Tag: Insurance

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 Wrong Skew

Well, it seems like Obamacare is finally working. Two million people are signed up, so obviously this is … oh:

Now that more than 2 million people have signed up for private insurance plans created by President Barack Obama’s healthcare law, a crucial next check-up for the new marketplace will be to see how old customers are.

Early data from a handful of state exchanges shows the administration needs more young adults to sign up in the next three months to help offset costs from older enrollees and prevent insurers from raising their rates.

Critics of Obama’s Affordable Care Act say the market won’t attract enough young people to keep it financially viable, putting more pressure on government funds to compensate for any insurer losses.

Data from seven states and the District of Columbia, which are running their own marketplaces, show that of more than 200,000 enrollees, nearly 22 percent are 18 to 34 years old, according to a Reuters analysis.

The administration had hoped that over 38 percent, or 2.7 million, of all enrollees in 2014 would be 18 to 35 years old, based on a Congressional Budget Office estimate that 7 million people would sign up by the end of March.

Now, to be fair, these are early numbers and there is some data showing that the most recent signups skew as young and healthy as Obama wants them to. However, we are once again seeing how this Obamacare thing is like a house of cards. The insurers offered rates based on a projection of seven million signups with 2.7 million of those from young healthy people. That lower number is a critical card in the house. Without young people paying identical rates to older ones but using less care, the system becomes a massive money pit. Suddenly, you’ve got a way more expensive group of patients than you anticipated.

That leads to another card: an insurer bailout. To keep the insurance market from completely imploding, the government is poised to bail out their losses if this happens (these bailouts are euphemistically called “risk corridors”). Republicans want to repeal this, which would bring the entire house crashing down. But really, it’s a matter of timing. You can’t go on forever with a zombie insurance industry.

We Should Hope This Works

As the insurance exchange debacle drags on into its fourth week, the Democrats and the Obama Administration continue to dodge questions, obfuscate and try to find ways to blame Republicans. Yesterday’s hearing featured Democrat Frank Pallone calling the hearing a “monkey court” because Republicans have the temerity to wonder what the hell is going on with an overhaul of one-fifth of our economy. The Democrats’ media dog-washers are trying to silence liberal critics of the system using the “under no circumstances ever agree with conservatives, especially when they’re right” doctrine.

But they can’t keep up the facade. Conservatives, libertarians and honest liberals are detailing the many flaws this system has and the significant hurdles it faces getting online. Those critics are not passe about this; they are livid. And they should be.

One of the memes that is emerging among the Obamacare defenders is that Republicans and other opponents of Obamacare have no right to criticize the utter complete failure of the federal exchanges because we opposed it reform the first place. Since we opposed Obamacare, how can we complain about it? You’ll remember, of course, how that logic was applied to the Iraq War. Those who opposed the war never complained about how the war was executed or what happened in the aftermath of it.


But as an opponent of Obamacare myself, I am highly critical of the rollout because … I actually want the insurance exchanges to work. Everyone — conservative, liberal, libertarian or monarchist — should want the exchanges to work for three very important reasons.

First, the exchanges are one of the few good ideas that got into Obamacare. One of the things that drives up insurance costs is the lack of competition. The exchanges force open competition between the insurance companies, which is a good thing. They’re not perfect, of course or even particularly good. A better exchange system would have cheaper entry-level insurance, allow insurance to be sold across state lines and have fewer coverage mandates (it would also, you know, work). But compared to subsidies, coverage mandates, purchase mandates, Medicaid expansion and the IPAB, the exchanges are almost smart.

Second and more far more important is that if the insurance exchanges don’t work for a long time or if the purchase mandate is delayed, the result could be the complete destruction of the individual insurance market.

A lot of people don’t appreciate how much Obamacare is like a house of cards. Insurance companies can no longer deny coverage and have priced insurance on the exchanges based on the idea that people will be “taxed” for not buying insurance. This only works, however, if people are actually forced to buy insurance. Otherwise, they will wait until they are sick to insure themselves. If people can’t buy insurance or aren’t made to, the result is a death spiral where insurance gets more and more expensive and more and more people wait until they are sick to buy it.

This isn’t some theoretical possibility. It happened in New York:

New York state’s guaranteed issue and community rating rules—the two regulations that limit how insurers can charge based on health history and require them to sell policies to all comers—took effect in 1994. At the time, there were about 752,000 policyholders in the state’s individual market, or about 4.7 percent of the non-Medicare population. But by 2009, according to a Manhattan Institute report by Stephen Parente and Tarren Bragdon, the state’s individual market had practically disappeared, leaving just 34,000 participants, or about 0.2 percent of the non-elderly population. Individual insurance premiums, meanwhile, were among the highest in the nation—about $388 on average in 2007, compared with just $151 in California, another big Democratic-leaning state. In New York City, the annualized premium cost for individuals was more than $9,300 and more than $26,400 for a family.

