Predictable Woes

I said 7 years ago when I started this blog that this was going to happen. It was predictable.

Two Words: Adverse Selection. 🙂

Republicans and many health policy experts said this would happen – that’s one of the reasons the GOP wouldn’t sign off on it.

So now that the obvious has come true, Barack Obama is floating an idea to save the entire system: Go full-steam into true socialized medicine, complete with the dreaded “public option.”

In an article for The Washington Post,  Dr. Ezekiel Emanuel, a former Obamacare top official, said he had a fix for the problems. He offered a five-prong solution, but one in particular stands out: A public option.

He says that “we should consider a public option,” because “consumers should never be subject to the whims of insurer withdrawals or withdrawal threats,” The Daily Caller is reporting.

I said the objective of ObamaCare as crammed down our throats by the Democrats was only to crash the whole thing so that the Government could ride in and “save” everyone from it by doing EVEN MORE of it, namely Government Controlled Health Care. Its what the Democrats wanted all along and it’s not like they take “no” for an answer when it comes to their Agenda.

Never Let a Crisis Go to Waste.

Barack Obama “authored” a piece in the Journal of the American Medical Association. In it, he argued that progress on Obamacare is through “continuing to implement the Health Insurance Marketplaces and delivery system reform, increasing federal financial assistance for Marketplace enrollees,” and by “introducing a public plan option in areas lacking individual market competition.”

2009: Obama told the Washington Post that he thought a public option would provide the most Americans the greatest access to healthcare.

That same year, in an interview with Univision, Obama said a public option in the exchanges is “something that we can still include as part of a comprehensive reform effort.”

And he only has a few month left in office. There is no guarantee, despite what the Liberals and The Liberal Media have been doing to rig the election, that a Democrat will be around to finish us off.

And it’s not like someone is going to tell you about it.

Townhall: The number of uninsured is expected to spike by 2 million people between 2017-2026, the number of those enrolled came in 24 million under the original CBO projections, a large percentage of those who enrolled in Obamacare were already insured before their previous plans were gutted under the law, and the whole notion that the law is on the verge of total collapse. It’s a total disaster, yet NBC News, CBS News, and ABC News’ evening programs seem to ignore that President Obama’s signature domestic achievement is on life support.

The honorable mention is CBS Evening News, which has devoted 2 minutes and 18 seconds of airtime to Obamacare woes…for the entire year thus far. Mike Ciandella of the Media Research Center crunched the numbers. It’s not pretty, folks—believe me:

The broadcast networks have refused to cover the repeated failures of ObamaCare in 2016. During the entire year, ABC World News Tonight and NBC Nightly News have yet to give the floundering program any coverage at all, while CBS Evening News only found time to cover two of the ObamaCare updates – and that only added up to 2 minutes and 18 seconds of coverage for the entire year.To put that in perspective, these same three evening news shows managed to find 46 minutes and 49 seconds to dedicated to Olympic swimmer Ryan Lochte running afoul of Brazilian police.

[…]

Here are some of the major ObamaCare developments that the networks ignored:

February: Investigators from the Government Accountability Office successfully defraud the ObamaCare system 11 out of 12 times.

No network evening news coverage

[…]

April: Premiums rise, deductibles spike as high as 76 percent in some states

No network evening news coverage

May 12: Federal judge says the President is illegally using federal money to pay for premium subsidies

No network evening news coverage

August: Aetna announced that it plans to back out of ObamaCare, after losing $300 million this year from individual coverage sold on the ObamaCare exchanges. Aetna and Humana join UnitedHealth in pulling out of ObamaCare.

Only CBS Evening News covered this, for 1 minute, 55 seconds on August 16

Well, of course, you know this is media malpractice. A significant law is on the verge of disaster millions of Americans’ health care coverage could be detrimentally impacted, and the media is doing their best to shield the White House from fanning the flames of their horrible law. That’s sounds like par of the course…sadly.

reluctant

 

 

Roll Tide

One might be forgiven for thinking health insurers are cracking under the strain of Obamacare’s broken insurance exchanges. But don’t be fooled: it is the 10 million Obamacare enrollees who are in trouble, not the insurers.

To be sure, new nonprofit cooperative insurers, set up with special subsidies to compete in the exchanges, have had a terrible run. They deliberately underpriced their premiums to gain market share, expecting the federal government to bail out their losses. Once the Republicans took over the House of Representatives, then the Senate, this became unlikely. As a result, the administration announced in November that 12 of 23 nonprofit cooperative insurers were shutting down.

However, these nonprofit cooperative insurers, which did not exist before Obamacare, are not important overall. That is why UnitedHealth Group’s November 19 announcement that it is losing $500 million on the Obamacare exchanges and might withdraw from Obamacare in 2017 is a big deal. Just a few weeks earlier, UnitedHealth Group had announced it would expand into 11 new states’ Obamacare markets.

The insurer is also dialing back advertising and brokers’ commissions for 2016, even though it is too late to withdraw from the market literally. (We are in the middle of Obamacare’s third open season.) However, it is the threat of absolute withdrawal in 2017 that has shocked many. By 2017, the fourth year of Obamacare, the market is supposed to have shaken out. Both insurers and Obamacare’s political sponsors understood that insurers would not know how expensive claims would be from those who signed up during the first three years. That is why insurers were given temporary taxpayer subsidies, called reinsurance and risk corridors, for 2014 through 2016. Reinsurance is a direct handout of $25 billion from taxpayers to insurers. Risk corridors were more complicated and supposed to be budget-neutral. Insurers that made more money than expected would pay money to those that lost more money than expected.

 

When it became clear that the losers far outnumbered the winners, the administration tried to raid the kitty to make risk-corridor payments from the general fund. By this time a new Congress (in which the majority opposed Obamacare) actually read the bill that its predecessor had passed in 2010 and pointed out that the administration could not pay out that money. As a result, Obamacare insurers will only receive $362 million of $2.9 billion of risk-corridor payments requested.

However, even if Congress did cave in and pay the risk corridors in full, payments would finish in 2016. That is what makes UnitedHealth Group’s announcement about dropping out in 2017 so important: it is effectively an admission that three years are not enough to learn how to manage risks in Obamacare’s exchanges. Indeed, it suggests that risks are unmanageable, that the vicious circle of increasing premiums’ driving healthy subscribers away and leaving only sick ones on the books cannot be stopped under Obamacare.

The exchanges have fewer victims than initially expected. The economy has been strong enough that employer-based coverage has stood up to Obamacare. As a result, only 10 million people are caught in them, instead of the 21 million forecast when the law was passed. However, this is a mixed blessing. These 10 million are a politically weak constituency of working-class and lower middle-class citizens in middle age — the people whose needs politicians always talk about but seldom address because they are not politically active.

The only group politically powerful enough to renegotiate the exchanges are the insurers, and they show no more creativity than to lobby for their subsidies to be restored, which this Congress has promised not to do. On the other hand, simply quitting the exchanges is not very painful for large health insurers. UnitedHealth Group’s stock took a small hit when it admitted its struggles, but Obamacare exchanges are a tiny share of its business. As more insurers make the same decision to quit, 10 million Obamacare subscribers will be left high and dry in short order. (DC)

Political Cartoons by Michael Ramirez
Political Cartoons by Bob Gorrell
Political Cartoons by Jerry Holbert
Political Cartoons by Bob Gorrell

If you Like your Job…

ObamaCare

Please enjoy the latest installment of the “it’s working” chronicles. Sorry, American workers (via The Hill):

ObamaCare will force a reduction in American work hours the equivalent of 2 million jobs over the next decade, Congress’s nonpartisan scorekeeper said Monday. The total workforce will shrink by just under 1 percent as a result of changes in worker participation because of the new coverage expansions, mandates and changes in tax rates, according to a 22-page report released by the Congressional Budget Office (CBO). “Some people would choose to work fewer hours; others would leave the labor force entirely or remain unemployed for longer than they otherwise would,” the agency said in its latest analysis of the now five-year-old law.

This assessment largely confirms the bombshell February 2014 analysis from the nonpartisan entity, which also projected that Democrats’ $2 trillion healthcare scheme would slow economic growth and slow job creation.  Take it away, 2011 Nancy Pelosi:

“Four million jobs will be created by the legislation when it is fully in effect.”

In 2010, she said Obamacare would create 400,000 new jobs “almost immediately.”  Last year, the law’s defenders were reduced to arguing that the reduction in worker hours was a positive development, offering Americans more time to spend with their families, and freeing them from “job lock.”  CBO’s findings determined that Obamacare disincentivizes work, shifting the burden of subsidizing health coverage for people who choose to work less or leave the workforce altogether onto the backs of middle class taxpayers.  Democrats’ frantic “liberation from job lock” spin worked out…about as well as one might have expected.  Obamacare’s cheerleaders have been wrong about virtually everything: Their law was not a job creator.  Their law has not bent the national health spending “cost curve” down.  Their law has not even approached lowering rates across the board.  Their law has not made healthcare more affordable.  Their law has not secured access to care.  Their law has not reduced emergency room visits, or decreased uncompensated care. Their law did not guarantee that satisfied consumers could keep their preferred doctors and plans. And their law has not attracted nearly as many enrollees as they expected, largely due to lack of affordability.  Their law has not signed up as many young and healthy consumer as they’d anticipated, raising new fears of an adverse selection spiral.

Gee, How many times have I said that very thing? 🙂

And their law has not become popular post-implementation.  Meanwhile, the string of high-profile failures among Obamacare co-ops is inflicting more chaos onto an already-strained system:

Health care providers could get stuck with unpaid bills in a half dozen states where co-op plans have collapsed. That’s because there’s no financial backstop in those states if the failed nonprofit startups backed by Obamacare loans run out of money before paying off all of their medical claims. That messy scenario is already playing out in New York, where the state’s co-op shut down at the end of November after its financial situation proved direr than originally known. The Greater New York Hospital Association estimates the co-op, Health Republic Insurance of New York, owes its members at least $165 million. And the Medical Society of the State of New York found that of more than 900 doctors surveyed, 64 percent reported being owed money by the co-op plan. For most insurers, a state’s guaranty fund – bankrolled by the industry – will cover unpaid medical claims if they become insolvent. But in some states, like New York, that fund doesn’t support plans that are licensed as health maintenance organizations, which is typically how the co-ops were set up. The other five states where providers could end up with unpaid bills if the failed co-ops run out of money: Kentucky, Louisiana, Nevada, Oregon and Utah…Just over half of the 23 co-ops seeded with $2.4 billion in loans have collapsed, with most set to cease operations at the end of this year. That’s left roughly 600,000 individuals scrambling to find new coverage.

On Capitol Hill this week, Republican lawmakers are demanding answers about how the government spent hundreds of millions of dollars on state-level Obamacare exchanges that ultimately collapsed, and have since been abandoned.  Here’s Rep. Marsha Blackburn (R-TN) grilling acting CMS administrator Andy Slavitt about whether or not he agrees with the nonpartisan Government Accountability Office’s (GAO) recently-announced verdict that zero of the remaining state-level exchanges are “fully operational,” after five years and $1.45 billion in IT spending, courtesy of taxpayers:

Senate Republicans used a budget maneuver called reconciliation to vote to repeal vast swaths of Obamacare last week, approving a bill that would gut the law.  Once it passes the House, President Obama is expected to veto the legislation in order to protect his unpopular, harmful law. Hillary Clinton, who invented Obamacare, asserted last week that the law is working.

