Tag: health care

Quote of the Day – .Gov Shutdown Edition

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From a comment at Instapundit:

All this havoc wreaked through the Park Service. Consider that for a moment. The National Park Service has managed to barricade scenic vistas in North Dakota, piss off World War 2 vets in DC, and keep small children from getting home to their parents after school in Tennessee. And it’s just the Park Service! Imagine if the federal government were as omnipresent and powerful as the left wishes it were. “Sorry; we’d love for you to have your kidney transplant, but the government is shut down. All because you pesky citizens wouldn’t behave!”

But holy crap, it’s the Park Service! The absurdity is stupefying. Just the thought of using something as innocuous as the PARK SERVICE to cause so much damage–all for the sake of causing damage and pissing people off–confounds the mind. It’s like a confederacy of clowns on tricycles, swarming over the nation, wreaking havoc with balloon animals and confetti–because those are the only tools at their disposal.

But, in any case, Obama’s intended lesson was meant to be, “See how awful life is without your Federal Family?” But the lesson learned–I hope–is, “See how awful your Federal Family can make your life if you tick it off?” We’re not seeing the absence of government; we’re seeing an excess of bad government.

But only if you go online and look for it.

My brother posted this picture on Facebook a day or so ago. Pretty much says it all:

I’ll Be Interested to See if More of These Show Up

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Seen on Facebook, so take it with a grain of salt until there’s corroboration. Purported report from someone who tried to sign up on the ACA website:

I actually made it through this morning at 8:00 A.M. I have a preexisting condition (Type 1 Diabetes) and my income base was 45K-55K annually I chose tier 2 “Silver Plan” and my monthly premiums came out to $597.00 with $13,988 yearly deductible!!! There is NO POSSIBLE way that I can afford this so I “opt-out” and chose to continue along with no insurance. I received an email tonight at 5:00 P.M. informing me that my fine would be $4,037 and could be attached to my yearly income tax return. Then you make it to the “REPERCUSSIONS PORTION” for “non-payment” of yearly fine. First, your drivers license will be suspended until paid, and if you go 24 consecutive months with “Non-Payment” and you happen to be a home owner, you will have a federal tax lien placed on your home. You can agree to give your bank information so that they can easy “Automatically withdraw” your “penalties” weekly, bi-weekly or monthly! This by no means is “Free” or even “Affordable.”

So, uninsured now, paying $0 annually, unlimited out-of-pocket expenses.

Now has the “option” of paying $7,164 annually, with a $14k deductible (essentially no coverage short of completely catastrophic), or paying $4,037 a year with, again, an unlimited deductible. Of course, now with the ACA, he no longer has the option of not paying anything except out-of-pocket expenses, his annual health insurance tax, penalty, tax bill is $4,037 for which he gets exactly zilch.

Gotta pay his fair share! Yes, the Affordable Care Act has added an army of bureaucrats, but not one doctor, will increase the number of people who supposedly will have health insurance ($7,164 per annum, with a $14k deductible counts as “coverage,” you see), and will save us all money because we’ll be sharing the burden!

And if you believe that you’re a moron or a Democrat.

If more of this comes out, expect some blowback.  Delay Obamacare?  Why?  Why not let the Democrats experience the full reaction of the people who actually pay taxes?

Quote of the Day – Health Care Edition

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This is a long one.  As I’ve previously mentioned, I’m currently reading Kevin D. Williamson‘s new book, The End is Near and It’s Going to be Awesome:  How Going Broke Will Leave America Richer, Happier and More Secure.  I generally try to read one non-fiction and one fiction book at the same time.  No, not with one eyeball on each text.  I read the fiction book when I’m at home, I read the non-fiction generally during lunch breaks.  I’ve recently finished the novel I was reading and The End is Near is getting pretty interesting, so I spent some time today with it.

What follows is an excerpt from the chapter titled Health Care is a Pencil that makes up one of the better explanations of just why the American health care system is as expensive as everyone complains about:

The price of health care is high because there is no price for health care.

