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PPACA: Are you shocked?

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Pete Holmes is a very talented guy. He is an actor, a writer, and stand-up comedian who draws cartoons for the New Yorker magazine. Though you may not know his name, you know his voice. Pete is the voice of that urbane pint-size hipster known as the E*Trade baby.

As ubiquitous as those commercials are today, the agency that created the campaign (Grey New York) wasn’t sure it would be a winner. According to Tor Myrhen, Grey’s chief creative officer, they wondered if it was “the dumbest thing we’d ever done or if it was genius.”

“I had just come to New York, and this was my big chance — here’s the first big Super Bowl spot for my agency — and it was a talking baby, which had been done a million times,” he said. “It was scary.”

It wasn’t scary for long, though. The day after the Giants stunned the Patriots, the company registered more new accounts than on any other day in the company’s history. The commercials are still helping bring customers to the company, and everyone seems to have their favorite.

Some like the commercial where the baby says, “Apparently, riding the dog like a small horse is frowned upon in this establishment.” He is being punished — but is still perusing his accounts on an iPad. When mom takes the iPad, he pulls out his smartphone with an E*Trade app.

Other friends tell me they like the commercial where the baby is on an airplane, dealing with his freaked out baby friend a few rows back in the cabin. In our house, the favorite is the spot with the baby watching a (grown-up) friend trying to secure his retirement by scratching off lottery tickets. When the friend doesn’t win, the baby is unsurprised and sarcastically says, “Let me show you my shocked face!” He then slides down in his high chair and has a faux freak out.

I’ve been thinking about adopting that same “shocked face” for friends, fellow citizens and pundits who are suddenly coming to the awful realization that they have been hoodwinked by the rhetoric surrounding the Patient Protection and Affordable Care Act (PPACA). Just like the E*Trade baby who knew the lottery ticket investing approach was folly, many benefits professionals tried to warn about the implications (intended and unintended) of what was to come from the government’s takeover of health care delivery and “insurance.”

The most rudimentary place to start was our admonition that insurance was not about paying claims but about transferring risk across a broad population in a predictable and actuarially sound manner. The run-up to PPACA was characterized as a health care debate — when, in fact, it was not, in the end, about health care, nor was it a debate.

Promises, promises
“If you like your health care plan, you’ll be able to keep your health care plan. No one will take it away. No matter what.” If we had a nickel for every time President Obama said this, we could probably make a sizeable dent in the national debt. Okay, that’s a bit of an exaggeration, but we now know that the statement will, in the end, be an empty promise. According to a recent report by the Congressional Budget Office, PPACA will erode the current employer-based system and force as many as 7 million into government-proscribed plans.

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The list of PPACA broken promises is growing daily. Rep. Nancy Pelosi was right; they did have to pass the bill so we could see what was in it. Families with incomes under $250,000 certainly don’t like what they see. Anyone who thought we could add all of these goodies for free probably still believes in the tooth fairy. Some of the taxes are not frontline increases, but are more insidious and corrosive. Medical device makers now have to add a 2.4 percent surcharge on any device costing more than $100. Who do you think is going to have to pay that additional cost?

New CBO estimates hike the estimated program costs from their original prognostication of $814 billion to $1.047 trillion over the next 10 years. Interestingly, the administration that made the aforementioned promise to the country now contends that money raised from taxes, penalties and fees will offset those costs. Seriously? Re-read my recent column on the goings-on in Massachusetts and see how that philosophy is working out for the Bay State.

We were told that costs would go down, but the IRS now estimates that the least expensive bronze plan will cost a family of four nearly $20,000 a year in 2016. That is an increase of $4,000 from the average cost a family paid last year. No one today believes that health care will be improved.

A shortage of primary care doctors combined with a glut of newly insured (maybe we should say covered — it is getting increasingly difficult to call something insurance that is not insurance) citizens is a formula for public clinics. While that scheme works in some countries, America is not some countries. Americans don’t have a propensity for waiting in lines unless they come away with a new electronic device with a name beginning with a vowel.

Now even the unions that were foursquare in favor of PPACA are getting cold feet. They are worried the law will drive up the cost of providing health care plans and make them less competitive. They are lobbying to make some of their members eligible for federal subsidies. Remember, those subsidies were designed for employees whose employers did not provide plans, so the employees could buy private insurance.

Mission creep
Here is yet another problem, endemic to all government-funded programs: mission creep. The term, usually used to describe military operations that expand beyond their original goal, seems to be especially applicable here. For those who may be thinking the subsidies are pretty well-specified in PPACA and can’t really be fooled with, think again. The Obama administration, contacted for comment by the Wall Street Journal (Jan. 30, 2013) says, “The issue is subject to regulations being written.”

Ever since state-based, small group reform in the 1990s, it has been clear that while the legislatures set the table, it is the regulators who end up dictating the real-world implementation — and effects — of the laws. Regulations are where the rubber meets the road. Regulations are also the mother’s milk of mission creep.

Many labor groups are concerned that if the subsidies are not expanded, unionized employers will drop coverage. “So what?” you ask. “This is the same conversation I am having with all of my employer groups.” The salient difference is that current coverage for this population is provided as a benefit of being a member of a union. If that benefit is removed, organized labor worries it will lose a key membership driver that will, in turn, have a disastrous effect on their numbers.

In the coming months, there will be more instances of PPACA proponents learning their interests may be compromised as this expansive and ever-expanding law and its thousands upon thousands of pages of regulation move forward. Those folks should surf on over to YouTube to watch the E*Trade baby show his shocked face. Watch his expression. It’s the same face you will see on those of us who knew these problems were an inevitable consequence of this legislation.