Minnesotans Shouldering Hidden Anti-Obamacare Tax

This week the Minnesota Hospital Association (MHA) announced that its member hospitals paid $226 million in “charity care” last year. The MHA is referring to instances when uninsured and underinsured patients are unable to pay their hospital bills, and the hospitals get stuck with the expenses.

While the term “charity care” is used by hospitals, hospitals don’t end up bearing the whole burden. They make up for the bills substantially by charging more to their insured patients, and insurance companies subsequently shift these higher costs to insurance premium payers.

This post isn’t meant to be a criticism of either the hospitals or the insurers. They would go out of business if they couldn’t shift costs.

Supporters of preserving the Anti-Obamacare Tax.
But it is meant to be a criticism of Obamacare obstructionists. The MHA numbers are a reminder that those who have been aggressively blocking efforts to reduce the number of uninsured and underinsured through Obamacare are responsible for maintaining what is akin to an enormous annual tax on premium payers. An Anti-Obamacare Tax.

Given that a fully implemented Obamacare is predicted to reduce the uninsured rate from today’s 50.7 million people to about 18.7 million, and the number of underinsured people by about 70%, leaders opposing Obamacare in Congress, state legislatures and federal courts are effectively blocking the elimination of a huge annual burden on American households. If the anti-Obamacare obstructionists win, we all keep paying this Anti-Obamacare Tax.

And it’s not a small tax. In Ramsey County, taxpayers are up in arms over a proposed $10 million per year tax for the Vikings stadium. This hidden Anti-Obamacare Tax is much more painful. The Center for American Progress finds “on average, 8 percent of families’ 2009 health care premiums—approximately $1,100 a year—is due to our broken system that fails to cover the uninsured.”

– Loveland

8 thoughts on “Minnesotans Shouldering Hidden Anti-Obamacare Tax

  1. Newt says:

    Unions make up 40 percent of employees exempted from Obamacare

    By: David Freddoso | 01/27/11 4:57 PM

    Yesterday, the Deparment of Health and Human Services announced it had granted more than 500 new waivers to Obamacare’s requirement that health plans have annual limits of no less than $750,000. This annual limit requirement climbs to $1.25 million next year and then to $2 million.

    The reason these exemptions from the law are needed is that Obamacare forces all health insurance consumers to over-insure themselves and pay high premiums as a result. Without the waivers, many companies, non-profits and unions would simply drop their health plans. As of 2014, the waivers will no longer be available — at least, that’s the way the law is written.

    It is worth noting that there are 166 union benefits funds now exempted from this requirement, which account for about 40 percent of the exempted workers. This means that although there are only 14.6 million unionized employees in the United States, and 860,000 of them are already exempted from this provision of Obamacare.

    1. Joe Loveland says:

      Very far off-topic but…

      The reason there is not a source cited here may be because it is from the Washington Examiner, which makes Fox News look objective.

      Here is a rebuttal from MediaMatters, factcheck.org and others.

      1. Newt says:

        Maybe Joe would care to explain why Obama has exempted 1,500 organizations from his own healthcare bill.

      2. Joe Loveland says:

        Newt, I wrote about covering the uninsured, and not about the waiver system, so I don’t know a lot your side topic. But this is what the non-partisan non-profit organization factcheck.org said about the issue:

        Q: Has the Obama administration allowed corporations to “opt out” of the new health care law?

        A: No. The government has granted more than 200 waivers, but these merely give companies a temporary delay before being required to improve the coverage of cheap, bare-bones plans they currently offer.

        …the federal government had approved a total of 222 one-year waivers that allow the insurance plans at companies like McDonald’s, Jack in the Box and Ruby Tuesday, and unions, to ignore the requirement on annual limits. Far from being “Obama’s buddies,” as the Internet post claimed, the restaurant industry, through the National Restaurant Association, opposed the legislation.

        Companies seeking these waivers claimed the limit regulation would force significant hikes — in some cases, even a 100 percent increase — in premiums, according to an Oct. 6 New York Times article. AHIP’s Zirkelbach told us the regulation could cause seasonal, part-time or temporary workers that are typically covered by limited-benefits plans to lose all of their coverage.

        The companies that have been approved for the waivers must reapply for them next year. Waivers are available until 2014.

        But mini-med plans are controversial. While they do provide some benefits, critics say they provide only the illusion of insurance coverage. Workers who have an accident or an illness can quickly exceed daily or annual coverage limits and find themselves facing hefty medical bills.

  2. Erik says:

    So you’re sure of this? Elimination of the charity / uncollectable shift is going to decrease my costs as a premium payer?

    Mind you, I’m sure you can cite a study saying as much, but you might as well believe in Santa Clause as well.

  3. Eileen Smith says:

    Thanks for trying, Joe. You connected some of the dots. One of the large health care systems in the Twin Cities says people with health insurance pay 20 percent more than the actual cost of their care to make up for no payment and under payment. The only thing that will stop premiums from going up is to make the cost of care go down. Too bad it’s not as easy as it sounds.

  4. john sherman says:

    One figure that never gets talked about is the medical loss ratio (mlr) which measures the amount of money for health care dollar that goes into actual health care as opposed to say gold plated flatware on the insurance company’s corporate jet. A mlr of 90 would mean that out of every dollar spent on health care, ninety cents would go to actual caring for the sick.

    The international experience is that a health care system can be run with about two percent administrative cost (a mlr of 98), and sure enough, Medicare has had a mlr of 98 or better over the last couple of decades. Obamacare forces insurance companies to get their mlrs up to 85–in some cases 80 from, for example, 53.

    The difference between two percent administrative cost and 15 or 20 percent is economically, though not politically, low hanging fruit.

    1. Joe Loveland says:

      Great point. As we blabbed about at the time it was proposed, Minnesota’s Franken and Ellison offered the MLR amendment at the 90% level, based roughly on the performance of Minnesota non-profit insurers, who are more efficient than some of their for-profit peers.

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