Some years ago, I found myself needing a medical procedure at the same time I was considering changing jobs.  It was a possibility that I might find myself without health insurance and paying for the procedure out of pocket.  In order to calculate how I should modify my plans, I began calling around to various medical practices and inquiring as to the price of the procedure.  It was nearly impossible to get an answer other than “Let’s see if your insurance covers it.”  I was quite insistent that I needed a price that I could rely upon in the event that I needed to pay out of pocket, a proposition that seemed to universally mystify every medical professional with whom I came in contact.  After dozens of phone calls to several medical practices—including some very prestigious ones—the answer was the same:  “Talk to the lady in insurance.”  When I finally succeeded in getting an estimate from one doctor, the possible price ranged from the low five figures to the low six figures, the higher end of the estimate being more than ten times the lower end.  Strange that I can get an exact price on an iPhone, a Honda Civic, or a pizza, but not on something as essential to my well-being as health care.

There are almost no consumer prices in health care.  Because there are no prices, there is no price discrimination by consumers, and therefore no pressure to keep prices down to where consumers can pay them.  It’s a chicken-and-egg problem:  One of the reasons that we rely on insurance or government programs to pay medical bills is that the bills are too high for ordinary consumers to pay; one of the reasons that the bills are too high for ordinary consumers to pay is that we rely on insurance and government programs to pay for them.

—

American health care is great.  Health-care financing is a mess.

—

Is there something inherent in the structure of the health-care market that means consumers cannot pay expenses out of pocket and negotiate prices the way they would on a television or a car?  In some cases, yes:  If you get hit by a bus and are wheeled unconscious into the emergency room, you are not in a very good negotiating position.  Likewise, if your daughter has a brain tumor, you probably are going to pay whatever it costs to have that tumor treated.  but most health-care decisions are not immediate life-and-death issues.  There is less reason to think that consumers cannot negotiate the price of an annual checkup or routine dental work, the inevitable cuts and scrapes in life, or preventative and diagnostic care.  True, most consumers do not have a great deal of medical knowledge; most of them aren’t telecommunications engineers either, but they manage to negotiate that market just fine.  But with no prices there can be no price discrimination and no negotiation—none of the iterative social learning that characterizes our most productive enterprises.

And here I will give a rare nod of appreciation to the Obama administration for at least giving a nod to this problem:

As part of the Obama administration’s work to make our health care system more affordable and accountable, data are being released that show significant variation across the country and within communities in what providers charge for common services. These data include information comparing the charges for the 100 most common inpatient services and 30 common outpatient services.  Providers determine what they will charge for items and services provided to patients and these charges are the amount the providers bills for an item or service.

But that’s not enough. Williamson elaborates:

The lack of consumer prices produces some truly odd consequences.  Chad Terhune of the Los Angeles Dog Trainer Times (Sorry.  Ed.) identified a clinic that charges $4,432 for a CAT scan.  The clinic has a relationship with Blue Shield, which pays a negotiated price of about $2,200 for the same procedure.  And the out-of-pocket price for a consumer paying cash?  Only $250.  But they do not advertise that price.

It’s gotten so bad that the market is finally beginning to respond:

Doctor stops accepting insurance, lowers prices and posts costs online

A family practice doctor in Maine is refusing all forms of health insurance, including Medicare, in order, he says, to provide better service to his patients.

Dr. Michael Ciampi told the Bangor Daily News that he wants to practice medicine without being dictated to by insurance companies.

On April 1, Ciampi lowered his prices and posted the costs online. For example, an office visit in which patients discuss “one issue of moderate complexity or 2-3 simple issues” costs $75. When Ciampi accepted insurance, the visit would run $160, according to the Bangor Daily News.

The fact that Ciampi lists the prices, he says, means no surprises for his patients.

Dr. Ciampi is not alone.