The result, in other words, was a combination of sky-high premiums and far fewer insured individuals.

The individual markets only survived at all because insurance companies could make up the losses from less stupid states. But Obamacare is national; there is no other state to make money off of.

If people can’t buy insurance, the result will be the complete meltdown of the individual insurance market and millions of Americans becoming uninsured. In fact, many have already lost their insurance as companies cancel individual policies in anticipation of the Obamacare exchanges.

Now maybe you think that’s acceptable. Obamcare will implode, the Democrats will be blamed and Republicans will sweep back into power (assuming they don’t screw it up). But look beyond the politics. Millions of Americans will be cast into an insurance purgatory that they may never get out of. The individual insurance market works because of people being good citizens — buying insurance when they don’t need it so that the market can support those that do. If that culture is destroyed, if Americans get into the habit of waiting until they are sick to buy insurance, they may never get out of it. A good example of this is the Israeli Daycare Study where daycare centers imposed a fine on people for picking up their kids late. The result? More parents showed up late because they could now buy off their guilt. And when the fine was rescinded, the parents kept showing up late because the social norm of being on time had been effectively destroyed.

Once the individual market collapses, we may never be able to rebuild it. We may be in a situation where your insurance choices are either through your employer or through Medicaid. That is an extremely high price to pay for making Obama look bad and maybe winning an election.

(It has been suggested, here and on other blogs, that this sabotage is deliberate; that Obama is deliberately crippling the individual market to lead us toward single payer. I’m open to the possibility of a subconscious desire to wreck the private market. But I have a hard time believing in any conspiracy with this administration. It’s not that they wouldn’t try. It’s that these guys are so incompetent that if they actually tried to sabotage the exchanges, the result would be a perfectly functioning exchange system.)

Now my second point may cause many liberals — who see Obamacare as a stepping stone to single payer — to quietly rejoice. Already, many are blaming this on the private sector. Who will be the first to say this “proves” we should trash private insurance and go with single payer? Who will be the first to say we should just expand Medicaid to everyone who isn’t insured by an employer?

But this idea is mind-bogglingly stupid. If the Democrats destroy the individual insurance market and increase the number of uninsured, Americans will not thank them for it. We are not going to rise up in a mass and say, “Oh, you great ones who took away our insurance. Tell us what to do next!”

And frankly, if anyone thinks Medicaid is the future of health insurance (oh, wait, here’s Krugtron the Ever-Wrong making the case) they need to spend a few weeks working in a hospital that only takes Medicaid. Medicaid is only marginally preferable to no insurance at all, providing a consistently lousy quality of service. That’s how it keeps costs down. In fact, Krugman’s defense of Medicaid is made entirely in terms of costs. His only acknowledgement of the downside of consigning millions to the Medicaid gulag is this:

But the problems of access, such as they are, would largely go away if most of the health insurance system were run like Medicaid, since doctors wouldn’t have so many patients able and willing to pay more.

Yes. I’m sure those doctors will take massive pay cuts rather than leave the field. Let’s apply Krugman’s logic to academia, another industry afflicted with runaway costs. We could cut those costs by turning the entire shebang to the community college model. And the problem of finding good professors for those colleges would disappear if they no longer had universities like Princeton able and willing to pay more.

(My apologies to community colleges, who are far better at teaching than Medicaid is at insuring.)

Obamacare is a bad law. It ignores everything we’ve learned about healthcare reform over the last decade and applies a model that at least twenty years old. But the situation with Obamacare could get far, far worse and could do permanent damage to the healthcare system if the exchanges don’t start working. Everyone should hope that they do because this isn’t a political game: this is the healthcare of millions of people. We will never be able to truly reform the system if there’s nothing left to reform.

Is Krugman Stupid, A Troll Or A Stupid Troll?

Paul Krugman — fresh off his I’m smarter than you post (I have a few tasty comments in that thread that riled the libs something fierce), says this today in response to the Oregon study:

Fire Insurance Is Worthless!

After all, there’s no evidence that it prevents fires.

But strange to say (as Mark Thoma points out in correspondence), people seem to think it’s a good idea anyway.

I leave the relevance of this thought to the Medicaid discussion as an exercise for readers.

This is the most common defense being dragged out in response to the Oregon study: that maybe health insurance doesn’t actually improve health. But it saves people from being financially ruined by a health crisis! Isn’t that good?

