Saturday, December 28, 2013

Off the grid

I’m going to have very limited access to the Internet for the next six weeks so I won’t be blogging and comments are shut down.

I thought I’d leave you with a video (Via Ace of Spades). Someone set a camera up in front of his fireplace and let it run for about three hours. Every so often he pokes the fire or puts a new long on it. The fire burns nicely and the snaps and crackles are almost enough to make it feel warm. There are a couple of “click here” banners at the beginning of the video but they disappear by a minute in.

We started this running Christmas Eve; lit our seasonal candles; turned on our little, lop-sided ceramic tree; and spent a couple of hours listening to Christmas music courtesy of the Mormon Tabernacle Choir:

Fireplace video

Have a very Happy New Year everyone. See you in February.

Friday, December 27, 2013

A meandering manifesto

One line of argument (loosely speaking) that I’ve seen popping up around the Internet consists of supporters of ObamaCare accusing those who are currently insured in the individual market and are complaining about ObamaCare making their situations worse, of being selfish. Or, as one commenter at that recent Megan Mcardle post put it, we’re “hard hearted” for ignoring the “thousands - maybe hundreds of thousands - who can’t get health insurance preACA, who can now”.

It took a few iterations of this for me to realize that I was starting to feel defensive and guilty for wanting to buy what I prefer with my own money. Once I did realize it, I got exasperated with myself and wrote in response to that commenter:

I absolutely support doing something to help people who are too poor to afford health care. (Pre-existing conditions are a little trickier. In some circumstances, yes, I support providing help. However, if an adult who could have afforded health insurance decided to gamble and not get it, I don't think other policy holders should have to pay for her treatment when she gets sick and *then* decides she needs health insurance.) If you had asked me 3 years ago if I'd throw an extra $1000 in the pot every year to help poor people get health care, I would have said yes. But the ACA asks me and many more like me to throw extra money in the pot and get worse (for me) health insurance and have fewer choices in health insurance and pay a fine/tax if I don't want to spend the extra money for worse health insurance. Not being a saint, I'm angry about that. Not being a supporter of government coercion, I'm opposed to that.

I'm especially opposed to it because there are much better (and much simpler) ways to have helped the uninsured and the people who passed this bill decided against all of them and went the ACA route instead. I'm especially angry about it because a lot of the people who think I should be happily willing to get a worse deal to help others have employer-sponsored health insurance and, oddly, don't seem eager to opt out of that insurance and buy on the individual market in order to help with the helping out.

In retrospect, I would have left off the first three sentences. They’re everything up through "I would have said yes." That's absolutely true for me but they give it gives too much legitimacy to the idea that other people, who don’t want to spend money to help the poor buy health insurance, are, in fact, selfish or hard-hearted. They aren’t. They’re just people who would rather spend their money on something else and there’s nothing wrong with that. It’s their money, after all.

Also, after writing that comment, I realized that there was nothing stopping me three years ago - or 30 years ago - from putting together a group of like-minded people, having each of us throw $1000 in the pot each year, and helping poor people buy health insurance. That realization, and the fact that I did nothing of the kind, brought home to me just how much I tend to see government action as the appropriate way to handle issues like this - notwithstanding my shift from leaning Left to leaning Right.

It took the very personal fall-out from ObamaCare for me to truly understand how and why getting the government involved should always be a rare move of last resort rather than a default position. And for helping me generalize my difficulties with ObamaCare to the larger picture, I’m indebted to two men.

First, Grim for this comment to a post over at the Hall:

If it makes you feel any better, this stomping of the social contract in the name of "Progress!!!" isn't unique. It's a persistent feature of the project. Ask the people whose land is underneath TVA reservoirs. It didn't matter what they wanted, or that their ancestors' graves were laid there. It didn't matter that they'd be reduced from free farmers on their own land to some other way of life they had reason to hate. Their land was in the way of water and power, and whatever it cost them they'd have to move.

For that matter, ask the Apache. How do you live with these people again? I'm not sure they've figured it out yet.

Second, Kevin D. Williamson. I re-read his book, The End Is Near and It’s Going to Be Awesome, and realized I’d pretty much totally missed the point of the book the first time around. I originally read it thinking he had some interesting policy prescriptions. The second time, primed by my close encounter with ObamaCare, I realized he had some interesting ideas about what people might do as individuals or in groups if we are able to - or forced to - stop thinking in terms of government-imposed, fully-specified, one-size-fits-all policies.

Many years ago - 40 or more - I heard a news story about some poor Third World country. The government had decided it needed men to mine something or plant something or build a road or whatever. The government sent troops to a small village out in the middle of nowhere and scooped up all the men and boys who were the right age to do the work. The soldiers left with their captives and no one left in the village knew where the men and boys had been taken or if they would ever come home again.

I was horrified and heart-broken. That government, I was sure, was made up of cruel men who cared nothing for their fellow citizens. It never occurred to me that those men undoubtedly believed that they were doing the best thing for the country as a whole; that the suffering of a few was a fair price to pay for the betterment of many; and that those who opposed them were short-sighted and, quite possibly, selfish and hard-hearted to complain about the plight of a few when so many would benefit.

The damage from ObamaCare is not on the same scale as the damage from that Third World government’s policies, of course, but the shape of it is the same, as it is for the people displaced by the TVA, as it is for all the people whose lives have been disrupted or damaged in the name of progress or the greatest good for the greatest number or simply because those in our government are convinced they know what’s best for every man, woman, and child in the country. The intentions may have been good but the reality is that the government doesn’t know what’s best; the greatest good for the greatest number is an illusion; and progress is something people do, not something government creates. And you know what they say about the road to Hell.

This shift in my outlook feels very odd to me because so much of my blogging has been about what policies I think the government should be imposing. It will take a while for me to rearrange my thinking now that I understand that the lesson of ObamaCare is that the answer to the question, “What’s the best government health care policy, government education policy, government agricultural policy, government energy policy, government whatever policy?” is almost always going to be, “As close to none as possible”.

And if I’m no longer arrogant enough to believe I know what everyone else should be doing, what the heck am I going to blog about? All the people who still are that arrogant?

Thursday, December 26, 2013

As a favour

{When one has been threatened with a great injustice, one accepts a smaller as a favour. - Jane Welsh Carlyle}

In an earlier post, I wrote about the lack of out-of-network coverage in many ObamaCare policies. Recently, I posted something about it as a comment to a Megan McArdle piece:

At least in my State (NJ) most ObamaCare plans have no out-of-network coverage other than covering an Emergency Room charge. None of the Bronze policies offer out-of-network coverage; only the AmeriHealth Silver, Gold, and Platinum have this coverage. No out-of-network coverage means no access to specialized medical facilities like MD Anderson, Memorial Sloan Kettering, Mayo Clinic. As far as I can tell (and I find this hard to believe so I need to double-check this), it also means that if a policy holder is traveling and has a heart attack or breaks something major and has to spend time in a hospital in another State, those expenses (beyond the ER charges) are not covered by insurance.

Someone pushed back in a reply and inspired me to do what I’d said I was going to do: double-check. I talked to a sales rep at my insurance company and here’s what the rep told me:

- If I’m traveling and I have a heart attack or break something major or whatever and have to spend time in a hospital and get medical care because I can’t make it back to New Jersey (in other words, in the case of a true emergency), my insurer will cover my out-of-network care just as if I was in-network. Same deductible, same co-insurance.

- If I need care I can’t get in-network, there is a process by which I can apply to get that care paid for. The sales rep couldn’t describe the process in detail but it apparently involves paperwork and attestations by my doctors that I can’t get the care from an in-network doctor.

Being able to buy out-of-network coverage is still preferable, of course. I can imagine some lively disagreements over what constitutes an actual emergency and at what point during one I’m well enough to travel. And I can imagine even livelier discussions over whether I really need to see the guy in Manhattan who’s done fifty reverse shoulder replacements with a 90% success rate or I can get by with the in-network guy in New Jersey who’s done two, neither of which turned out very well. If I have out-of-network coverage, I make those decisions myself - so long as I’m willing to stand the higher deductibles, co-pays, and out-of-pocket maximums. If I don't, the insurance company makes those decisions.

Still, the situation is better than what I thought it was. I imagine I'll be saying that about a lot of things in ObamaCare, as the now outrageous becomes the new normal.

Tuesday, December 24, 2013

Christmas light show

I enjoy and am amazed by Christmas light shows and this one from 2010 is wonderful:

Holdman Christmas Lights

Merry Christmas, everyone.

Sunday, December 22, 2013

Slow Cooker Bourbon Breast of Chicken

This is not a Christmas or New Year or holiday recipe in any traditional sense; the only holiday-ish thing about it is the bourbon. However, it is a wonderful recipe to put together before heading out to lunch and a day of shopping or gift returning - or any afternoon activity. I only found a couple of references to it on the Internet (a little different from my version) which really surprised me because we love it.

I was told this recipe originally appeared - in some version - in Crock Cookery by Mike Roy (Ward Ritchie Press, 1975) but I can’t swear to that.

