United We Fall

A “Healthcare Workers for Obamacare” sign hangs torn in a parking lot in New York on Oct. 31, 2012.  AP

President Obama repeatedly promised that his signature health law, the Affordable Care Act, a.k.a. Obamacare, would reduce insurance premiums by $2,500 for the typical family.

ObamaCare: United Healthcare’s surprise warning that it may scrap participation in federal health care exchanges is more than bad news for consumer choice. It’s a broader sign of an unsustainable system.

The nation’s largest health insurance provider surprised the markets Thursday by saying losses from its 550,000 individual ObamaCare exchange enrollments were sharply cutting its bottom line. That’s notable because ObamaCare exchange participation only forms a small slice of the $105 billion company by market capitalization.

Yet it was enough to make the giant company and all the value it creates throughout its many operations suffer enough to trigger, as IBD market reporter Jed Graham wrote, “a surge of red ink.”

The company forecast $425 million less revenue in the fourth quarter and cut its full-year 2015 earnings-per-share forecast to $6 from $6.25-$6.35.

Not surprisingly, its stock fell 5.6% by the close of trading Thursday, and other health care and hospital companies such as Aetna, Anthem, Tenet, Cigna, Humana and HCA took similar hits.

“We see no data pointing to improvement,” UnitedHealth Group CEO Stephen Helmsley said on a conference call. Patients, he explained, were using their plans more than the company had anticipated and, worse still, were dropping coverage when they got well.

Bad as that is for company profits, it’s a predictable outcome given the structure of the law and what it permits.

What Helmsley described was a company caught up in the classic “death spiral” that IBD and reputable economists have been warning about: Insurance policy sales going in the main to the sickest patients who use the most health care services, while the high prices of the larded-up government-mandated packages continue to drive off younger, healthier consumers.

DOH!  It’s not like it was predictable or anything… 🙂

In short, the ObamaCare master plan of having young and healthy consumers subsidize the oldest, sickest patients isn’t working as the White House’s central planners and self-proclaimed experts claimed.

<<chuckle>>

Not that the ideologically rigid Obama and The Democrats will care. They will continue to hammer on it until you give in to government control of who lives and who dies and the Insurance companies go bankrupt leaving only the government left.

That’s Democrat “compassion” for ya… 🙂

What’s striking here is that UnitedHealth is no tiny startup ship with a narrow margin of error riding the big ObamaCare regulatory waves. It’s the biggest of the big, a conglomerate that’s the product of the consolidation of the industry — Anthem and Cigna, UnitedHealth and HCA, HCA and private investors — that was supposed to enable the sector to absorb the blow of higher costs of insuring more customers and still continue to do well.

That’s not happening.

What’s more, UnitedHealth was in the ObamaCare exchanges for only a year, during a window of time when the government was supposed to cushion insurers against losses in the ObamaCare transition. The cushion ends next year, leaving companies on their own.

(Insert “Jaws” theme music here) 🙂

Will smaller health care companies really be able to make a profit in an atmosphere that even UnitedHealth found impossible to sustain a profit in? There’s plenty of reason to wonder, as the markets did Thursday. (IBD)

“We cannot sustain these losses,” CEO Stephen Hemsley said in an investor call Thursday morning. “We can’t really subsidize a marketplace that doesn’t appear at the moment to be sustaining itself.”

Several nonprofit insurance cooperatives that were supposed to compete for customers on the exchanges have folded. Meanwhile, some big publicly traded insurance companies, including Anthem, Aetna, Cigna and Humana, say they are enrolling fewer people than expected or even losing money.

A recent report by McKinsey & Co. found that the industry lost a total of $2.5 billion, or $163 per customer, in the individual market.

Insurance companies have had trouble attracting healthy customers to the exchanges to purchase their insurance products, many of which have deductibles of thousands of dollars.

The industry’s troubles are reflected in the insurance products being offered on the exchanges during the current enrollment period, reports The Wall Street Journal:

“For these plans, which will take effect in 2016, many insurers have raised premiums in order to cover the medical costs of enrollees, which have run higher than many companies originally projected, fueling this year’s losses. Insurers have also shifted to offering more limited choices of health-care providers”

Still, no other big insurer has signaled its intention to leave the exchanges. (NPR)

YET. But it will come. But don’t worry Obama and The Democrats are from the Government and they are here to help you! 🙂

The average premium for medium-benefit plans offered to 40-year-old non-smokers will rise 10.1% in 2016, according to the Kaiser Family Foundation.

