily distorted by government policies that result in people making decision with other people's money (or at least what they perceive as other people's money). The excerpt below is a good summary of John's key points, but I'll add a couple of rhetorical questions. What do you think would happen if government created a tax break that made it attractive to expand auto insurance to cover the cost of oil changes and trips to the gas station? Would that make that market more efficient or less efficient? Would Jiffy Lube and Sunoco charge higher prices or lower prices? What would happen to administrative costs?

Almost everyone believes there is an enormous amount of waste and inefficiency in health care. But why is that? In a normal market, wherever there is waste, entrepreneurs are likely to be in hot pursuit — figuring out ways to profit from its elimination by cost-reducing, quality-enhancing innovations. Why isn’t this happening in health care? As it turns out, there is a lot of innovation here. But all too often, it’s the wrong kind. There has been an enormous amount of innovation in the medical marketplace regarding the organization and financing of care. And wherever health insurers are paying the bills (almost 90 percent of the market) it has been of two forms: (1) helping the supply side of the market maximize against third-party reimbursement formulas, or (2) helping the third-party payers minimize what they pay out. Of course, these developments have only a tangential relationship to the quality of care patients receive or its efficient delivery. The tiny sliver of the market (less than 10 percent) where patients pay out of pocket has also been teeming with entrepreneurial activity. In this area, however, the entrepreneurs have been lowering cost and raising quality — what most of us wish would happen everywhere else. ...Wherever there is third-party payment, the goal of innovation is to produce more products that qualify for reimbursement, even if the effects on patient outcomes are only marginal. Wherever there is no third-party reimbursement, innovators are focused on ways to lower cost and raise quality. Take cosmetic surgery. Over the past two decades there has been an enormous amount of innovation in the field — all of the cost-lowering, quality-raising variety. That explains why the volume of cosmetic surgeries grew six-fold over the past 20 years, while the real price declined by more than one-third. Similarly, there has been remarkable innovation in LASIK surgery — another area where third-party payers are not. Yet the real price of LASIK surgery has declined by 25 percent over the past decade. The same principle can be seen at work in the international marketplace. For example, India has a potentially huge market for medical care. But 80 percent of health care spending in that country is private and there is very little health insurance. So some of the companies that make expensive technology for the developed world are now finding ways to produce the same services for a fraction of the price. GE Healthcare, for example, has introduced a portable electrocardiogram machine into the Indian market that will perform the heart exam for 20 cents (compared to a normal price of $50). Siemens (another maker of high-end, expensive equipment) has built mobile diagnostics units for the Indian market with X-ray, ultrasound and pathology systems.

Missouri Voters Send Obama a Big Message on Government-Run Healthcare

I believe in freedom and my opinions are never swayed by polling data and election results, but I'm not oblivious to the importance of public opinion. So I'm delighted that the voters of Missouri overwhelmingly approved a measure against a federal mandate to purchase health insurance. Here are the cheerful details.

Missouri voters on Tuesday overwhelmingly rejected a federal mandate to purchase health insurance, rebuking President Barack Obama's administration and giving Republicans their first political victory in a national campaign to overturn the controversial health care law passed by Congress in March. "The citizens of the Show-Me State don't want Washington involved in their health care decisions," said Sen. Jane Cunningham, R-Chesterfield, one of the sponsors of the legislation that put Proposition C on the August ballot. She credited a grass-roots campaign involving Tea Party and patriot groups with building support for the anti-Washington proposition. With most of the vote counted, Proposition C was winning by a ratio of nearly 3 to 1. ...The question now is whether the administration will respond by suing the state to block passage of the law, much as it did in Arizona recently over illegal immigration. The issue in both is the same: When state laws conflict with federal laws, the courts have generally ruled in favor of the federal government, because of the Supremacy Clause of the U.S. Constitution.

Great Moments in Government-Run Healthcare

Somebody sent me this story from the Drudge Report and can't resist the temptation to share. What really astounds me is not that a Swedish man sewed up his own leg after waiting for a long time in a hospital. Heck, I wouldn't be surprised if things like that happened in all nations. The really disturbing part of the story is that the hospital then reported the man to the police. A classic case of "blaming the victim." The bureaucrats in Sweden's government-run healthcare system obviously were not pleased that he called attention to their failure.