I make the recipe as is for 2 chicken breasts to yield a lot of sauce. When I make this with 4 chicken breasts, I double all the sauce ingredients (from onion on down), but don’t use all the liquid from the tomatoes/mushrooms - it’s too watery.

Slow Cooker Bourbon Breast of Chicken


4 chicken breast halves, skinless
2 Tablespoons oil (I use olive oil)

1/4 cup flour
1/2 teaspoon paprika
1 teaspoon salt

2 tablespoons chopped onion
2 tablespoons chopped fresh parsley (or 2 teaspoons dried)
1/4 teaspoon dried chervil (or substitute 1/4 teaspoon of dried parsley)

One 4-oz. can mushrooms, undrained
One 10-oz. can tomatoes (I can’t find this size can so I use about 2/3 of a 15 ounce can; the whole 15 ounces is too much for this recipe)
1/8 teaspoon Lawry's Season Salt
1 teaspoon salt
1/4 teaspoon pepper
1/4 cup bourbon


Heat oil in skillet.

Mix flour, paprika, and 1 teaspoon salt in brown paper bag.

Add chicken breasts one at a time and shake to coat breast with flour mixture.

(You can also mix flour, paprika, and salt on a plate or in a wide bowl and dredge the chicken.)

Saute chicken breasts on both sides until lightly browned (about 5-6 minutes per side).

Remove chicken breasts to slow cooker.

Add onion, parsley, and chervil to skillet and cook for just a minute or two. Turn off heat under skillet.

Add tomatoes, mushrooms, Season Salt, 1 teaspoon salt, and pepper to skillet. Stir to scrape up brown bits.

Stir bourbon into skillet.

Pour skillet contents over chicken in slow cooker.

Cook at low for 6 to 7 hours.

Serve over noodles.

Thursday, December 19, 2013

Define "overpaid" - or "underpaid" for that matter

This is an about an old proposal to let consumers buy health insurance directly from insurers and let the insurers estimate the appropriate subsidies. Whether something like this is still on the table, I don’t know but I suspect some variant of it is probably in the mix somewhere, ready to be re-considered if January 1 arrives with millions of formerly insured still left uninsured.

Here’s how the Washington Post described this proposal when it was first floated:

On their own, insurers can help consumers through almost the entire enrollment process, but they need to rely on the federal online system for people to enter their incomes and find out whether the government will pay for part of their health plan. Since the enrollment period began Oct. 1, insurers have not had access to that feature — and, as a result, some have a lineup of potential customers unable to choose a plan and complete their purchase.

Part of the discussions lately between insurers and administration officials has been about what to do if that function is not fixed soon. One idea circulated within the insurance industry would be for HHS to approve a method to estimate subsidies and give preliminary tax credits based on those estimates — with the accurate amount determined later, once the system works better.

According to several people familiar with these conversations, insurance industry leaders have said that they would insist on a guarantee that they would be compensated for any underpayments — and that they have asked to keep any overpayments. Said one health-care consultant who is knowledgeable about insurance exchanges and who has been in touch with administration officials: “The concern is: Who bears the risk?”

Here’s how that plan from the Washington Post story was interpreted by Peter Suderman at Reason:

So the insurers have suggested a temporary measure: Let the insurers estimate the subsidies on their own. Any estimates that are too low would be reimbursable, and any estimates that are too high, the insurers would get to keep. In other words, the federal government, backed by taxpayers, would be on the hook for their bad estimates.

Can this possibly be legal? Can the administration seriously be considering this idea, which is potentially costly and politically disastrous? Imagine how Democrats will feel about turning over the central operations of the health law to insurers. Imagine how Republicans will react to a plan that could cost more, and will serve as an implicit admission that the exchanges simply won’t work without a major overhaul.

This doesn’t make sense to me, not because it seems like an insane idea but because both the Washington Post story and the Suderman take on it imply that somehow the insurance companies are going to end up being overpaid for the health insurance policies they provide. There’s no way that can happen.

Let’s say I want to buy a particular health insurance policy from Acme Insurance. Whether I buy that policy directly from Acme or buy it through the website, the premium Acme charges for the policy will cost the same; let’s say $500 per month. Now let’s say the website remains difficult and/or untrustworthy so the Obama Administration decides insurance companies can calculate the probable subsidy for someone buying a policy directly from them.

I promptly give up on trying to buy a policy through and buy one directly from Acme. I tell them my income information, they run it through their subsidy calculator, and they decide I should get a $250 per month premium subsidy. They bill me for $250 for my first month’s premium; I pay them. They bill the Federal government for the other $250 for that first month’s premium; the Feds pay them. Acme has now received $500 for my first month’s premium so I’m all paid up. The same thing happens for the second month of my health insurance contract, the third month, the fourth month. Then, finally, is working correctly. The insurers and the Feds begin the process of running people like me through the website to be sure everything has been calculated correctly.

First scenario: When the Feds check on my subsidy, they discover it has been calculated incorrectly. Rather than being subsidized to the tune of $250 each month, I should have been subsidized $300 each month. I’ve paid $200 more for my insurance than I should have and the Feds have paid $200 less for my insurance than they should have. However, Acme has not been either overpaid or underpaid; they’ve received exactly the $2000 they were due for my four months of insurance coverage. The needed adjustment is between me and the Federal government: the Feds owe me - not Acme - $200.

Second scenario: The incorrect calculation was in the other direction; rather then being subsidized to the tune of $250 each month, I should have been subsidized only $200 each month. I’ve paid $200 less for my insurance than I should have and the Feds have paid $200 more for my insurance than they should have. Once again, however, Acme has not been either overpaid or underpaid; they have still received exactly the $2000 they were due for my four months of insurance coverage. And, once again, the needed adjustment is between me and the Federal government: under this scenario I owe the Feds - not Acme - $200.

What about going forward once the error in the subsidy calculation is discovered, for the fifth, sixth, etc., months of my policy? What should happen under the first scenario is that Acme should start billing me for $200 each month and billing the Federal government for $300 each month; in other words, my monthly bill should go down by $50 each month. Under the second scenario, Acme should start billing me $300 and the Federal government $200 each month; in other words, my monthly bill should go up by $50 each month.

Neither the first or the second scenario results in Acme Insurance being overpaid or underpaid; Acme always gets the $500 monthly premium amount, no more, no less. There are no “underpayments” for it to be “compensated for” and there are no “overpayments” for it to “keep”. So what were the insurance companies asking for?

My guess is that they did not want to be in the middle of any adjustments that should be taking place between a policy holder and the Federal government. In my first scenario, where I’ve overpaid by $200, I imagine the insurers were unwilling to refund that $200 to me and then bill the Feds for it; they probably wanted the Feds to reimburse me directly. While this scenario doesn’t involve a lot of financial risk for the insurers, it does involve what is essentially a cash flow delay: they would have been paid “late” for $200 worth of premiums.

When a policy holder has gotten a larger subsidy than he should have, things can get really ugly. So in the second scenario, where I underpaid by $200, I can’t imagine the insurers would have been willing to give the Feds back the $200 over-subsidy and then try to get that money from me. This involves a huge financial risk for them as well as a huge public relations risk. If the Feds want that money back, the insurers would insist the government go after it directly.

I also wonder if the insurers wanted any over-subsidization to continue even after was straightened out and correct subsidies could be calculated. While the insurers would be delighted to tell the me from the first scenario that my monthly premium would drop by $50 a month, I’m sure they would resist strongly telling the me from the second scenario that my monthly premium was going to increase by $50 a month. So I imagine they asked that policy holders who were under-subsidized start receiving the correct (larger) subsidy while those who were over-subsidized continue to receive the incorrect (larger) subsidy.

I don’t think any of this is out of line for the insurance companies to ask for - there’s no reason they should bear the financial and public relations risk for the government’s incompetence - or insane for the government to consider - desperate times call for desperate measures. And, contrary to what the Washington Post article and the Suderman post seem to imply, there is no way an insurance company would end up overpaid for a particular policy. The premium amount is the premium amount, wherever the premium payment comes from.

There is, however, a danger in this that Megan McArdle notes as follows:

The potential abuses are obvious; the insurer with the most erroneous subsidy calculator gets all the business!

Well, yes. If Acme Insurance tells me I qualify for a $250 subsidy and Xenon Insurance tells me I qualify for a $400 subsidy, I’m buying from Xenon - and so is everybody else. Xenon isn’t going to make any more per policy than they would without this kind of plan but they will sell a lot more policies. Of course, there is a simple fix for this danger: whatever method HHS approves for quick and dirty subsidy calculations must be the same for all insurance companies in a State. Just one more little task for the State’s insurance commissioners.

As I said, this is an old proposal and appears to be dead in the water. I wanted to walk through it, however, because that’s how I clarify my thinking about topics and especially about the tangle that is ObamaCare. In particular, I believe it’s important to think carefully about the relationships among the Federal government, the insurers, and the policy holders. Despite the appearance that there are two bilateral relationships - Federal government with insurers and insurers with policy holders - the fact is that the relationship between the Federal government and policy holders is quite real and quite important. When the Federal government subsidizes a policy holder’s purchase of a health insurance policy, the government is not giving money to the insurer; the government is giving money to the policy holder.

