Getting Rid of More Junk Policies

When Obamacare forced cancellations of health insurance policies in the individual market the supporters first denied it, then said the policies were junk policies. Praise the Lord! Obamacare is now going to rid the small business market of junk policies. From the Washington Post:

When millions of health-insurance plans were canceled last fall, the Obama administration tried to be reassuring, saying the terminations affected only the small minority of Americans who bought individual policies. 

But according to industry analysts, insurers and state regulators, the disruption will be far greater, potentially affecting millions of people who receive insurance through small employers by the end of 2014.

Who knows, maybe the Administration will delay this portion of the law as it has delayed and waived much of the law. Whatever happened to "this is the law of the land" antiphone the supporters of the law made whenever asked about the votes to delay, diminish or destroy the law by the crazy, evil, insane, stupid, racist, Neanderthal, Republicans whose sole focus is to keep people from having access to health care?

I particularly enjoyed this quote:

Jonathan Gruber, a key architect of the health law and a professor of economics at the Massachusetts Institute of Technology, said the number of people covered by small-group policies that will be discontinued is “not trivial.” 

“We’re ending discrimination [against people who are sick, and as a result] the people who were previously benefiting may now suffer,” Gruber said. “That’s sad for them, but it does not mean we should continue discrimination.”

The number will be "not trivial." Well, you know the saying, extremism in the service of health care is no vice.

This word discrimination is thrown around a lot. It is clearly being used in a pejorative sense to connote some wrong-doing. But riddle me this: If I build a house in a flood plain is my higher flood insurance premium "discrimination?" If a driver with a record of drunk driving is charged higher auto premiums, is that "discrimination?" Are life insurance premiums "discriminatory" because an 80 year old is likely to pay more than a 20 year old?

There were four foundational promises of Obamacare:
1) If you like your plan you can keep your plan.
2) If you like your doctor you can keep your doctor.
3) Premiums will decline
4) More Americans will be covered

The first three promises are obviously absurd, and now recognized as such by most of the cheerleaders of law, after vigorously making the opposite claim for years. The fourth can be accomplished fairly easily, but the Democrats decided to go around their elbow to get to their rear and came up with Obamacare instead.  They bungled the law so badly it's not clear to me even the fourth foundational promise of this law will be kept.

Couldn't Happen to a Nicer Guy

Paul Krugman Collides With The Truth (Healthcare.gov Edition)

By, Chris Rossini

As an update to a previous post, I'm proud to announce that Truth and Paul Krugman have crashed into one another. It's in regards to Healthcare.gov, but hey, when worlds collide, it's only right to recognize it.

So let's look at the timeline (my emphasis):

Oct. 1 - "The glitches will get fixed."

Oct. 14th - "Obviously they messed up the programming big time, which is kind of a shock. But this will get fixed..."

Nov. 6 - "If the bugs in healthcare.gov get fixed..."

AND NOW .... Drumroll please!

Nov. 20 - "But the future of the reform depends not on policy per se but on whether the IT issues can be fixed well enough soon enough, a subject on which I have zero expertise."

There we go...Krugman has no clue. He had no business saying that anything would work. It took almost 2 months, but he got there.

Now that we have Healthcare.gov out of the way, let's build on this admission of ignorance. Let's move on to Economics....

Prices and the Affordable Care Act.

The biggest problem with the Affordable Care Act, and Medicare and any single payer system is consumers are shielded from price. When prices are too low, people over-consume. The Obama administration realizes this. From the Washington Post on Healthcare.gov:

The problem there was politics, not code. In the first version of HealthCare.gov, there was no way to window shop. You needed to register an account in order to see the plans. The rationale was sensible enough: The White House wanted to ensure people saw the real price they'd be paying. That meant verifying their identity, their income, their age, their citizenship, and everything else that goes into calculating subsidies.

This proved a technological nightmare. Imagine if before browsing a book in Barnes & Noble you had to find a clerk and have them take down and verify your credit card, your phone number, and the address you want the book sent to once you've bought it. The staff would quickly be overloaded. No one would ever get into the store. And it would be a massive waste of time because many of the people clogging the line were just there to browse anyway.