A 32-year-old took the needle into his hands when he tired of the wait at Sundsvall hospital in northern Sweden and sewed up the cut in his leg himself. The man was later reported to the police for his impromptu handiwork. "It took such a long time," the man told the local Sundsvall Tidning daily. The man incurred the deep cut when he sliced his leg on the sharp edge of a kitchen stove while he was renovating at home. "I first went to the health clinic, but it was closed. So I rang the medical help line and they told me that it shouldn't be closed, so I went to emergency and sat there," the man named only as Jonas told the newspaper. After an hour-long wait in a treatment room, he lost patience and proceeded to sew up his own wound. "They had set out a needle and thread and so I decided to take the matter into my hands," he said. But hospital staff were not as impressed by his initiative and have reported the man on suspicion of arbitrary conduct for having used hospital equipment without authorization.

Obamacare Humor

While the cartoon is amusing, I'm sure I don't need to remind this audience that this isn't really a joke. The IRS now has immense additional powers to micro-manage our lives.

With Tax Increases Looming, CBO Does About-Face and Frets about Deficits and Debt

Like the swallows returning to Capistrano, the Congressional Budget Office follows a predictable pattern of endorsing policies that result in bigger government. During the debate about the so-called stimulus, for instance, CBO said more spending and higher deficits would be good for the economy. It then followed up that analysis by claiming that the faux stimulus worked even though millions of jobs were lost. Then, during the Obamacare debate, CBO actually claimed that a giant new entitlement program would reduce deficits. Now that tax increases are the main topic (because of the looming expiration of the 2001 and 2003 tax bills), CBO has done a 180-degree turn and has published a document discussing the negative consequences of too much deficits and debt.

...persistent deficits and continually mounting debt would have several negative economic consequences for the United States. Some of those consequences would arise gradually: A growing portion of people’s savings would go to purchase government debt rather than toward investments in productive capital goods such as factories and computers; that “crowding out” of investment would lead to lower output and incomes than would otherwise occur. ...a growing level of federal debt would also increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government’s ability to manage its budget, and the government would thereby lose its ability to borrow at affordable rates. ...If the United States encountered a fiscal crisis, the abrupt rise in interest rates would reflect investors’ fears that the government would renege on the terms of its existing debt or that it would increase the supply of money to finance its activities or pay creditors and thereby boost inflation.

At some point, even Republicans should be smart enough to figure out that this game is rigged. Then again, the GOP controlled Congress for a dozen years and failed to reform either CBO or its counterpart on the revenue side, the Joint Committee on Taxation (which is infamous for its assumption that tax policy has no impact on overall economic performance).

Obamacare Complexity vs Free Market Simplicity

Free markets are characterized by voluntary exchange between buyers and sellers. Mapping that relationship is absurdly simply, as this image indicates.


Indeed, the only reason I even bothered to include that image was for purposes of comparison. Here is a new flowchart prepared for the Joint Economic Committee showing the healthcare system under Obamacare.


It's worth noting, by the way, that the system already was a disaster even before Obamacare was enacted. In the health care sector, free markets are only allowed to operate in very rare cases, such as cosmetic surgery, laser eye surgery, and (for better or worse) abortion. The rest of the sector was heavily distorted by government intervention. Obamacare simply makes a bad situation worse.

Another Sad Example of Mitchell's Law

I've decided my one legacy to the world is the phrase, "Bad government policy begets more bad government policy." This term, which I am modestly calling Mitchell's Law, describes what happens when government intervention (Fannie and Freddie, for example, or Medicare and Medicaid) causes problems in a particular market (a housing bubble or a third-party payer crisis), which leads the politicians to impose more misguided intervention (bailouts or Obamacare). Here's a good example from Germany. The politicians created government-run healthcare. Overweight people are putting a larger burden on the system, imposing costs on taxpayers. The logical response is to shift to a market-based system where people are in charge of their own healthcare costs. Not surprisingly, that option isn't being considered. Instead, politicians are using the situation as an excuse to consider even more taxes.