 Political Cartoons by Glenn McCoy

Political Cartoons by Michael Ramirez

 

 

Here We Go Again

First, there was the delay of Obamacare’s Medicare cuts until after the election. Then there was the delay of the law’s employer mandate. Then there was the announcement, buried in the Federal Register, that the administration would delay enforcement of a number of key eligibility requirements for the law’s health insurance subsidies, relying on the “honor system” instead. Now comes word that another costly provision of the health law—its caps on out-of-pocket insurance costs—will be delayed for one more year.

Obamacare contains a blizzard of mandates and regulations that will make health insurance more costly. One of the most significant is its caps on out-of-pocket insurance costs, such as co-pays and deductibles. Section 2707(b) of the Public Health Service Act, as added by Obamacare, requires that “a group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish lifetime limits on the dollar value of benefits for the any participant or beneficiary.” Annual limits on cost-sharing are specified by Section 1302(c) of the Affordable Care Act; in addition, starting in 2014, deductibles are limited to $2,000 per year for individual plans, and $4,000 per year for family plans.

Out-of-pocket caps drive premiums upward

There’s no such thing as a free lunch. If you ban lifetime limits, and mandate lower deductibles, and cap out-of-pocket costs, premiums have to go up to reflect these changes. And unlike a lot of the “rate shock” problems we’ve been discussing, these limits apply not only to individually-purchased health insurance, but also to employer-sponsored coverage. (Self-insured employers are exempted.)

These mandates have already had drastic effects on a number of colleges and universities, which offer inexpensive, defined-cap plans to their healthy, youthful students. Premiums at Lenoir-Rhyne University in Hickory, N.C., for example, rose from $245 per student in 2011-2012 to between $2,507 in 2012-2013. The University of Puget Sound paid $165 per student in 2011-2012; their rates rose to between $1,500 and $2,000 for 2012-2013. Other schools have been forced to drop coverage because they could no longer afford it.

According to the law, the limits on out-of-pocket costs for 2014 were $6,350 for individual policies and $12,700 for family ones. But in February, the Department of Labor published a little-noticed rule delaying the cap until 2015.

The delay was described yesterday by Robert Pear in the New York Times.

Last month the White House announced a one-year delay in enforcement of another major provision of the law, which requires larger employers to offer health coverage to full-time employees. Valerie Jarrett, Mr. Obama’s senior adviser, said that the delay of the employer mandate showed “we are listening” to businesses, which had complained about the complexity of federal reporting requirements.

Although the two delays are unrelated, together they underscore the difficulties the Obama administration is facing as it rolls out the health care law.

Advocates for people with chronic illnesses said they were dismayed by the policy decision on out-of-pocket costs.

“The government’s unexpected interpretation of the law will disproportionately harm people with complex chronic conditions and disabilities,” said Myrl Weinberg, the chief executive of the National Health Council, which speaks for more than 50 groups representing patients.

For people with serious illnesses like cancer and multiple sclerosis, Ms. Weinberg said, out-of-pocket costs can total tens of thousands of dollars a year.(NYT)

Delay needed to align ‘separate computer systems’

Notes Pear, “Under the [one-year delay], many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors’ services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.”

The reason for the delay? “Federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.”

The best part in Pear’s story is when a “senior administration official” said that “we had to balance the interests of consumers with the concerns of health plan sponsors and carriers…They asked for more time to comply.” Exactly how is it in consumers’ interests to pay far more for health insurance than they do already?

It’s not. Unless you have a serious, chronic condition, in which case you may benefit from the fact that law forces healthy people to subsidize your care. To progressives, this is the holy grail. But for economically rational individuals, it’s yet another reason to drop out of the insurance market altogether. For economically rational businesses, it’s a reason to self-insure, in order to get out from under these costly mandates.

