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

NY Times: You WILL lose your Plan. You WILL pay more. You WILL stop complaining about it.

The NY Times editorial page this morning laid out some of the basic tenets of the Affordable Care Act: People will lose their plans, and they will pay more. An adjacent oped has an interesting view on those who complain about this.

Up to seven million people may be able to get health policies without paying any premium at all. Some four million people may have to pay more for new (and better) policies, not all of whom will necessarily be upset at getting better coverage at a competitive rate.

(At least) 4 million will not be able to keep their plan and "may have to pay more." This is just the individual market. The employer based market is much bigger and the disruptions to the employer market will be much larger as well. For instance, my small employer will be switching plans to avoid the Cadillac tax. The Cadillac Tax is a tax on high-price, high-benefit plans. The reason our old plan was a Cadillac plan is because we are a small company operating in NY. We have high premiums, but certainly not extravagant, not even generous, benefits. But such is the "logic" of the law that I must change to a plan with FEWER benefits for the purpose of..... If anyone can tell me I'd love to hear the answer.  The Affordable Care Act's response to their assertion American's pay too much for health care is to incentivice me from buying health care. Ok, but why? What if I want to buy health care? What's wrong with that? I like Apple products. An increasing portion of my budget over the years has gone to Apple products. But that's not a national crisis. I digress.

What was equally interesting to me was an op-ed by Lori Gottlieb remarking on the unsympathetic responses her friends had to her complaint about losing her plan and having to pay more for it.

“Obamacare or Kafkacare?” I posted on Facebook as soon as I hung up with Anthem. I vented about the call and wrote that the president should be protecting the middle class, not making our lives substantially harder. For extra sympathy, I may have thrown in the fact that I’m a single mom. (O.K., I did.)

 She wanted sympathy and instead was told to suck it up.

I understand the whole point of the law is to do this. The point of the law is to make some pay more and get less so others can pay less and get more. This whole Rube Goldberg contraption has that guiding principle. I do get that. But what the supporters of the law are finding out is that people get kind of cheesed when the foundational promises made when passing this law: keep your plan, keep your doctor, lower premiums, fewer uninsured, were deliberate deceptions, at worst, or made from ignorance of the law's consequences, at best.

Bill

Oh, and those heartless, evil, racist, stupid, insane, extreme neanderthals have been pointing out the law's promises were untrue for years. But tell me. If someone is a heartless, evil, racist, stupid, insane, extreme neanderthal for pointing out the truth, what is the person who has been deliberately deceiving or the person who didn't understand the untruths being promised?

A Pox on Comprehensive Legislation

Eli,

This is from Ben Domenech's "The Transom," on the NSA's data capture program:

And why are we at this point? Because, in some sense, Congress never understood what it was authorizing in the first place when it came to the Protect America Act, which swept through Congress with bipartisan support. http://vlt.tc/wbe  “In reality, the PAA represented a sweeping change to American surveillance law. Before conducting surveillance, the PAA only required executive branch officials to “certify” that there were “reasonable procedures” in place for ensuring that surveillance “concerns” persons located outside the United States and that the foreign intelligence is a “significant purpose” of the program. A single certification could cover a broad program intercepting the communications of numerous individuals. And there was no requirement for judicial review of individual surveillance targets within a “certified” program. Civil liberties groups warned that the PAA’s vague requirements and lack of oversight would give the government a green light to seek indiscriminate access to the private communications of Americans. They predicted that the government would claim that they needed unfettered access to domestic communications to be sure they had gotten all relevant information about suspected terrorists.” 

I maintain Congress never really understood the Affordable Care Act (ObamaCare), nor Dodd-Frank, and probably doesn't understand the comprehensive immigration reform bill. It seems that much of the comprehensive legislation is more of a guideline for the regulatory state to fill in the details.

The result is the atrocity of the IRS targeting political speech,  HHS forcing the Catholic Church to violate its principles, hundreds of new regulations on banks, brokerages, and publicly traded companies and of course the NSA's collection of meta data on our phone calls and postings to the cloud.

Not to worry we are told, it's for our own good. Obama defends it saying this has caught terrorists, ignoring the point it violates our civil liberties. Comic relief can alway be found from the Burns and Allen of the Senate, McCain and Feinstein, who lecture us not to worry since the program has been ongoing for seven years.

The proponents of big government have a big challenge, in my opinion. Tell me again why I should favor these big programs when they appear to run amok in frightening ways.

Bill