And The Ministry of Truth assures us that it’s all just a plot by dissidents and Thought Criminals and that they just want poor people to die. 🙂

THE AGENDA IS THE AGENDA. They fight for it to very last drop of YOUR blood. 🙂

 

The November Surprise?

Another round of “if you like your plan” well… too f*cking bad suckers!

But don’t worry, the Liberal media won’t tell you about it because that’s not on The Agenda (and it’s still “the Affordable Care Act” to them because their Orwellian training says so when it’s bad news) or they’ll sugar coat it in Orwellian BS and class warfare as they do anything that’s bad new for them.

One of the causes they’ll never see, because it was central to their Agenda:

From MSNBC (earlier this year): Until recently, insurance companies screened individual buyers for potential health needs and penalized or excluded anyone who might actually need care. The Affordable Care Act bars that discrimination, and it uses tax credits to subsidize coverage for people with modest incomes.

And we know how this was destined to fail and has failed. What they are flapping their collectivist lips about is Adverse Selection (which I have harped on before).

Suppose an insurance firm offered health insurance to the general public. It is likely to have the highest take up rate amongst unhealthy people. People who don’t exercise, people who smoke. They are the group most likely to need health care, therefore, it makes sense for them to take out insurance. Healthy people don’t see the point, if the price of health insurance is determined by the average unhealthy person.

If insurance premiums are based on the needs of smokers, then the premiums will be high. Therefore, there is no incentive for healthy people to take out the insurance.

Solutions to Adverse Selection

To avoid adverse selection, firms need to try and identify different groups of people. This is why health insurance premiums are higher for smokers and obese people, etc.

And some people deemed of high or extreme risk are excluded altogether.

And this works in any insurance really, the higher risk people get higher premiums or excluded altogether in order to try and keep premiums as low as possible.

BUT

In Health Insurance if  you MANDATE that you can’t adversely select the higher risks (what the Left calls “discrimination”) then EVERYONE‘s premiums are going up to cover the influx of the unhealthy and the one’s who couldn’t afford it in the first place but are mandated to have it anyhow (or just like a freebie) are now on the taxpayers-you-and-me’s dime and we get to pay to pay for them as well!

That’s fair!, right. 🙂

And then you stick in the provision, in ObamaCare, that says if your plan doesn’t match up perfectly with what ObamaCare considers the perfect plan then your plan has to bit the big one and you get….

More than a dozen states plan to cancel health care policies not in compliance with ObamaCare in the coming weeks, affecting thousands of people just before the midterm elections.

“It looks like several hundred thousand people across the country will receive notices in the coming days and weeks,” said Jim Capretta of the Ethics and Public Policy Center.

The policies are being canceled because states that initially granted a reprieve at the request of President Obama are no longer willing to do so.

In coming weeks, 13 states and the District of Columbia plan to cancel such policies, which generally fall out of compliance with the Affordable Care Act because they don’t offer the level of coverage the law requires.

Virginia will be hardest hit, with 250,000 policies expected to be canceled.

And because federal law requires a 60-day notice of any plan changes, voters will be notified no later than November 1, right before the Nov. 4 midterms.

Many of those forced out of their current plans and into ObamaCare may not be able to keep their doctors. They also could face higher deductibles and out-of-pocket expenses, making ObamaCare an election issue on the eve of voting.

Obama had originally unequivocally promised that under his health care plan, everyone could keep their doctors and plans.

In 2009, he told the American Medical Association, “If you like your doctor, you will be able to keep your doctor. Period.If you like your health care plan, you will be able to keep your health care plan. Period.No one will take it away. No matter what.”

The president later was forced to admit that any plan without the additional benefits required under ObamaCare faced cancellation.

But that unleashed a nasty political backlash, forcing him to back down and call for states and insurers to extend those policies for three more years.

Some said he didn’t have much choice. “There were some five or six million people who were at stake here and the federal exchange was in no condition to even process a few hundred thousand people much less millions,” said Joe Antos of the American Enterprise Institute.

Many states flatly refused to extend and now comes the new round of states that plan to cancel policies. (Jim Angle)

But don’t worry, IF the liberal media even mentions it, it will be the Insurance Companies fault, not the fault of ObamaCare and it’s ridiculous “requirements” because ObamaCare is the Light, and we “haters” are the Darkness, after all.

You don’t want the days of “discrimination” (racial overtone background music) to come back now do you? 🙂

After all, The Left is the Light, and everyone else is The Dark.

MSNBC: “Honest people can differ on the merits of those policies.

And there’s no one more honest and transparent than The Left, after all, they are The Angels of Mercy and Compassion… 🙂

So LIGHTen your wallet, here comes ObamaCare! The November Surprise?

Political Cartoons by Bob Gorrell

Hardship Discharge

“It’s now been redefined,” Charles Krauthammer continued, “so that all you have to do is to claim that going into the exchange would create a hardship. I mean, it’s ironic. It makes Obamacare itself the hardship — which is slightly ironic, but I think she <Sebelius> is beyond the reach of irony so she didn’t quite see it.”

Hardship exemptions

If you have any of the circumstances below that affect your ability to purchase health insurance coverage, you may qualify for a “hardship” exemption:

  1. You were homeless.
  2. You were evicted in the past 6 months or were facing eviction or foreclosure.
  3. You received a shut-off notice from a utility company.
  4. You recently experienced domestic violence.
  5. You recently experienced the death of a close family member.
  6. You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.
  7. You filed for bankruptcy in the last 6 months.
  8. You had medical expenses you couldn’t pay in the last 24 months.
  9. You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.
  10. You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you do not have the pay the penalty for the child.
  11. As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace.
  12. You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act.
  13. Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.
  14. You experienced another hardship in obtaining health insurance. (healthcare.gov)

Which is all well and good, but remember, the “shared responsibility payment” was one of the major FUNDING vehicles for this onerous mess so if have a run away program with no funding mechanism then you have a gigantic mess.

And then one has to ask why did you do it in the first place?

THE AGENDA IS THE AGENDA.

Suckers! 🙂

“The door’s wide open,” economist Doug Holtz-Eakin, who leads the conservative-leaning American Action Forum, told Fox News. “[The] mandate which they said was absolutely crucial to ObamaCare is falling apart day by day.” 

The most recent exemption was included in an ObamaCare application document. There already had been 13 distinct exemptions, but this document added one more — apparently it was added in late December. 

The document said that individuals can now qualify for a “hardship exemption” — meaning they would not have to pay a penalty for not buying insurance — if they “experienced another hardship in obtaining health insurance.” 

The document does not define what “another hardship” means, and suggests the administration might not be a stickler when it comes to proof either. It says anyone seeking this exemption should “submit documentation if possible.” 

Of all the exemptions created so far, this category appears to be the broadest. Prior exemptions were created for people who are homeless, who filed for bankruptcy, who experienced a fire and who dealt with other financial emergencies. Already, the 13 exemptions previously on the books could apply to millions. Another created in December would give a pass this year to many of those whose policies were canceled due to ObamaCare and who struggled to find an affordable option — last week, the administration quietly extended that waiver through 2016. 

All along, the administration has rejected congressional attempts to officially delay the individual mandate in its entirety. The White House even threatened to veto one such bill. 

But the 14 exemptions now on the books raise the question of whether the mandate has been pushed off in all but name. 

“There’s a real question as to whether the White House just abandoned the individual mandate,” Boehner said Thursday. “It just seems they are hoping no one will notice.”

They still want there agenda, because they need more time to figure out how to screw you without you squealing so much and spurting so much blood on the table as they cut you into pieces.

As a consequence, he said, there could be “chaos” in the insurance market. Insurance companies, in exchange for taking on older and sicker patients as part of the Affordable Care Act, were counting on millions of young and healthy Americans signing on. The individual mandate — and the penalty that comes with it — was supposed to compel people who might not otherwise buy insurance to enter the system. 

Now that the mandate is being softened, it’s unclear whether insurance companies will have enough of those new customers to keep premiums down for everyone else. (FOX)

They didn’t already, so this will just make it even worse.

Adverse selection is now officially off the table. 🙂

So does “If you wanna keep your exemption…” start?? 🙂

Congrats, Mr. President!!

Not that he will take the blame for it or that anyone in the liberal media will assign it to him, mind you. They just hope you still vote for them, because the other guy is a much bigger asshole than they are and they will be glad to tell you all about that. 🙂

They are Homo Superior Liberalis, and you’re not!

Freedom Delayed is Freedom to Vote for Democrats and to still pay for the insurance even if you can’t afford it…

And we’ll get new hidden taxes in their to make up for our crap shoot. And when those fail, we’ll go for the more overt taxes and bailouts because we are never wrong!

So Vote for us, the other guy is still a bigger asshole! 🙂

http://dailycaller.com/2014/03/12/krauthammer-obamacare-hardship-exemption-essentially-cancels-individual-mandate-video/

 

 

Hope & Change 2014

“I guess what I would say, if you looked at that person’s budget, and you looked at their cable bill, their cell phone bill, other things that they’re spending on, it may turn out that it’s just they haven’t prioritized health care because right now everybody is healthy.” President Obama. The man who has ADDED 7 1/2 Trillion to the Debt in 5 years! I guess that was his priority!

Political Cartoons by Chip Bok

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius admitted Wednesday that Obamacare premiums will probably go up in 2015, that she does not know how many Obamacare customers have paid their premiums, and that she does not know how many Obamacare enrollees had insurance previously.

“I think premiums are likely to go up, but go up at a slower pace” than they did previously, Sebelius admitted at Wednesday’s House Ways and Means Committee hearing.

“I can’t tell you that, sir, because I don’t know that,” Sebelius said when asked by Georgia Rep. Tom Price how many Obamacare customers have paid their first premiums. Sebelius said she also does not know how many Obamacare customers previously had insurance plans that were canceled.

However, an industry source says the White House “definitely knows” who has made these payments from two separate data points, as the exchanges were set up to be the “source of truth for information.” The source claims the White House is withholding the information for “political reasons because it would force them to lower their enrollment figures if 10% of 20% of enrollees had not paid.”

The Obama administration has delayed many provisions of the Obamacare law until after the 2014 midterms, including the economically consequential employer mandate.

The administration’s inability to meet its goal for enrolling young, healthy “invincibles” on the Obamacare exchanges has mired the entire Obamacare program in the so-called “death spiral,” which drives up health insurance rates because older, sicker people are primarily signing up. (DC)

Subverted Adverse Selection they did! 🙂

Most recently, the administration extended the “hardship exemption” from the individual mandate for those who had their previous policies canceled because of Obamacare until October 2016.

To qualify, your plan must have been canceled because it wasn’t compliant with Obamacare, and you just have to tell the government you “believe” that other insurance policies are unaffordable.