Thursday, December 12, 2013

The other ObamaCare orphans

My posts about ObamaCare have focused on those who have health insurance now but will lose their current plans as a result of the implementation of the Affordable Care Act. They are (we are) people who have gone along, taking care of our insurance needs, and are now getting a raw deal.

However, there is also another group of people who are getting a raw deal from the structure and implementation of ObamaCare: the people who have not been able to afford or not been able to get health insurance, and who were promised they would be able to get it as of January 1, 2014. It’s easy to say that they won’t miss what they’ve never had but I can imagine the worry, frustration, and heartbreak of those who are ill or, worse, have sick children; thought they would finally be able to get health insurance; and are now discovering they can’t afford the premiums or can’t afford the deductibles or simply can’t get through the websites to discover what’s available to them. And even those among them who don’t have illness in their family but believed the time was coming when they didn’t have to lie awake at night terrified that one of their kids would fall ill, must be bitterly disappointed.

This was all so unnecessary. There are many, many ways to help those who can’t afford health care. Ways that don’t require a huge, complex government mechanism; that don’t require a competent Administration; that would spend money on getting people health insurance - and health care - rather than on websites and administrative overhead. Ways to help that would actually help those who need it rather than serving the goals and ambitions of politicians and bureaucrats and ideologues

For the government to have made so many people’s lives worse is unforgivable. But for the government to have made promises it must have known it couldn’t keep to the most vulnerable among us is shameful.

Clear as mud

According to Sarah Kliff at the Washington Post’s Wonkblog, “Obamacare’s deadlines are changing. Again.” :

With deadlines fast approaching and some shoppers still stuck, the Obama administration is proposing new ways to guarantee coverage to those hoping to gain insurance in January.

Health and Human Services announced Thursday some additional flexibility for those still hoping to buy coverage -- and many more steps that the agency urged, but did not require, health insurers to take.

Here’s the stuff that the Administration is doing unilaterally:

1) People will still have to enroll by December 23, 2013, to have coverage as of January 1, 2014, but they can delay paying their first month’s premium until December 31, 2013.

2) The high-risk pools established by ObamaCare, which were due to end as of December 31, 2013, will stay open until January 31, 2014.

Here’s the stuff that the Administration is urging (or “encouraging”) health insurers to do:

1) Allow people who sign up for coverage after the December 23 deadline to still start coverage on January 1. It’s not clear how late the Administration would like people to be able to sign up for coverage that begins January 1.

2) Allow people to pay for policies that start January 1 after the first of the month. It’s not clear how late the Administration would like people to be able to pay for coverage that begins January 1.

3) Keep paying to refill prescriptions that were covered under a previous policy.

4) “Charge patients’ visits for acute conditions to out-of-network doctors as if the physician were part of the health plan.”

Here’s my take on these actions and urgings:

1) The Obama Administration is now flailing around like a sign-language interpreter in the midst of a schizophrenic episode.

2) Somehow, someway the Obama Administration must be planning to compensate insurers (and/or medical providers) for the losses they could and almost certainly will suffer based on all this. Let’s say I enroll in an ObamaCare Platinum plan and write a check for my first premium on December 31. The check bounces but by the time it’s bounced, I’ve seen 10 doctors and filled 20 prescriptions. The insurance company isn’t going to pay. Do the doctors and pharmacies just eat the loss? Are they going to come after me? I’m the one who just wrote a hot check, remember?

Or let’s say the company writing my ObamaCare plan gives me until January 8 to pay my first premium. I can get some serious surgery done in a week and then just never write the check. Who’s going to pay for that?

Or let’s say the Administration wants people to be able to enroll in policies starting January 1 up until January 8. Maybe I wasn’t going to enroll at all or maybe I planned on getting a Bronze policy but on January 2 a doctor tells me I have a serious or chronic condition. It’s Platinum all the way for me. The insurance company is going to eat that one and never even know they’ve done so.

3) I don’t understand how paying to refill prescriptions that were covered under a previous policy is going to work. I’m assuming this is only for people who have insurance now but lose it on January 1 and haven’t signed up for other coverage. So how long is this grace period going to last and what happens if the person whose prescriptions are being covered never signs up for insurance at all or signs up with a company other than the one that’s been footing the bills for his or her prescriptions?

And what if I have obtained new coverage but my old insurance policy gave me a better deal on my prescriptions? If my new policy is with a different insurer, what’s to stop me from just not telling my pharmacy or my old insurance company that I have new coverage and continuing to get my prescriptions filled by my older, more generous insurer for as long as I can get away with that?

4) I really, really don’t understand how this is going to work:

Charge patients’ visits for acute conditions to out-of-network doctors as if the physician were part of the health plan.

Let’s say I go see Doctor Adams. He’s in network for my insurer, Acme Insurance. This means he’s agreed that he will charge only as much as Acme allows for the medical treatment he provides. For the sake of this example, we’ll say Acme allows $45 for an office visit and I have a $30 copay. That means Doctor Adams will charge me $30 for an office visit and bill Acme for the remaining $15. So far, so good.

Now let’s say I go see Doctor Baker. She is not in network for Acme Insurance. This means Doctor Baker is free to charge whatever she wants for an office visit. Assume she charges $120 for such a visit. Doctor Baker is not going to take just $30 from me; she’s going to want the whole $120. Is the Administration suggesting that I should be able to pay just $30 and Acme will pay Doctor Baker the remaining $90 she charges? If so, and I were Acme (or Doctor Adams for that matter), I would be just a wee bit upset.

Or is the Administration suggesting that Doctor Baker should take the $30 from me and the $15 from Acme and write off the remaining $75? If so, I have a king-size picture of that.

The damage done to real, live people by ObamaCare is painful and enraging to watch. At the same time, the cascading fiascos and the scrambling responses provide a textbook lesson in how health insurance functions. It also makes crystal clear that the people who wrote ObamaCare, implemented it, and are trying so desperately to keep it afloat, know very little about health insurance and understand even less.


The ACA Death Spiral blog:

... if 2 million obtain insurance through the Exchanges but more people (3.5 million is a prevailing estimate from sources ranging from Forbes to Jonathan Gruber) lose their current individual health insurance, that’s a net decrease in the number of insured.  And if we add in the loss of 100,000 or so people from the Pre-Existing Condition Insurance Plan that likewise is terminated or those who heretofore were in various state high risk pools, there is a serious risk that the Affordable Care Act will have decreased the number with private health insurance. [snip]

... it may well be that for every such success story apparently to be catalogued by paid grants from the government, there is another who had health insurance tailored to their needs (such as policies for the 50 and over set that did not cover maternity expenses) who now find themselves priced out of the health insurance market with its Essential Health Benefits requirement (section 1302 of the ACA).

Ace of Spades:

Just about 1.2 million people have gained health coverage through Obamacare, according to new federal data released Wednesday morning. Approximately 365,000 of those people have purchased private insurance and 803,000 have been determined to be eligible for the public Medicaid program.

1- At least 5 million people have lost coverage due to policies being cancelled thanks to ObamaCare. So that 365,000 number is insignificant compared to that. There will no doubt be more uninsured on January 1 than there were on October 1. Don't let them get away with pretending "1.2 million people who didn't have insurance have it now!".

Liberals will point to the new "enrollments" (and assume they will pay and become actual customers) while ignoring the previously uninsured who won't get coverage in time or be able to afford the new rates and deductibles.

The are simply redistributing health insurance from those who paid for it to those who didn't. This is a victory in their minds.

Sarah Kliff at the Washington Post’s Wonkblog:

These are Obamacare's biggest losers: People whose current plans have been canceled but who are having trouble getting through HealthCare.Gov to purchase coverage by Dec. 23 -- the deadline for buying insurance that begins Jan. 1.

The concern is particularly acute for patients with expensive medical conditions, who rely on their coverage for doctor visits and drug refills that would otherwise break the bank. [snip]

Those facing a potential coverage gap include an estimated 15 million people who purchase coverage for themselves on the individual market, many of whom received cancellation notices because their policies did not meet health-care law requirements.

Megan McArdle:

That means that in theory, almost 10 percent of the population of Vermont needs to sign up for insurance in the first three weeks of December, just to avoid losing coverage. Fortunately, Vermont is a small state, so that’s a small number -- fewer than 60,000 people. The bad news is that Vermont’s exchanges haven’t been working too well. The governor has belatedly unveiled contingency plans: Individuals can extend their 2013 coverage for three months, and small businesses can sign up directly with a carrier. So hopefully, most people won’t actually lose coverage. Nonetheless, for the state of Vermont, 2.5 percent of its population signed up represents a disastrous failure, not a roaring success. That figure means the state hasn’t even managed to sign up the people who already had insurance, much less cover anyone new. And if it can’t get things working better by March, when those temporary renewals expire, then Green Mountain Care will have resulted in a net loss of insurance coverage for the state.