Marco Wanderwitz, a conservative member of parliament for the German state of Saxony, said it is unfair and unsustainable for the taxpayer to carry the entire cost of treating obesity-related illnesses in the public health system. "I think that it would be sensible if those who deliberately lead unhealthy lives would be held financially accountable for that," Wanderwitz said, according to Reuters. Germany, famed for its beer, pork and chocolates, is one of the fattest countries in Europe. Twenty-one percent of German adults were obese in 2007, and the German newspaper Bild estimates that the cost of treating obesity-related illnesses is about 17 billion euro, or $21.7 billion, a year. ...Health economist Jurgen Wasem called for Germany to tackle the problem of fattening snacks in order to raise money and reduce obesity. "One should, as with tobacco, tax the purchase of unhealthy consumer goods at a higher rate and partly maintain the health system," Wasem said, according to Germany's English-language newspaper The Local. "That applies to alcohol, chocolate or risky sporting equipment such as hang-gliders." Others are suggesting even more extreme measures. The German teachers association recently called for school kids to be weighed each day, The Daily Telegraph said. The fat kids could then be reported to social services, who could send them to health clinics.

Great Moments in Government-Run Healthcare

While it will be nice to say "I told you so" when Obamacare leads to bad results in America, I would much prefer to avoid having stories like this appear in the American press. But in the United Kingdom, where government controls more than 90 percent of the healthcare system (as opposed to my rough guess of less than 70 percent in America), these kinds of disasters are becoming increasingly common. Here's a blurb from a story in the UK-based Telegraph.

Women in labour have been forced to wait while epidural equipment was borrowed from other hospitals, while other patients have been denied chest drains and radiology supplies, according to doctors at South London Healthcare Trust. Minutes of a meeting between medical staff and the trust’s chief executive say “cash flow” problems at the trust which has a £50 million deficit, mean vital equipment is regularly not ordered. A separate letter sent to managers of the trust, one of the largest in the country, says consultants have been misled into carrying out operations when it was not safe to go ahead because of bed shortages. ...Doctors told managers “again and again” that consultants were unable to know that equipment was missing until the last item had been used, when their patient was already lying on the table, according to the minutes of June 16 meeting. The document states that Chris Streather, the trust’s chief executive said the situation had improved to the extent that the trust could now pay some of its bills, but that he could not promise that the problem would not recur. It describes “significant risks” to patient safety because of shortages of beds, and “chaotic” failures dealing with such crises at the trust, which also runs Queen Mary’s Hospital in Sidcup, in Kent, and Queen Elizabeth Hospital in Woolwich, London, and NHS units in Orpington and Beckenham, in Kent. Patients affected include a woman who had undergone major cancer surgery who could not be found a bed.

Abortion, Third-Party Payer, and the Cost of Health Care

A major problem with America's healthcare system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining healthcare. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of healthcare expenditures. But even a majority of supposedly private healthcare spending is financed by employer-provided policies that are heavily distorted by a preference in the tax code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of healthcare costs are financed directly by consumers. And since consumers almost always are buying healthcare with somebody else's money, it should come as no surprise that this system results in rising costs and inefficiency. This is why repealing Obamacare is just the first step that is needed if policymakers genuinely want to restore a free market healthcare system (all of which is explained in this 4-minute video).

Unfortunately, many people think that market forces don't work in the healthcare system and that costs will always rise faster than prices for other goods and services. There are a few examples showing that this is not true, and proponents of liberalization usually cite cosmetic surgery and laser-eye surgery as examples of treatments that generally are financed by out-of-pocket payments. Not surprisingly, prices for these treatments have been quite stable - particularly when increases in quality are added to the equation.

I just ran across another example, and this one could be important since it may resonate with those who normally are very suspicious of free markets. As the chart from the Alan Guttmacher Institute shows, the price of an abortion has been remarkably stable over the past 20-plus years. Let's connect the dots to make everything clear. Abortions generally are financed by out-of-pocket payments. People therefore have an incentive to shop carefully and get good value since they are spending their own money. And because market forces are allowed, the cost of abortions is stable. The logical conclusion to draw from this, of course, is that allowing market forces for other medical services will generate the same positive results in terms of cost and efficiency.


None of this analysis, by the way, implies that abortion is good or bad, or that it should be legal or illegal. The only lesson to be learned is that market forces control costs and promote efficiency and that more government spending and intervention exacerbate the third-party payer crisis.

Are Reporters for the New York Times Biased or Stupid?

