More problems for Obamacare

"They're saying, 'Where do we get the free Obama care, and how do I sign up for that?' " said Carrie McLean, a licensed agent for eHealthInsurance.com. The California-based company sells coverage from 185 health insurance carriers in 50 states.

Read more: http://www.mcclatchydc.com/2010/04/06/91696/health-care-overhaul-spawns-mass.html#ixzz0kQsu1pgl

More cost problems for Obamacare

Reports WSJ:

One provision of the health-care bill that is now law says that parents will be able to keep their dependent children on their health insurance policies up to age 26.

New work by a trio of economists, circulated by the National Bureau of Economic Research, suggests that could produce a significant increase in demand for health care from previously uninsured young adults. Using the National Health Interview Survey and records from hospital emergency and in-patient departments from seven states to track the habits of young adults who lose their insurance when they leave school or “age out,” the economists find that hospital visits by young people fall sharply when they fall off their parents’ insurance.

The bond market knows Obamacare costs will skyrocket. Remember the medical industry is the third largest user of energy.

Another Dead Zone for Obamacare

I previously noted the employment Dead Zone effect for Obamacare, it will cause fewer wage settings, a broadening of the Dead Zone of unemployment and when the wage grows to positive income tax a large marginal tax increase for the low wage worker.

Now Barrons interviews WILLIAM DUNKELBERG, the chief economist with the National Federation of Independent Business. He sees the Dead Zone effect for small businesses that grow beyond the minimum number of employees for Obamacare exemptions.

Mish quotes from Barron's:

Just when a small business gets large enough to no longer be called "small" is arbitrary. The legislation sets the exemption bar at fewer than 50 employees. And it turns out that, based on Bureau of Labor Statistics figures, there were nearly 4.7 million such firms in the U.S. last year, 95% of all private-sector firms. This 95% employed just 31.2 million workers in 2009 (down from 33 million in '07), accounting for 29.4% of all private-sector employment. Not surprisingly, Congressional Budget Office figures show that a disproportionate share of these workers lack health insurance.

The legislation waits until 2014 before imposing stiff fines on firms with 50 or more employees that do not install a government-approved health insurance plan. If Dunkelberg is right, however, then rising costs and shortfalls in revenue could lower the cutoff to 20 employees, or even 10. At a cutoff of 10, for example, one million firms (out of the 4.7 million total), would no longer be exempt. But wherever the cutoff is set, consider how the rule could affect firm behavior.

Obamacare will be a nightmare as small firms try to navigate the cut off for exemptions.

Bad news on Obamacare Costs

Division of Labor reports on this study, with abstract below:

Substantial uncertainty exists regarding the causal effect of health insurance on the utilization of care. Most studies cannot determine whether the large differences in healthcare utilization between the insured and the uninsured are due to insurance status or to other unobserved differences between the two groups. In this paper, we exploit a sharp change in insurance coverage rates that results from young adults “aging out” of their parents’ insurance plans to estimate the effect of insurance coverage on the utilization of emergency department (ED) and inpatient services. Using the National Health Interview Survey (NHIS) and a census of emergency department records and hospital discharge records from seven states, we find that aging out results in an abrupt 5 to 8 percentage point reduction in the probability of having health insurance. We find that not having insurance leads to a 40 percent reduction in ED visits and a 61 percent reduction in inpatient hospital admissions. The drop in ED visits and inpatient admissions is due entirely to reductions in the care provided by privately owned hospitals, with particularly large reductions at for profit hospitals. The results imply that expanding health insurance coverage would result in a substantial increase in care provided to currently uninsured individuals.

This implies that Obamacare will put ER rooms at severe stress with a 60% rise in emergency room visits, suddenly. Hospitals will be swamped, and federal deficit will rise way beyond the CBO fiction.