ObamaCare orphans

Scott Gottlieb of the American Enterprise Institute is looking at people who lost their current insurance plans and either can’t afford ObamaCare plans or are getting worse coverage from ObamaCare plans or can’t get through the web portals to buy subsidized insurance. He suggests they be allowed to buy into the Federal Employees Health Benefits Program (FEHBP).

Brilliant idea. Just like it was when Bill Bradley came up with it fourteen years ago (although he made it way too complicated). Just like it was when I blogged about it more than four years ago. And again almost exactly four years ago when “Senate Democrats” started thinking about basing health insurance reform on the FEHBP.

Don’t get me wrong - I’m not claiming any particular intelligence in writing about this a few years ago. The instant Congressmen and Congresswomen started talking about exchanges, levels of coverage, and making sure health insurance plans are “adequate”, anyone with half a brain should have realized all that was already in place in the FEHBP. It’s kind of like re-using code when programming. If I knew I already had a program that, say, calculated profit/loss for one set of traders, how stupid would I have to be to write another program, from scratch, to do the same thing for a different set of traders? Hint: pretty darn stupid.

However, Mr. Gottlieb does seem to have missed some steps in his proposal. First, you can’t just dump ObamaCare orphans (a term I love) into the FEHBP; they have to go into a separate risk pool and that has a lot of ramifications. Mr. Gottlieb also doesn’t talk about whether his proposal includes any subsidies. It sounds like it doesn’t since he talks about using pre-tax dollars to buy FEHBP policies. The lack of subsidies can be a sticking point and why do the orphans who buy into FEHBP get to use pre-tax dollars while those who buy or bought the metallics don’t? I understand Mr. Gottlieb is trying to come up with something we can do quickly to help the orphans but not thinking things through is part of what got us into this mess in the first place.

If we must have a national health insurance plan then piggybacking it on the FEHBP is far more desirable than ObamaCare. I’d love to see it happen before January 1 - I feel somewhere between furious and heartsick thinking about people who will have health insurance on December 31 and not have it on January 1. But anyone who is proposing we move to that in the next 20 days needs to think carefully about how this will work. We’ve already wrecked the individual health insurance market; I’d hate to see us wreck the Federal employee health insurance market as well.

Wednesday, December 11, 2013

So that's how that works - or at least how it's written

Way back in the mists of ObamaCare time - like probably a year ago or so - I read or heard something that implied that a State not having its own exchange was a good thing for the businesses in the State but I never quite understood why that would be. Last week, I ran across a Wall Street Journal piece that explains the connection:

While the president's health law is vast and extraordinarily complex, it is in one respect very simple. Subsidies are only to be made available, and tax penalties for not signing up for health insurance are only to be assessed, in states that create their own health-care exchange. The IRS, however, is attempting to enforce tax penalties in all states—including Oklahoma and the majority of the other states that have declined to create their own exchanges. Citizens and businesses in these states must use the federal exchange instead.

The distinction is critical, because under the terms of the law it is the availability of government insurance-premium subsidies that triggers the penalties against businesses if they fail to provide their employees with health insurance that the administration deems acceptable.

In other words, if a State didn’t set up an exchange then the residents of that State can’t get government subsidies to help pay for health insurance. And if subsidies aren’t available in a State, the IRS cannot penalize businesses for not providing the kind of health insurance the government wants them to. (The IRS also cannot penalize individuals who choose to forgo health insurance altogether.)

At least that’s the way ObamaCare is written. The Administration wants to ignore the law, provide subsidies to those who buy on the Federal exchange, and thus be able to penalize businesses (and individual consumers) who fail to meet the ObamaCare requirements. Employers - including State and local government entities - are suing.

It will be interesting to see what the courts decide but in the meantime it seems foolhardy for residents of States without their own exchanges to count on premium subsidies when making decisions about what health insurance to buy.

Tuesday, December 10, 2013


A couple of weeks ago, I wrote a post I never put up - it kind of sputtered out - and as part of that I wrote a footnote. I really wanted to post the footnote and have tried to shoehorn it into a couple different posts. I finally figured I’d just put it up on its own, a “stub”, so to speak.

In his well-worth-reading discussion of the possibility of adverse selection leading to an insurance death spiral, Yuval Levin points out that:

To provide affordable insurance to people with preexisting conditions, [the exchange system] depends on attracting millions of young, healthy Americans, many of whom do not currently have health insurance because they do not think it is worth their while to buy it, and yet it makes insurance both more expensive and less valuable for precisely those same people.

As he says, “[t]he economics of this always struck many people as implausible”.

So if, in fact, “young, healthy Americans” are not willing to carry the load in the exchanges, another group of not desperately sick people must be found to do so. In the eyes of many who support ObamaCare and particularly in the eyes of many who were unhappy about President Obama supposedly allowing cancelled policies to be un-cancelled, that group of people is made up of those currently insured through the individual market. Those who really, really want to force the currently insured into ObamaCare plans seem to assume first, that the currently insured are unwilling to go without health insurance; and second, that the currently insured are relatively healthy. The former assumption seems somewhat reasonable since these are people who have been buying health insurance, although I have some reservations. The latter assumption is more problematic.

I wonder if the assumption that those currently insured through the individual market are healthier than the uninsured (or, more accurately I suppose, than the uninsured in the same age ranges) might owe something to two wide-spread beliefs about how the individual health insurance market functioned pre-ObamaCare:

1) the belief that if someone is really sick, he can’t get health insurance in the individual market; and

2) the belief that if someone who is insured in the individual market gets really sick, she will be dropped by her insurer under any flimsy pretext.

These two beliefs would naturally lead to the assumption that everyone who is currently insured in the individual market is relatively healthy. However, the individual insurance market doesn’t really work that way and hasn’t for quite a while.

With regard to the first belief, Megan McArdle explains that it is not universally true that those who are sick cannot get insurance:

Since the Health Insurance Portability and Accountability Act passed in 1996, people with pre-existing conditions can still be covered as long as they maintain health coverage. It’s only if your coverage lapses that you run into trouble.

Can some relatively unhealthy people end up without health insurance? Yes. If someone gets sick and cannot afford his health insurance premiums, his coverage will lapse and, if his illness is the sort that could well lead to further health care costs down the road, he may well find it very difficult to get health insurance when he can again afford it. This does not mean, though, that everyone who is or was seriously ill is without individual health insurance.

With regard to the second belief, Ross Douthat links to a Kaiser Health News article explaining that insurers dropping policy holders who get sick (rescission) is rare:

Rescissions are very rare. They apply only to the individual market (less than 10% of private health insurance) and even then they occur less than 4/10ths of 1% of the time. Even when it does happen, there is almost always an appeals process where the decision is reviewed by an internal committee and often submitted to outside reviewers. Further, when insurers are wrong – as they may sometimes be – it is the job of state regulators to correct this injustice.

So the currently insured may not be as healthy as those who want to force them into ObamaCare policies believe. And, in particular, those who have been buying health insurance in the individual market and are willing to continue doing so even as ObamaCare drives up premiums and reduces benefits would seem to be those who are more likely to have health problems themselves.

Sunday, December 8, 2013

How to save ObamaCare

In order to survive, ObamaCare needs an influx of relatively healthy people who are well enough off not to end up in Medicaid. Otherwise, the risk pools for ObamaCare policies are going to end up with mostly sick people whose health care costs exceed the premiums they pay. The insurance companies will lose money hand over fist; the government will have to bail them out and/or insurers will bow out for 2015; the insurers who remain in the individual market will increase premiums for next year.

So far, things don’t look too good. Although information is spotty, a lot of people who go through the exchanges seem to be ending up in Medicaid. Those buying insurance policies through the exchanges seem to be skewing older, will usually means more medical costs. Anecdotally, the success stories we’re hearing about are people who are seriously or chronically ill and are grateful to finally get health insurance so they can receive treatment. That’s a good thing from a human point of view but not great for the survival of ObamaCare. Also anecdotally, there are “a lot” of people who are electing early renewal on their existing insurance plans which means they are not part of the ObamaCare policy risk pools. And there seems to be an increased interest in going without health insurance. with information about self-pay and alternatives like accident insurance being passed around - although, of course, we don’t know how many people will take such a drastic step when push comes to shove.

So if the young and healthy don’t seem interested in buying ObamaCare policies and those who currently buy insurance in the individual market are doing everything possible to stay out of the ObamaCare plans, who can offset the older people and the sicker people who are eager to sign up? Simple: Those who believe ObamaCare is worth saving and who currently have health insurance through their employers.

Currently employed ObamaCare supporters can choose to forgo their employer-provided plans and enroll in the ObamaCare plans. Because they are healthy enough to work they are, pretty much definitionally, relatively healthy. True, very few of them will be eligible for subsidies. Also true, they will almost certainly find that the ObamaCare policies provide worse coverage or cost more (or both) than their employer-provided plans. But if they want to save ObamaCare, their flooding into the ObamaCare metallics will do it. And surely if currently employed ObamaCare supporters believe it is right and good that millions of people must give up the individual policies they like and take on plans with higher costs and worse coverage in order to help the sick and the needy, those same ObamaCare supporters must also believe it is right and good that they themselves should do the same.