Patient groups upset

While insurers and premium-payers will be happy with the delay—whose legal justification is dubious once again—there are groups that grumbled. Specifically, groups representing those with chronic diseases, and the pharmaceutical companies whose costly drugs they will use. “The American Cancer Society shares the concern” about the delay, says Pear, “and noted that some new cancer drugs cost $100,000 a year or more.” But a big part of the reason those drugs cost so much is because manufacturers know that government-run insurers will pay up.

“The promise of out-of-pocket limits was one of the main reasons we supported health reform,” says Theodore M. Thompson of the National Multiple Sclerosis Society. “We have wonderful new drugs, the biologics, to treat rheumatoid arthritis,” said Patience H. White of the Arthritis Foundation. “But they are extremely expensive.”

The progressive solution to expensive problems? More subsidies. But subsidies don’t reduce the underlying cost of care. They only excuse the high prices that manufacturers and service providers already charge.

It’s one of the many aspects of Obamacare that should be repealed, if we are to combat the rate shock that the health law imposes on tens of millions of Americans. But that will require Republicans to come up with a smarter strategy than shutting down the government. (Forbes)

http://www.forbes.com/sites/theapothecary/2012/03/22/how-obamacare-dramatically-increases-the-cost-of-insurance-for-young-workers/

135698 600 ObamaCare waivers cartoons

Give The People What They Want Chapter II

A Psalm of Obama
(To be sung by children, K-12, every morning of their seven-day school week.)*

The State is my shepherd,

I shall not want.

It makes me lie down in federally owned pastures.

It leads me beside quiet waters in banned fishing areas.

It restores my soul through its control.

It guides me in the path of dependency for its namesake.

Even though our nation plunges into the valley of the shadow of debt,

I will fear no evil,

For Barack will be with me.

The Affordable Care Act and food stamps,

They comfort me.

You prepare a table of Michelle Obama approved foods before me in the presence of my Conservative and Libertarian enemies.

You anoint my head with hemp oil;

My government regulated 16-ounce cup overflows.

Surely mediocrity and an entitlement mentality will follow me

All the days of my life,

And I will dwell in a low-rent HUD home forever and ever.

Amen.

*Special Note: For union workers teaching their subjects this psalm in government schools, it is to be regarded as a psalm of exquisite beauty. The main subject is the watchful care that the Government extends over its dependents and the consequent faux assurance that you must make them feel that the State will supply all their needs. The leading thought—the essential idea—is to get gullible Americans to fully believe that Big Government will provide for them and that they will never be left to want. Make certain the dumb bastards get that message, okay? (Doug Giles)

BRAVO! BRAVO BRAVO!

And speaking of entitlements…

Riding a wave of confidence after his re-election victory, President Obama is eager to collect scalps from the class war he appears to have won. Americans, Obama said in his postelection news conference earlier this month, “want to make sure that middle-class folks aren’t bearing the entire burden and sacrifice when it comes to some of these big challenges. They expect that folks at the top are doing their fair share as well.” House Minority Leader Nancy Pelosi, D-Calif., echoed this point in a fundraising pitch sent out on Monday: “Voters sent a clear message to Republicans in the election: we must stand up for the middle class and ensure the wealthy pay their fair share.”

Although Obama and his fellow Democrats repeatedly call on wealthier Americans to pay their “fair share,” they never specify what percentage of the nation’s tax burden the wealthy would have to bear. As matters stand, the top 1 percent of American households paid 39 percent of income taxes in 2009, according to the most recent data compiled by the Congressional Budget Office, and the top 5 percent of taxpayers paid 64 percent.

But income taxes, taken in isolation, do not tell the whole story, because lower-income Americans do pay payroll taxes. But even taking into account all forms of taxation, the top 1 percent still paid 22 percent of federal taxes while earning just 13.4 percent of household income. The top 5 percent paid 40 percent of all federal taxes, despite earning only 26 percent of all income. No matter how you slice the numbers, it’s hard to understand why anyone would think the wealthy aren’t already shouldering a burden commensurate with their blessings.

In the next few weeks, Obama will keep repeating this “fair share” language as part of his call to raise taxes on those earning more than $250,000 per year. He also wants to close additional loopholes and limit deductions to increase their tax burden further. But bear this in mind: On top of whatever new taxes go into effect in the deal to avert the so-called fiscal cliff, there will be additional new taxes due to Obama’s national health care law. These include a 0.9 percent Medicare tax hike for individuals earning more than $200,000 per year and couples earning more than $250,000 as well as a 3.8 percent surtax on investment income.

