Tag: Healthcare reform

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!

Pelosi Watch: College Students

Doh!

College students will soon wake up to the fact that they have been had. While they were overwhelmingly supportive of the Patient Protection and Affordable Care Act (PPACA or “ObamaCare”) when their charismatic President was championing it, they will not be pleased when they find out that there is a huge price they will have to pay. ObamaCare will be anything but affordable.

Apparently, New Jersey is the only state in the nation that currently requires all college students to have healthcare coverage. This has always been a bare-bones plan costing from $100-600 per year. The new healthcare regulations will force these plans to be phased out, as the mandated coverage under ObamaCare will cause the premiums to rise from a few hundred dollars to $1,700 per year.

North Carolina has experienced this as well. The reason is very simple and is something conservative and libertarians have been talking about since the day Obamacare was passed. If you mandate a high minimum standard for insurance, you are going to price people out of the market. We may soon reach point where paying the Obamacare tax and waiting until you’re sick to get insurance is a better choice than getting insurance.

Told ya.

The Healthcare Market

Reason has a great video about a free market healthcare system in Oklahoma. It is definitely worth six minutes of your time. By going outside the traditional insurance model, they have cut healthcare prices to a fraction of what they usually are.

A few things to clarify. This obviously wouldn’t work for people without jobs or cash to pay for these services (although it would be cheaper than Medicaid). And some of the most expensive parts of our healthcare system — long-term and end-of-life care — would not fit under this model. But, if this were applied universally, we would be talking about massive and major cuts in our healthcare bill and imminently more affordable care for hundreds of millions.

I can testify to a couple of aspects of this first-hand. I left the healthcare industry 17 years ago, but it was getting top-heavy with administrators then. I am assured by friends and relatives it has only gotten worse. It is not unusual at all for the highest paid people in a healthcare system to be, not doctors, but administrators like — oh, let’s take a random example — Michelle Obama before her husband became President.

I have also had two encounters with our healthcare system this year. The first was with the traditional system when I had my gallbladder popped out. Even that comparatively simple procedure was ridiculously expensive. But my surgeon’s fees were a comparatively small fraction of that; most was the hospital. The second was with a completely private system in our (so far unsuccessful) attempts to have a second child. Fertility isn’t cheap, but we got rigid quotes, outstanding service and doctors determined to go the last mile. At one point, we had to switch fertility medication at the last minute when the clinic was closed. The head nurse had us pick it up from her house. How often does that happen in the traditional system?

Obamacare has many flaws but the biggest is that it completely turns its back on the idea of a free market in healthcare. There is no provision for high-deductible major medical plans (again, if you’ve never read it, read David Goldhill on this). There is no incentive for innovation. Its cost controls are the kind of top-down bureaucratic bullshit that fails (if we’re lucky) or creates bad unintended consequences (if we’re not).

Oklahoma is showing the way forward. Does anyone want to follow?

The Obamacare Stumble

I am Hal’s complete lack of surprise:

By the end of this week, states must decide whether they will build a health-insurance exchange or leave the task to the federal government. The question is, with as many as 17 states expected to leave it to the feds, can the Obama administration handle the workload.

“These are systems that typically take two or three years to build,” says Kevin Walsh, managing director of insurance exchange services at Xerox. “The last time I looked at the calendar, that’s not what we’re working with.”

These marketplaces often get described as a Travelocity or Expedia for health benefits. While that might be the case for the consumer experience, experts say the underlying technology is hugely more complex, a maze of interconnecting computer systems meant to deliver health insurance to 30 million Americans.

“The reality is, states and the federal government are building something new,” says Pat Howard, who runs state health issues for consulting firm Deloitte. “There’s a rough blueprint in terms of federal regulations, but there’s still a number of decisions that need to happen to operationalize this.”

Read the whole thing, including a lovely chart on the complexity underpinning these exchanges. It’s going to take years and cost immense amounts of money to get these exchanges going. And then we’ll see if it works. I expect the entire thing to fall over at least a few dozen times.

As I said, I’m not surprised at all. It’s difficult enough to build complex insurance markets from the bottom up. Building them from the top down, to borrow a phrase from P.J. O’Rourke, is like building the Great Pyramid from the top down. Right now, Obama is holding up a big pointy piece and the states are scrambling around for two million blocks of stone.

Update: Here’s the graphic of how the exchange system will work. No one could set up something like this on a timescale of months.

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