The Obama Administration has decided to mandate that insurance companies provide dozens of tests to consumers at no charge. Any person with an IQ that is above room temperature understands, of course, that this doesn't mean there is no cost for the tests. It just means that the costs are borne indirectly, most likely in the form of higher premiums charged by insurance companies. Yet Robert Pear, a reporter for the New York Times, leads off his story by saying that the tests are now free and this will be beneficial for consumers. And at no point in the story does he mention any of the various - and unavoidable - effects of the new government mandate. The only logical conclusion is that he is either completely oblivious to indirect costs or that he is an opinion writer masking as a reporter because he wants to advance an ideological agenda. You choose.

The White House on Wednesday issued new rules requiring health insurance companies to provide free coverage for dozens of screenings, laboratory tests and other types of preventive care. The new requirements promise significant benefits for consumers — if they take advantage of the services that should now be more readily available and affordable. ...The rules will eliminate co-payments, deductibles and other charges for blood pressure, diabetes and cholesterol tests; many cancer screenings; routine vaccinations; prenatal care; and regular wellness visits for infants and children.

Political Humor and Obamacare (at least I hope this is just a joke)

Big-Business Lobby Group Supports So-Called Stimulus and Obamacare and then Has Gall to Complain about Big Government

Regular readers of this blog know that big corporations often are enemies of free markets and individual liberty. So it is hardly suprising to know that the Business Roundtable, a lobby representing CEOs of major companies, supported the wasteful and ineffective stimulus pprogram in 2009 and the bloated new healthcare entitlement in 2010. Big companies, after all, are quite proficient at working the system to obtain unearned wealth and to rig the rules against smaller competitors.

What is surprising, however, is that representatives of that organization now have the chutzpah to complain about a "hostile environment for investment and job creation." Equally galling, the group has published a document called "Policy Burdens Inhibiting Economic Growth." We've all heard the joke about the guy who murders his parents and then asks the court for mercy because he's an orphan. The Business Roundtable has adopted that strategy, except this time taxpayers are the butt of the joke.

Here's an excerpt from the Washington Post report:

The chairman of the Business Roundtable, an association of top corporate executives that has been President Obama's closest ally in the business community, accused the president and Democratic lawmakers Tuesday of creating an "increasingly hostile environment for investment and job creation." Ivan G. Seidenberg, chief executive of Verizon Communications, said that Democrats in Washington are pursuing tax increases, policy changes and regulatory actions that together threaten to dampen economic growth and "harm our ability . . . to grow private-sector jobs in the U.S." ...The final straw, said Roundtable president John Castellani, was the introduction of two pieces of legislation, now pending in Congress, that the group views as particularly bad for business. One, a provision of the administration's financial regulation overhaul, would make it easier for shareholders to nominate corporate board members. The other would raise taxes on multinational corporations. The rhetoric accompanying the tax proposals has been particularly harsh, Castellani said, with Democrats vowing to campaign in this fall's midterm elections on a platform of punishing companies that move jobs overseas. ...Seidenberg polled the members of the Business Roundtable and a sister organization, the Business Council. The result was a 54-page document, delivered to Orszag on Monday, chock full of bullet points about actions taken or considered by a wide array of executive agencies, including the White House Middle Class Task Force and the Food and Drug Administration. "We believe the cumulative effect of these proposals will help defeat the objectives we all share -- reducing unemployment, improving the
competitiveness of U.S. companies and creating an environment that fosters long-term economic growth," Seidenberg wrote in a cover letter for the document, titled "Policy Burdens Inhibiting Economic Growth."

Obamacare Kills a Company and Puts 50 More People on the Unemployment Rolls

In the real world, government policies that raise the cost of doing business often lead to crippling - and sometimes even fatal - results. Here's a story, which I saw via Instapundit and Megan McArdle, about an insurance company that is closing its doors because "federal healthcare legislation made the two-year old company's business model unsustainable." In her commentary, Megan displays an appropriate level of skepticism about whether bad policy deserves all the blame whenever a company goes under, but this does seem to be one of those instances since Obamacare forces health insurance companies to follow bad business practices such as allowing people to get sick before getting insurance. The loss of 50 jobs is discouraging, as is the loss of a company that was providing very sensible (or at least would be very sensible in the absence of destructive government policies) high-deductible policies that represented genuine insurance rather than inefficient low-deductible policies (i.e., pre-paid, "all you can eat" plans) that dominate the current quasi-private market:

