Ways the New Health Law May Affect You in 2011

BY SALLY C. PIPES – A federal judge recently ruled President Obama’s healthcare law unconstitutional. The U.S. Supreme Court will no doubt have to settle the matter, but several of the reform package’s most damaging provisions have already taken root.

For starters, the new law effectively stops the construction of physician-owned hospitals throughout the country — even as it extends government-subsidized insurance coverage to tens of millions of new patients.

Section 6001 of the healthcare law required physician-owned hospitals to obtain their Medicare certification by the end of 2010. Without it, they can’t treat Medicare patients.

The facilities needed to be open, however, to receive that certification. So construction halted at 45 hospitals as the New Year arrived. Work on countless others will never start, having been effectively banned by Obamacare.

This artificial limit on the construction of new hospitals will limit competition in the healthcare marketplace, driving up costs for patients.

Not only will patients have fewer hospital choices, they also may have trouble finding a doctor this year. A new survey conducted by The Physician’s Foundation revealed that 40 percent of doctors planned to “drop out of patient care in the next one to three years.” Sixty percent said Obamacare will “compel them to close or significantly restrict their practices to certain categories of patients” — typically those on Medicare or Medicaid.

Health reform may force many folks to give up their current insurance plans, too.

New rules requiring insurers in the individual and small-group markets to spend at least 80 percent of premium dollars on medical claims are intended to ensure that consumers get good value for their money. Instead, they’ll legislate many plans out of existence. With fewer competitors to keep them honest, the insurers that survive will have an easier time raising rates.

Patients will also face new hurdles when they try to purchase over-the-counter (OTC) medications. Thanks to Obamacare, owners of Health Savings Accounts (HSAs) can no longer spend their tax-free savings on basic OTC drugs. Instead, they’ll have to pay for a doctor’s appointment — and then get a prescription for a pricier pharmacist-dispensed drug.

Consider the case of Claritin, an allergy medication that recently was approved for OTC use. A report from the National Center for Policy Analysis found that longtime users of the drug saw their per-day costs decrease 80 percent, from about $2.50 to just 50 cents. Obamacare reverses this cost-declining trend by encouraging people to opt for higher-priced prescription drugs when a cheaper OTC medication would work just as well.

A new $2.5-billion excise tax on pharmaceutical companies will raise health costs further. Drug manufacturers won’t simply swallow this new bill; they’ll pass it onto consumers in the form of higher prices. By increasing the cost of care for patients who need cholesterol-lowering statins or cancer-fighting meds, for instance, Obamacare effectively adds insult to injury.

The healthcare law will even drive up the  price of food by requiring chain restaurants and vending machine operators to post calorie counts for the items they sell.

That may seem like a harmless way to arm consumers with useful information so that they can make healthful food choices. But the rule could force vending machine operators to spend up to $100 per machine in order to refurbish their units. Consumers will have to foot that bill by paying more for their snacks.

Further, ordering vendors to display calorie counts doesn’t even lead to healthier eating.

In 2008, New York City mandated the counts on menus. Researchers from New York University and Yale studied the effect of the new regulation and discovered that calorie consumption in the city actually rose 2.5 percent. Nearby Newark, New Jersey — which did not have a similar calorie-count regulation  — saw virtually no change in its residents’ caloric intake over the same period.

Public discontent with Obamacare will only grow as its provisions begin to take effect this year. Congress should repeal it with all due speed.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is The Truth About Obamacare (Regnery).

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