But seeing that health care expenditures in this country costs well in excess of 15% of GDP, and the passage of the “Patient Protection and Affordable Care Act” now puts the Federal government SQUARELY in the driver’s seat, I don’t see this effort gaining much traction. It takes power away from too many people firmly entrenched in both industry and government for either one to ever let it survive the nursery.

Clayton Cramer Wrote a Book About This

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A family’s mentally ill son buys a gun with the intent to perpetrate a massacre. Prior to this, he’d planned on doing it with a knife.

http://cnettv.cnet.com/av/video/cbsnews/atlantis2/cbsnews_player_embed.swf
Note that they can’t get their son institutionalized, even though it’s apparent that he’s dangerous. Clayton Cramer in his book My Brother Ron: A Personal and Social History of the Deinstitutionalization of the Mentally Ill discusses the changes in America’s mental health system that has led to dangerously violent people wandering around free until they finally do something that will get them incarcerated.

Kudos to the parents. By age 21 I would imagine the daily grind of dealing with a mentally ill son would have worn most people out.

More Unintended Consequences!

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Rate Shock: In California, Obamacare To Increase Individual Health Insurance Premiums By 64-146%

One of the most serious flaws with Obamacare is that its blizzard of regulations and mandates drives up the cost of insurance for people who buy it on their own. This problem will be especially acute when the law’s main provisions kick in on January 1, 2014, leading many to worry about health insurance “rate shock.”

Last week, the state of California claimed that its version of Obamacare’s health insurance exchange would actually reduce premiums. “These rates are way below the worst-case gloom-and-doom scenarios we have heard,” boasted Peter Lee, executive director of the California exchange.

But the data that Lee released tells a different story: Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.

RTWT.

Who saw that coming?

Unintended Consequences or “LOOPHOLE! LOOPHOLE!”

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Fort Wayne, IN public school to cut part-timer’s hours in order to avoid Obamacare penalties:

Fort Wayne Community Schools is trimming the hours of more than 600 part-time teaching aides and cafeteria workers in anticipation of a projected budget shortfall and to satisfy the requirements of the federal health care law, a school official said.

Kathy Friend, chief financial officer for FWCS, said the school district is dropping 610 employees from 30 hours to 25 hours per week starting June 3, rather than provide them with health insurance as mandated by impending federal regulations. Offering all of the district’s 840 part-time employees health insurance would have cost $10 million, a price the district cannot afford, she said.

Friend said the decision to cut hours was also driven by the expectation that FWCS will have a tighter budget in 2015.

“We have to make the decision we’re making because of a budget situation, and we really have to make it because of the insurance issue,” she said.

“There’s not an easy answer to this problem.”

Beginning in January 2014, the Patient Protection and Affordable Care Act, known as Obamacare, will require employers with at least 50 full-time employees to offer health insurance to employees who work at least 30 hours per week.

“This is not just an FWCS problem,” Friend said. “It’s something that almost all employers with part-time employees are trying to resolve.”

The school district’s penalty for not providing health insurance to legally entitled workers would have been $2,000 for every one of its roughly 4,000 employees, regardless of how many hours they work. This was a price the district was not prepared to pay.

“We didn’t think it would be wise to spend $8 million and get nothing in return for it,” Friend said.

Who saw that coming?

Obamacare Predictions

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Those of us in the “government is a necessary evil, but still evil” demographic made many predictions about the result of Obamacare while it was being debated, after it passed, and even after the Supreme Court upheld it.

We did so based on past experience with sweeping “feel good” legislation, with our understanding of President Obama’s personal philosophy and agenda and the agenda of those in power in the Democrat party, on our understanding of basic economics and our grasp of human nature when faced with economic choices, just to name a few.

