Corker says Obamacare won't work

Corker says Obamacare won't work

October 5th, 2010 in News

The health care reform plan adopted by Congress this spring will drive up health care costs and will have to be revamped next year to be financially viable, U.S. Sen. Bob Corker said Monday.

"I don't think there is anybody in this industry who thinks this law is going to work," Corker said after meeting with top officials with BlueCross BlueShield of Tennessee, the state's biggest health insurer. "The funding just won't work and there are a lot of unintended consequences."

Corker, who helped oversee Tennessee's TennCare program as commissioner of Finance and Administration in the 1990s, said one of every three Tennesseans could end up on the state's Medicaid plan once the Patient Affordable Act adopted by Congress this year is fully in place by 2014.

Already, Corker said the first phase of the reform package effective on Sept. 23 has led to all of Tennessee's private health insurers dropping their child-only plans for individual coverage, pushing more people on to government-subsidized plans or leaving them without coverage.

"If you wanted to buy a child-only plan as an individual from a private health insurance plan, you could not do that in the state of Tennessee," he said. "That's one of many unintended consequences in this law."

Chattanooga-based BlueCross was the last insurer in the state to drop its child-only plans for individuals, although the insurer does offer child coverage for those willing to buy family plans. BlueCross officials said they could not afford to absorb the expense of those who would disproportionately sign up for such plans with sick or injured children since the health care law no longer allows insurers to deny coverage because of pre-existing conditions.

Ron Harr, senior vice president for BlueCross, estimates health insurance premiums next year will be pushed up by an average of 1.5 percent more than what they otherwise would increase because of the extra mandates in the new health care law. The law requires employers offering family coverage to keep dependents on a parent's plan until age 26 and mandates broader coverage for wellness and preventative medicine.

"We met the requirements of the first part of the law that went into effect on Sept. 23 and now we're really looking at the great unknown," Harr said. "There are so many rules that are yet to be promulgated."

Harr said it is still too early to estimate how much health insurance premiums will rise, on average, in Tennessee in the next year.

Proponents of the new law insist health care reform will help slow the growth in health insurance premiums by extending coverage to more individuals and reducing the expense of uncompensated care. Tony Garr, executive director for the Tennessee Health Care Campaign in Nashville, said the average insured Tennessean pays more than $1,000 a year in extra premiums to pay the expense of uncompensated care to the nearly 1 million residents in the state without insurance.

"The health reform plan is not perfect and it will need to be tweaked," Garr said. "It does extend health insurance to millions more Americans and it is paid for so it certainly does not need to be repealed."

Garr noted that both Social Security and Medicare took years before most seniors were covered. The Government Accounting Office, the independent congressional service that scores legislation, projects that health care reform changes will be paid for with a combination of new taxes and program savings.

Corker said the $500 billion of cuts planned in Medicare in the next decade under the new law "are just not sustainable when the program is already $37 trillion in the hole" for unfunded future liabilities. But Garr said eliminating excess payments to insurers for Medicare Advantage programs will save $180 billion and paying for preventative medicine and electronic medical records will reduce other expenses.

Corker said expanding TennCare will be costly for both the federal and state government. But Garr said Tennessee stands to get an extra $11 billion from the federal government for more TennCare coverage by putting up only $1 billion of state funds.

Corker said it is probably unrealistic to repeal the entire law as long as Obama is president since the White House can veto any repeal attempt. However, Corker said "the change in Washington from the upcoming elections" should produce changes in parts of the overall package in 2011.

"Until at least January of 2013, President Obama is going to be in the White House and any repeal is going to require 67 votes in the U.S. Senate," Corker said. "We're looking at those things that are practically changeable in the interim to make sure we preserve a highly competitive, privately-oriented health care system in America."

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