So the individual mandate is a “hardship” and the employer mandate is on hold until he’s not running anymore. BUT IT’S NOT POLITICAL!!!! And it’s doing good for everyone, anyone who says otherwise is a “liar” (Harry Reid).

So the 80-90% of the funding structure of this Magnum Opus just pissed down the drain…Gee, that’s very responsible budgeting Mr. president. Maybe we should cut your Cable bill!

“President Obama has refused to enforce those parts of our nation’s immigration laws that are not to his political liking, has waived portions of our welfare laws, has stretched our environmental laws to accommodate his policy objectives, and has waived testing accountability provisions required under the ‘No Child Left Behind’ education law,” according to Rep. Bob Goodlatte, the chairman of the House judiciary committee.

For example, in June 2012, Obama created a temporary mini-amnesty for at least 500,000 younger illegal immigrants. The act boosted his election-day support among Hispanics, but made it more difficult for young Americans to find jobs.

“Political appointees at the Justice Department have announced that rather than work with Congress to amend the federal criminal code, they will simply stop prosecuting low-level drug offenders under mandatory minimum sentencing laws,” said Goodlatte in a Fox News op-ed.

“And now that his signature health care law has not been working and revealed his empty promises, President Obama has changed that law unilaterally over 20 times,” Goodlatte added.

The House bill is titled “the Faithful Execution of the Law Act.”

The House is expected to pass the bill Wednesday, along with a companion bill, titled “ENFORCE the Law Act.”

The bills are expected to be blocked by the Democrat-controlled Senate. (DC)

Now that’s By-Partisan!
So do you “believe” in Hope & Change now…

Political Cartoons by Jerry Holbert

Political Cartoons by Glenn McCoy

Political Cartoons by Henry Payne

 

Happy New Health Care Everyone…

More than three years after passage of the Affordable Care Act (aka, Obamacare), most Americans still lack a good understanding of what the law does and how it will affect them. In large measure, that is due to the sheer complexity of the law and the fact that its major pieces are only now beginning to take effect. That complexity is also the root cause of many of the technical problems the federal government is facing in implementing the law, with those technical problems creating, in turn, even greater public confusion and anxiety.

The politically “popular provisions” (such as, so-called “free” preventive care, covering 26-year-old “children” on their parents’ plans, and expanding Medicare prescription drug benefits) took effect first—prior to the 2012 election. But these provisions are nearly inconsequential compared to the damaging Obamacare components slated to take full effect in January 2014.

That’s when a new and completely unsustainable subsidy program takes hold via the government exchanges. It’s also when Obamacare expands the broken Medicaid program to take in millions of new patients, and when Americans start paying for most of the nearly $1.8 trillion in new entitlement spending with massive tax hikes and unprecedented cuts to the Medicare program.

The results of these intertwining provisions will profoundly change the U.S. health care system and will undoubtedly produce lasting negative effects for a majority of Americans, regardless of the source of their health care coverage. Many Americans will see higher costs, fewer choices for coverage and less access to doctors and hospitals.

CHANGING INSURANCE COVERAGE AS WE KNOW IT

The Exchanges
The key vehicle used by Obamacare to radically transform and standardize health insurance in the U.S. is the creation of government health insurance exchanges. These exchanges were created to sell and subsidize standardized government-approved health care plans. Most of those who acquire coverage through the exchanges will have their costs subsidized by federal taxpayers. In 34 states, the federal government will be in charge of running the exchange.

Sixteen states, plus the District of Columbia, have elected to run their own state exchange. Open enrollment in the exchanges began on October 1. Coverage for enrollees kicks in beginning January 1, 2014.

Standardizing Health Insurance
Plans are offered in metal tiers: bronze, silver, gold, and platinum. Bronze plans will have the lowest premium, but highest cost sharing, and the reverse will be true of platinum plans. Those under age 30 can also purchase so-called catastrophic plans.

While there is some variance from state to state, every plan sold on the exchanges must offer a new “essential health benefits package”—an extensive level of benefits drawn from 10 different benefit categories.

With these built-in benefit mandates, insurers are unlikely to offer additional benefits. Doing so would further increase the price of their products compared to their competitors. In essence, the benefit floor created by Obamacare is likely to also become a benefit ceiling. The result is that meaningful differences among health plans can be hard to come by at the benefits level.

Over-Regulation of Insurance
These benefit mandates are combined with new insurance rules inside and outside the exchanges that take full effect in 2014. These include:

  • Unrestricted guaranteed issue, meaning no one can be denied coverage due to a pre-existing condition, even if they didn’t have previous coverage. (Of course, to avoid people waiting until they are sick to buy coverage, Obamacare added the infamous individual mandate to coerce healthy people to join Obamacare now.)
  • No medical underwriting, meaning an insurer cannot vary premiums based on health condition.
  • Community rating, which essentially forces insurers to charge younger adults artificially higher premiums by limiting the variation in premiums between the young and old. (The natural variation in medical costs runs at about 1:5. Obamacare sets the ratio at 1:3)
  • Prohibition of annual and lifetime limits on benefits. This provision has been gradually phasing in. The limits will be fully phased out on January 1, 2014. (At that time, any waivers for plans with such limits will expire, and 4 million people in plans that got waivers will lose their existing coverage.)

These new rules and mandates create a one-size-fits-all insurance model. Unfortunately, millions of policies previously sold do not fit this model. As a result, millions of Americans have lost—or are at risk of losing their health plan.

Subsidizing Coverage in the Exchange
Starting in 2014, the government will subsidize premiums for coverage purchased through the Exchange by individuals earning from 100 percent to 400 percent of the federal poverty level (FPL). For individuals, that income range is between $11,490 and $45,960 in 2013. For a family of four, the income range is between $23,550 and $94,200. The subsidies are applied on a sliding scale with the lower income participants receiving higher amounts.

In addition to premium subsidies, cost-sharing subsidies are available to those who purchase a silver plan in the Exchange and earn between 100 and 250 percent of FPL. These cost-sharing subsidies will offset enrollees’ out-of-pocket expenses.

The heavy subsidies are expected to draw more and more people to the exchanges. In May 2013, the Congressional Budget Office (CBO) estimated 7 million people would obtain coverage through the exchanges in 2014. By 2023, the CBO projected 24 million to obtain coverage there, with 19 million receiving subsidies. The CBO estimates that together, the subsidies will cost taxpayers almost $1.1 trillion from 2014-2023.

Higher Premiums and Fewer Choices
The main effect of these Obamacare provisions is a lack of competition, reduced consumer choice, and increased costs in the exchanges. Just the opposite of what the president promised.

The standardization of benefits inherently limits choice but this is combined with a lack of insurer competition, further reducing choices for Obamacare consumers. A county-level analysis of insurers participating in the state exchanges shows that 17 percent of the nation’s counties will have no choice—only one insurer is offering coverage to residents there. More than a third (35 percent) of all counties have only two carriers to choose from. Another 26 percent are being offered coverage from only three carriers. Thus, three out of four counties in America will only have three insurance options through Obamacare. A lack of insurer competition not only reduces choice, it also reduces pressure on insurers to keep costs down.

Obamacare’s many onerous provisions have led to significant premium increases for most consumers in a majority of states. A Heritage Foundation analysis found that 42 of the 47 states for which comparable premium data are available will see significant average premium increases—in many cases, over 100 percent— for individuals purchasing from the exchanges.

A common way for insurers to mitigate premium increases is to reduce the scope of their provider networks. As a result, major hospitals are being excluded in some exchanges, and many exchange customers are finding that their doctor isn’t in their exchange plan’s network.

For instance, the Los Angeles Times reports that “a major insurer in the state run market, Blue Shield of California, said its exchange customers will be restricted to 36% of its regular physician network statewide.”

EXPANDING A BROKEN ENTITLEMENT
Another major piece of Obamacare is an expansion of Medicaid to individuals earning up to 138 percent of the FPL, an annual income of $15,856 in 2013.

The law promises that our already broke federal government will fund the Medicaid expansion population at 100 percent for the next three years, gradually reducing reimbursement to 90 percent in 2020 and thereafter. The CBO expects a partial expansion to cost $710 billion over the next decade. Those states that have opted to expand their programs will see their Medicaid rolls start to swell in January. The administration’s fight to get the rest of the states to expand will rage on.

Originally the law stated that, if a state refused to expand its Medicaid program, the federal government would take back its matching funds for the entire program.

But in June 2012, the Supreme Court deemed that provision to be coercive and ruled that the federal government could not withhold all its funding to states that chose not to expand, it could only withhold the expansion funding.

Prior to Obamacare, Medicaid traditionally covered low-income mothers and children, as well as low-income disabled and elderly. Obamacare’s blanket expansion includes anyone with income up to 138 percent of the FPL. If every state expands its program, as many as 25 million additional people could enroll in Medicaid by 2021—most of them childless adults.

Thus far, only 25 states have agreed to the massive expansion. The rest are weighing their options. The 25 states that have not yet bought into the expansion are under intense pressure from hospital lobbyists to do so. The administration, too, shaken by the dismal enrollment figures in the exchanges, has recently stepped up its efforts to “shame” governors into expansion.

Health Coverage Doesn’t Equal Access to Care
Medicaid beneficiaries already find it difficult to access care. A major reason is due to low physician participation rates. Sandra L. Decker, an economist at the National Center for Health Statistics, found that in 2011, one of three primary care physicians would not accept new Medicaid patients. And it’s no secret why. Medicaid typically reimburses doctors at rates below paid by private insurance plans. In 2008, Medicaid reimbursement was little more than half (about 58 percent) that provided by private plans.

Although Obamacare provides a federal funding boost for Medicaid primary care physicians, reimbursement levels are likely to trend back down. For one thing, the federal boost is only to Medicare reimbursement levels which are still below private insurance rates—about 80 percent. For another, the increase in Medicaid reimbursements is only temporary, ending after 2014.

Instead of reforming a program that is already failing the most-vulnerable in our society, Obamacare expands it, worsening the problem.

PAYING FOR OBAMACARE
New Taxes, Mandates, and Fees Obamacare contains 18 specific tax hikes, mandates or penalties estimated to raise a total of $771 billion in new revenue from 2013-2022. All but four of these are already in effect, and three more will take hold in 2014. Total tax revenue from Obamacare is estimated to be almost $32 billion in 2014.

Included in this list are the individual mandate and the employer mandate. The Supreme Court upheld the individual mandate as a constitutional exercise of Congress’s power to tax, yet it remains wildly unpopular. It is designed to coerce individuals into purchasing government approved health insurance or face a tax penalty. The penalty will start in 2014— based on either $95 or one percent of annual income, whichever is greater. However, nearly all those subject to pay it will pay the latter (one percent of income) amount because individuals with an annual income of only $9,500 or less would likely qualify for Medicaid or a hardship exemption.

The employer mandate forces all employers with 50 or more full-time employees (defined as those working 30 hours per week) to either offer coverage the government deems affordable and adequate or pay a penalty. The penalty varies—either $2,000 per employee after the first 30 workers, or $3,000 per employee receiving subsidized coverage in the exchange, whichever is less.