Moreover, even if Obama gets his way on all of his tax hikes on the wealthy, it still won’t make a dent in the $16.3 trillion national debt. Later in his term, once he has blown all of the new revenue with spending increases and goes back to this well for still more revenues, will the media let Obama get away with claiming the wealthy aren’t paying their “fair share” once again, without specifying what constitutes fairness? (WE)

Unequivocally, Yes, they will. They are drinking from the same poisoned well.

They are The Ministry of Truth. They cannot commit heresy upon their God.

For they are with God, The Almighty, and none shall pass unless they are of The Body (yes, that’s a Star Trek Reference) and you will be Assimilated (another one) or you will be EXTERMINATED! (Doctor Who) Figurative, for now.

It’s what they voted for, after all.

Big Brother is Watching You. 🙂

 

4 Days to Go

While New Yorkers dumpster dive, Where our Dear leader. He was in Vegas and other “battleground” states campaigning. He’s in Ohio today, campaigning.

Imagine what would have happened had this been a Republican? 🙂

Gee, after his Photo-Op with “the enemy” (Gov. Christie of NJ) for propaganda purposes that’s pretty much it for him.

http://www.nbcnewyork.com/video/#!/on-air/as-seen-on/Sandy-Starved-New-Yorkers-Dumpster-Dive/176839571

So I guess when tragedy strike and people die, it’s off to Vegas Baby!

OBAMACARE

When Obamacare’s individual mandate takes effect in 2014, all Americans who file income tax returns must complete an additional IRS tax form. The new form will require disclosure of a taxpayer’s personal identifying health information in order to determine compliance with the Affordable Care Act’s individual mandate.

As confirmed by IRS testimony to the tax-writing House Committee on Ways and Means, “taxpayers will file their tax returns reporting their health insurance coverage, and/or making a payment”.

So why will the Obama IRS require your personal identifying health information?

Simply put, there is no way for the IRS to enforce Obamacare’s individual mandate without such an invasive reporting scheme.

Every January, health insurance companies across America will send out tax documents to each insured individual. This tax document—a copy of which will be furnished to the IRS—must contain sufficient information for taxpayers to prove that they purchased qualifying health insurance under Obamacare.

This new tax information document must, at a minimum, contain:

the name and health insurance identification number of the taxpayer; the name and tax identification number of the health insurance company; the number of months the taxpayer was covered by this insurance plan; and whether or not the plan was purchased in one of Obamacare’s “exchanges.” (KFYI)

So you will be required to rat on yourself if you don’t have it. Then you’ll be fined. And you still won’t have it. Isn’t that special.
And if you don’t, undoubtedly that’s “tax evasion”. because as the Supreme Court ruled it is a TAX.
Because the Affordable Care Act’s individual mandate penalty is a tax, the IRS will be able to assess interest and non-criminal penalties on those families who will not or cannot pay the tax. The IRS will issue regular, periodic correspondence audits to these families to help them comply with their filing responsibilities. (ATR)

Well, isn’t that special.
Americans for Tax Relief have prepared a ‘proposed’ form for this tax page at:
And there’s still over 1700 waivers for Obama’s Cronies and political friends.
So do you think Romney & Ryan can come up with a better idea than this sh*t!?
I think so.
Ann Coulter: The single most important issue in this election is ending the national nightmare of ObamaCare. If it’s not stopped, it will permanently change the political culture of this country. There will be no going back.America will become a less-productive, less- wealthy nation. What wealth remains will have to be plowed into ObamaCare — to the delight only of the tens of thousands of government bureaucrats administering it.

One moment won’t mark the end of America. Everything will just gradually get worse, like trains and the tax code, until a bustling, prosperous nation is as distant a memory as pleasurable train travel and one-page tax returns.

The reason we have ObamaCare is not because the public was clamoring for the federal government to take over health care. It’s because the Democrats had 60 senators. In the frozen ideology of the left, it doesn’t matter if anyone wants government health care. Democrats had been waiting 50 years to win huge majorities in the House and Senate and the presidency, so they could check off this box on “FDR’s Unfinished Business.”

