Obamacare Winners: Big Pharma / Hospitals / MDs / Insurance Companies ... The People: Who Knows ?


By David Caploe PhD, Chief Political Economist, EconomyWatch.com

By David Caploe PhD, Chief Political Economist, EconomyWatch.com

America continues to be a sad sad place, with a lot of great people and qualities that are nevertheless increasingly overcome by the very worst elements of a society that doesn’t see itself as such but, rather, as a random collection of individuals somehow thrown together.

This goes against, I realize, the whole notion of American exceptionalism, the idea the US is a “universal” nation, open to people of all other countries, brought together in search of both ideal and material satisfactions unavailable elsewhere in the world, and transformed in the process into a new kind of being.

But as we witness the bizarre spectacle of President Obama’s health care “reform” “victory,” it’s hard not to be reminded of Shakespeare’s phrase, “a tale told by an idiot, full of sound and fury, signifying nothing,” or, at least in this case, signifying not too much, despite a hell of a lot of noise.

Yes, it’s true that if the legislation had failed, it would have been a disaster for Obama personally, his presidency, and probably made a bad situation, both generally and re health “care,” even worse – so in that sense, I guess this is a “victory” of sorts.

But it’s really hard to feel excited / positive / full of hope / all teary-eyed etc, the way I see some of my FaceBook friends getting.

And I’m not just saying this because a lot of them felt that way about Obama initially, and have been so disappointed they simply WANTED to “feel good again” about him –

or they were just so scared by the not-unreasonable idea a legislative defeat would, somehow, portend a return to the awful days of Cheney / Bush.

If this sounds cynical, my apologies. But after the spectacle we’ve witnessed – whose sordid details really DON’T need to be re-hashed here for the thousandth time –

the only emotion I can feel is slight relief the unabashedly obstructionist Republicans didn’t succeed in this initial phase,

although they seem bound and determined, as they keep reminding us, to “keep on fighting” this battle, most of which is in their heads, until the November elections at least.

That sort of effort is all too pathetically predictable. But so too is what we identified last year as the fundamental difficulty with Obama’s approach to just about EVERY important problem:

playing ball with the middlemen, in this case, the health insurance companies, as if they were the only game in town.

Once that decision was taken – and it obviously happened early on, when Obama made clear that not only was single-payer off the table, but he also wasn’t going to push very hard for the “public option” that, its exponents claimed, would impose some “market discipline” on the insurance companies – the outcome was basically foreordained:

either the whole thing would go down in flames, or the insurance companies would definitely be taken care of in whatever emerged.

And that’s exactly what happened.

To be sure, the ability of insurance companies to deny coverage for pre-existing conditions is SUPPOSED to be eliminated within three months of Obama’s signing of the law, albeit in a very indirect way as they would become “eligible for subsidized coverage through a new high-risk insurance program,”

the details of which I still haven’t been able to discern, despite reading every article in the New York Times and a raft of other websites on the subject.

And that’s one big part of the problem: no one really has any idea of what the hell is going on here EXCEPT, of course, the insurance companies and the drug companies and the hospitals

who know because it was THEIR K Street lobbyists who put in the specific sections of the law that “insure” they make plenty of money from all the new changes.

To see just how ludicrous the situation is – and how dominated it is by middlewo/men who control the process – check out this passage from the Q & A the Times set up to try to shed some light into this incredibly UN-transparent “brave new world”:


Is there anything to limit the insurance companies from extreme rate hikes on individually bought policies, particularly in the immediate future? — AVC, NM


In 2014, once the state-run insurance exchanges are up and running, people who earn up to 400 percent of the poverty level (or $88,200 for a family of four) would not have to pay more than 9.5 percent of their income on premiums. People with low incomes could pay as little as 3 percent. The government would help subsidize the rest.

But ultimately, premiums will still reflect the medical care costs in your geographic area, according to Sara Collins, vice president for the Affordable Health Insurance Program at the Commonwealth Fund. That said, insurers would have to adhere to new rules.

For one, older people cannot be charged more than three times as much as younger people. The legislation also includes provisions that could help bring down premiums, but it’s still too early to tell how well they would work.

For instance, large group plans that spend more than 15 percent of your premiums on items other than medical costs (or more than 20 percent, in the case of individual and small group plans) must provide a rebate to consumers beginning in 2011. Details are still fuzzy.

Moreover, the legislation would immediately create a process for review of increases in health care premiums and would require plans to justify those increases, according to the Kaiser Family Foundation. And once the state-run insurance exchanges are up and running, states would be required to report premium increases and recommend whether any plans should be excluded due to unjustified premium increases, according to Kaiser.

Sounds crystal clear right ??? So simple even somebody who is racked with pain and merely trying to get better should have no problem dealing with an open transparent system like this – right ???

My favorite lines from that are the immortal: “Details are still fuzzy” and “It’s still too early to tell how well they would work”

Or how about this beauty from an exchange in the same section:


Who do I talk to about finding out how the changes in health care reform apply to me? I live in Oregon, am unemployed/self employed and have an individually paid for insurance plan that I do not like and can hardly afford. Are there any changes in the reform that will benefit me, and who can tell me about them? Any direction that can be offered is appreciated. Thank you. — ESC Portland, Oregon


There are a number of resources available online where you can read about the changes in the reform to see how they might impact you. The Web site of the Henry J. Kaiser Family Foundation has this side-by-side comparison of various provisions in the original House bill, the original Senate bill and the bill that reconciles the two.