Let’s put aside that the liberals have spent the last four decades insisting that a lack of insurance kills tens of thousands of Americans every year. Let’s put aside that they will drag that bogus stat back out from behind the barn if the next Oregon study shows health gains from Medicaid (and probably even if it doesn’t). No, let’s concentrate on this:

This is what conservatives and libertarians have been saying for a very very long time.

This what is David Goldhill said in his excellent essay four fucking years ago. This is what I have said many many many times. I have specifically asked people to imagine how much car insurance would cost if it paid for every gasup (and how efficient our cars would be). I have specifically pointed out how expensive fire insurance would be if it covered every burnt meal. A number of us have called specifically for catastrophic health insurance that is more modelled after fire insurance than our current “first dollar coverage” model, at least on the government side. For that, we have been mocked as heartless and clueless. We’ve been told that health insurance is fundamentally different from other forms of insurance (which it is, when you consider it a handout).

Now the liberals want to pretend that this is a novel argument? They want to pretend they have discovered that the real benefit of health insurance is risk mitigation, not magical health fairies? Seriously?

I suppose I should be happy. This is progress in liberal thinking, after all. But no, I’m not happy. Because they have turned to this explanation as an excuse for why the Oregon study hasn’t yet shown the huge benefits they thought Medicaid expansion would produce. The minute the wind turns, the minute the next study shows even minimal health gains, they will tack and suddenly start saying that insurance is the only thing that keeps people from dropping dead in the street.

Pelosi Watch: Healthcare Exchanges

So one of the keystones of the Obamacare plan is the health insurance exchanges. These are the inventions, borrowed from Romneycare, that will supposedly heal the diseased health insurance market, right? They are the cure to what ails us, right?

Well guess what? In one of the most predictable developments in history, it looks like they’re not going to be ready in time:

Where was the contingency plan?

That’s what Joe Klein asks upon learning that Obamacare’s health care exchanges, a sort of government-run insurance supermarket, are going to delay implementation of most of functionality that was supposed to be available for small businesses. Instead of a choice of offerings, in many areas, they’ll basically have one. This is worse, not better, than the current markets.

Sure, the administration was surprised when so many states declined to operate their own exchanges, forcing the federal government to step in. But the administration doesn’t seem to have prepared for that possibility, even though it was an obvious threat by last year. Instead, they held open the deadline for states to declare, making themselves even later.

Savor that for a moment. When Obama’s healthcare supermarkets open, many of them will have one product on the shelves. Hugo Chavez’s supermarkets had a greater selection.

In addition to the lack of exchanges and the poor state of the exchanges, the insurance coming out of them is likely to be more expensive than the insurance available right now. I would say that’s another unintended consequence but … it’s kind of an intended consequence. The purpose of the healthcare exchanges is not to bring down the cost of healthcare. It’s to bring it up. Ezra Klein:

When people say that Obamacare will, in certain parts of the country, for certain people, increase premiums, what they mean is that something akin to the switch from Texas Inc. to Vermont LLC. Obamacare will force insurers to upgrade their products to meet a minimum level of comprehensiveness, lay down some rules limiting price discrimination against the sick and the old and the female, and then help people pay for the final product. It’s a lot like what happens if you move to an employer that offers better health insurance and helps you pay for it.

Uh, no, it really isn’t. What your employer does is voluntary. And the money comes from him, not the government.

The intent of Obamacare is to ensure that almost all Americans are covered by high-quality insurance that they can afford. To say that the law will move many Americans onto more costly insurance products is simply to restate part of that premise more negatively, and to leave out the effect of the subsidies, or the change in the underlying insurance product, is to mislead.

What Klein is admitting is that Obamacare is, at its core, a subsidy so that people can get more expensive insurance. This was not how this pile of shit was sold to us. We were told that healthcare costs were spiraling out of control, threatening the very existence of the Republic. It was implied, at least, that this was to make sure that people had a least a minimum of insurance, not a “high quality” plan. Now we’re being told that the purpose is to effectively outlaw cheap insurance. Now we’re being told that this is the equivalent of subsidizing everyone to live in a four-bedroom, two-bath house.

(I shouldn’t give them ideas.)

And then, of course, the liberals will act all shocked and surprised when healthcare utilization and costs spike again. They have never understood that people will use more of something when it is cheaper. If you give people subsidized (or God help us, free) insurance, they will go the doctor for every sniffle.

Oh, and about that “price discrimination” we’re eliminating (or, as it is known in more rational circules: charging people insurance premiums that reflect the costs they will likely incur). Guess what?

On Monday, the D.C. exchange’s executive board voted to prevent insurers from charging higher premiums to smokers than to nonsmokers — meaning nonsmokers are likely to pay modestly higher rates than if smoking surcharges were permitted. The District joins three states — Massachusetts, Rhode Island and Vermont — that have banned tobacco surcharges on their own exchanges.