Unlike all other major legislation in the nation’s history, ObamaCare was passed exclusively by one party that had just won an aberrationally large majority in Congress. Not a single Republican in the House or Senate voted for it.

Republicans have passed legislation on partisan votes too, but never something that would fundamentally change the lives of every American. Nationalizing one-sixth of the economy is not the kind of thing one party should pass by sneering, “Ha, ha — we have 60 votes!”

As soon as all Americans have been thrown off their employer-provided insurance plans and are forced to start depending on the government for health care, Republicans will never be able to repeal it.

The private insurance market will be gone. Most Americans won’t be able to conceive of getting health care that doesn’t come from the government — just as people in the Soviet Union couldn’t imagine how they’d get bread if the government didn’t provide it.

(Also similar to Communist systems, you’ll have to know someone in power to get decent medical care.)

A powerful health care Leviathan will arise, composed of self-paced, well-pensioned, unionized government workers who will manage our health care from 10 a.m. to 3 p.m., except federal holidays, sick days, mental health days and in bad weather.

This new phalanx of government workers will spend the bulk of their time campaigning to ensure the election of more Democrats who promise to lessen their workload and increase their benefits. Even Republicans will have to run for office promising only to enlarge Obama-Care. Newt Gingrich will call plans to alter ObamaCare “right-wing social engineering.”
The Democrats’ idea for funding their endless government programs is always the same: Tax the rich, and just keep taxing them, no matter how high taxes have to be raised. One thing all such people have in common is that they’ve never had a real job, meaning a job from which you can be fired. Not Bernie Sanders, not Barack Obama, not Joe Biden, not Chuck Schumer and on and on.

Such people simply cannot grasp that doubling tax rates will not double government revenues because people won’t work as hard for half the money. Their ideas about tax policy will put America on a high-speed train to government deficits rivaling Greece. We’ll be a country with no military, no wealth, no hope.

Even before the train wreck of ObamaCare, health care was half-a-disaster because that’s the percentage of medical care in this country that was already provided by the government — via Medicare, Medicaid, Veterans hospitals and other public hospitals.

In 2008, a single county in Florida — Miami-Dade — received more money in Medicare home health care payments than the entire rest of the country combined. This continued throughout the entire year and was finally noticed by our Department of Health and Human Services in December 2009. Do you think it would take a private insurer two years to catch onto the fact that health care claims coming from a single county in Florida were larger than the rest of the country combined?

Lifelong politicians haven’t the first idea what an efficient system would even look like. If only we had a presidential candidate who had spent his life working in the private sector . . .

The way to fix health care is to take as much as possible away from the government and give it to the private sector. It is a universal law of nature that everything run by the government gets worse and more expensive over time — the postal service, airport security and Amtrak. Everything run by the private sector gets better and cheaper over time — cellphones, computers, hair products, dishwashers, etc.

You know who specializes in rescuing failing enterprises and making things work? Mitt Romney. Contrary to slanders about Romney’s private sector work, his specialty was not buying thriving companies and stripping them for parts. Rather, the Bain Capital model was to take companies that were on the verge of collapse — about to cut all jobs, pensions and health care for their workers — and save them.

Romney is the Red Adair of his profession. He’s like a doctor who specializes in multiple gunshot wounds or an oncologist who takes only Stage 4 cancer patients. Yes, there were layoffs, but also lots and lots of jobs, profit, success, efficiency, saved businesses and saved lives.

Romney will be the most accomplished incoming president since Dwight Eisenhower.

Not only has Romney promised to issue a 50-state waiver from ObamaCare on his first day in office and then seek a formal repeal and replacement, but he’ll know how to do it. The savior of dying companies will fix health care in this country so that no Democrat will be able to wreck it again.

The only way to rid ourselves of this national poison pill, set to destroy both health care and the nation at large, is to elect Mitt Romney our next president.

Then get the bastards to do something. Not an easy task these days because the Democrats and the News Media will go into hysterical hyperbole overload if they lose.
Then comes the “obstruction” and the lawsuits  (and conspiracies) that contest it.
Charges of racism.
The same old stuff.

BUT WE HAVE TO GET RID OF OBAMA FIRST!