The Obama administration has delayed the enforcement of the employer mandate until 2015, but it was done administratively rather than through legislative action. Thus many in the business community are still confused— since the law says one thing and the administration says another. Regardless, plenty of businesses have already adapted by reducing hours for their employees to fall under the hourly threshold.

The health insurer tax, one of the bigger taxes included in the law, is an annual fee on health insurance plans. This tax is based on each individual company’s share of the market and is estimated to raise $101.7 billion from 2014-2023, including $8 billion in 2014 alone. While the insurance industry is actively trying to delay the tax, it is sure to have a huge effect on premiums next year and thereafter. An actuarial analysis by the consulting firm Oliver Wyman shows that in 2014, this tax will increase premiums by 1.9 to 2.3 percent. And the impact will be far greater in later years.

Another large fee to help pay for Obamacare is a reinsurance fee, which isn’t even included in the list of 18 taxes. The temporary fee is assessed on group health plans to help spread the cost of the covering those in the exchanges. The fee is going to be $63 per covered life in 2014. Like most taxes and fees, the result will likely be higher premiums.

Using Medicare to Pay for Obamacare
Seniors in Medicare are also hit by the Obamacare spending spree. Obamacare includes a host of across-the-board Medicare spending cuts, totaling $41 billion in 2014 and more than $700 billion by 2022. Contrary to the way these cuts are often portrayed, they are not being used to shore up the Medicare program and are not aimed at specific instances of waste, fraud, and abuse.

Seniors, access to care will be compromised if these draconian cuts take place. The Medicare Trustees project that 15 percent of all hospitals, hospices, nursing homes, and home health agencies would become unprofitable within five years. As the Trustees go on to explain:

“Medicare’s payments for health services would fall increasingly below providers’ costs. Providers could not sustain continuing negative margins and would have to withdraw from serving Medicare beneficiaries or (if total facility margins remained positive) shift substantial portions of Medicare costs to their non-Medicare, non-Medicaid payers.”

In fact, Obamacare’s initial Medicare payment changes are already having an effect on seniors’ access to care. UnitedHealth, the nation’s largest provider of Medicare Advantage plans, announced in November that thousands of doctors would be dropped from their network thanks to lower reimbursement payments due to Obamacare. “It’s no secret that we are under substantial funding pressure from the federal government,” UnitedHealth President Austin Pittman told the Wall Street Journal.

As Obamacare’s payment reductions intensify in the coming years, so will the damage they wreak among health care providers and facilities. This can only increase the severity of barriers to care confronting America’s seniors.

An Experiment We Can ’t Afford
Obamacare’s new entitlements are kicking into high gear at a time when the nation rapidly approaches a fiscal crisis. The national debt has surpassed $17 trillion, and government spending is on track to exceed revenues in 2014 by 18 percent. Existing entitlement programs, desperately in need of reform, are largely to blame for this untenable situation.

While the U.S. health care system certainly needed reform before Obamacare, the Affordable Care Act exacerbates pre-existing flaws and creates new problems. Americans can’t afford the cost of Obamacare or its harmful impact on access to quality health care.

But sice Homo Superior Liberalis can never be wrong and they have the best of intentions you’ll just have to suck it…:)

Enjoy.

Political Cartoons by Steve Kelley

Remember, Vote For Me! The Other Guy’s an Asshole!
 

Doing The Math

The number of American workers collecting federal disability payments climbed to yet another record of 8,853,614 in March, up from 8,840,427 in February, according to newly released data from the Social Security Administration.

But don’t worry, the economy is “improving”. 🙂

Political Cartoons by Jerry Holbert

The Obama administration wants banks to lower lending standards, and Fannie and Freddie are back in the black. The stage is set for a replay of some very unpleasant history.

Do you miss the thrill you felt when your wealth got vaporized in 2008?

Well, they want to do it again. Because it’s only “fair”….And after all, it was the Banks’ fault! 🙂

Michael Ramirez Cartoon

Let’s do the math: We have nearly 30 million uninsured people about to get medical coverage under the health care law come January. And we have a projected shortage of 45,000 primary care physicians by 2020. Add to that the American Association of Nurse Practitioners (AANP), with 43,000 members who say they can offer basic care if state laws would just let them set up an independent practice without doctor supervision.

And the answer is …

The nurse-practitioners, of course, say it’s a matter of simple addition: New laws are needed to give them more autonomy.

But doctors say it’s a miscalculation to think that patient safety won’t be compromised by not having a doctor overseeing things. Family physicians have more than four times as much education and training, accumulating an average of 21,700 hours, whereas nurse-practitioners receive 5,350 hours, the American Academy of Family Physicians points out.

So you’ll get the clerk instead of the mechanic to fix you up.

But fear not! Obama is here to save you.

Last week, one of the world’s leading consulting firms, Milliman, warned about sticker shock ahead for individuals and families buying health insurance.

How did the White House respond? In its usual Orwellian fashion, it said, “Health care costs are falling, thanks to the reform law.” Falling is correct only if you’re standing on your head.

President Obama repeatedly promised that insurance exchanges would save families up to $2,300 a year.

He couldn’t possibly have believed it. From day one, it was obvious the law would push up premiums.

That’s because it requires insurers to cover services rarely covered in the past, puts sick people in the same risk pool with the healthy and slaps insurers with $100 billion in taxes to pass along to consumers.

Who will be clobbered by high premiums? Everyone buying insurance on the exchanges.

Those are people who customarily buy their own insurance (about 25 million) and people who are currently uninsured but have to get it beginning in 2014, and finally millions of people whose employers will drop coverage in response to the law’s costly requirements. Milliman predicts 67 million people in all by 2017.

These people will have no choice but to buy the one-size-fits-all “essential benefits package.”

That includes treatment for drug addiction, maternity care and dental and vision care for children. Only 2% of plans currently include all these services. When the law compels insurers to cover more, it compels consumers to pay more.

The Ohio Department of Insurance says the requirements will push up premiums 20% to 30%.It cheats the couple not having any more children and the straight-arrows who will never shoot heroin.

The healthy also get whacked. Until now, most states helped people with pre-existing conditions by setting up separate, subsidized risk pools.

Someone in the sickest 5% of the population will use 17 times as much care as a healthy person, according to the Agency for Healthcare Research and Quality. The Obama health law pools everyone together and requires the healthy to pay as much as the sick.

This is like asking you to subsidize the premiums of the guy who has 15 speeding tickets and 5 DUIs but is required to have insurance! (they do exist by the way- High risk pools)
See Adverse Selection. 🙂
So what’s the answer…Slick Marketing!! 🙂

Uninsured: The White House recently released details about how it plans to market ObamaCare to the uninsured. What it reveals is that most of them don’t want what the administration is trying to force them to buy.

In a series of slides posted on the Health and Human Services’ website, the administration explains how it plans to market ObamaCare to the uninsured.

Let’s leave aside for a minute the oddity of this effort. Its backers have endlessly touted ObamaCare as a miracle of modern government that will at long last bring insurance within reach of 48 million people who desperately want it. Besides, the law mandates that everyone buy ObamaCare coverage.

So why the need for a big marketing push at all?

Once you look at the marketing slides the HHS has produced, you find the answer.

It turns out that the Democrats and the Obama administration apparently didn’t bother to investigate who these uninsured people actually are before they forced through a $1.8 trillion plan to help them.

What they’ve learned since is that more than half of the 48 million who the government says are uninsured aren’t interested in health insurance, which is why they don’t bother to buy it in the first place.

The administration now admits that vast numbers of the uninsured will be unlikely to respond to ObamaCare’s marketing pitches.

The biggest market segment identified by HHS, in fact, is what it describes as “healthy and young,” who make up 48% of the uninsured population.

They have “a low motivation to enroll” because they are in “excellent to very good health” and so “take health for granted.”

Plus, as the HHS has apparently just discovered, most of them say that cost is the main reason they don’t have coverage.

Then there are the “passive and unengaged,” which make up 15% of the uninsured and also have a “low motivation to enroll” because they “live for today.” They also cite cost as a key factor.

The problem, of course, is that ObamaCare will make insurance vastly more expensive for many of those who fall into these groups by larding on new benefit mandates and placing limits on premium-lowering deductions and co-pays. It will also introduce insurance market rules that force the young and healthy to subsidize premiums for those older and sicker.

State insurance commissioners have been warning the administration about how all this will cause “rate shocks.”

And even ObamaCare’s backers admit that its subsidies won’t compensate for all the new costs these rules will impose, making it even less likely that these groups will sign.

Indeed, the only group likely to rush into ObamaCare’s arms are the 29% who the HHS says are “sick, active and worried” who will have the “highest predicted responsiveness” to mass media ads.

See adverse selection. And Moral Hazard. And you should understand why this whole thing is so doomed….

If only these people sign up, ObamaCare’s premiums will spiral out of control, as the pool of insured gets sicker and more expensive.

And that, in turn, will cause still more of the young and healthy to drop insurance and taxpayer subsidy costs to skyrocket.

Democrats may think that a big, slick marketing campaign can change all this. Our guess is that it will be about as effective as Ford’s was for the Edsel. (IBD)

But you get to pay for it, in perpetuity!! 🙂

Imagine if you and your friends split the tab for coffee every day, and then someone who orders a five-course meal joins the group. Oliver Wyman, management consultants, reported that putting people with pre-existing conditions in the risk pool will push up premiums 40%.

Similarly, Milliman predicts medical claims going up 32% on average and by as much as 62% in California and 80% in Ohio by 2017.

$100 billion in new federal sales taxes on health plans over the next decade will clobber consumers, too. In New York, where premiums will be highest, the taxes will add $900 a year to the cost of a family plan, Oliver Wyman estimates.

The White House dismisses concerns about rising premiums, saying consumers with moderate incomes will get subsidies. That’s like arguing that it’s OK for food prices to double because the needy can get food stamps. Taxpayers foot the bill for subsidies. And consumers ineligible for them get socked with sky-high costs.

Even with subsidies, millions of people coerced to sign up will stop paying premiums. A family with two adults, two kids and a household income of $35,300 will be eligible for an $11,090 subsidy paid directly to the insurer, but they will have to pay at least $118 a month toward the premium.

Families living paycheck to paycheck will default in order to make rent or car payments.

This is the mortgage crisis and the college loan crisis all over again. Another gift from the politicians who think Washington knows best. (IBD)

‘Government is not reason; it is not eloquence. It is force. And force, like fire, is a dangerous servant and a fearful master.’ –George Washington

Political Cartoons by Lisa Benson

Photo

Laying Down The Law

claims

Insurance companies will have to pay out an average of 32 percent more for medical claims on individual health policies under President Barack Obama’s overhaul, the nation’s leading group of financial risk analysts has estimated.

That’s likely to increase premiums for at least some Americans buying individual plans.

The report by the Society of Actuaries could turn into a big headache for the Obama administration at a time when many parts of the country remain skeptical about the Affordable Care Act.

While some states will see medical claims costs per person decline, the report concluded the overwhelming majority will see double-digit increases in their individual health insurance markets, where people purchase coverage directly from insurers.

The disparities are striking. By 2017, the estimated increase would be 62 percent for California, about 80 percent for Ohio, more than 20 percent for Florida and 67 percent for Maryland. Much of the reason for the higher claims costs is that sicker people are expected to join the pool, the report said.