Mohammad N. Akhter, chair of the D.C. Health Benefit Exchange board and a former city health director, said the authority had no hard data on what cost impact banning tobacco surcharges might have on nonsmoker premiums. But he said the vote furthers the board’s policy of encouraging broad participation in the exchange.

Emphasis mine. They don’t know what this will do to insurance premiums. They don’t give a blue fuck what this will do to insurance premiums. All they care about is getting more people onto subsidized policies.

In a statement, Akhter referred to tobacco use as a “pre-existing medical condition” and added that charging smokers more would be “in direct conflict with our efforts to help people quit smoking.”

I want you to wrap your brain around that statement. They want to get people to quit smoking … by eliminating one of the penalties for smoking! And a “pre-existing condition”? I once smoked. Tobacco is very addictive. But it isn’t leukemia. It is not a pre-existing condition; it is a pre-existing behavior. It is chosen no matter how addictive nicotine may be.

Oh yeah, this experiment in socialism is going to go JUST GREAT!

Today the NHS, tomorrow Obamacare

The next time that some progressive tells you that you have no proof when you point out that there are very few ways government controlled healthcare can reduce costs, none of them good, point out this umpteenth example of healthcare rationing by a government controlled system to them.

Family doctors have been ordered to ration the number of patients they send for life-saving cancer scans to save money. They are being told to slash the number they refer to hospital for tests including ultrasounds, MRIs and CT scans commonly used to spot tumours. Last night experts warned the cost-saving measures increased the risk of patients being diagnosed too late and dying unnecessarily.

If you thought insurance companies where evil, wait unitl Uncle Sam owns it all and tells you you can’t get something you desperately need, something life saving. Not only can’t you complain to anyone about it, it’s not as if the government will police itself effectively, efficiently, or fairly, but you now have no where else to go either, because there will be no competition allowed. Can we say this decision came from a death pannel, or is that still politically incorrect?

Pills Is On Us

Hmmm. It is looking very likely that, under Obamacare, the government will mandate that birth control pills be covered at 100% by insurance companies.

This seems like a good idea on paper — it might prevent some unwanted pregnancies. But I’m kind of mixed on it. The more I think about it, the more I wonder if we’re going to see minimal benefit for significant imposition. Bear with me for a moment.

First, this is going to make health insurance more expensive. Yeah, I know — just passing a regulation does not make free birth control pills rain down from the sky. Liberals still have a huge lacuna on this concept. I discovered this in grad school, when students reacted with shock and outrage when they found out that covering BCP’s in the student insurance would raise rates by the cost of the pills. The cost increase will be minimal, but it’s not zero. Liberals always claim that birth control should save insurance companies money, but it’s not clear that is necessarily true. Children are, generally speaking, very profitable to insure. Preventative care can do a lot of things — saving money is not one of them.

Second, this marginally increases the discrimination in Obamacare. Congress already forbad insurance companies from charging women more for insurance just because they happen to use more healthcare. The cost of pills will therefore be split and shifted around so that everyone, from 60-year-old men to 53-year-old menopausal women, are still paying a little extra. In principal, that’s not so bad. Our government system already shifts money from the young to the old, from the rich to the poor and from the childless to the childed (is that a word? It should be).

Third, there’s a moral question. Because women getting BCP’s will not see their insurance rise, you are forcing everyone else to pay for their pills. There are a lot of people who have moral qualms about the pill. Is it right to force them to pay for it? We already do through birth control subsidies and Medicaid, of course. But this is a little different, requiring employers who may have an objection to pay for this anyway.

The gripping hand here is that this is very unlikely to produce the huge social benefit the liberals are hoping for. There are already subsidies for poor women to get pills and the poorer are on Medicaid. Moreover, I am unconvinced that the cost of pills is the limiting factor in unwanted pregnancies. Irresponsible behavior is far more insidious problem, one that money can not make go away (and frequently makes worse). The primary beneficiaries will be women who have the money to buy insurance or have jobs. These are, generally speaking, not women to whom a copay is the principle roadblock to birth control. This may buy votes from them, but it’s unclear that it will keep babies out of them.

For me, the critical argument is the first one I made — the increased cost of insurance. Birth control pills are small potatoes but we are setting a precedent for future mandates that will drive up the cost of insurance even further. Because once you’ve mandated 100% copay-free coverage for birth control, what’s to stop you from mandating mental health? Or cancer screenings? Or free physicals? Or free flu shots? Or any of a number of things that sound reasonable but add up to make insurance more expensive?

In the end, we will all be priced out into the Medicaid gulag.