Political Cartoons by Chuck Asay

Political Cartoons by Steve Kelley
Political Cartoons by Gary Varvel

Michael Ramirez Cartoon
Political Cartoons by Robert Ariail

NO!!!!!!! It’s Not True! It Cant Be!……Search your Wallet Luke, You know it to be True!

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

Carry me back to old Virginny

The Commonwealth of Virginia is obvious the next target for the Chicago Mob in the White House.

But will they go there? That is the question.

The Commonwealth has enacted an Illegal Immigration strategy that is very similar to Arizona, but with some key differences.

But they have also won Round 1 in the “Up Yours!” Obamacare fight. And they are just the first out of the gate.

The state of Virginia can continue its lawsuit to stop the nation’s new health care law from taking effect, a federal judge ruled Monday.

U.S. District Court Judge Henry Hudson said he is allowing the suit against the U.S. government to proceed, saying no court has ever ruled on whether it’s constitutional to require Americans to purchase a product.

“While this case raises a host of complex constitutional issues, all seem to distill to the single question of whether or not Congress has the power to regulate — and tax — a citizen’s decision not to participate in interstate commerce,” Hudson wrote in a 32-page decision.

“The congressional enactment under review — the Minimum Essential Coverage Provision — literally forges new ground and extends (the U.S. Constitution’s) Commerce Clause powers beyond its current high watermark,” Hudson said.

“Given the presence of some authority arguably supporting the theory underlying each side’s position, this court cannot conclude at this stage that the complaint fails to state a cause of action,” he wrote.

The decision is a small step, but in no way a minor matter to opponents of the health care bill rejected by all congressional Republicans but signed into law by President Obama earlier this year.
“This lawsuit is not about health care, it’s about our freedom and about standing up and calling on the federal government to follow the ultimate law of the land — the Constitution,” said Virginia Attorney General Ken Cuccinelli, who brought the suit. “The government cannot draft an unwilling citizen into commerce just so it can regulate him under the Commerce Clause.”

“Attorney General Ken Cuccinelli has brought forward a specific and narrowly tailored objection to the Act. It warrants a full and thorough hearing in our courts. It is meritorious and constitutionally correct. … I look forward to the full hearing this fall,” said Virginia Gov. Bob McDonnell.

Cuccinelli filed the suit almost immediately after the law was signed, arguing that it conflicts with Virginia’s legislation — also passed this year — exempting state residents from the requirement that all Americans be forced into health care coverage. Cuccinelli argued that the law violates the Constitution’s Commerce Clause.

The Commerce Clause allows the U.S. government to regulate economic activity. But Virginia argued that it’s not economic activity when someone chooses to refrain from participating in commerce.

The U.S. government, which was defending itself through the Health and Human Services Department run by Secretary Kathleen Sebelius argued that everyone will need medical services at some point in their life and therefore is either a “current or future participation in the health care market,” and therefore subject to taxation.

“We do not leave people to die at the emergency room door — whether they have insurance or not. Those costs — an estimated $43 billion annually — are absorbed by everyone else paying into the health care market including doctors, hospitals and insured patients. Congress has the authority under the Commerce Clause to address that cost-shifting burdening the interstate market for health care,” argues the brief filed by the Justice Department on behalf of HHS.

“Today’s ruling is merely a procedural decision by the court to allow this case to move forward. We believe there is clear and well-established legal precedent that Congress acted within its constitutional authority in passing the Patient Protection and Affordable Care Act of 2010. We are confident that the health care reform statute is constitutional and that we will ultimately prevail,” the department said in a statement.

Supporters of the law say the decision Monday is merely procedural, but the law will be proven constitutional when it gets to a hearing on the content.

“This case is really a politically motivated ploy aimed at diverting attention from the many benefits of the new law,” said Ron Pollack, executive director of Families USA, which lobbied in favor of the bill. “The decision today should not distract states and the federal government from focusing on implementing the new law in the most effective way possible. The benefits of the new law are just becoming apparent, and substantially more help is on the way.”

More than a dozen state attorneys general have filed a lawsuit in Florida challenging the federal law, but Virginia’s is the first to reach a courtroom. (FOX)

Missouri voters are expected to pass a measure on Tuesday to forbid the federal government from penalizing individuals for refusing to buy health insurance. But it could be symbolic because federal law typically supersedes state laws.

