Tag: Healthcare reform

The Public Option Returneth

With the collapse of the Obamacare exchange markets imminent, the Left Wing is calling for the return of the “public option”. The public option would be a single-payer system run by the government that would “compete” with private insurance, supposedly without subsidies to make things fair. According to the Left Wing, this is “only way” to return competition to the Obamacare exchanges, many of which have shrunk down to a single insurer.

It’s all lies. They know it’s all lies. That entire paragraph above can be exploded with two words: state lines.

For years, the Republicans have advocated that health insurance be sold across state lines, rather than within fifty restricted markets. The reason is very simple: in many states, there is no competition for insurance. In Alabama, for example, Blue Cross is a virtual monopoly, controlling 90% of the private insurance market. Allowing insurance to be sold across state lines would allow at least the big insurers and preferably dozens to compete in every market in America. It would destroy the virtual monopoly many insurance companies enjoy. It would not be a silver bullet — establishing networks of doctors and hospitals is arduous. But it would help.

Democrats have opposed this, claiming that it would cause a “race to the bottom” as employers sought the worst insurance possible. Apart from the bald cynicism, this is hysterical bullshit. We already have established federal guidelines for minimal insurance standards.

But the public option talk exposes several lies at once. The Democrats claim that the public option would not be subsidized. But the public option has a built in subsidy which is … the ability to be sold across state lines. And I would expect other non-subsidy subsidies to follow suit: forcing doctors to accept it; hiding administrative costs in other parts of the government (as Medicare does); exemption from federal and state regulations that drive up the cost of private insurance.

Obamacare was Stage One of moving us toward a single payer healthcare system. Obama said as much himself. The public option is simply Stage Two. If the Democrats wants single payer, then they should advocate for single payer. I’ll oppose them, but at least that would be honest. The public options is simply an attempt to sneak single payer in through the back door.

Sunday Triple Play

Three thoughts on unrelated topics:

Brexit:

When it came to the Brexit vote, I was partial to Remain, mainly because I am an avid supporter of free trade. And I’m worried that the departure of the UK could trigger an eventual dissolution of the EU, with bad economic consequences and an empowerment of Russia. I still worry about this but … I think the reaction of the Remain faction has been hysterical. Vox alone has run a few dozen articles rending their garments and gnashing their teeth over this. To borrow a thought from Greg Guttfield, this is about ten times as many articles as they’ve run on Venezuela, which is having an actual economic meltdown right now, with severe shortages of good, medicine and power. For Americans to go into hysterics because the UK’s economy might be a little weaker going forward while ignoring the Lord of the Flies situation developing in our own hemisphere is insane. McArdle argues they are lamenting the decline of this idea that we will no longer be citizens of nations but “citizens of the world” — a notion that has a lot of sway in elite circles.

Warren Meyer has a great post up, contrasting the “it was racism!” explanation that is now the default on the Left against the real regulations coming down on things like tea kettles. It’s worth a read but here’s a critical point:

The real crime from a US perspective is the actions of our President. Mr. Obama has told the British that by voting for Brexit, they go to “the back of the line” for trade negotiations with the US. This is, amongst a lot of stupid things politicians say, one of the stupidest I have ever heard. My response as president would have been to move Britain to the front of the line, offering them a free trade treaty with the US the day after the Brexit vote. Like most politicians, unfortunately, President Obama does not view trade as a vehicle for the enrichment of individuals but as a cudgel to enforce his whims in the foreign policy arena. Why on Earth has President Obama threatened to undermine America’s strong interest in trading with the UK merely to punish the UK for not staying in the EU, a transnational body this country would certainly never join?

The UK would be one of the most logical countries in the world for us to have a free trade agreement with. I have little hope that our next President will grok this.

Orlando:

The FBI has said that they have no evidence that the Orlando shooter was gay. That doesn’t prove he wasn’t, as the FBI notes. There are still indications from his friends and wife that he might have been. But the narrative that he was actively dating men and a regular at the club appears very unlikely.

The FBI is currently saying “they may never know” his motive, given some of the ambiguity around his sexuality. But given that he called 911 to specifically pledge allegiance to ISIS and Abu Bakr al-Baghdadi, the slightest thought might begin to speculate about the merest possibility of crossing our minds that this was Jihadist terrorism. Especially as Jihadism and killing gay people are not exactly incompatible ideas.

Honestly, theres enough blood to go around. We don’t have to confine ourself to one motive.

Obamacare:

Blue Cross has announced that they are pulling out of the Minnesota individual insurance market. The Kaiser Foundation is projecting steep hikes in insurance premiums. The longer this goes on, the more Obamacare is faltering, slowly destroying the individual market. We’re barely two years into this thing and we are now at the point where it’s not if, but when, Obamacare is going to face a massive overhaul. I don’t know that the insurance market can be repaired after this. But I know that if we dick around for much longer, we’re going to see uninsured rates spike drastically to the point where individual insurance may cease to exist.