The report did not make similar estimates for employer plans, the mainstay for workers and their families. That’s because the primary impact of Obama’s law is on people who don’t have coverage through their jobs.

Like many poor people and the unemployed. The targets of ObamaCare. 🙂

And if you think, well I’m not one of those people so it won’t effect me…

WRONG!!

Insurance is a shared pool of risk. Everyone is in the pool and if Barack and Nancy are peeing in the pool you’ll get splashed with it.

Insurance companies uses the “Law of Large Numbers” and probability to determine the chance of an event occurring.  If the chance of someone having a car accident is one in one hundred, then insurance companies collect premiums from 100 people to pay the claim that one driver will incur. This is called “spreading the risk”. It is important for insurance companies to adequately gauge the hazards (items that increase the chance of loss) of a risk before insuring it.  If they don’t research and know a business or the habits of an individual and they guess wrong in predicting the chance of something happen the insurance company could lose money.  If they do this often enough then the company suffers.

Of course it is still up to chance but past experience is a good indicator of the future.

http://www.learninsurance.org/Content/LEARNING-INSURANCE/What-is-Insurance/Law-of-Large-Numbers.aspx

What you don’t understand will hurt you.

The purpose of insurance is to protect against loss. If there is no potential for a loss to occur or if there is potential for the person to profit or gain, insurance usually cannot be purchased.

It is not your personal bank and it is not a stock market and definitely NOT FREE MONEY!!! with no consequences.

While loss of property is certainly serious, an even greater potential for loss
exists when a person or family becomes legally obligated to someone else. The main difference between liability and property loss exposures, is that while the amount of a potential loss to property can rather easily be estimated prior to the loss, the amount of a claim for liability is not determined until after something has happened. Even then, it is difficult to predict what a judge or jury might determine a person must pay to another as compensation for damage or injuries.

Many people fail to recognize one of the most significant loss exposures they face—risk of losing their health and being unable to earn income. One of the biggest assets any person has is their potential earning capacity. If that potential is interrupted by ill health, disability, or death, there is a significant loss, not only to that person, but to others who are dependent upon them.

Property, liability, and human losses can be expensive. In addition to the financial impact, or direct loss, there may also be other costs that are not as obvious.

So now do you want the government bureaucrats involved in your Insurance? 🙂

At a White House briefing on Tuesday, Health and Human Services Secretary Kathleen Sebelius said some of what passes for health insurance today is so skimpy it can’t be compared to the comprehensive coverage available under the law. “Some of these folks have very high catastrophic plans that don’t pay for anything unless you get hit by a bus,” she said. “They’re really mortgage protection, not health insurance.”

See above. Do you think they understand? Do they understand risk management??

A prominent national expert, recently retired Medicare chief actuary Rick Foster, said the report does “a credible job” of estimating potential enrollment and costs under the law, “without trying to tilt the answers in any particular direction.”

Unlike 1-directional Liberals and progressives. 🙂

Kristi Bohn, an actuary who worked on the study, acknowledged it did not attempt to estimate the effect of subsidies, insurer competition and other factors that could mitigate cost increases. She said the goal was to look at the underlying cost of medical care.

“Claims cost is the most important driver of health care premiums,” she said.

The more claims, the more risk, the higher the premium. That’s NOT rocket science.

Oh, and those “subsidies” from government are what? SPENDING. So if the subsidies have to increase to hide the cost then the SPENDING will have to increase. And where does the spending come from?

Tax Payers! 🙂

Congratulations. You get to fun yet another self-bloating bureaucratic nightmare!

Aren’t you happy!!!!

Bohn said the study overall presents a mixed picture.

Millions of now-uninsured people will be covered as the market for directly purchased insurance more than doubles with the help of government subsidies. The study found that market will grow to more than 25 million people. But costs will rise because spending on sicker people and other high-cost groups will overwhelm an influx of younger, healthier people into the program.

Especially, when you are not allowed to manage your risks by Adverse Selection.

Some of the higher-cost cases will come from existing state high-risk insurance pools. Those people will now be able to get coverage in the individual insurance market, since insurance companies will no longer be able to turn them down. Other people will end up buying their own plans because their employers cancel coverage. While some of these individuals might save money for themselves, they will end up raising costs for others. (Yahoo)

But in a Me-Centered Universe isn’t that a win? 🙂

Go Me! It’s all about ME! ME ME! 🙂

Political Cartoons by Lisa Benson

Political Cartoons by Glenn Foden

Political Cartoons by Ken Catalino
Political Cartoons by Gary Varvel

Bending the Curve

“The only thing we’re going to try to do is lower costs so that those cost savings are passed onto you. And we estimate we can cut the average family’s premium by about $2,500 per year.” – Barack Obama, October 2008

Eventually the “affordable” portion of the “Affordable Care Act” kicks in, right?

“It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.” Thomas Sowell

The must-issue regulation built into ObamaCare increases costs for the insurers, who cannot draw all of the needed revenues from the high-risk pool, thanks to mandates on rates.  That means those costs have to get spread out to everyone in the pool.  This is nothing more than Risk Pool 101, a course that Congress flunked repeatedly in the ObamaCare debate because that wasn’t the point of the exercise to begin with.

As I have said before, to put it very simply, look up Adverse Selection and you’ll know why this was doomed to failure.

My Adverse Selection Blog

Insurance companies try to minimize the problem that only the people with big risks will buy their product, which is the problem of adverse selection, by trying to measure risk and to adjust prices they charge for this risk. Thus, life insurance companies require medical examinations and will refuse policies to people who have terminal illnesses, and automobile insurance companies charge much more to people with a conviction for drunk driving.

Or a Person who never had insurance get’s a terminal disease and gets insurance to pay for it and it costs  A LOT to the insurer then dies shortly thereafter.

If the insurer had known they’d have adversely selected to not insurer this too a high a risk person but if they can’t do that then You and I get higher premiums to pay for it!!

Ta da! 🙂

Moral Hazard: In insurance markets, moral hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer, since the insured party no longer bears the full costs of that behavior. Because individuals no longer bear the cost of medical services, they have an added incentive to ask for pricier and more elaborate medical service—which would otherwise not be necessary. In these instances, individuals have an incentive to over consume, simply because they no longer bear the full cost of medical services.

And does this all not sound like ObamaCare to you??

But ObamaCare was a political decision not an economic decision so that’s why the economics are bass-ackwards AGAIN.

Obama and The Democrats are masters of this. Pass a Political bill that sounds like economics but is purely an ideologically based bill meant to benefit THEM politically and nothing else.

In the meantime you, the moron ,I-don’t-wanna-know voter gets it in the shorts but you’re happy to be given yet another government approved enema!!

Case In Point….

The latest government report on national health spending provides more evidence that ObamaCare will act as poison to a health care system that was already on the mend.In 2011, the last year for which data are available, spending on health care climbed just 3.9% for the third year in a row.The press is dismissing it as the result of the recession, while the Obama administration claims ObamaCare deserves credit. Neither is true.

Health spending skyrocketed during previous economic slumps — it saw double digit increases during the deep, prolonged 1981-82 downturn, for example.

Plus, the spending trend had been falling for years before the last recession, dropping from 7% in 2004 to 4.7% in 2008. In any case, even after the recession ended in mid-2009, spending growth still slowed.

Insurance premiums showed the same trend. According to the Kaiser Family Foundation, annual family premium increases fell from 9% in 2005 to 5.4% in 2007, and to 3% in 2010.

The health care market, it turns out, was already figuring out how to control costs long before ObamaCare. Witness the explosive growth in Health Savings Accounts.

These plans — which combine high-deductible insurance policies with a tax-free health spending account that rolls over at the end of the year — went from virtually nonexistent in 2005 to become the second most popular plan offered by employers, the Kaiser study found.

These plans hold down health spending by giving consumers a more direct financial stake in their own health care decisions.

The problem is that ObamaCare declares war on this cost control effort by capping deductibles at $2,000 and making it harder to offer health savings accounts. And ObamaCare’s ever increasing list of benefit mandates will drive up costs just as they have at the state level.

The “guaranteed issue” rule will force premiums still higher, which even ObamaCare fans now admit, and its huge subsidies will drive up taxpayer costs.

The result: Annual spending increases will shoot up to 7.4% in 2014, when ObamaCare fully kicks in, and will remain at or above 6% for the foreseeable future.

Insurance premiums are already spiking, up 9.5% in 2011 and 4.5% last year. And as we pointed out in this space yesterday, double-digit premium increases are now popping up all over the place.

Doctors take an oath to “first do no harm.” Too bad Obama didn’t adhere to that when he forced ObamaCare down the country’s throat.

But it’s the HOLY GRAIL of Authoritarian Liberalism!!

Getting to choose who lives and who dies. Getting to choose how you live. It was irresistible. They’d been slobber over the idea for 80 years.

Now they can decide when you are no longer of any use to the State. They can have the Food Police out there deciding that what you’re eating isn’t “healthy” enough for the State’s purposes. And they get to have the IRS to kick down your tax door if you don’t pony up!!

What’s not to like, if you’re a petty dictator and consider yourself so far above mortals in “enlightenment” and “compassion”??

After all, if you disapprove you must be and evil, mean, poor-hating “granny-off-the-cliff” arsehole! 🙂

Political Cartoons by Lisa Benson

Michael Ramirez Cartoon

Insurance 201

Thomas Sowell has column today that is very well sad and I personally know the impact of it. And I have preached at this pulpit before.

https://indyfromaz.wordpress.com/2012/06/19/insurance-101/

In insurance markets, moral hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer, since the insured party no longer bears the full costs of that behavior. Because individuals no longer bear the cost of medical services, they have an added incentive to ask for pricier and more elaborate medical service—which would otherwise not be necessary. In these instances, individuals have an incentive to over consume, simply because they no longer bear the full cost of medical services.

And does this not sound like ObamaCare to you?? :)

Take it away Mr. Sowell.

Insurance is all about risk. Yet neither insurance companies nor their policy-holders can do anything about one of the biggest risks — namely, interference by politicians, to turn insurance into something other than a device to deal with risk.

By passing laws to force insurance companies to cover things that have nothing to do with risk, politicians force up the cost of insurance.

Annual checkups, for example, are known in advance to take place once a year. Foreseeable events are not a risk. Annual checkups are no cheaper when they are covered by an insurance policy. On the contrary, they are one of many things that are more expensive when they are covered by an insurance policy.

All the paperwork, record-keeping and other things that go with having any medical procedure covered by insurance have to be paid for, in addition to the cost of the medical procedure itself.

If automobile insurance covered the cost of oil changes or the purchase of gasoline, then both oil changes and gasoline would have to cost more, to cover the additional bureaucratic work involved.

In the case of health insurance, however, politicians love to mandate things that insurance must cover, including in some states treatment for baldness, contraceptives and whatever else politicians can think of. Playing Santa Claus costs a politician nothing, but it can cost the policy-holder a bundle — all of which the politician will blame on the “greed” of the insurance company.

(see Adverse Selection).