The federal penalty provision does not take effect until 2014 and the Obama administration has pointed to tax credits, subsidies and other mechanisms to help those who cannot afford to buy insurance. Some 46 million people in the United States lack healthcare coverage.

The Obama administration has countered that the government always has the ability to levy taxes and that the Constitution places the federal government’s powers over the states.

Shut up and sit down, we have supreme executive power and can do anything we want! 🙂

Never before has Congress sought to use its powers under the Commerce Clause to force a private citizen to buy a good or service from another private person or entity.  If Congress can do that in the name of ensuring that everyone has health insurance, what is to stop it from ordering citizens to buy a particular brand of car to ensure that everyone has a car to drive?  The possibilities, and hence the power claimed, are virtually limitless.– Virgina AG Cucchinelli

Naturally, the Ministry of Truth and the Liberals are playing it down as no big deal. Just a “procedural” victory they all say in unison. It’s no big deal.

But the “procedural” partial victory they got in the Arizona case was a full-on party-hardy yippee! victory against the evil racists!

Fascinating… 🙂

The media’s bias and ideology shines through again!

Meanwhile, It’s Mayberry to the Rescue!

The latest ObamaCare ad, curiously out at the same time as this decision, 🙂 has Andy Griffith touting the greatness of Medicare and now ObamaCare and how it’s going to take care of Seniors.

I saw they ad, it thought it was very self-centered, arrogant, and greedy. Which means it’s perfect for Obama.

Factcheck.org:

Would the sheriff of Mayberry mislead you about Medicare? Alas, yes.

In a new TV spot from the Obama administration, actor Andy Griffith, famous for his 1960s portrayal of the top law enforcement official in the fictional town of Mayberry, N.C., touts benefits of the new health care law. Griffith tells his fellow senior citizens, “like always, we’ll have our guaranteed [Medicare] benefits.” But the truth is that the new law is guaranteed to result in benefit cuts for one class of Medicare beneficiaries — those in private Medicare Advantage plans.

The White House released the ad on the 45th anniversary of the Medicare program, and said it would run nationally on cable TV networks. Griffith, whose “Andy Griffith Show” was a TV comedy hit at the time Medicare was first enacted in 1965, explains the “good things” that the new health care law will mean for Medicare beneficiaries.

“This year, like always, we’ll have our guaranteed benefits,” he says. An announcement of the ad on the White House website reinforces that claim, saying: “Under the Affordable Care Act … Seniors guaranteed Medicare benefits will remain the same.” But the truth is, for millions of seniors, benefits won’t remain the same.

As we wrote most recently last December, about 10 million Medicare Advantage recipients could see their extra benefits reduced by an average of $43 per month, according to the Congressional Budget Office. And more recently, a detailed analysis by the Medicare program’s own chief actuary, Richard Foster, stated in April:

Medicare Actuary Richard Foster: The new provisions will generally reduce MA rebates to plans and thereby result in less generous benefit packages. We estimate that in 2017, when the MA provisions will be fully phased in, enrollment in MA plans will be lower by about 50 percent (from its projected level of 14.8 million under the prior law to 7.4 million under the new law).

Even the head of the White House Office of Health Reform, Nancy-Ann DeParle, acknowledges that Medicare Advantage benefits are going to be reduced. “I’m sure that some of those additional benefits have been nice,” the Wall Street Journal quoted her as saying in a July 25 report. “But I think what we have to look at here is what’s fair and what’s important for the strength of the Medicare program long term.”

A Weasel Word

So how can the Obama administration claim that “guaranteed Medicare benefits will remain the same”? The answer is that the term “guaranteed” is a weasel word — a qualifier that sucks the meaning out of a phrase in the way that weasels supposedly suck the contents out of an egg. It may sound to the casual listener as though this ad is saying that the benefits of all Medicare recipients are guaranteed to stay the same — and that may well be the way the ad’s sponsors wish listeners to hear it. But what the administration is really saying is that only those benefits that are guaranteed in law will remain the same.

There’s even a section in the new law (section 3601) that says: “Nothing in the provisions of, or amendments made by, this Act shall result in a reduction of guaranteed benefits under title XVIII of the Social Security Act” (the title that establishes the Medicare program). Section 3602 says even Medicare Advantage recipients won’t suffer any reduction of “any benefits guaranteed by law.”