Makes you kind of wonder if that was the point.

Pelosi Watch: Poor Hospitals

Nancy Pelosi once said we had to pass Obamacare to find out what was in it. And boy are we finding out:

An Obamacare program that aims to improve American health care may have an unintended side effect: penalizing hospitals that serve the sickest and poorest patients.

The Affordable Care Act penalizes hospitals that have high readmission rates, where patients come back within 30 days to deal with some complication of the initial procedure. The aim of that program was to encourage doctors to do the best job possible on the first hospital visit, improving patients’ experience and saving money by preventing a second trip.

But a new paper from three Harvard health-care experts suggests that the readmission program is penalizing hospitals for the type of patients they see. Hospitals that have high readmission rates tend to see patients who are less educated, more disabled, and more likely to suffer from depression — factors the Obamacare program doesn’t account for.

I suspect that you, like me, are shocked SHOCKED that a bill designed by politicians and wonks to exert control over a massive and complicated system didn’t work precisely as advertised. Keep in mind … this is one of Obamacare’s supposed big successes. They’ve touted the “huge” drop in readmissions (all of … 1%) as a sign of how awesome their reform is.

To be fair, penalizing hospitals for readmissions is not a completely stupid idea. Several insurance companies have been trying out programs to encourage better care. But the Obama people didn’t care for this kind of free-market innovation. To them, providers were greedy monsters doing poor care so they could charge more (remember Obama’s comment about amputating diabetic legs?) So they applied a ham-fisted program that has, on balance, made things work.

Well … at least we’ve seen insurance rates come down, right? Right?

Oh, yeah.

Video Monday: Takei and Hobby Lobby

I bookmarked these two video over the weekend. The first is a TED talk from George Takei. While I’m not fond of TED talks — they often cross me as smug and overly confident in their points — this one explains why George Takei still loves the country that interred him during the war:

(I’ve found this embed tends to hang. If someone has a better link, I’ll update the post.)

This comes close to my view of America. The United States, like all human institutions, is flawed and capable of doing awful things. But the principles on which our nation is founded are a beacon to humanity. And I would take the achievements of America, its role in the world and its history over any other nation on Earth. Takei’s story sounds familiar to me — and probably to many of you as well. Both of my paternal grandparents fled the “Jewish crescent” of Eastern Europe in the early 20th century. Despite the virulent anti-semitism they encountered — they vividly remembered the Leo Frank lynching — they still believed there was nowhere else in the world they would rather be.

The second I couldn’t resist. Takei is calling for a boycott of Hobby after the Supreme Court’s narrow decision last week. This completely useless gesture would accomplish little except making liberals feel better (how many liberals actually go to Hobby Lobby?) Reason, by contrast, proposes some changes to the law that would actually do some good:

The amazing thing about Obamacare is that many liberals believed — many still believe — that Obama “stood up” to the special interests and the healthcare industry. This could not be more false. He “stood up” to the insurance industry by forcing everyone to buy their product, outlawing the cheaper versions of their product and refusing to break the intra-state cartels. He “stood up” to healthcare providers by mandating coverage of expensive procedures and not even considering obvious cost-reducing measure like making birth control available over the counter.

All three of Reasons’s suggestions would be diametrically opposed by the healthcare industry lobbyists who wrote and campaigned for Obamacare. Insurance companies don’t want to offer cheap catastrophic plans. They certainly don’t want to compete across state lines. And providers don’t want more competition And so we can expect the liberal wing to “stand up for the little guy” by continuing to acquiesce to every demand of the industry they supposedly hate.

The Bill Comes Due

Remember all that talk about how Obamacare was going to save us all this money? Evil uncaring heretics like me pointed out that this was impossible. You can not insure more people and you can not outlaw cheap insurance without increasing healthcare costs. Romneycare saw costs soar after implementation because … funny story … when people have insurance they see the doctor more often. Even the dreaded ER visits went up.

But no, we just didn’t understand. We were letting our hatred of poor people cloud our vision. Why the cost curve bent down in 2009-2013, which was proof that Obamacare was keeping costs down even before it was implemented!

Um … oops:

As I reported earlier this month, there were already signs of growing health care spending in the fourth quarter of 2013, when it jumped 5.6 percent, which had been the fastest clip since 2004.

But the 9.9 percent jump (on an annualized basis) came in the quarter from January through March, which was the first three months in which individuals who gaining coverage through the law were able to use it. That was the fastest rate recorded since health care spending grew at a 10 percent rate in the third quarter of 1980.

The data released on Wednesday, as part of the government’s report on gross domestic product, is preliminary and subject to revision in the coming months.

Note that first quarter GDP growth came in at 0.1%, so the non-healthcare section of the economy shrank by 1% last quarter.