Saturday, December 7, 2013

Grim question

In a comment to my earlier post about ObamaCare providing subsidies to help with out-of-pocket costs, Grim asked whether the out-of-pocket subsidies (available only to those who purchase a Silver-level plan) are “generous enough at -250% FPL that it's cheaper to buy a Silver plan than a Bronze or Catastrophic?” After thinking about it, it seemed to me that the way to figure out how much someone will save by buying a Silver plan with out-of-pocket subsidy instead of a Bronze-level plan without such a subsidy is to look at the difference between the actuarial value of the two kinds of policies and see how that compares to the price difference between the two policies.

To do this comparison, I used the Silver and Bronze plans offered by Health Republic Insurance of New Jersey, a health insurance co-op seeded through ObamaCare. Specifically, I compared their two Prime Plans. The monthly premiums are (I told them I was 35 - a harmless fantasy with one of “those” birthdays coming up):

Silver Prime Plan - $384.99
Bronze Prime Plan - $346.75

Therefore, the Silver plan costs $458.88 more than the Bronze plan for the entire year.

From the subsidy information page I cited in my earlier post, I get the following information about the actuarial values of the out-of-pocket subsidies as determined by how your income relates to the Federal Poverty Level (FPL):

If your income is 200-250% of the FPL, a Silver policy must cover 73% of your costs.
If your income is 150-200% of the FPL, a Silver policy must cover 87% of your costs.
If your income is 100-150% of the FPL, a Silver policy must cover 94% of your costs.

We also know that:

If your income is more than 250% of the FPL, you do not qualify for an out-of-pocket subsidy. In that case, a Silver policy must cover 70% of your costs.
Regardless of your income level, a Bronze policy must cover 60% of your costs.

So what we want to know is: How much do you have to spend on health care to recoup the difference between the cheaper Bronze policy and the more expensive Silver policy; that is, to recoup your extra $458.88 in annual premiums?

If your income is more than 250% of the FPL, we can frame this question as:

How much must you spend so that 10% of your spending is greater than $458.88?

The 10% is the greater cost coverage (actuarial value) of a Silver plan (70%-60%).

Answer: You must spend $4,588.80 in order to break even if you buy a Silver policy rather than a Bronze one.

Now we can do the same math for the various out-of-pocket subsidy levels, using their coverages (73%, 87%, 94%) to determine how much more they cover than a Bronze plan at 60%. This gives us cost coverage differentials of 13%, 27%, and 34% which yield the following calculations:

If your income is 200-250% of the FPL, you must spend $3,529.85 in order to break even.
If your income is 150-200% of the FPL, you must spend $1,699.44 in order to break even.
If your income is 100-150% of the FPL, you must spend $1,349.65 in order to break even.

So - and obviously this makes sense - the lower your income and the more you spend on health care, the better deal a Silver plan is for you. But does the out-of-pocket subsidy always make it cheaper for someone whose income is less than 250% of the FPL to go Silver rather than Bronze? No, it doesn’t - assuming, of course, that I’m thinking about this correctly.

Walking through this exercise has made me curious about how the out-of-pocket subsidy is being presented to consumers. The Kaiser subsidy calculator tries to explain it in summary form. For example, if I tell the calculator I’m 35 and live in New Jersey and make $20,000 per year, it tells me about my subsidy and some of my options, and then says:

Out of Pocket Costs

Your out-of-pocket maximum for a Silver plan (not including the premium) can be no more than $2,250. [snip]

You are guaranteed access to a Silver plan with an actuarial value of 87%. This means that for all enrollees in a typical population, the plan will pay for 87% of expenses in total for covered benefits, with enrollees responsible for the rest. If you choose to enroll in a Bronze plan, the actuarial value will be 60%, meaning your out-of-pocket costs when you use services will likely be higher.

As I change the income amount I give it, the out-of-pocket maximum and actuarial value for a Silver plan change accordingly.*

The Kaiser article I cited earlier says that the application of the subsidy can be structured differently from one insurance company to another because insurers “have some flexibility in how they structure their plans to meet cost-sharing reductions.” The article gives an example of way this may work in California, where policies are required “to standardize deductibles, copayments and coinsurance amounts”:

In California, for example, a standard silver plan will have a $2,000 deductible, a $6,400 maximum out-of-pocket limit and a $45 copayment for a primary care office visit. Someone whose income is between 150 and 200 of the poverty level, on the other hand, will have a silver plan with a $500 deductible, a $2,250 maximum out-of-pocket limit and $15 copays for primary care doctor visits.

I suppose it’s possible that all States with their own exchanges have required insurance companies “to standardize deductibles, copayments and coinsurance amounts.” If they haven’t, I’m sure the programmers writing their exchanges wish they had.



* Interestingly, it does this for New Jersey even though New Jersey does not have a State exchange and, therefore, out-of-pocket subsidies should not be available. I don’t know if this means that the Kaiser calculator simply isn’t worrying about stuff like that or that the Obama Administration has decided to ignore that part of the law also.

Tuesday, December 3, 2013

Redistributing misery

I’m On November 24, the Fox News Sunday roundtable discussed Obamacare; you can see the entire segment here. At about 3:25, Chris Wallace asked a question, posing it first to Nina Easton from Forbes and then to Juan Williams:

Wallace: Nina, let’s assume - because at some point the website will start working - but we still have millions of people with cancelled policies. As it turns out this week, we’re finding out that doctors are not being included in a lot of these plans so the promise that “if you like your doctor you can keep your doctor” is not true. From your reporting, as the next few months go on, will the experience of ObamaCare be better or worse for people?

Easton: I think George [Will] put his finger on it with that word “kerosense” because this was supposed to be a safety net program, this was supposed to make people feel more secure. What it’s doing is making people feel less secure. So, beyond the website problems, you’ve got now stories of cancellations, the Stage 4 cancer victim who suddenly doesn’t have coverage to go to her own doctors. You’ve got the child, this chronically sick child, who can’t go to the Seattle Children’s Hospital because the cost of that hospital is so high and they’re not included. You’ve got these stories after stories coming out now. And then you’ve got AIE coming out this week saying, well...

Wallace: American Enterprise Institute, conservative think tank.

Easton: American Enterprise Institute, conservative think tank. But it says, is predicting millions, tens of millions more cancellations by small businesses coming around next Fall deciding that - they got in under the line, it’s complicated, but they got in under the wire this time with their policies, but now they’re going to have to have Obama standard policies, and there’s going to be cancellations coming out there. So there’s this sense, this deep sense, of insecurity that I think has infused the body politic and it’s going to affect the 2014 elections.

Wallace: Juan.

Williams: Well, you know, I got to go talk with the President and senior officials at the White House this week and this topic came up and, I mean, and their position is, look, ObamaCare inherits all the problems of health care generally but no one was promising that everyone was going to the executive suite at the Mayo Clinic. The idea is that you had people who were uninsured, people who were underinsured, and what the Affordable Care Act does is to set minimum standards for networks to make sure that people have someplace to go and there were so many people who had no place to go and that’s what they’re addressing in trying to put in place this program. And yet, I mean the attacks, I think this is just, again, more attacks coming from Republicans who don’t like the plan. And guess what? I’ve gotten that message, I think the President and the White House has gotten it, they don’t like it. It’s what the White House now calls the original sin. They cannot work or expect Republicans to work with them to fix the plan.

My first reaction to Williams’ ludicrous response was that Williams (and presumably “the President and senior officials”) are totally clueless. The cancellations are not about an “executive” - presumably a middle-aged man who has spent his entire adult life smoking, drinking, eating too much, and chasing his secretary around the desk - now experiencing health problems and expecting the government to pay for his platinum-plated health care. The cancellations are about - as Easton says - seriously ill people, including children, who currently have good health care and are losing that care. To claim that someone with advanced cancer who wants to keep seeing the doctors that are keeping her alive is asking for the moon is just ridiculous. And to claim that parents who want their chronically ill children to keep getting the top-flight treatments that are helping those children are greedy pigs gorging at the public trough is disgusting.

Now, though, I think the response of Williams, et. al., reflects not cluelessness but a new overarching narrative: In order for the uninsured to get any insurance, those currently buying their own insurance in the individual market will have to get worse insurance - and any of the currently insured who object to this are selfish. In other words, it is right and just that those who have something should have less so those who have nothing can have more. This is naked redistribution in its starkest terms. And what ObamaCare redistributes is not just money - it’s lousy health insurance, uncertain health insurance, and the attendant fear and suffering. ObamaCare redistributes misery, taking it from those who haven’t had health insurance and giving it to those who have.

Is it good that people who have not been able to get health insurance can now get it? Yes, it is. Am I willing to pay little extra to help them get that health insurance? Yes, I am. Am I willing to make my own health insurance and, therefore, probably my own health care worse to help them? No, I am not. Am I willing to live with the uncertainty unleashed by ObamaCare and the realization that I have no recourse against the government’s ham-fisted “improvements” to my health insurance in order to help people without health insurance? No, I am not.