Let’s review a few of those predictions:

  • Medicare would be cut to help fund it.
  • Doctors would retire early to avoid it.
  • Health insurance costs would not, as promised, drop.  Instead, they would increase.  Significantly.
  • Many if not most people would not, in fact, get to keep their existing plans because of the increases in premium costs.
  • New hiring would be detrimentally affected because businesses would not have any idea what new employees would cost, much less their existing ones.
  • Some full-time employees would lose their full-time status so their employers could avoid having to pay for their insurance.
  • Despite the law’s aims of “universal coverage,” many people would remain uninsured, perhaps as many as were uninsured before the law passed.
  • Taxes on the middle class would, necessarily, rise to support the ballooning costs of the law – in opposition to Obama’s promise that he would not raise taxes on the middle class.

Boiled down into a single graphic:

photo Obamacare_Ramirez.jpgSo, here we are a quarter of the way into 2013, three years after Obama signed the Act and a year before its full implementation, and where are we?

National Center for Policy Analysis, March 12, 2013:

Though Republicans are usually responsible for calls to modify or end Medicare, the Obama administration has made the first move in cutting benefits. The administration’s cuts will impact the poor the most, says Joseph Antos, the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute.

  • Low-income seniors will see an estimated 7 percent to 8 percent reduction in their Medicare Advantage benefits in 2014.
  • As opposed to traditional Medicare, Medicare Advantage (MA) is provided by private providers and is attractive to lower-income individuals because it is less expensive.
  • The reduction will occur because of the Affordable Care Act (“ObamaCare”), which is reducing Medicare benefits and raising taxes to pay for the expansion of Medicaid and subsidies in the health insurance exchanges.
  • The cuts are larger than originally expected because the administration believes that Medicare spending will abruptly drop for no reason.

Private plans, averse to such a large spending cut, will likely leave markets or reduce their benefits as plans become less profitable.

More than 14 million Medicare beneficiaries will be affected by the cuts, which will disproportionately affect low-income individuals.

Forbes August 12, 2012:

A recent survey by the Doctor Patient Medical Association Foundation reveals that 83 percent of physicians surveyed are thinking of quitting because of Obamacare, and 90 percent feel that the U.S. health care system is now heading in the wrong direction.

This result is not a surprise; patients everywhere need to be concerned that Obamacare is putting an enormous new weight on the back of doctors who were already over-burdened.

This survey is not alone. Previous surveys by Athena, Sermo, Deloitte, the Doctors Company Survey, the Physicians Foundation, and IBD/TIPP have clearly shown that most doctors are unhappy with the direction of things, and a clear majority are opposed to the health care law. The Physicians Foundation survey in 2010 found that physicians view Obamacare “as a further erosion of the unfavorable conditions with which they must contend.”

Christian Science Monitor, March 27, 2013:

From the perspective of insurance companies, implementation of Obamacare will mean an average increase of 32 percent in the cost of medical claims per person by 2017, according to a study released Tuesday by the Society of Actuaries (SOA). But that figure will vary dramatically state by state, depending on how states handle their high-risk pools, which are then folded into the individual market under the reform. The cost of claims drives the price of health-care premiums.

“The projections in this study suggest that when the dust settles by 2017, we can expect mixed results on the reform bill’s goals of expanding coverage and reducing costs,” says Kristi Bohn, consulting health staff fellow at SOA, in the report.

In the SOA model, what are currently considered “low-cost states,” such as Ohio, Wisconsin, and Indiana, will see a large increase in the cost of medical claims – 80.9 percent for Ohio, 80 percent for Wisconsin, and 67.6 percent for Indiana. But the current “high-cost states” will see the average cost of medical claims go down. The biggest decrease, 13.9 percent, is projected for New York, followed by Massachusetts, with a 12.8 percent decrease.

Still too early to tell with that one, but I’m not holding my breath

Congressional Budget Office report, The Budget and Economic Outlook: Fiscal Years 2013 to 2023 (PDF, p. 61):

In 2022, by CBO and JCT’s estimate, 7 million fewer people will have employment-based health insurance as a result of the Affordable Care Act; in August, that figure was estimated to be about 4 million people. The revision is the net effect of several considerations, with the largest factor being the reduction in marginal tax rates, which reduces the tax benefits associated with health insurance provided by employers. The increased movement out of employment-based coverage also reflects revisions to CBO’s projections of income over time and higher projections of employment-based coverage in the absence of the Affordable Care Act.

