Fixing the federal health reform law

GUEST EDITORIAL

The projected cost of Obamacare is going up - again. The nonpartisan Congressional Budget Office (CBO) now estimates the 10-year cost of federal health reform at $1.45 trillion, a $40 billion increase in just the first 12 months.

If history is any guide, the real cost of Obamacare will be much higher. A 2009 study by the Senate Joint Economic Committee found that health-care plan costs are always dramatically underestimated:

· In 1967, the House Committee on Ways and Means predicted that the new Medicare program would cost about $12 billion in 1990. Actual Medicare spending in 1990 was $110 billion.

· In 1987, Congress estimated that a special Medicaid payment program to hospitals would cost less than $1 billion in 1992. The actual cost that year was $17 billion.

· When Congress debated changes to Medicare's home care benefit in 1988, the projected 1993 cost of the benefit was $4 billion. The actual 1993 cost was more than twice that amount, $10 billion.

This latest CBO estimate will likely fuel new debates in Congress about the funding for federal health reform.

One of those debates has already surfaced. Opponents say that buried deep in the 2,700-page health reform bill is a provision that provides automatic funding for various programs in the law. But that automatic funding is unconstitutional, according to Rep. Jack Kingston, R-Ga., and Rep. Louie Gohmert, R-Texas. They say only Congress has the authority to appropriate funding, and they have introduced legislation to remove $105.5 billion in automatic funding for Obamacare.

Some opponents in the U.S. House of Representatives want to use the power of the purse to defund Obamacare entirely. Even if the law remains in place, it cannot be implemented unless Congress authorizes funding.

One of the complaints about the new health reform law is that it actually eliminates many existing programs that have proved successful in providing affordable health coverage.

For example, the law's regulations mandating what constitutes "acceptable" health insurance coverage would eliminate Health Savings Accounts (HSAs). HSAs are very affordable policies in which the consumer "banks" money tax-free in his or her individual Health Savings Account and uses those funds to pay for regular and incidental medical care. If the money isn't used, it remains in the individual's account and can be withdrawn for other uses at some point.

Unlike other "cafeteria" policies, the consumer's deposits are not lost at year's end; the unused money is banked in the account for future use. Standard catastrophic coverage is available as a backstop should the policy holder be confronted with unforeseen major medical bills.

Another casualty of the new health reform is the highly successful association health plans.

In 1995, Washington Gov. Mike Lowry (D) and a bipartisan majority of state legislators approved association health plans (AHPs) to help small business owners provide affordable health-care coverage. Gov. Lowry's goal was to cut the number of uninsured people.

It worked. Today, more than 500,000 employees in Washington have health-care coverage through association health care plans, and 37 percent of the enrollees in AWB's AHP did not have health insurance previously.

Fifteen years after they were created, AHPs continue to be a stunning success. Overall member satisfaction is high, and over the prior year, almost 91 percent of the enrollees in AWB's association health plan have renewed their coverage.

Nevertheless, regulations in the federal health reform law could eliminate the key elements in association health plans that allow them to provide affordable health-care coverage.

Federal health reform was promoted as a way to expand health coverage and provide Americans with more choices. Ironically, it appears that, in some cases, it's doing just the opposite. By eliminating successful programs that are providing affordable health coverage for tens of thousands of people, the federal law isn't expanding choice - it's reducing it.