But here’s the catch: The extra benefits generally offered by Medicare Advantage plans aren’t guaranteed by law. They are offered by private insurance companies as inducements. The companies have been able to offer somewhat more generous packages than traditional, fee-for-service Medicare because the system pays them as much as 40 percent more per patient than it pays for traditional Medicare, according to the chief actuary. The average in 2009 was about 14 percent more, according to the most recent analysis by the nonpartisan Kaiser Family Foundation, issued in February. But the new law generally eliminates the extra payments in the coming years. Foster, the chief actuary, estimates that federal spending for Medicare Advantage will be reduced by $145 billion over the law’s first decade.

Currently, about 1 in every 4 Medicare beneficiary is enrolled in a Medicare Advantage plan. For many of them, the words in this ad ring hollow, and the promise that “benefits will remain the same” is just as fictional as the town of Mayberry was when Griffith played the local sheriff.

But Barney Fife wrote the Law and now expects you believe them when they say, it’s for your own good. 🙂

The The American Spectator and American’s For Tax Reform:

The Spectator blog reports on a conference call held this morning by HHS Secretary Sebelius to promote a new report regarding the health law’s impact on Medicare.  Questioned about claims by the Centers for Medicare and Medicaid Services’ chief actuary that the Medicare reductions in the law “cannot be simultaneously used to finance other federal outlays and to extend the [Medicare] trust fund” solvency, Secretary Sebelius replied that

There are two different operating methods of looking at this, and the CMS actuary in the report that you cite differs in his strategic opinion from every accounting methodology that’s used for every other program in the federal budget, that has traditionally used for Medicare.  And he has a different interpretation that is not agreed upon by either the Congressional Budget Office or the OMB or traditionally in Congress.

Unfortunately for the Secretary, however, the Congressional Budget Office has on numerous occasions confirmed that any claims the law will improve Medicare’s solvency revolve around notional double-counting under federal budgetary conventions.  A January CBO letter found that “the majority of the [Medicare] trust fund savings…would be used to pay for other spending and therefore would not enhance the ability of the government to pay for future Medicare benefits.”  And in a March letter, CBO quantified the amount of that double-counting, estimating that, if the law’s Medicare savings were actually set aside to improve the solvency of the Medicare trust fund (as opposed to being used for other spending), the bill would increase the deficit by $260 billion over its first ten years alone.

In other words, the CBO agrees with the CMS actuary that the same money the same money can’t be used twice – once to expand coverage, and a second time to extend the life of the Medicare trust fund.  The Secretary’s statement that “there are two different operating methods of looking at this,” and that CBO disagrees with the Administration’s own actuaries on the impact of this budgetary double-counting, is demonstrably FALSE.

But don’t worry, the Ministry of Truth is right on top of it. 🙂

http://www.cnn.com/video/#/video/us/2010/08/03/pkg.tuchman.sanctuary.city.cnn?hpt=C2

President Obama described officials who “demagogue” immigration or take sudden “anti-immigrant” stances as people who want to make a name for themselves and not help solve what he called “a national problem.” (CBS)

But his demagoguery is not worth mentioning. 🙂

“I understand the frustration of people in Arizona,” Mr. Obama said. “But what we can’t do is demagogue the issue, and what we can’t do is allow a patchwork of 50 different states, or cities or localities, where anybody who wants to make a name for themselves suddenly says, ‘I’m going to be anti-immigrant, and I’m going try to see if I can solve the problem ourself.’ This is a national problem.”– on CBS “Early Show”

But I end on a Vote of No Confidence  on ICE Director John Morton, from his own people.

http://www.pdfdownload.org/pdf2html/view_online.php?url=http%3A%2F%2Fkfyi.com%2Fcc-common%2Fmlib%2F622%2F08%2F622_1280843100.pdf

or http://kfyi.com/pages/jimsharpe.html

But don’t it’s all for your own good. We are the Washington Elites, we are just better than you unwashed peasant masses.

And now the New York City government elites says it’s ok for there to be a 13-story Islamic Mosque 600 yards from Ground Zero built by a guy who believes in Shiria Law in America.

Doesn’t that just make you feel safer about the government. 🙂