The hotly debated healthcare reform bill signed into law in March has killed a local insurance company. At least that’s according to a brief letter Richmond-based nHealth sent to insurance agents explaining the reason behind the shuttering of the once promising local startup. “I wanted to share with you the decision by nHealth’s board of directors to exit the health insurance market,” wrote James Slabaugh, executive vice president of the Richmond-based insurance company that employed about 50 people. (Many of those were at an office in Ohio). ...The letter explained that “considerable uncertainties” in the health insurance market caused by the recent federal healthcare legislation made the two year-old company’s business model unsustainable. ...Nezi said nHealth tried to raise additional capital but was unsuccessful. “People got skittish about writing any more checks,” Nezi said. “Because of that uncertainty, would you invest a few more million dollars of your money in a startup if you don’t know what the rules are going to be?” That left company with only one choice. “The most prudent and sensible conclusion for us is to discontinue the sale of healthcare policies and withdraw from the healthcare business,” Slabaugh wrote in the letter. Founded in 2008, nHealth was built around a high deductible insurance plan model that utilized health savings accounts and kept costs down making consumers more involved in their healthcare decisions.

Obamacare Means IRS Nightmare for Small Business

We've looked at this issue before, but this new CNN article fleshes out the awful IRS rules in the new healthcare bill:

The massive expansion of requirements for businesses to file 1099 tax forms that was hidden in the 2,409-page health reform bill took many by surprise when it came to light last month. ...The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year. ...Starting in 2011, financial firms that process credit or debit card payments will be required to send their clients, and the IRS, an annual form documenting the year's transactions. ...The 1099 changes attached to the health care reform bill are another kettle of fish. These massively expand the requirements for filing the "1099-Misc" form, which companies use for recording payments to freelance workers and other individual service providers. Until now, payments to corporations have been exempt from 1099 rules, as have payments for the purchase of goods. Starting in 2012, that changes. All business payments or purchases that exceed $600 in a calendar year will need to be accompanied by a 1099 filing. That means obtaining the taxpayer ID number of the individual or corporation you're making the payment to -- even if it's a giant retailer like Staples or Best Buy -- at the time of the transaction, or else facing IRS penalties. ...SMC's survey found that extending 1099s just to services purchased from corporations would push that number to at least 200 filings per year for a typical small business -- adding an estimated $6,000 to the cost of preparing the average tax return. And that's without even accounting for the requirement that 1099s be filed for purchases of goods, a provision that Henschke's group didn't see coming when it conducted its survey last year. "These folks are doing their paperwork in the evenings and on the weekends already," he says. "This certainly adds to the burden substantially."

Great Moments in Government-Run Healthcare

British healthcare is often criticized for long waiting lines and slovenly conditions, but that's just part of the story. Here's a frightening story about a women who actually got treated - and died as a result. To be fair, this presumably is a tragic exception and most people in the United Kingdom surely receive adequate care. That being said, how can medical professionals miss a six-inch handle stuck in someone's butt?!? Here's an excerpt from the Sun newspaper:

A young mum died after a series of blunders by doctors who failed to spot a six-inch long toilet brush handle embedded in her buttock, an inquest was told today. Cindy Corton, 35, was left with the bizarre injury after a drunken fall in a friend's bathroom in 2005 but "serious errors" by doctors then led to her death. It was two years before Cindy, who was in constant pain, was able to convince doctors that the thin serrated plastic handle was stuck in the flesh of her bottom. By then what should have been a routine procedure to remove it had become much more dangerous because the handle had become embedded in her pelvis. After two unsuccessful operations in 2007 the mother-of-one was in such agony that she agreed to undergo further surgery in June last year despite being told it could prove fatal. Cindy of Sleaford, Lincs, spent more than ten hours in surgery at Nottingham's Queens Medical Centre but died from massive blood loss. ...Cindy's husband, a construction manager, is now taking legal action against United Lincolnshire Hospitals Trust. ...He added: "Cindy got a very poor service from the NHS. I'm sure she would have got better treatment in foreign countries."