 When the Post says the White House wanted people to see the real price they would be paying, it is saying the White House didn't want people to see the real cost of their health insurance. It didn't want old and sick to see how much it really costs to insure them, because they may choose not to buy. Where they less concerned the young and healthy people wouldn't notice they were being forced to overpay to subsidize the old and sick, or did they succumb to their own hype and believe somehow exchanges would result in lower prices for the young and healthy as well? Or was it a numbers game: many more getting subsidies, than paying for over-priced insurance and the politicians were willing to make that trade-off?

It is ironic the ACA is in deep trouble due to it's willful desire to shield consumers from price and that desire resulted in a technological, are we still calling it Glitch?

The idea consumers should be shielded from price is the biggest objection many, including myself, have had to this legislation from the very beginning. The ACA relied on insurance as a financing mechanism for health care, the original sin, removing the consumer from seeing the price of his consumption, and doubled down by removing the consumer from seeing the price of his insurance. It took a bad system, and made it worse.

Single payer won't make it better. It will make it even worse. "Free" healthcare will result in more over consumption. The only way the government will be able to ration healthcare is by bureaucratic mechanisms which includes deciding what treatments people can and can not have and when they can have it. It will be health care for the loudest. Scream you need your neighbor to pay for your birth control and birth control becomes free. Scream you need your neighbor to pay for your ED and ED becomes free. This has already happened with Medicare and ACA, there's no reason to think this trend would moderate with single payer.

Bill

Gaming the Affordable Care Act.

When the price of something is artificially controlled, all sorts of crazy ways to arbitrage will be created. One of the more imaginative (creepy? immoral? disgusting? unseemly?) and tongue-in-cheek ways is below. You might think this particular one will never occur, and that's probably true. The point is, plenty of other schemes will.

So, if it's now illegal for a medical insurance co to refuse people for 'pre-existing conditions'-- what's to prevent a group from using this for various extortionate purposes? For example you live in a big city, you have cancer, and you are friends w/ a bunch of cancer victims. You get them all on board to threaten to switch from their disparate insurers to a single one, such as ABC Insurance Corp. You call ABC and tell them, 500 of us cancer victims will sign up tomorrow for your policy, and you cannot refuse us, and we will cost you tens of millions. If you just pay us $5k each we will go away.

Bill

The Affordable Care Act and Marriage

Turns out the Affordable Care Act has a fairly substantial incentive to avoid marriage. From The Atlantic

Any married couple that earns more than 400 percent of the federal poverty level—that is $62,040—for a family of two earns too much for subsidies under Obamacare. "If you're over 400 percent of poverty, you're never eligible for premium" support, explains Gary Claxton, director of the Health Care Marketplace Project at the Kaiser Family Foundation.

But if that same couple lived together unmarried, they could earn up to $45,960 each—$91,920 total—and still be eligible for subsidies through the exchanges in New York state, where insurance is comparatively expensive and the state exchange was set up in such a way as to not provide lower rates for younger people.

Personally, I don't care if people marry, who they marry, how many they marry, how often they marry, what species they marry. Personally, I don't think the government should care either.

I'm guessing this marriage penalty was not contemplated by the authors of the ACA. Designing "a system" sounds so alluring to those in power, and pretty much impossible to do in practice. We are seeing that proven (again) with the ACA.

Let's add this incentive to the long list of perverse incentives (employer incentive to reduce work hours, employer incentive to keep business from hiring, employee incentive to not work, consumer incentive to cost shift to Medicaid, insurance incentive to drop plans and of course insurance incentive to undo the risk pools so painstakingly created by the ACA). It is an edifice doomed to collapse. We've known this from the beginning.

Bill

Losing your Plan is a Feature, not a bug, of the Affordable Care Act

Supporters of the Affordable Care Act (ACA) respond to the "You can keep your plan" broken pledge by saying 1) those were junk plans that are being lost and 2) it only applies to small segment of the individual health care market. Both claims are wrong.

It is curious supporters would make a blanket claim about the quality of plans being dropped, a claim without subtlety and nuance, when it is exactly that lack of specificity that has put the broken pledge of "read my lips you can keep your plan" in such focus. The idea that ALL plans impacting 26 million people are junk is absurd on its face and there is no evidence presented ALL, or the majority, or even some, of those plans are junk.