Insurance companies are regulated by both states and the federal government. This means that, instead of there being one vast nationwide market, where innumerable insurance companies compete with each other from coast to coast, there are 50 fragmented markets with different rules. That adds to the costs and reduces the competition in a given state.

When there are innumerable insurance companies, it is by no means clear that political regulation of them will produce better results than the regulation provided by competition in the market. In a competitive market, insurance companies would cover only those things that their policy-holders are willing to pay to have covered. Policy-holders would have no reason to pay to have insurance cover things that would be cheaper if paid for directly — or not paid for at all, in the case of things that are not a real concern to many people, such as baldness cures.

One of the factors in the number of the “uninsured,” for whom politicians are willing to turn the whole medical care system upside down, is the high cost of insurance that covers far more things than most people would be willing to pay for, if it was up to them. The uninsured who use hospital emergency rooms and don’t pay are a problem only because politicians passed laws forcing hospitals to let themselves be taken advantage of in this way.

Too many political “solutions” are solutions to problems created by previous political “solutions” — and will be followed by new problems created by their current “solutions.” There is no free lunch. In the case of health insurance, there is not even an inexpensive lunch.

Health insurance would be a lot less expensive if it covered only the kinds of risks that can involve heavy costs, such as a major operation or a crippling disability. While such things can be individually very expensive, they don’t happen to everybody, and insurance is one way to spread the risks, so that the protection of a given individual is not prohibitively expensive.

The problem of “pre-existing conditions” is a problem largely because of the way that politicians have written the laws — more specifically, by giving a tax break to employer-provided health insurance. If individuals bought their own health insurance, with the same tax advantages, the fact that an illness occurred after they changed employers would not make it a “pre-existing condition.”

There is no inherent reason for employers to be involved, in the first place. The fact that some guy manufactures furniture or plumbing fixtures in no way qualifies him to understand insurance for his employees. Including him in the loop adds another unnecessary layer of bureaucratic costs.

Political risks are the biggest risks.

So you want to know why your auto insurance is going up “even though I’m a good driver” or your Home insurance is going up “even though my house is worth less”??

Well, it’s very simple. Along with all of what has been discussed there is INFLATION.

http://www.bls.gov/data/inflation_calculator.htm

And the medical costs, repair costs and the lawyer  (you know all those “call me now” lawyer commercials?) costs go up and guess what happens to your premiums. They go up. It’s not personal.

And any real homeowners policy will be based on the replacement cost of the home and not the market value because the market value is a) fickle (just think about 5 years ago) b) includes land and locational factors that have nothing to do with the home.

Example, my home. It’s located with the “noise zone” of Sky Harbor International Airport. Thus my house is technically worth less because you can hear plane noise at a certain level.

If my house burns down do I want the replacement cost based partially on that or do I want it based on the materials to rebuild it?

And if inflation in the cost of those materials cause the premium to go up?

I hope you see the point.

Most people don’t.

Why?

Narcissistic Greed. It’s all about ME! and Insurance should only be about ME.

I don’t want MY policy based on other people.

Which is a fundamentally flawed understanding of the entire concept of insurance in the first place.

And that lack of education is a real problem because it leads people to misunderstand the entire process and the fundamentals underlying the entire concept.

And lets politicians and manipulative Liberals get away with their “solutions” that just cause more problems but make them look good.

And thus, you go for “get rich quick” type schemes by manipulative politicians that actually CAUSE more problems than they solve. But you get the satisfaction of “sticking it” to them. But it’s you that ultimately gets stuck.

Oh, there are ways to bring it down, but reforms to litigation laws and practices (by politicians who are mostly lawyers) is very hard. Lobbyists are very strong in the area. This is their meat and potatoes.

Medical costs are skyrocketing and ObamaCare will just make them worse. Trying to reform that gets you “thrown grandma off the cliff” rhetoric.

So, in the end RHETORIC HAS IT’S CONSEQUENCES.

Consequences in your wallet.

That’s the risk.

Political Cartoons by Glenn Foden

Political Cartoons by Glenn Foden

Political Cartoons by Gary Varvel

Insurance 101

ObamaCare and Insurance 101. It may be a bit dry, but this is the problem with it and why the claims of lower premiums was such a lie and why this whole thing was either a scam or more pie-in-the-sky feel good liberalism taking a piss on reality.

So the Democrats have started working on what if it’s struck down:

Under the law, insurers would still have to accept all applicants regardless of health problems, and they would be limited in what they can charge older, sicker customers.

As a result, premiums for people who directly buy their own coverage would jump by 15 percent to 20 percent, the Congressional Budget Office estimates. Older, sicker people would flock to get health insurance but younger, healthier ones would hold back.

To forestall such a problem, the administration asked the court – if it declares the mandate unconstitutional – to also strike down certain consumer protections, including the requirement on insurers to cover people with pre-existing health problems. That would mitigate a damaging spike in premiums. (AP)

So the administration wants the parts that they say “the people love” to be struck down to mitigate the damage. Fascinating… 🙂

Kind of like the Mandate was going to be great for everyone, then 1700+ waivers, mostly to unions, were granted because it was going to hurt these people.

And of course, it wouldn’t be there fault when grandma gets thrown off a cliff and run over by the bus! 🙂

Mind you, as I have said since this whole thing started that ObamaCare was designed to destroy the private insurance industry and replace it with nothing but government controlled insurance anyhow.

Adverse Selection: It describes a situation where an individual’s demand for insurance (either the propensity to buy insurance, or the quantity purchased, or both) is positively correlated with the individual’s risk of loss (e.g. higher risks buy more insurance), and the insurer is unable to allow for this correlation in the price of insurance. This may be because of private information known only to the individual (information asymmetry), or because of regulations or social norms which prevent the insurer from using certain categories of known information to set prices (e.g. the insurer may be prohibited from using information such as gender, ethnic origin, genetic test results, or preexisting medical conditions, the last of which amount to a 100% risk of the losses associated with the treatment of that condition). The latter scenario is sometimes referred to as ‘regulatory adverse selection’.

The insurance company is unable to screen out “pre-existing conditions” so premiums will be higher simply because people with conditions that will cost more than the premium can charge will rush to the door and flood the system thus causing a financial hardship on the company. Thus premiums will inflate to cover this.

This has always been one of the factors in ObamaCare that made me laugh when they said premiums would go down.

That is simply NOT POSSIBLE with “pre-existing conditions” mandated.

But does that mean that people like this are just left out in the cold by mean old, greedy insurance companies?

No.

There are risk pools for that. Pools usually subsidized for their high risk, much like Flood is or that idiot driver that you can’t refuse auto insurance to even though they’ve had 5 DUI’s in the year (yes, that does really happen- rare, but it does happen).

2010: Last year, Charles Baker, former CEO of Harvard Pilgrim Health Care, one of Massachusetts’s largest health plans, noticed some health insurance brokers posting comments on his widely read blog. They were suspicious that people were applying for health coverage after a medical condition developed, got the care they needed, and then dropped the coverage.

From April 2008 to March 2009, 40% of the individuals who applied to Harvard Pilgrim stayed covered for less than five months. Yet claims were averaging about $2,400 a month, about six times what one would expect.

Blue Cross and Blue Shield of Massachusetts has now confirmed it is experiencing similar problems. The company says that in 2009, 936 people signed up for three months or less and ran up claims of more than $1,000.

And that’s just Two Examples. Just Two. From 2010. Imagine the Future.

Furthermore, if there is a range of increasing risk categories in the population, the increase in the insurance price due to adverse selection may lead the lowest remaining risks to cancel or not renew their insurance. This leads to a further increase in price, and hence the lowest remaining risks cancel their insurance, leading to a further increase in price, and so on. Eventually this ‘adverse selection spiral’ might in theory lead to the collapse of the insurance market.

And ObamaCare does this in spades, but with the Mandate in place these lowest risk individuals are not allowed to cancel and assume their own risks. Not without a penalty and a visit from an IRS agent that is. But if the penalty is less than the premium then you just keep gaming the system.

To counter the effects of adverse selection, insurers (to the extent that laws permit) ask a range of questions and may request medical or other reports on individuals who apply to buy insurance, so that the price quoted can be varied accordingly, and any unreasonably high or unpredictable risks rejected. This risk selection process is known as underwriting. 

That’s why now a policy can be cancelled by Underwriting if it is found you made fundamentally false statements because it has to be assumed at the time of the contract that both parties are acting in good faith.

Mandates increase a moral hazard is a situation where there is a tendency to take undue risks because the costs are not borne by the party taking the risk.

Uber Liberal Economist Paul Krugman described moral hazard as “any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly.”

Aka, you and higher premiums.

Also you get high premiums from what could be called REGFARE (aka Regulatory Warfare) and boy does the Obama Administration love using this with HHS, The EPA, The FCC, the IRS, Justice Dept., ad nauseum.

In insurance markets, moral hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer, since the insured party no longer bears the full costs of that behavior. Because individuals no longer bear the cost of medical services, they have an added incentive to ask for pricier and more elaborate medical service—which would otherwise not be necessary. In these instances, individuals have an incentive to over consume, simply because they no longer bear the full cost of medical services.

And does this not sound like ObamaCare to you?? :)

Example: if you know you have terminal cancer and you buy insurance to cover your last 6 months but don’t disclose this to the insurance company (“pre-existing condition”) the company will be paying 10’s of thousands of dollars in claims potentially with virtually no premium to cover that.

Now multiply that by millions of people. The 30 million uninsured. They may not all have this intent, but the scale is still relevant and the effect is too.

Are you starting to see the problem here and how ObamaCare was meant to subvert it?

And if it’s struck down, the Democrats will just come back with another pig and new lipstick.

Being able to decide who lives and who dies and to control every facet of your life “to cut your costs” (Food Police anyone?) is the Holy Grail of Liberalism so they won’t give up if even if it’s unconstitutional. They’ll just re-brand it and call the pig by another name but the effects will still be the same though.

LAWFARE. Waging a war by lawsuits and REGFARE, waging war by regulation and subversion of Adverse Selection and Moral Hazard.

That’s the Insufferably Morally Superior Left in a nutshell.

So endeth the lesson.

Political Cartoon by Chuck Asay
Political Cartoons by Lisa Benson

Political Cartoons by Glenn Foden

Happy Birthday, ObamaCare

Facinating Site: http://www.thirdway.org/taxreceipt

A year after the passing of health reform, a new industry report revealed that consumers may be paying billions of dollars more in out-of-pocket health care expenses than was previously thought.

These “hidden” costs of health care — like taking time off to care for elderly parents — add up to $363 billion, according to a report from the Deloitte Center for Health Solutions, a research group.

That amounts to $1,355 per consumer, on top of the $8,000 the government says people spend on doctor fees and hospital care.

The out-of-pocket costs that the government tallies usually include only insurance-related costs like premiums, deductibles, and co-payments.

The study is the first to estimate how much consumers dish out on health care related goods and services not covered by private or government insurance.

These include: ambulance services, alternative medicines, nutritional products and vitamins, weight-loss centers and supervisory care of elderly family members.

The average household income fell 1.9% last year while health care costs rose 6%.(KFYI)

I guess findout what was in the bill after passing it was like finding a zonk on “Let’s Make a Deal”.