I’m willing to help people who cannot afford to buy food by having the government give them money, including some of my money. I am not willing to help them by having the government tell me what kinds of food I’m forbidden to buy, what kinds of food I’m required to buy, and what price I must pay for my food. I’m willing to help people who cannot afford to buy shelter by having the government give them money, including some of my money. I am not willing to help them by having the government tell me what rooms I’m forbidden to have in my home, what rooms I’m required to have in my home, and what price I must pay for my home. I’m willing to help people who cannot afford health insurance by having the government give them money, including some of my money. I am not willing to help them by having government tell me what health insurance I’m forbidden to buy, what insurance I’m required to buy, and how price I must pay.

Period. (Although, as someone pointed out to me recently, “period” just doesn’t mean what it once did.)



Mickey Kaus has some interesting posts on another anger-inducing aspect of ObamaCare: there is a very targeted, very visible monetary redistribution that has fallen not on all or most of the taxpayers in the country but only on those who are “over 400% of poverty unlucky enough to be in the famous 3% who are trapped in the individual insurance market”. (I actually think even many people who fall below 400% of poverty and therefore get subsidies may find themselves worse off financially once the high deductibles, limited networks, and scarcity of out-of-network plans manifest themselves - but that’s not yet a highly visible problem.) His points about how narrowly targeted this monetary redistribution is are also true for the misery redistribution I write about above.

You can read through Kaus’ recent posts - the ObamaCare ones are obvious from their titles - but here are snippets from a couple of them:

3 Problems with Today’s Obamacare Excuse:

It’s BS for Gruber to suggest that the current “small number” of losers is inevitable in any attempt to “fix” the insurance market. Obama could have constructed a reform along Medicare lines, with a large number of Americans who lost a little by virtue of paying higher taxes. [snip]

Instead Obama (and Gruber) created his “small” number of big losers–a seemingly arbitrary group (since they are only those affluent people who happen to be in the individual market). And, again,  it’s anger at that arbitrariness and unfairness Obamacare objectors are mainly expressing, not a general aversion to helping the poor.

Eddie Murphy in Reverse:

It would be one thing, after all, to tax everyone who made more than 400% of poverty and use the money to finance health care for the poor. It’s another to say that in any particular situation where the government has to charge for a service it can almost reflexively charge those who make over “400%FPL” more than other citizens. The first is standard broad-based redistribution (whatever you think of it). The second is a sort of branding, in which better-off people–and 400% of poverty, $62,040 for a couple,  is not that better off–are presumed fair targets for adverse discrimination on any given occasion. [snip]

If you want to produce a political rebellion, this seems like a good recipe: social inequality that disses the top 50% of society, including the heart of the middle class. There’s a reason Bill Clinton didn’t think of this.

And finally, What’s the Obamacare line today?. No snippet, just a fun read.

Monday, December 2, 2013


[When I tell any truth, it is not for the sake of convincing those who do not know it, but for the sake of defending those that do. - William Blake]

Apparently some of the media reported that Horizon Blue Cross Blue Shield of New Jersey had decided not to renew their Basic and Essential plans. As Horizon’s original statement on this made clear, this was not Horizon’s decision but was made for it by the recently promulgated Federal regulations.

Horizon has released another statement (missing link added) entitled, “Horizon Blue Cross Blue Shield of New Jersey Statement Correcting Media Accounts About the Renewal of Canceled Health Plans,” to make this not just clear but extra super-duper crystalline (emphasis mine):

In response to media stories that incorrectly state that Horizon Blue Cross Blue Shield of New Jersey decided not to renew individual health plans that the New Jersey Department of Banking and Insurance said could be renewed, the company's Director of Public Affairs, Thomas Rubino, issued the following statement:

"Horizon Blue Cross Blue Shield of New Jersey would like to be able to renew its Basic and Essential and Basic and Essential Plus plans (B & E plans) currently held by more than 90,000 members. Horizon BCBSNJ had every intention to renew the plans, based upon President Obama's declaration that health insurers would be able to renew recently cancelled plans.

The federal government, however, has decided not to allow New Jersey’s B & E plans to be renewed in their current form. The B & E plans would have to be drastically altered, which would significantly increase premiums.

In order for Horizon BCBSNJ to renew the current B & E plans, the federal government needed to extend its waiver to the New Jersey Department of Banking and Insurance to allow the current B & E plans to be renewed for another year because these plans do not conform to Affordable Care Act mandates. The federal government has refused to extend this waiver, which expires on December 31, 2013. Without the waiver, the current B & E plans no longer exist and cannot be renewed. This was not Horizon BCBSNJ’s decision.

The New Jersey Department of Banking and Insurance made this clear in its statement Wednesday, when it said: "Further guidance provided as recently as this week by the federal government makes clear that even if an individual wants to keep their existing coverage in New Jersey, certain provisions will still be altered in order to make each plan consistent with federal mandates."

Horizon BCBSNJ understands our members’ frustration that they will not be able to keep their current B & E plans. If given the option to do so, Horizon BCBSNJ would renew the current B & E plans for our members.

Members who currently have Horizon BCBSNJ B & E plans will be able to keep their current plans until the renewal date of their policy in 2014. At that time, they will have to choose a new ACA compliant health plan.

You know things are getting interesting when your insurance company is trying to defend you from your government. I figured the least I could do was return the favor.

Capable of perjury

[Those who are capable of tyranny are capable of perjury to sustain it. - Lysander Spooner (of whom I had never heard but who turns out to be a remarkably interesting man)]

Here’s what President Obama said on November 14, 2013, when he announced that his Administration would not prosecute health insurance companies who continued to sell plans already in effect, even if they did not meet the ObamaCare requirements or the grandfathering requirements:

Already people who have plans that pre-date the Affordable Care Act can keep those plans if they haven’t changed. That was already in the law. That’s what’s called a grandfather clause that was included in the law. Today we’re going to extend that principle both to people whose plans have changed since the law too [sic] effect and to people who bought plans since the law took effect.

So state insurance commissioners still have the power to decide what plans can and can’t be sold in their states, but the bottom line is insurers can extend current plans that would otherwise be cancelled into 2014. And Americans whose plans have been cancelled can choose to re-enroll in the same kind of plan. [snip]

And — and so what we want to do is to be able to say to these folks, you know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan. Now, what folks may find is the insurance companies may still come back and say, we want to charge you 20 percent more than we did last year, or we’re not going to cover prescription drugs now. But that will — that’s in the nature of the market that existed earlier.

On that same date, a letter from the Centers for Medicare and Medicaid Services clarified that the President’s announcement did not cover all of 2014:

... health insurance coverage in the individual or small group market that is renewed for a policy year starting between January 1, 2014, and October 1, 2014, and associated group health plans of small businesses, will not be considered to be out of compliance with the market reforms specified below under the conditions specified below.

At that point, the “conditions specified below” were that the policy be in effect as of October 1, 2013, and that the insurance company send a notice explaining how the policy being renewed did not conform to ObamaCare standards and that the policy holder has other options for coverage.

The letter also lists the parts of ObamaCare with which the insurance companies are permitted to not comply. It is now clear that either there are some significant portions of ObamaCare that were not included in that list, or that the Administration has changed the rules again. Either way, the President’s November 14 statement has been revealed to be untrue.

The New Jersey Department of Banking and Insurance has given health insurance companies the option of continuing cancelled health care plans, thus taking the President up on his offer. However, the November 26 press release announcing this decision cautions (emphasis mine):

“Despite the President’s recent announcement of a fix claiming that individuals will be able to keep their existing coverage, the fact is that many plans cannot be renewed in their current form and face selective enforcement by the federal government,” Commissioner Kobylowski said. “However, while restrictive federal parameters exist, we will cooperate with health insurers that choose to renew these plans.”

Further guidance provided as recently as this week by the federal government makes clear that even if an individual wants to keep their existing coverage in New Jersey, certain provisions will still be altered in order to make each plan consistent with federal mandates. Some of these potential changes include:

- In the individual market, plans that were supposed to be fixed by the President’s recent announcement will still have to eliminate the annual limits; 
- In the small employer market, services that are now covered under an annual cap will have to be revised to remove the cap; and 
- Continuing plans will still be subject to federal Obamacare fees and taxes for 2014.

Because of these changes, despite what the President and the Obama administration has recently claimed, it is anticipated that health insurance costs will increase for New Jersey consumers. 

The most popular plan in the New Jersey individual market is the Basic and Essential Plan, which covers more than 109,000 consumers and currently includes annual limits as a means to keep the premium affordable. Obamacare’s elimination of the annual limits will devastate this plan, and rates may require adjusting to cover the cost of additional requirements.

In response to the Department’s press release, Horizon Blue Cross Blue Shield of New Jersey issued a statement on November 27 (emphasis again mine):

Horizon Blue Cross Blue Shield of New Jersey is evaluating the Department of Banking and Insurance’s decision to allow health insurers the option to continue cancelled health care plans. Given the federal requirements to modify current products, we are assessing the impact to our members. Our initial sense is that this decision may still provide some relief for our small employer customers.

