Bluegrass Beacon – Obamacare: Public policy malpractice

BluegrassBeaconLogoReviews on cable news and social media of retired Kentucky Gov. Steve Beshear’s response on behalf of the Democratic Party to President Donald Trump’s first – and powerful – speech to a joint gathering of Congress aren’t great.

Speaking while seated in a diner with a small group of attendees who appear largely impassive in a let-us-know-when-we-can-get-back-to-the-pie-and-coffee sort of way, Beshear’s canned and casual approach made it seem more like he was headed to a backyard barbecue than offering a serious response to the commander-in-chief’s weighty address.

“Small and stunty,” panned liberal MSNBC commentator Rachel Maddow.

However, “to be fair to Beshear, going after that Trump speech is like taking the stage after a U2 set with nothing but a ukulele in your hands,” radio talk-show host Buck Sexton tweeted.

If life hands you a ukulele, at least find an effective composition to play.

Nothing is ever as effective as truth – especially in these days of fake news and alternative facts.

Alas, it seems all Beshear can locate is “Obamacare’s Concerto for Ukulele and Liberals in F (for Failure) Minor” as he remains stuck on maintaining that 22 million more Americans, including a half-million Kentuckians, “now have health care that didn’t have it before.”

At least 14.5 million of those Americans – including more than 400,000 Kentuckians – got their coverage through the misnamed Affordable Care Act’s expansion of Medicaid eligibility, which simply means that all previously uninsured citizens on Medicaid now have is a card in their pockets identifying them as government-program beneficiaries.

No assurance of actual care exists.

But that’s just one of the problems with off-key claims by Beshear and his fellow Obamacare supporters. Consider also:

  • Obamacare provides a costly barrier to needed care.

A Families USA study shows that premiums for high-deductible plans purchased through Obamacare’s exchanges are increasing by double-digit amounts and more annually – 116 percent in Arizona last year alone – resulting in one in four of those customers skipping doctor’s appointments and medical tests while struggling to pay the bigger invoices.

How does this add up to better care or lower costs?

  • Labor-force participation is dropping in states using Obamacare to expand Medicaid.

While Beshear spoke of unemployment-rate drops, fiscal experts are more concerned about Obamacare’s impact on discouraging people from even looking for work.

Georgetown University researcher-turned government analyst Tomás Wind reports that “expanding Medicaid is associated with a 1.5 to 3 percentage point drop in labor force participation” in states that chose to join in the expansion.

  • Obamacare perversely drives up costs then punishes individuals who work extra to pay for it.

People who’ve taken extra jobs to cover double-digit increases in premiums for policies obtained through Obamacare’s exchanges risk abruptly losing thousands of financial-aid dollars.

Tort reformer Ted Frank of the Manhattan Institute Center for Legal Policy used the Kaiser Foundation’s Health Insurance Marketplace Calculator to show how a 62-year-old earning $46,000 in a high-cost area suddenly loses the $7,836 tax credit that helps cover his premium if he earns just $22 more.

Hans Bader of the Competitive Enterprise Institute in noting Frank’s example writes that while it makes sense to “gradually phase out” subsidies for those whose incomes rise and who need less government help, Obamacare takes a “far more extreme and indefensible” approach.

“It suddenly takes away thousands of dollars in subsidies when many people earn a few extra dollars – blindsiding many of them in the process,” Bader writes. “… That leaves them much worse off than if they had never earned that extra income, potentially leaving them poorer for taking on a second job to pay the costs of their health insurance.”

It’s so severe that our 62-year-old will have more take-home pay if he earns $46,000 than if he reaches $55,000.

Frank’s conclusion: “This is just public policy malpractice.”

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read his weekly Bluegrass Beacon column at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.

Bluegrass Beacon — Regulating’s first rule: Help, don’t harm

BluegrassBeaconLogoAmericans of all political persuasions want safe working conditions, clean air and unpolluted water.

But reform is clearly needed when government begins to regulate for the sake of regulating, and when doing so harms – even endangers – those citizens it’s called to protect.

For example, while the Food and Drug Administration was created to help safeguard the food supply and ensure reasonable protocols for drug safety, it too often uses its regulatory power to shield monopolizing companies from competition, which can block the path to lifesaving generic drugs.

Competition, on the other hand, reduces costs and increases access to many groundbreaking drugs and medical miracles.

It’s been just the opposite with EpiPen, a lifesaving anti-allergic reaction device, the cost of which has risen from $60 a few years ago to now $600 for a pack of two, even though the epinephrine included in the EpiPen costs less than $10 to manufacture.

This price tag forces some to ask: “Are we going to pay the mortgage or ensure our kids have this life-saving drug available should they get stung by a bee or suffer some other potentially fatal allergic reaction?”

Drastic choices like this could be avoided if regulators remained true to the fact that their agencies were created to help, not harm.

U.S. Sen. Rand Paul in a speech on the United States Senate floor recently highlighted the Clean Water Act as an example of the morphing of well-intended regulations that protect against the discharge of pollutants in navigable streams into job-killing “monsters that emerged from the toxic swamp of big-government bureaucrats at the EPA.”

Paul pummeled courts and regulators who “came to decide that dirt was a pollutant and your backyard just might have nexus to a puddle which has a nexus to a ditch which was frequented by a migratory bird that might have flown from the ditch to the Great Lakes. Ergo, the EPA can now jail you for putting dirt on your own land.”

Such morphing is helped along by the lack of serious, consistent reevaluation of well-intentioned rules that originally served useful purposes but now are enforced only because they remain on the books.

Former Indiana Gov. Mitch Daniels, whose Reaganesque reforms led to a dramatic economic turnaround in the Hoosier State, required proposals for new regulations to demonstrate favorable benefit-to-cost ratios and sunset provisions allowing reevaluation of their continuing usefulness every few years.

Daniels also demanded agencies search for an existing rule that could be updated before creating a new rule.

This approach could be helpful in Kentucky, where more than 3,500 of the 4,700 regulations in the regulatory code have never been reviewed.

Still, it’s rare for regulations – like taxes – to actually go away.

Instead, they swell to the point where the Competitive Enterprise Institute estimates it now costs each American household $15,000 annually just to comply with federal regulations.

Plus, state regulatory codes too often emulate Washington by mutating into ugly opponents of individual liberty and economic growth.

According to the Mercatus Center at George Mason University, while the U.S. Code of Federal Regulations grew from 71,000 pages in 1975 to 178,000 pages in 2015, the Kentucky Administrative Regulations Service (KARS), as it’s known, grew by a whopping 250 percent in the last four decades – from just four volumes in 1975 to currently 14 books.

The commonwealth’s regulatory code has become so large that it takes 367 hours – reading 40 hours a week at a rate of 300 words per minute for nine weeks – just to read it.

Large, increasingly complicated regulatory codes make it difficult for businesses and citizens to comply, which ultimately defeats any positive purpose of regulation by reducing compliance and incentives to improve safety while increasing uncertainty and frustration.

Jim Waters is president of the Bluegrass Institute; Kentucky’s free-market think tank. Reach him at jwaters@freedomkentucky.com. Read previously published columns at www.bipps.org.