But don’t tell that to a Liberal, they will just rant on about evil capitalists.

But it’s not a real surprise. Not really. Not if you live in reality. Not Liberal socialist fantasy land.

You have massive number of new regulations.  More Adverse Selection has been forced on the industry.

The term adverse selection was originally used in insurance. It describes a situation where an individual’s demand for insurance (either the propensity to buy insurance, or the quantity purchased, or both) is positively correlated with the individual’s risk of loss (e.g. higher risks buy more insurance), and the insurer is unable to allow for this correlation in the price of insurance. This may be because of private information known only to the individual (information asymmetry), or because of regulations or social norms which prevent the insurer from using certain categories of known information to set prices (e.g. the insurer may be prohibited from using information such as gender or ethnic origin or genetic test results). The latter scenario is sometimes referred to as ‘regulatory adverse selection’.

The potentially ‘adverse’ nature of this phenomenon can be illustrated by the link between smoking status and mortality. Non-smokers, on average, are more likely to live longer, while smokers, on average, are more likely to die younger. If insurers do not vary prices for life insurance according to smoking status, life insurance will be a better buy for smokers than for non-smokers. So smokers may be more likely to buy insurance, or may tend to buy larger amounts, than non-smokers. The average mortality of the combined policyholder group will be higher than the average mortality of the general population. From the insurer’s viewpoint, the higher mortality of the group which ‘selects’ to buy insurance is ‘adverse’. The insurer raises the price of insurance accordingly. As a consequence, non-smokers may be less likely to buy insurance (or may buy smaller amounts) than if they could buy at a lower price to reflect their lower risk. The reduction in insurance purchase by non-smokers is also ‘adverse’ from the insurer’s viewpoint, and perhaps also from a public policy viewpoint.

So all that “can’t refuse people with pre-existing” conditions means your insurance goes UP!

But then again, as I said repeatedly, and I do mean repeatedly, that ObamaCare was about bring down the cost of health care, it was about bringing down the entire private health care industry so that socialist government health care is all that was left and you’d have no choice.

And that still stands.

So Happy Birthday, ObamaCare. the Damien Hell-child of The Left.

Oh, and then there’s this from Rep. Anthony “The Whiner” Weiner, one the most vocal leftists:

Rep. Anthony Weiner said Wednesday he was looking into how a health law waiver might work for New York City.

Weiner, who is likely to run for mayor of New York, said that because of the city’s special health care infrastructure, his office was looking into alternatives that might make more sense. Weiner is one of the health care law’s biggest supporters; during the debate leading up to reform, he was one of the last holdouts in Congress for the public option.

“The president said, ‘If you have better ideas that can accomplish the same thing, go for it,’” said Weiner. “I’m in the process now of trying to see if we can take [President Barack Obama] up on it in the city of New York, … and I’m taking a look at all of the money we spend in Medicaid and Medicare and maybe New York City can come up with a better plan.”

Hey, Mr. Weiner I have a much better plan to never have passed the damn thing in the first place, but since you crammed down our throats and now your political fantasies are gagging on it here’s your better plan — REPEAL THE DAMN THING!!!!! 🙂

During the debate over his health care law, President Obama repeatedly promised that “if you like your plan, you can keep it,” but for millions of Americans that promise has already been broken.

In a shocking admission, Obama’s administration has granted more than 1,000 waivers to the health law to prevent 2.6 million workers from losing their coverage. Millions more weren’t lucky enough to get a waiver, and have already been forced to switch plans.

Most waivers have been distributed to Fortune 500 corporations like Pepsi and McDonald’s, unions, Las Vegas casinos and in one case an entire state.

If corporations and unions can get a waiver from the health law, every American should get one. That is why I have introduced a bill that would allow anyone – an individual, a family, a small business – to receive a waiver. You should not need to be politically connected to keep your health insurance.

My bill uses the same standard created by the Obama Administration. If the law increases your insurance premiums, you can apply for a waiver. If you’re forced to drop the coverage you like, you can apply for a waiver. The bill also requires the Obama Administration to educate the public about the option and regularly report how many families and employers have received waivers.

The Obama Administration has been pretty clear why these waivers are necessary. In an application posted on the Department of Health and Human Services website, applicants are told they can receive a waiver if the lifetime limit mandate would result in a “significant increase in premiums” or a “significant decrease in access to benefits.”

“We don’t want to take away people’s health insurance before they have some realistic other choices,” Secretary of Health and Human Services Kathleen Sebelius told one newspaper.

This confession by the administration is telling. There are countless mandates in the law which would increase premiums and decrease the ability to obtain coverage. For example, by 2014 every American will be required to purchase expensive, government-designed health insurance. Most employers will be forced by Washington to offer comprehensive health benefits or face a fine. The law’s one-size-fits-all benefit mandates will likely eliminate Health Savings Accounts for 11 million families. According to the administration’s own data, the law’s restrictive rules will force 80 percent of small businesses to drop their current plans and purchase more expensive coverage.

The President promised his health law would reduce premiums by $2,500 per family, but insurance has only become more expensive under the law. In New Hampshire, some plans are seeing premiums go up more than 40 percent. In Massachusetts, several plans have announced rate increases of 20 percent or more. In my home state of Michigan, 15 percent rate increases are becoming routine.

Increasing costs are the number one reason Americans cannot access insurance. Yet ObamaCare does nothing to actually reign in health care costs. Instead, it forces Americans to purchase a government-designed insurance product which will be unaffordable for countless employers and workers.

If given the chance, most Americans would prefer to keep the coverage they have. Expanding the administration’s own waiver process will allow families to keep their plans and small businesses to continue offering benefits. (U.S. Rep. Mike Rogers (R-MI))

Happy Birthday, ObamaCare. 😦

Political Cartoons by Chuck Asay

Political Cartoons by Lisa Benson

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500

Political Cartoon

Minority Leader Nancy Pelosi: “This resolution is a fitting tribute. It is a great resolution. Please, read it again and again. Carry those names in your heart. Remember, each of these people because, again, a tragic accident took lives, wounded people in the expression of ideas.”

Thanks, Nancy. For nothing! 😦

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This is my 500th blog post so I am where I more or less began, ObamaCare.

The greatest abomination every crammed down the American people’s throat in American History. Period.

And if the normal things government does doesn’t bankrupt us this surely will.

No doubt.

So with that, new info on ObamaCare from americansolutions.com (just click on the links if you want more info or a copy of the charts- The wall chart below has to be blown up to 400% to be seen and read properly by the way- it was a WALL chart, after all):

159-Agencies-Map_580x290.jpg

  • Obamacare adds 159 new agencies, offices, and commissions to an already bloated federal government.
  • Obamacare threatens to increase costs for American businesses by more than $4 billion.
  • The Obama administration has threatened companies who dare to blame Obamacare’s new regulations and taxes as a reason for their higher operating costs.
  • The law is so toxic that even several Democrats introduced legislation in 2010 to repeal part of the bill.
  • Health care premium costs are going up under Obamacare, even though President Obama, Nancy Pelosi, and Harry Reid all claimed that would not happen.
  • Citing high costs and the potential for employees to lose their health coverage, the Obama administration has already issued more than 100 waivers for companies to be exempt from certain provisions in Obamacare.

Actually, the waivers are at over 220 and comprise mostly of companies and unions friendly to the Democrats or people they hope to be Democrats.

ATLANTA – The Center for Health Transformation (CHT) today unveiled its first wall chart of the 2010 healthcare legislation, making the enormous diagram available to the public, members of Congress and those in the medical community to view the complexity of the six-week-old legislation.

“This chart demonstrates how Obamacare is going to make American health care much more complicated,” said Newt Gingrich, founder of the Center and former Speaker of the House of Representatives. “With the release of these diagrams CHT will be the go-to place for information on the new health legislation.”

The chart illustrates how Obamacare will create 159 boards, commissions, bureaus, programs and offices of the federal government to carry out new tasks under the health care law. Most of these ideas are undefined and will be determined in the coming years under agencies such as the Centers for Disease Control or the Centers for Medicare and Medicaid.

“This diagram shows the new law is a massive expansion of government and does little to focus on improving individual health,” Gingrich said. “This is a blueprint for more regulation and more headaches for every American – especially those who rely on the government for health insurance coverage.”

The Center’s CEO, Nancy Desmond, said the chart is the first in a series that will provide straightforward facts about the Obama healthcare law and will help Americans understand how the law is playing out and what will happen in the future.

“Our goal is to serve as a trusted resource where people can get updates regarding the facts on the health law,” Desmond said. “We believe that people have the right to know what their government is doing, and CHT is dedicated to doing what we can to fulfilling that right to know.”

Desmond added: “Our first chart provides the names of 159 new government programs and their reporting structure. As individuals are appointed and new regulations are introduced, we will add to the charts.”

Desmond said the next chart will be a massive timeline of actions scheduled, public response periods created and a checklist that CHT will update weekly so Americans can track what the federal government is doing regarding healthcare.

Among the new programs in the law illustrated in the wall chart: the Interagency Pain Coordinating Committee; the Community Preventive Services Task Force; the Medicare Shared Savings Program; the Office of Indian Men’s Health; the Food and Drug Administration’s State-Based Reinsurance Program; and the Commission on Key National Indicators.

Most of ObamaCare’s taxes dishonestly take effect AFTER the 2012 election but here are a few for 2011:

Atr.og: 2011 HSA Withdrawal Tax Hike($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Employer Reporting of Insurance on W-2(Min$/Jan 2011): Preamble to taxing health benefits on individual tax returns.

And while you’re at it, Look up ADVERSE SELECTION. Be amazed. 🙂

Michael Ramirez Cartoon

And add in $4 or $5 a Gallon Gasoline.

Inflation (though the liberals and the media have been working 24/7 to hide the 1000-lb gorilla in the next room bashing on the door)

Be Afraid, Be Very Afraid.

And for all you Class Warfare Liberals out there, some wisdom from Dr. Thomas Sowell:

Bailouts say: “Give the taxpayers a little rhetoric, and a little smoke and mirrors with the bookkeeping, and we can keep the party rolling.”

One of the political games that is played during a budget crisis is to cut back on essential services like police departments and fire departments, in order to blackmail the public into accepting higher tax rates. Often, a lot more money could be saved by getting rid of runaway pension contracts with public sector unions.

Take California for instance:

Jerry Brown, a Liberal from the 1970’s, was elected largely by Unions (the Nurse’s Union was behind the whole Illegal Maid Scandal) got their payback in his budget to start cutting California’s $26 BILLION dollar budget deficit by savaging everyone in California, EXCEPT THE UNIONS!

Shocking, I know. 🙂

So stick it to everyone except the bloodsuckers who are killing you because they are the ones who got you elected.

Illinois, the same thing. Unions are being protected against the “shared sacrifice” because they are an important Liberal voting block.

Hence, why many of the waivers for ObamaCare are UNIONS!

But the amount of money it would take to keep the poor from starving in the streets is chump change compared to how much it would take to keep on feeding unions, subsidized businesses and other special interests who are robbing the taxpayers blind.