The claim that losing your plan only applies to a small segment of the population is more troubling. There is plenty of evidence from HHS and CBO that many in the employer-based market will lose there plan. For instance, here is the CBO in May of 2013 estimating 7 million will lose employer based coverage by 2018 and 5 million total in the non-group market by 2017. That's a  lot of junk plans.

Casey Mulligan thinks the estimates are too low. He thinks the number can be 20+ million, driven by the incentives written into the law. Employers have an incentive to drop coverage and employees will have an incentive to allow their coverage to be dropped. He concludes:

Moreover, this is not an issue of the adequacy of the group coverage that's lost, it simply that the ACA induces market participants to tolerate coverage loses in order to, at taxpayer expense, reduce the monetary loses they experience as a consequence of the law.

Losing your health insurance is a feature of the ACA. The ACA was designed to kick people off their plans. This is not a surprise to many who have opposed this plan from the start.

Bill

Did Diane Feinstein Really Say "You can keep you plan" only applied until ACA was passed?

The answer Senator Feinstein gave to Bob Schieffer's question, on Sunday's Face the Nation,  about keeping your plan was that it applied only until the ACA was passed. Let's give her the benefit of the doubt that she was really answering some other question. But what question was she answering?

More and more people are discovering that losing your health plan is a FEATURE of the ACA, not a bug.

SCHIEFFER: The president said in the beginning that one thing was that if you like the health care program you had you could keep it. We now know there was debate within the administration before he said that as to whether that was actually a promise that could be kept. Should the president not have made that statement?
FEINSTEIN: Well, as I understand it you can keep it up to the time -- and I hope this is correct, but this is what I've been told -- up to the time the bill was enacted, then after that it's a different story. I think that part of it, if true, was never made clear. It is really very unclear right now exactly what the situation is. And, yes, that's a problem. But I think it has to be said, this is a very large major priority. And if it can get up and running, it can be, I think, a very positive thing. The big problem here is there are so many destroyers -- in the House, in the public, in the private health care sector that just want to destroy. That's not helpful.

Bill

When Are the Democrats Going to Suggest a Health Plan of Their Own?

1- Dems are upset Republicans didn't support the Affordable Care Act even though the ACA was a Republican idea, thought up by the Heritage Foundation and implemented in Massachusetts by Mitt Romney. Got it? The Affordable Care Act is a Republican idea.
2-Dems are upset the Republicans won't suggest a replacement for the Affordable Care Act. Got it? The Republicans have no ideas for health care.

But if #1 is true, number #2 is false, since the ACA IS a Republican idea.

So the real question is, When are the Democrats going to suggest a health plan of their own? And if the answer is Medicare for All, the question is, Why didn't they pass that in 2008 instead of passing the opposition party's plan?

Bill

Don't Spit on My Boots and Tell Me It's Rain. ObamaCare Edition

From CBS News:

(CBS News) WASHINGTON - For 31 days now, the Obama administration has been telling us that Americans by the millions are visiting the new health insurance website, despite all its problems. 

But no one in the administration has been willing to tell us how many policies have been purchased, and this may be the reason: CBS News has learned enrollments got off to an incredibly slow start.

Early enrollment figures are contained in notes from twice-a-day "war room" meetings convened within the Centers for Medicare and Medicaid Services after the website failed on Oct. 1. They were turned over in response to a document request from the House Oversight Committee.

 The number that signed up the first day? 6. As in 1, 2, 3, 4, 5, 6. Not six hundred, or six thousand. VI.

Now I know it's the tendency of most humans to hide bad news, and put the shiniest happiest face on things.

But as they say in Texas, Don't spit on my boots and tell me it's rain.

Bill

Mark 10:42-45

Eli,

From CBS News

I think the reason Obama may lose the election is because his campaign made the decision to paint a portrait of Romney that is simply not accurate. When the American public saw that portrayal was not accurate, in the first debate, they turned away from Obama.

This CBS News piece shows just how innaccurate that portrayal is, and dovetails nicely with the Gospel reading yesterday.

By the way, in the pews was the Catholic Bishop's response to Joe Biden's claim that "no religious institution... has to either refer contraception, none has to pay for contraception, none has to be a vehicle to get contraception in any inusrance policy they provide. That is a fact. That is a fact."

Bill

 

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