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Politics of health

"Politics of health" Continued...

Issue: "2010 Election: The Governors," Oct. 23, 2010

In anticipation of overload, the new law pumps $1.1 billion into community health centers. But that leads to another concern: To receive federal funds the clinic already has to jump through regulatory hoops, and it's a constant temptation to put meeting those requirements ahead of meeting the needs of patients. "As a physician that doesn't feel right," Shafer said, and he is apprehensive about more strings attached to new federal healthcare coverage.

Robert Moffit, a healthcare expert with the Heritage Foundation, expects a blizzard of regulations: "It is almost as if Congress said, 'This is very complicated stuff, we will turn it over to [Health and Human Services Secretary Kathleen] Sebelius and the very smart people she has hired. They will figure it out and tell us what to do.' Unelected bureaucrats are going to determine how our lives are going to be affected."

More rules will put added stress on doctors in rural communities, such as Mitchell, S.D.-a town of about 15,000 located on Interstate 90 between Sioux Falls and Rapid City. There a group of medical professionals told me that small clinics lack the resources to navigate this federal maze. The very kinds of communities Democrats said they wanted to help with the reform may end up being suffocated by it.

It is not just doctors who should be skeptical about Obamacare: Studies are revealing that the law's provisions make it attractive for employers to drop their insurance plans and dump their workers onto new government-run insurance exchanges. An American Action Forum report predicts that the number of employees who enlist in the exchanges could be three times as high as original estimates.

Why? Private insurance premiums will rise because more healthy Americans likely will forgo insurance. Penalties for not buying insurance under the mandate are cheaper than the cost of an annual premium. Plus, the young and healthy can wait until they get sick to sign up thanks to the law's ban on preexisting condition exclusions. With fewer customers and demands under the new law to provide greater coverage, insurance companies in September filed requests with state legislators asking for between 1 percent to 9 percent rate increases on insurance plans.

Already cash-strapped small businesses will have difficulty affording the new costlier private insurance plans for their employees. One of the first regulations released under the law even makes this scenario more likely.

Obama said during the healthcare debate, "If you like what you have, you can keep it." But the very regulation designed to grandfather in already existing plans and to help businesses avoid the law's often-onerous requirements is riddled with red tape. Its own authors estimate that between 39 percent and 69 percent of businesses will not qualify. By 2013, based on the Department of Health and Human Services predictions, as many as 80 percent of small businesses will lose their grandfathered status.

"The reality for many, under this new regulation, is that if you like what you have, you can't keep it," said Sen. Mike Enzi, R-Wyo. The Senate on Sept. 29 defeated along party lines Enzi's amendment to overturn this regulation, highlighting the triumph of administrative law over elected law. "The final result of this new regulation will be that all Americans will eventually be forced to buy the kind of health insurance the federal government thinks you should have."

But it is not only small businesses that feel pinched. McDonald's Corp. told federal regulators in late September that new mandates might make it "economically prohibitive" to continue offering health insurance for nearly 30,000 hourly workers.

Jay Tolsma is a 48-year-old accountant from Mitchell, S.D., who says the new law provides economic incentives for businesses to avoid hiring more workers and to keep wages low. For his accounting firm of about 20 employees, the average wage is about $50,000. Healthcare costs run about $4,000 per employee for an annual total of $100,000. But under the new law the government will provide a tax credit of 35 percent of total premiums, or $35,000 in Tolsma's case, if the average wages are below $50,000.

"This is not a bill to contain healthcare costs, it is a bill to control healthcare," he says.

Obamacare will not be fully implemented until 2014, but the professionals I met in South Dakota already see a gathering storm. Federal regulation could further reduce the autonomy given to doctors and drive students away from pursuing medical careers. The new healthcare landscape, herding people onto government plans, threatens to overrun already burdened community health centers. And businesses will look at their bottom line in the face of rising healthcare costs and decide to keep their staff small and their wages low in order to qualify for federal assistance.

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