Letting armies of government employees retire in their 50s, to live for decades on pensions larger than they were making when they were working, costs a lot more than keeping the poor from starving in the streets.

Pouring the taxpayers’ money down a thousand bottomless pits of public and private boondoggles costs a lot more than keeping the poor from starving in the streets.

Bankruptcy says: “We just don’t have the money.” End of discussion.

And just in case you weren’t cynicial enough (like me) about the Tucson Campaign Rally:

Bracing for a half-billion-dollar onslaught of outside GOP cash in 2012, President Barack Obama’s advisers are quietly working to bring back together the major donor base that produced a record-breaking fundraising haul in his first run for president.

In the past few months, Democratic National Committee aides have contacted several of Obama’s earliest financial backers to brainstorm about when and where to host the first money-raising events. Several big donors said they expect the Obama 2012 operation to open its doors this spring, with a string of fundraisers to generate the early cash needed to rebuild the president’s high-tech campaign operation. (Politico)

So who are the real Greedy, narcissistic bloodsuckers? Corporate America or Liberals and Their Unions?

I know which one I see.

And ObamaCare is jut another boondoogle masquerading as a massacre waiting to happen.

Someone call the Pima County Sheriff’s Office… 🙂

Adverse Selection

The leftists are all in a tizzy. A tizzy of their own making mind you.

But they’ll never see it that way. Because it was done “for the children” and the Insufferably Morally Superior Left doesn’t care about reality in their fantasies and delusions of “fairness” and “equality” in their own minds.

It makes them “feel good”.

Here’s a little lesson the Left refuses to hear about reality:

People who buy insurance often have a better idea of the risks they face than do the sellers of insurance. People who know that they face large risks are more likely to buy insurance than people who face small risks. Insurance companies try to minimize the problem that only the people with big risks will buy their product, which is the problem of adverse selection, by trying to measure risk and to adjust prices they charge for this risk. Thus, life insurance companies require medical examinations and will refuse policies to people who have terminal illnesses, and automobile insurance companies charge much more to people with a conviction for drunk driving or if you get into an accident (or if your neighbors are idiots you’re going to pay more because of a more adverse selection–that’s why “my rates keep going up but I haven’t caused any accidents”).

It describes a situation where an individual’s demand for insurance (either the propensity to buy insurance, or the quantity purchased, or both) is positively correlated with the individual’s risk of loss (e.g. higher risks buy more insurance), and the insurer is unable to allow for this correlation in the price of insurance. This may be because of private information known only to the individual (information asymmetry), or because of regulations or social norms which prevent the insurer from using certain categories of known information to set prices (e.g. the insurer may be prohibited from using information such as gender or ethnic origin or genetic test results). The latter scenario is sometimes referred to as ‘regulatory adverse selection’.

And regulatory adverse selection is what we have in droves in the Insufferably Morally Superior Left Health Care Cramdown.

And the little superior moralists are shocked and applauded that the insurance industry would actually follow these principle laid out above and not just roll over and kiss their morally superior asses and do  “the right thing for the children” and as they are told like a good little doggie.

Health plans in at least four states have announced they’re dropping children’s coverage just days ahead of new rules created by the healthcare reform law, according to the liberal grassroots group Health Care for America Now (HCAN).

The new healthcare law forbids insurers from turning down children with pre-existing conditions starting Thursday, one of several reforms Democrats are eager to highlight this week as they try to build support for the law ahead of the mid-term elections. But news of insurers dropping their plans as a result of the new law has thrown a damper on that strategy and prompted fierce push-back from the administration’s allies at HCAN.

The announcement could lead to higher costs for some parents who are buying separate coverage for themselves and their children at lower cost than the family coverage that’s available to them.

“We’re just days away from a new era when insurance companies must stop denying coverage to kids just because they are sick, and now some of the biggest changed their minds and decided to refuse to sell child-only coverage,” HCAN Executive Director Ethan Rome said in a statement. “The latest announcement by the insurance companies that they won’t cover kids is immoral, and to blame their appalling behavior on the new law is patently dishonest.

“Instead, they should reverse their actions immediately and simply follow the law. If the insurance companies can casually turn their backs on sick children now, who will they abandon next? This offensive behavior by the insurance companies is yet another reminder of why the new law is so important and why the Republicans’ call for repeal is so misguided.”

Health plans and state insurance commissioners in July raised concerns that the new rules could lead some insurers to stop children-only coverage because families could wait until their children get sick to buy coverage.

Days later, the Obama administration issued regulations clarifying that insurers would still be able to establish enrollment periods in accordance with state law.

“To address concerns over adverse selection, issuers in the individual market may restrict enrollment of children under 19, whether in family or individual coverage, to specific open enrollment periods if allowed under state law,” the Department of Health and Human Services clarified.

The issue had largely dropped out of sight since then, but insurers including WellPoint and CoventryOne have announced in recent days that they’re dropping children’s coverage in California, Colorado, Ohio and Missouri, according to HCAN. (The Hill)

I guarantee this is only the beginning. Trust me.

But the Insufferably Morally Superior Left will just sit there and be “appalled” and kick and scream and whine and moan “they aren’t doing what we told them to do whaaaahh!!!”

Then go to their government buddies and pass more regulations to have their way.

I say a new term in a headline recently that fit, LAWFARE. Waging a war by lawsuits and REGFARE, waging war by regulation.

That’s the Insufferably Morally Superior Left in a nutshell.

As I said repeatedly and often during the Health Care debate, it’s about the government and leftists wanting total control of who lives and who dies and you dependent on them for everything. Period. End of Story.

They want private insurance gone. But private insurance is not going quietly.

That would be a moral hazard.

In insurance markets, moral hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer, since the insured party no longer bears the full costs of that behavior. Because individuals no longer bear the cost of medical services, they have an added incentive to ask for pricier and more elaborate medical service—which would otherwise not be necessary. In these instances, individuals have an incentive to over consume, simply because they no longer bear the full cost of medical services.

And does this not sound like ObamaCare to you?? 🙂

Political Cartoon by Chuck Asay

Playing The System

Democrats claim their newly passed health insurance reform will eventually provide health coverage for more than 30 million uninsured people. Don’t bet on it.

I doubt they are betting on it, it just sounded good. After all, as I have said, the Health Care Reform bill wasn’t about covering people and lowering costs, it was strictly about Government control of who lives and who dies. Control of Life itself.

Eventually.

The poison in the bill has to have time to kill off Private Industry first.

The key to achieving that goal, Democrats believe — along with expanding Medicaid and subsidies for buying coverage — is the individual mandate, which requires individuals to have health insurance or pay a fine. The mandate is supposed to push nearly everyone into the pool to minimize free-riding on the system. But what if millions of Americans decide it’s a better deal to pay the fine and remain uninsured until they need coverage?

And they will. And so will companies.

That is, when the government catches up to them.

There was a guy on the radio last week who has lives in Socialist Utopia of Massachusetts that has had no health insurance since the law was passed 4 years ago.

He hasn’t received an letters about fines until now, 4 years later.

He still can’t afford the insurance, even in Massachusetts…

Imagine that Nationwide.

Sure, the IRS is hiring new people, but not to go after you for Health Insurance…right….

It appears that’s exactly what’s happening in Massachusetts, which passed its own ObamaCare-like reform with an individual mandate in 2006.

Last year, Charles Baker, former CEO of Harvard Pilgrim Health Care, one of Massachusetts’s largest health plans, noticed some health insurance brokers posting comments on his widely read blog. They were suspicious that people were applying for health coverage after a medical condition developed, got the care they needed, and then dropped the coverage.

Coverage for an individual, noted Mr. Baker, now a Republican candidate for governor, might be $2,000 to $3,000 a year, while the penalty was only about $900. So he asked his finance people to see if they noticed any discernible patterns. Boy, did they.

From April 2008 to March 2009, 40% of the individuals who applied to Harvard Pilgrim stayed covered for less than five months. Yet claims were averaging about $2,400 a month, about six times what one would expect.

Blue Cross and Blue Shield of Massachusetts has now confirmed it is experiencing similar problems. The company says that in 2009, 936 people signed up for three months or less and ran up claims of more than $1,000.

The disparity between the cost of expensive coverage and the fine for not getting it encourages individuals buying their own coverage — i.e., those not in an employer plan — to game the system by paying the fine and remaining uninsured until they need coverage.

Insurers have long recognized this problem, known as “adverse selection,” which is why every type of insurance normally restricts people from obtaining coverage after an incident has occurred. Someone can’t, for example, buy a homeowners policy for a house that is already on fire. But Democrats have decided to do away with that basic actuarial principle with regard to health insurance.

And they did it because, to do otherwise would not get them to their goal: Total control of who lives and who dies.

Remember, this “reform” was not about reform the Private sector, it was about destroying it, so the Government–a Liberal Government– could step and save you from the evil capitalists and control you.

Screw actuarial principles.

After all, when the government controls everything what actuarial principle will be left??

If they need more money they will either print it, borrow it or just raise taxes.

It’s not like you’ll have a choice by then.

That means it’s all about the penalties. Under the existing Massachusetts law, Bay Staters face a penalty of perhaps a half to a third of the cost of the premium. And yet, as Mr. Baker indicates, there appears to be a lot of gaming going on.

ObamaCare, by contrast, has a minimum individual penalty of $95 in 2014, $325 in 2015, rising up to 2.5% of income (or $2,085 maximum) per family in 2016. So the first-year spread between the penalty and the cost of coverage for an individual may be 20-to-1 or 30-to-1. Think that might encourage even more gaming than they are seeing in Massachusetts?

In supporting the individual mandate, Democrats frequently cite the fact that nearly every state requires drivers to purchase auto insurance. But that mandate hasn’t gotten everyone insured. Auto insurance mandates usually have fairly low penalties, and they are often sporadically enforced. And so people game that system, too.

And then there’s the fact that if you don’t have an auto, you are not required to have insurance.

Whoops!

Indeed, the problem of uninsured drivers is so bad that many states require drivers to buy uninsured motorist coverage to protect them from all of those drivers who are required to have auto insurance but don’t.

The growing adverse selection problem has some Massachusetts officials considering other options; the governor has proposed legislation for a semi-annual open-enrollment period. That’s where people would have a limited time to enter the system or change health plans. Open enrollments don’t solve all the problems, but they help.

To be sure, the higher penalties in Obama-Care’s out years will discourage some gaming of the system, but they won’t eliminate it — not as long as there is a gap between the cost of coverage and a penalty. And that’s only if Congress keeps the current penalty schedule.

The Congressional Budget estimates the government will collect $17 billion in penalties from individuals over 10 years. But members of Congress don’t like penalizing their constituents, and there will be a lot of pressure to delay or reduce the penalties, just as there was when the 2003 Medicare prescription drug benefit was being implemented.

But then the Patient Protection and Affordable Care Act was never about creating an actuarially or financially sound health care system; it was about creating a new entitlement where everyone has coverage — when they need it. (IBD)

Regardless.

It sounds “fair”

And the Government gets to save you from the evil capitalists when this unsound economics drives them to raise premiums so much that they are driven out of business.

Then the Government owns your health.

And there is no one left to game, but The IRS.

Good Luck with that. 😦