So … are the Obamacare supporters admitting that they were wrong? Uh, not exactly:

But let’s be very clear about what’s happening here: an improving economy is allowing Americans to now spend more on health care, while people who have previously been uninsured are finally getting insurance and are using their care. In the meantime, health care prices are still continuing to grow at low rates, reducing Americans’ health costs.

ThinkRegress goes on to say that, in the long run, healthcare costs will come down because the IPAB will force changes in healthcare reimbursement. Therefore we should be celebrating because the first half of the CBO’s prediction — healthcare costs will rise — has come true!

There are many many problems with this. The biggest is history. IPAB is not the first effort by the government to reign in healthcare spending. There is a whole alphabet soup of programs — RBRVS, GRH, SGR, etc. — that have completely failed in this regard. And that leads to the bigger point. Those of you who have followed the budget debates for the last twenty years know how this plays out: we get spending increases today with the promise of spending cuts tomorrow to balance them out. And those spending cuts never happen. Because tomorrow we are told that spending needs to go up because of the economy, the uninsured, the homeless or Venus being in Taurus.

So what will the Democrats and their apologists say when health care costs continue to rise? Well, besides blaming Republicans, I expect they will claim that this “proves” how much we need single-payer. To prepare for that, read McArdle today. Over the last twenty years, uber-controlled monopsony single-payer healthcare systems have restrained their spending growth to … about what we’ve had in the United States. The big growth in US healthcare spending occurred forty years ago and is now baked into the system. So … no, Virginia, socialized medicine will not cure what ails us.

Buckle your seat belts, friends. The ride’s only going to get bumpier.

Physician, Heal Nothing

It finally seems to have sunk into the Obama Administration how badly this Obamacare thing is going. There have been rumblings that the system will not be fixed by the end of the month (color me surprised). The total enrollment is something like 100,000 (only a quarter from the federal exchange). And millions of people are livid over having their policies cancelled.

If you’ve followed Obama for the last five years, you know what comes next: rewriting the law on his own:

The White House has its own idea to stop the bleeding: Allow insurers to renew existing plans in 2014 (which means they could continue into 2015) while forcing them to send Landrieu-like letters explaining why their plans don’t conform to the Affordable Care Act’s standards.

(I’m tired from baby stuff and I first read that sentence as “Landru-like” letters … as in Landru the computer from the classic Star Trek serial “Return of the Archons”. Funny thing is that, now that I’m awake, a letter from a fictional crazed computer still sounds a lot better than one coming from Mary Landrieu of Louisiana.)

This doesn’t really ensure anyone can actually keep their plan — which means it also doesn’t affect premiums in the exchanges. But it makes it easier for Democrats to blame insurers for canceling these plans. And it perhaps makes it easier for the White House to stop congressional Democrats from signing onto something like Landrieu or Udall.
The insurance industry is furious. They’ve been working with the White House to get HealthCare.Gov up and running and they’ve been devoting countless man hours to dealing with the problems and they’ve been taking the heat from their customers over canceled plans, and now the Obama administration wants to make them into a scapegoat.

In other words, this changes the wording to, “If you liked your plan, you could have kept your plan if it weren’t for those greedy insurance companies.”

The problem is that the machinery of canceling plans and creating new ones is already moving. The insurance industry has put a million piece in motion anticipating that the exchanges would, you know, work. Stopping it at this point is like slipping you car into reverse on the highway. It’s such a bad idea that the state of Washington has already said they will not implement it.

So why is Obama trying to sell this snake oil? Well, as McCardle points out, there really isn’t a Plan B. The process has advanced so far and the individual market is so delicate right now, that we really don’t have a good option. Obama has driven us into a ditch with no way out.

No matter what happens from now on, I think we are witnessing the beginning of the end of individual insurance policies. By the time Obama leaves office, your choices will be Medicaid or employer insurance. And maybe that was the intention all along.

The Exemption

I think all of us — liberal, conservative and otherwise — can unite in saying “No Fucking Way“:

Congressional leaders in both parties are engaged in high-level, confidential talks about exempting lawmakers and Capitol Hill aides from the insurance exchanges they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.

The talks — which involve Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), the Obama administration and other top lawmakers — are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. Discussions have stretched out for months, sources said.

A source close to the talks says: “Everyone has to hold hands on this and jump, or nothing is going to get done.”

Yet if Capitol Hill leaders move forward with the plan, they risk being dubbed hypocrites by their political rivals and the American public. By removing themselves from a key Obamacare component, lawmakers and aides would be held to a different standard than the people who put them in office.

Gee, politico, ya think so? One thing to note in the article: there seems to be a lot of confusion on Capital Hill about what, exactly, implementing the bill will entail for Congress. That is, Congress isn’t clear on what their own healthcare reform is going to mean to them. How do they expect the rest of us to keep up?

