When Congress created Medicare Part D, the created two benefits for seniors. The first is a basic benefit where seniors pay 25% of their annual drug costs up to $2,830 (in 2010) and the government pays the rest. The second is a catastrophic benefit where the government will pay 95% of a senior's drug cost above $6,440. In the middle (from $2,830 to $6,440), seniors are responsible for 100% of the costs. The benefit to taxpayers is that the gap between the two benefit programs (critics call it the "donut hole") is that it incentivizes seniors to opt for generics to avoid the so-called donut hole. ObamaCare eliminates the donut hole and in turn one of the most important market-based aspects of Part D.

For more on this issue, go here.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC. 

"Under the current system, drug companies have an incentive to compete on price. If you have health insurance that covers birth control today, your insurer is likely to charge you a higher co-pay for expensive, "branded" versions of birth control over cheaper, generic ones. If you don't have health insurance, and you're buying the Pill directly from the pharmacy at Wal-Mart, you have even more incentive to shop on price."

"Under the new mandate, this price incentive disappears. Insurers will be required to pay for any and all oral contraceptives, without charging a co-pay, co-insurance, or a deductible. This "first dollar coverage" of oral contraception kills the incentive to shop based on price."

The Atlantic has an interesting article about Netflix and marginal costs. What does that have to do with healthcare? The author buried a little nugget in there that is instructive about why liberals ideas about health care policy will not work in the long run and will jeopardize innovation as well.  She writes:

"You can get a sweet deal if you are the customer who gets marginal cost pricing. Medicare does this--reimburses hospitals at above their marginal cost, but below their average cost, so that private insurers have to pick up most of the hospital overhead. European countries do this with prescription drugs: reimburse above the marginal cost of producing the pills, but below the total cost of developing the pills, so that the US has to pick up most of the tab for drug development. The problem is that as voters and as customers, we often get the notion that this can be extrapolated to everyone. So liberal policy wonks want to save money by putting everyone on Medicare, or some equivalent program that uses the government's monopsony pricing power to get lower prices for everyone.... But everyone cannot be the marginal cost consumer. Someone has to cover things like development costs." 

The bottom line is that ObamaCare tries to lower costs through price controls and by restricting access to care. In the end this will reduce choices, drive doctors from their chosen profession, and retard research and development in the field of health care. The implications for patients will be disastrous.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC.

The Heritage Foundation has a new piece detailing some of the specifics problems of ObamaCare's individual mandate.

The piece concludes, saying: ObamaCare's "employer mandates are simply too overbearing. As it turns out, most businesses want a way out. Only the few, privileged, and politically connected stand a chance.  As Representative Mike Pence (R–IN) said, 'Higher taxes and government regulations invariably have a cost, and that’s almost always a cost of jobs.'  And that’s something America simply can’t afford."

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC.  

Democratic Congressman Dan Boren (OK), who voted against ObamaCare last year and for repeal last month, has a new op-ed in Politico explaining his opposition to ObamaCare.  He had the following to say about last year's debate over the healthcare reform law:

"Rather than taking a bipartisan approach and tackling these issues incrementally, Congress and President Barack Obama produced a 2,000-page bill that dramatically expanded the federal government’s role in the private sector, placed burdensome mandates on small businesses and individuals and increased taxes during an economic downturn."

Near the end of the op-ed, Boren touts a bill he and follow-congressman Mike Rogers (R-MI) have introduced allowing everyone in America to apply for, and receive, a waiver from ObamaCare.  Boren said the following:

"Last week, Rep. Mike Rogers (R-Mich.) and I introduced the Health Care Waiver Fairness Act. This legislation will allow every small-business owner or average American the opportunity to apply for a waiver from the new health care law if they so desire. The basics of this bill are that if you like the health care reform law, you can take advantage of it. If you want no part of it, you can opt out."

AHEC supports the sentiment but would ask Boren and Rogers - why put the onus on Americans and businesses to obtain, complete, and file the necessary government paperwork and then also put the burden on them to navigate the government bureaucracy to "opt-out" of something that clearly violates their constitutional rights?  Why not automatically exempt every American and business unless they expressly "opt-in" to the provisions of ObamaCare related to mandates.