The statement from New Jersey’s Department of Banking and Insurance makes it clear that most New Jersey residents in the individual market will not be able to renew their plans in their current form after December 31, 2013. In particular, the requirement that Basic and Essential and Basic and Essential Plus plans have to be modified to meet Affordable Care Act requirements, essentially means Horizon Blue Cross Blue Shield of New Jersey would have to create new plans that would cost substantially more. We do not consider that a viable option for our individual members.

Horizon Blue Cross Blue Shield of New Jersey is evaluating the operational and financial impact of offering the option of renewing current products to our small employer customers and individual customers, who have products other than Basic and Essential and Basic and Essential Plus. It is important to note that more than 70 percent of consumers in the individual market have the Basic and Essential or Basic and Essential Plus plans.

What was it Obama said again?

And — and so what we want to do is to be able to say to these folks, you know what, the Affordable Care Act is not going to be the reason why insurers have to cancel your plan.

You can say it all you want. Doesn't make it true.

Monday, November 25, 2013

When Dinosaurs Ruled the Earth

I’ve been feeling very fatalistic lately about the course ObamaCare will take and, more generally, about whether the juggernaut of Incredibly Huge Utterly Unresponsive Federal Government Bureaucracy is stoppable - or even slow-down-able. Kevin D. Williamson does nothing to change that:

Barack Obama’s administration is unmoored from the institutions that have long kept the imperial tendencies of the American presidency in check. That is partly the fault of Congress, which has punted too many of its legislative responsibilities to the president’s army of faceless regulators, but it is in no small part the result of an intentional strategy on the part of the administration. He has spent the past five years methodically testing the limits of what he can get away with, like one of those crafty velociraptors testing the electric fence in Jurassic Park.

As Williamson points out, "the American public accepts" this. That's not a hopeful sign, either.

Saturday, November 23, 2013

Access denied

Robert Laszewski’s newest post is, like all that have come before, worth reading in its entirety. Entitled “If You Like Your Doctor You Will Be Able to Keep Your Doctor, Period”, this piece explains why ObamaCare makes narrow networks an increasingly important way for insurers to control their premium pricing; hypothesizes that those low-cost, narrow network plans will strongly influence the subsidy amount; and points out that attempts to use legislation to force insurers to widen their networks will result in another round of rate shock.

One point Laszewski does not make clearly enough is that not only do the new insurance plans have restricted networks; many (my limited research indicates most) of them also do not have any out-of-network coverage other than emergency care. None. Zip, zilch, nada. Niente. So when Laszewski says (emphasis mine):

... some health plans are only offering narrow networks on the new health insurance exchanges. Health plans, figuring that a great many of the new exchange customers will be coming from the ranks of the uninsured have decided to craft plans that largely include providers located where many of these uninsured people live and where they are most likely to get their health care anyway––perhaps not as big a deal for these folks who, because they are uninsured, don't have a regular provider relationship. But it also means these people will not have access to some of the most respected centers of excellence if they have a serous illness. [snip]

People who might be accustomed to broader networks found in employer health plans will have to either buy-up to better plans or may find their choices limited on the exchange.

it isn’t just that people will have to buy a more expensive plan to get a broader network; it’s also that people will have to buy a more expensive plan to get any coverage for out-of-network treatment at major cancer centers, well-regarded children’s hospitals, specialty diagnostic facilities - all kinds of “respected centers of excellence”.

Do people without out-of-network coverage still have “access” to these facilities? Of course, if by access one means they can show up and ask to be treated. But if by “access” one means actually receiving treatment at these facilities without insurance coverage - well, if people could get expensive medical treatment without being able to pay for it, no one would need health insurance in the first place.

Thursday, November 21, 2013

Wait. What?

So I was looking for information about what income levels mean one is thrown into Medicaid and I found a website called “ObamaCare Facts”. I cannot figure out exactly who runs this site: the government, the insurance companies, concerned citizens? It appears to present an uniformly positive view of the Affordable Care Act. Anyhow.

On the page about subsidies, I found this:

A subsidy (cost assistance) lowers the amount you spend on your monthly premium (via advanced premium tax credits) or reduces your out-of-pocket costs for things like copays, coinsurance, deductibles and out-of-pocket maximum (cost sharing reduction).

Subsidies for out-of-pocket costs? Did I know that? A little later, the page says:

Those making less than 250% FPL can get subsidies to lower out-of-pocket costs.

And a little later:

In order to receive out-of-pocket assistance (AKA cost sharing reduction subsidies), you must buy a Silver plan from the state exchange and an individual or family must have incomes no more than 250 percent of the Federal Poverty Line.

Note that in order to receive “out-of-pocket assistance”, one must buy a Silver policy and one must buy if from a State exchange. Of course, this page also says that premium support subsidies are only available if one buys from a State exchange and the Administration is doing its best to make that restriction no longer operative.

I haven’t heard about this type of subsidy but I did find a Kaiser Health News write-up on it and apparently it’s for real for State exchanges.

You learn something new every day.

Belief, hidden information, lying, and do-overs

The Wall Street Journal piece in which Nicole Hopkins talks about her mother being forced into Medicaid by ObamaCare provides some insight into a number of issues.

Briefly Ms. Hopkin’s mother had been purchasing health insurance on the individual market in Washington State. Her current policy cost her $276 per month; making those premium payments every month was a stretch for her but she believed it was important to do so. She believes it is her responsibility to take care of herself; she also believes that taking government handouts is shameful.

Ms. Hopkin’s mother received one of the infamous cancellation letters from her insurer. It informed her of the usual: her current policy didn’t meet the ObamaCare standards and could not be renewed. In its place, her insurance company offered an ObamaCare-compliant policy with a premium of $415.20. There was no way Ms. Hopkin’s mother could afford the new premium so she used Washington’s State-run exchange to see what other coverage she could find. After entering all the required information, she was informed that Medicaid was her only option. Her daughter re-did her mother’s work on the exchange and achieved the same result. Hoping that hitting “Apply for Coverage” would reveal more options, they did so and found Ms. Hopkin’s mother was now enrolled in Medicaid.

This story illustrates some general points about the understanding and implementation of ObamaCare among those who are living with it:

1) Ms. Hopkin’s mother (and Ms. Hopkins herself) appear to believe that the Washington State exchange is the only way Ms.Hopkin’s mother can buy health insurance. This is not true. Ms. Hopkin’s mother can buy insurance directly from any of the insurance companies selling to individuals in the State. (Well, actually, in her county - how weird is this whole “available policies and/or rates vary by county” thing?)

If they do believe this, I can’t blame them. I spent a few very anxious weeks believing the same thing: I could only buy individual health insurance through the exchanges and the exchanges weren’t working and oh, no, what was I going to do? I don’t remember what finally clued me in that I could still buy directly from whatever insurance companies were selling individual policies but it was a great relief to me when I finally stopped panicking and realized I would be able to buy health insurance even if the exchanges never, ever worked.

Further, based on what I’m seeing written about the ObamaCare cancellations across the blogosphere, Ms. Hopkins, her mother, and I are not the only people confused about this. There are a lot of articles, posts, and comments of the form, “Their insurance was cancelled because of ObamaCare and the exchanges aren’t working and so there is no way for these poor people to buy insurance before their policy goes away and they are going to find themselves uninsured as of January 1.” Sometimes the context makes it clear this is shorthand for “there is no way for these poor people to buy insurance they can afford before their policy goes away.” In its expanded form, this statement may very well be true: if the policy in question was cheaper than the ObamaCare policies and the people who were cancelled cannot handle the premium increase on their own, then the only way to have any hope of getting a subsidy to make their insurance affordable is through the exchanges.

Often, however, the writer seems to believe that individual health insurance can truly only be purchased through the exchanges. That’s incorrect and given the extent to which people apparently believe this, I think the series of ads put together by Wellmark Blue Cross Blue Shield is an excellent idea. The fact that the ads are funny is an added bonus not just because we can all use a good laugh about now but also because it means the ads will likely be seen by people outside their target areas of Iowa and South Dakota, thus spreading the information that the exchanges can be bypassed if buyers can live without, or are not interested in, the subsidies.

2) The replacement policy offered to Ms. Hopkin’s mother is not the cheapest policy available to her. The Premara Blue Cross site tells me that a 51-year-old woman* living in Pierce Country (zip 98303) can buy health plans with premiums ranging from $343.39 to $541.50 per month. Even the cheapest of these plans is more than Ms. Hopkin’s mother’s current premium of $276 but it is less than the $415.20 premium quoted in her cancellation letter.

There may be other insurance carriers from whom Ms. Hopkin’s mother could buy insurance. The Washington State Office of the Insurance Commissioner lists all the plans potentially available to people in Pierce County. Unfortunately, some of the links seem to go to 2013 rate sheets so it’s not clear whether there is a better deal available.