When this whole process started, I said that a keystone had to be that Congress got the same plan the rest of us did. Several Republicans made sure that got into Obamacare. We can’t back down now. If Congress exempts themselves from this, we really will end up with one system for the rich and power, and one system for the rest of us.

The Continued Implosion of Obamacare

Great Scott:

A labor union representing roofers is reversing course and calling for repeal of the federal health law, citing concerns the law will raise its cost for insuring members.

Organized labor was instrumental in getting the Affordable Care Act passed in 2010, but more recently has voiced concerns that the law could lead members to lose their existing health plans. The United Union of Roofers, Waterproofers and Allied Workers is believed to be the first union to initially support the law and later call for its repeal.

The roofers are in a uniquely bad position. As McCardle points out, union shops are facing stiff competition from smaller non-union shops. Those small shops will now be getting a subsidy to buy insurance on the exchanges. Doubtless, had the Democrats not passed a draft bill in the first place, some union subsidy would have accounted for this. But it was a draft bill and it does have these problems. So expect more unions to come out in favor of “repeal and replace”.

Oh, and it’s not just unions:

A senior Democratic senator who helped write President Barack Obama’s health care law stunned administration officials Wednesday, saying openly he thinks it’s headed for a “train wreck” because of bumbling implementation.

“I just see a huge train wreck coming down,” Senate Finance Committee Chairman Max Baucus, D-Mont., told Obama’s health care chief during a routine budget hearing that suddenly turned tense.

Baucus is the first top Democrat to publicly voice fears about the rollout of the new health care law, designed to bring coverage to some 30 million uninsured people through a mix of government programs and tax credits for private insurance.

Baucus is playing politics a bit here since he’s up for re-election. And, to be fair, he’s not calling for Obamacare to be repealed but worrying that the exchanges will not be ready (a concern we talked about last week).

But we’ve now got at least one labor union and one liberal senator publicly acknowledging what everyone has know for several years: this isn’t going to work.

Sebelius Doesn’t Know What Insurance Is

One of the problems that I encounter in the debate over healthcare reform is that a lot of people simply do not understand what insurance is. Insurance is not a magical money tree that gives you free stuff. It is a way of spreading out risk. It has a secondary function in aggregating purchasing power so that insurance can negotiate prices. But, in the end, insurance will always cost the average person more than paying for things on their own.

The primary purpose of insurance is prevent catastrophe. We buy home insurance hoping that we will lose money on it but knowing it’s there if our house burns down. We buy car insurance hoping we will lose money on it but knowing it’s there if we get in a big accident.

But health insurance, at least by the Left, is seen differently. Rather than being seen as a way to spread out risk or combine our purchasing power, it is seen as a way to get free healthcare. I’ve mentioned this before but it remains a perfect illustration of the problem. When I was in graduate school, the students were pushing for birth control pills to be covered by insurance. And they were shocked and angered to find out that this coverage would increase health insurance rates by … the cost of the pills (actually, very slightly less since the insurance negotiated a slightly lower price). They couldn’t wrap their minds around the idea that insurance is a device to mitigate risk, not a machine for dispensing handouts.

I and many other critics of Obamacare have pointed out that it is actually going to make healthcare utilization higher and costs higher by mandating first dollar coverage. When going to the doctor for every sniffle only costs $10, what do we think is going to happen? When you’re only paying 10% of the cost of an MRI, what is going to happen? Catastrophic plans or plans with high deductibles have been proven to keep healthcare costs down without compromising care. When their own money is at astake, people forgo unnecessary procedures and save up for real health problems. As David Goldhill pointed out, you could get every uninsured person a high-deductible plan, give them a $5000 voucher and you’d still save money over government-issued comprehensive coverage. And not compromise health.

Ladies and gentlemen, our Secretary of Health and Human Services:

But Kathleen Sebelius, the Secretary of HHS, thinks that catastrophic insurance isn’t really insurance at all.

At a White House briefing 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.”

She said this in response to a report from the American Society of Actuaries arguing that premiums are going to rise by 32% when Obamacare kicks in, as coverage gets more generous and more sick people join the insurance market. Sebelius’ response is apparently that catastrophic insurance isn’t really insurance at all–which is exactly backwards. Catastrophic coverage is “true insurance”. Coverage of routine, predictable services is not insurance at all; it’s a spectacularly inefficient prepayment plan.

I want you to sit back and let the roll over you. Our HHS Secretary does not know what insurance is. She really thinks it’s a magical money machine that can give free care to everyone without prices going up. The only reason premiums would go up is because what they had before wasn’t “real insurance.”

Oh, yeah. Obamacare is going to go just fine. It’s totally going to cut healthcare costs when it’s run by people who have no understanding of insurance, medicine, economics or markets. Nothing to see here!