Elsewhere, the Commonwealth Fund offers similar side-by-side comparisons on various topics here.

When reading the comparisons, you might want to focus on what they say about the creation of state-based health insurance exchanges through which individuals could purchase coverage, which is one change in the bill that could benefit you.

As covered in this New York Times story, the exchanges, or marketplaces, “are meant to provide much more competitive, consumer-friendly online shopping centers of private insurance for people who are not able to obtain coverage through an employer.”

You also might want to keep an eye on your state’s insurance department Web site for more information on the exchange once it comes into existence.

According to the Kaiser comparison, funding is available to states to create the exchanges within one year after the president signs the legislation and until January 2015.

Now ordinarily, our form at EconomyWatch.com is to take out the links in quotations. But the whole thing is just so ludicrously funny –

or would be, if this Rube Goldberg contraption of a “health care reform” weren’t actually determining people’s ability to live a full life or be chronically ill or remain alive at all –

I thought it best to leave them in, just so you can get a sense of how ridiculous this whole approach is.

Or, rather, WILL BE, since most of these “big changes” aren’t going to take place until well into the future –

some of them in a few months, some next year, some in 2013, most seemingly in 2014, but even a few afterwards in 2017.

It’s like a wet dream for lawyers / insurance companies / client advocates and all other manner of middlewo/men who can make their own livelihoods telling people what they are and are NOT eligible for under the new rules –

which, of course, will be SO different than the way things are today.

Of course, it’s a bit of crap shoot for people with some kind of chronic disease, like, say, cancer, or who suddenly have a heart attack in the “pre” period – but, hey, they’ve got to play the game like everybody else.

That said, don’t think insurance companies are the ONLY big winners here –

so are drug companies, aka Big Pharma, hospitals, and those practitioners of the Hypocritical Oath, the doctors, especially the 55% who DIDN’T support single-payer.

As we noted in a post in our new In the News section – which WILL be up on our main website momentarily, with an automatic link to Facebook, which has been a bit barren of late while we get ready for our shift:

Hospitals have little to fear. The number of newly insured is expected to decrease significantly the amount that hospitals now lose each year when they provide care to people with no means to pay ...

Doctors are another group likely to benefit from more paying customers, which is a reason the American Medical Association last week began publicly supporting the legislation....

Drug makers, meanwhile, may have the most clear reason to celebrate the legislation.

Pharmaceutical companies are going to be asked to contribute $85 billion toward the cost of the bill in the form of industry fees and lower prices paid under government programs over 10 years.

But they can look forward to tens of billions of dollars in additional revenue as more people with insurance visit doctors and fill prescriptions.

So it’s not just the insurance companies who are benefiting here from a Federal mandate – with penalties for non-compliance – that forces people to sign up with SOME kind of insurance companies.

ALL the vested interests will get their share of this new and even bigger pie of medical expenses in the United States of Kiss My Ass, as Joe Mantegna said so brilliantly in David Mamet’s one UNQUESTIONABLY great film, House of Games.

But really, you’ve got to admire the guts and fortitude of these players in the health care “game” – they really hung in there and worked the system, and, in the end, GOT EXACTLY WHAT THEY WANTED.

Let’s conclude with a truly hysterical passage about how Big Pharma –

probably the MOST ruthless group in this whole tale of tough guys and gals who were, in the end, able to bring home the bacon for management and, perhaps, stockholders –

came out of the whole thing:

[T]he legislation allowed the drug industry to “avoid any of the issues that were particularly of concern — price control or more regulation by the federal government,” said Barbara Ryan, an analyst with Deutsche Bank.

As a result, the pharmaceutical industry has been a significant proponent of the legislation, in sharp contrast to its behavior when the Clinton administration tried to pass a similar overhaul.

The industry spent an estimated $100 million in TV advertising, grass-roots organizing and other marketing efforts to promote reform.

The generic side of the drug industry had somewhat less to celebrate.

Legislators left intact a bill provision giving name-brand drug makers 12 years of marketing exclusivity on expensive medications called biologic drugs, which are made out of living cells.

Many of those drugs, including cancer treatments, cost thousands or even tens of thousands of dollars a year.

“Real reform could have expanded access to affordable medicine to patients in need,” Kathleen Jaeger, the president of the Generic Pharmaceutical Association, said in a statement.

Critics, including the Federal Trade Commission, argue that such deals are anticompetitive.

Jon Leibowitz, the chairman of the Federal Trade Commission, said last week that consumers would suffer if Congress allowed such deals to continue.

“The big winners are some of the branded pharmaceutical companies who have engaged in these deals and some of the generics who have done the same,” he said.

“The big loser is the American consumer, who is going to have to pay an extra $3.5 billion a year in much-needed drugs.”

To end on a personal note, as someone who lost a partner to ovarian cancer,

both the disease AND the drugs that “treat” it cause an UNBELIEVABLE amount of pain to the person affected.

To have to – at the same time – worry about how much money you are paying to experience pain that may, but most likely won’t, save your life, is an indignity no one should have to face – let alone someone with a chronic disease.

President Obama often talked about the hell his mother went through at the end of her life for precisely this reason.

That he didn’t do more to eliminate a situation that causes such indignity, on top of almost unbearable pain, is a scandal of which he should be deeply ashamed.

Yes, defeat would have been terrible, and this bill does do some important things … maybe … but not nearly enough – and Obama, of all people, should know this.

David Caploe PhD

Chief Political Economist


President / acalaha.com