The idea of opt-in is not a new idea in Congress.  Last Congress 15 bills were introduced that had opt-in language in them, including a credit reform bill that became law (P.L. 111.24).  That bill sought to "protect" consumers by giving them the right certain opt-in rights to protect against certain practices by the credit card companies.  If Congress thought this was the best way to protect consumers then, it should also be considered in the context of ObamaCare. 

On March 2, 2011, The Department of Health & Human Services (HHS) Office of Inspector General (OIG), issued a report detailing that in 2007 and 2008 Medicare's Part D improperly paid $3.1 million to reimburse insurers for the cost of drugs for the treatment of erectile disfunction (ED). Federal law prohibits using taxpayer dollars for the reimbursement of ED drugs.  

While the amount paid for these drugs is relatively small given the size of the Part D program, Part D spending in 2007 and 2008 totaled $133 billion, these payments are further evidence that HHS is unable to properly protect tax dollars from misuse.  After all, while private insurance companies have real incentives to prevent improper payments and other waste, government bureaucracies have no such incentive.

The OIG should give taxpayers reason to question the wisdom of ObamaCare, which grants HHS even more power over healthcare and our tax dollars.  After all, if the taxpayers cannot trust HHS to properly manage this aspect of healthcare, can we really trust them with the expansive grant of power given by ObamaCare?

Nearly 33 million people have Flex Savings Accounts with which they can use pre-tax dollars to pay for out-of-pocket medical costs.  Millions more have an HSA or an HRA.  These accounts empower consumers who are put in charge of their own healthcare dollars.  ObamaCare restricts the use of these plans by eliminating consumers' ability to use their HSA, FSA or HRA to purchase over-the-counter drugs and then to double the tax penalty for improper usage.

The Wall Street Journal recently reported that consumers have found a way to get around ObamaCare but it is leading to incredible inefficiency and waste in the healthcare system. Patients are now visiting their doctor before going to the local drug store in the hopes that the doctor will write a prescription for things like aspirin, diaper rash cream, and cough medicine.  Things consumers could, before ObamaCare, previously use their HSA or FSA to purchase.  This change in behavior is perfectly predictable and demonstrates that the HSA/FSA changes are further proof that ObamaCare is bad medicine.

As America nears the one-year anniversary of ObamaCare becoming law, AHEC has released a new document entitled: "A Policymaker's Primer on ObamaCare: The Myths, the Costs and a Practical Guide to Defunding the Government Takeover of Healthcare in the 112th Congress."

The following is the Primer's Abstract:

On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, which is commonly referred to as ObamaCare. This law includes a series of provisions that will have a dramatic impact on America’s healthcare system, including: (1) increased taxes and compliance burdens imposed on small businesses; (2) changes to HSAs that make them less useful to individual consumers and increased fines for non-qualified distributions; (3) deep cuts to Medicare Advantage, the free-market portion of Medicare; (4) a significant expansion of Medicaid, which will threaten state budgets; and (5) an unprecedented use of the Constitution’s commerce clause to justify the imposition of an individual mandate requiring individuals to carry health insurance or face serious tax penalties. Supporters of the law have made a series of promises about this law, including that it will reduce costs and expand access to insurance. Opponents of the law, however, note that these promises have proven false, and that the law will actually increase insurance costs, increase federal budget deficits, and damage the U.S. economy. In response to the clearly negative impact the law will have on businesses, individual consumers, and America as a whole, this primer concludes that it is necessary to repeal ObamaCare and recommends a course of action for state and local policymakers to achieve that objective.

The document is available on AHEC's website here and can also be found in the Policy & Analysis area of AHEC's website.

Be sure to follow AHEC on Twitter @TheAHEC and at Facebook.com/TheAHEC.

Americans for Tax Reform today released a list of 21 taxes associated with ObamaCare. The list describes the taxes, notes their dates of implementation, breaks down the tax increase percentages by amount and year, and estimates their generated revenue. Definitely worth a read.