Presumably the information that lower premiums were available is exactly what Ms. Hopkin’s mother hoped to find when she entered the Washington State exchange website. Because her income was so low, however, she was never shown these options and was instead shunted into Medicaid. This leads to the third point illustrated by this story:

3) If you want to see all your options, you may have to lie about your income when you’re shopping around in the exchanges - by reporting it as higher than it is. I’m not advocating lying about your income when it comes time to finally actually enroll through the exchanges (if you decide to go that route). However, if you want to see all available information and forestall the government deciding what you “should” see, you need to fool the system long enough to gather data.

As I understand it, the problem of incomplete information arises because if an applicant’s income is between 138% and 400% of the poverty level, he is eligible for a subsidy which can be applied to whatever policy he chooses. However, if the applicant’s income falls below 138% of the poverty line, he is not eligible for a subsidy and must either pay the entire cost of his insurance himself (and cannot buy it through the exchanges) or he must go into Medicaid.** I assume the system was designed this way to reduce the number of people getting subsidies (presumably Medicaid is cheaper than subsidies) but I really don’t like it. If someone who the government thinks is “too poor” to buy his own insurance wants to do so anyhow, I’d rather we help him than make him worse off than someone who makes just a few dollars more than he does.

A couple of the commenters over at the WSJ article are suggesting Ms. Hopkin’s mother lie to the exchange, reporting her income as high enough not to qualify for a subsidy, and that she do this as part of actually buying whatever policy she wants. There’s no need for this. She can report her income as high enough to see all her options on the exchange; pick the policy she wants; and buy it directly from the insurance company. So long as she does not want to try to get a subsidy, there is no need to buy her insurance through the exchange so there is no need to lie in a formal application.***

4) It sounds like the exchanges - Washington State’s, probably the Federal one and those of other States - need a better “are you sure you really want to do this” step and a relatively easy way to say “oops” if someone signs up without intending to or changes her mind or realizes she’s entered data incorrectly or her situation changes or whatever. This is particularly true if signing up erroneously affects someone’s ability to get insurance down the road, as I have seen claimed (although I can no longer find the source of that claim).

So was Ms. Hopkin’s mother “forced” into Medicaid. Sort of. There were other options available: she didn’t have to buy through the exchange; there was at least one plan that was cheaper than what her insurance company quoted her. However, by jacking up the price of health insurance to a level Ms. Hopkin’s mother could not afford; refusing to subsidize her purchase of this more-expensive insurance; and not making clear to her what other options she had, ObamaCare may have removed any other option. In that sense, yes, she was forced into Medicaid.

I find Ms. Hopkin’s mother’s story hits close to home. I admire her determination to take care of herself and find it terribly sad that her ability to do so has fallen victim to ObamaCare.



* Why are insurance sites (and this isn’t the only one) still asking about gender? I thought ObamaCare required that men and women be treated exactly the same.

** If your State did not expand Medicaid then if you make between 100% and 138% of the poverty level, you cannot go into Medicaid and your cannot get a subsidy. The technical term for this situation is "up the proverbial creek without the proverbial paddle".

*** If Ms. Hopkin’s mother lies on her actual application, reporting her income as higher than it is so she can get a subsidy rather than going into Medicaid, that’s fraud: she has received more than the law says she’s supposed to get. I have to admit that I planned to do exactly that at a point when I believed I would only be able to buy insurance through the exchanges; would not be able to afford to pay for an ObamaCare-compliant policy myself; and would have income low enough so that ObamaCare would throw me into Medicaid. (I have assets rather than income.) I figured I could get away with it because Obama had waived income verification for 2014.

According to this, I was wrong: it’s not true income verification has been waived. However, the guidelines for checking “suspect applications” apparently are all about looking for people who are reporting too little income, not people who are reporting too much. This seems to be yet another case where the people running ObamaCare don’t understand where the trap doors are.

Going back to whether lying on a formal application is fraud, if someone lies on a formal application through the exchanges, giving his income as higher than it is and high enough to not qualify for a subsidy, is that a crime? Fraud? Something? I suspect the government - Federal certainly, some States - would consider it so but the effect of the lie didn’t cost the government anything - may, in fact, have saved the government money if the applicant would have qualified for government help (either Medicaid or subsidies) if he had told the truth.

Here’s a more interesting example. Let’s say someone has been buying health insurance for himself all along. Now the ObamaCare policies are all that are available to him and they are all more expensive than what he’s been purchasing. His income is low enough that he would qualify for a subsidy that covers the entire cost of a policy roughly comparable to his old one. He does not like the idea of being subsidized but figures the only reason he needs the subsidy is because of ObamaCare. He decides to misrepresent his income, reporting it as higher than it is so the amount of the subsidy he receives is just enough to make his cost for the new insurance the same as his cost for his current insurance. Is this fraud? He has lied and he has received payment from the government but, once again, he has saved the government money.

(Apparently the whole issue of income and fraud is a tricky one as this piece points out.)

Monday, November 18, 2013

Moral calculus

Related to my previous post, JustOneMinute points out:

And do let's note - a standard lib talking point during the promotion of Obamacare was that access to health insurance saves lives. Dare we presume that failure to implement Obamacare thereby costs lives, eventually if not by this weekend? Ezra Klein was talking about 15,000 to 20,000 lives per year, which dwarfs the 1,833 who died at Katrina.

It’s an interesting moral question. If someone sees what they believe is a great wrong and attempts to fix it but instead makes the situation worse, is he more or less culpable than those who did nothing?

Sunday, November 17, 2013


The Washington Post is reporting that “[t]he Obama administration will consider the new federal insurance marketplace a success if 80 percent of users can buy health-care plans online.” A success for whom? For the Democrats? For the Obama Administration? For Obama's "legacy"? Not for the unlucky 20% who need health insurance and can’t buy it.

As JohnE over at Ace of Spades points out:

This, of course, includes the nearly 5 million people who have already been booted off their plans due to Obamacare. I suppose it's a success if 20% of them, or 1 million people, are unable to purchase insurance because the website is glitchy. Wait, wasn't this law passed in large part to "help those who were unable to purchase health insurance"? I seem to recall that being a thing.

Oh, well. Eggs and omelettes.

Today on Meet The Press, Nancy Pelosi insisted that the health insurance policies being cancelled were not because of the Affordable Care Act. You have to read her whole exchange with David Gregory to get a sense of how bizarre it is but here’s a snippet:

But that doesn't mean that there was anything in the law that said if you like what you had before 2010 you couldn't keep it.

Here’s what NBC said two days ago in an investigative report entitled “Insurers, state officials say cancellation of health care policies just as they predicted”:

In comments filed in August and December 2010, America’s Health Insurance Plans -- a trade group representing 1,300 insurance plans — urged the administration to “reconsider” grandfathering rules because they were too stringent to allow many to keep their policies.

In the first round of comments, AHIP stated that under the administration’s proposed regulations, “The percentage of individual market policies losing grandfathered status … will likely exceed the 40-67 percent range” and warned that could cause “disruptions” for those who wish to keep their policies.

When those proposed rules weren’t changed, AHIP again wrote in December, “We believe that more can and should be done to protect the interests of consumers who wish to maintain their existing coverage.”

That “first round of comments” happened in August of 2010. CNN reminds us that Republicans reacted to AHIP’s warnings shortly thereafter:

Senate Democrats voted unanimously three years ago to support the Obamacare rule that is largely responsible for some of the health insurance cancellation letters that are going out.

In September 2010, Senate Republicans brought a resolution to the floor to block implementation of the grandfather rule, warning that it would result in canceled policies and violate President Barack Obama’s promise that people could keep their insurance if they liked it.

In the round-table segment of Meet The Press, David Gregory said this:

And people will say this is like Katrina; I think it's more like Iraq. That was about life and death, this is not. That's not the comparison. The comparison is everybody looked at Bush through the prism of Iraq. Here, I think people are going to look at Obama through the implementation of Obamacare. He wants to talk about something else.

Gregory seems to be saying that Katrina was about life and death, but the Affordable Care Act is not.

That’s not what President Obama was claiming when he argued that we had to pass the Act. Speaking about a campaign supporter who died of breast cancer, he said:

She didn’t have insurance. She couldn’t afford it, so she had put off having the kind of exams that she needed. And she had fought a tough battle for four years. All through the campaign she was fighting it, but finally she succumbed to it.

It turns out Obama didn’t have his story straight but these kinds of anecdotes are exactly what sold people on ObamaCare: people who don’t have health insurance can’t get the health care they need and sometimes that means they die. And the Affordable Care Act was going to insure that didn’t happen any longer. That sounds like life and death to me.

The Administration that thinks leaving 20% of the people who need health insurance hanging is “a success”; the California Congresswoman who continues to lie about the damage done to those who are losing the health insurance she swears she wants everyone to have; the television pundit who sees health insurance as a political football rather than a matter of life and death. None of them seem to realize that the 20%; the cancelled policy-holders; the currently insured and currently uninsured whose only hope for insurance they can afford depends on getting through a broken website and praying there’s something on the other side they can afford - all these are human beings whose lives are being upended by the hubris, dishonesty, and incompetence of those who conceived, sold, and implemented ObamaCare.

I wonder if those responsible will understand the reality of what they’ve done if people start dying, or will that, also, be brushed aside as politics.