Reductions in employment-based health insurance coverage boost federal tax revenues because they increase the proportion of compensation received by workers that is taxable.

—

CBO and JCT have raised their estimate of revenues that will come from penalties paid by employers, by $13 billion for the 2013–2022 period, because fewer businesses are now expected to offer insurance coverage than had been estimated in August.

Seven million, eh? Anybody want to place a bet?

The Staffing Stream (trade journal) Feb. 6, 2013:

Staffing firm with 50 or more full-time W-2 employees will be caught by the employer mandate and will have to provide coverage for its employees or face penalties.

If they do provide coverage, they will face increased costs and ugly administrative headaches. Take for example the look-back period, which was instituted to help companies (particularly staffing firms) that have employees working variable hours determine if those employees must be covered. They are allowed to use a look-back period ranging from three to 12 months. If the employee averages 130 hours during the look-back period, they must be offered coverage during a subsequent “stability period” that must be as long as the look-back period and can’t be shorter than six months. If it sounds complicated, that’s because it is. Firms who do not have a dedicated benefits person on staff may have to get one.

Your clients are facing the same challenges and are trying to find ways around the employer mandate. And they have to act now. Even though the employer mandate doesn’t go into effect until 2014, it will be based on a company’s 2013 payroll. So employers are already instituting hiring freezes, laying employees off, or cutting their hours below 30 hours per week. In fact, a Mercer study cited in a recent USAToday article stated that half of the companies surveyed that are not currently offering health insurance would make changes to their full-time headcount to avoid complying with the PPACA.

Credit Union Times, August 9, 2012:

Employers with large part-time and low-wage populations — especially retailers — are more likely to take measures in order to avoid triggering a costly requirement to provide health care coverage to employees that used to be ineligible.

According to a survey released Wednesday from consulting firm Mercer, 67% of retail/wholesale employers expect they’ll be making changes to their workforce structure so they can dodge a coverage eligibility requirement that’s part of the Patient Protection and Affordable Care Act.

Also, CNBC, Feb. 12, 2013:

For large retail and restaurant chains the big unknown in the year ahead is how much more they’ll pay for health coverage. Employers with 50 or more workers who put in 30 hours a week will be required to provide health care coverage or pay a fine, under the Affordable Care Act, also called the ACA or Obamacare. But the details haven’t been settled.

“We can’t really calculate what it’s going to be like,” said John Mackey, Co-Founder and Co-CEO of Whole Foods, an outspoken critic of the Obama health reform law.

His grocery chain already offers health care to workers at the 30-hour threshold. But he said the company may be forced to reconsider its full-time staffing levels, if the final employer mandate rules still being crafted by the Obama administration require companies to offer costly benefit options.

“Say we’re paying $3,200 a year for insurance for somebody, and the new regulations cost us $5,000 to insure somebody. If they work fewer hours, we just saved $5,000 per person,” because there is no mandate to provide coverage for part-time workers, he explained.

Also:

Batchbook has been offering health benefits from day one, even when the firm had no profits. “It was a big decision, but it was really important for us, that we build the company that we wanted,” O’Hara said.

Now, she and her HR manager are spending a lot of time trying to figure out how the Affordable Care Act, also known as Obamacare, will impact the firm’s benefit plan. This year, they chose a high deductible plan to keeps costs down. Their insurance broker said that plan may not comply with new limits on out-of-pockets costs for health plans beginning in 2014, so their rates are likely to rise. That could impact hiring plans.

“My policy is you don’t hire somebody unless you can afford them,” O’Hara explained. “The question is what we can afford to pay someone, when you don’t have a really good understanding of what that benefits package is going to cost.”

Many of the new mandated coverage details are still being finalized in Washington, including the so-called employer mandate.

“Still being finalized.” That would be this stack of regulations:

photo Obamacare_regulations.png

July 2012 Congressional Budget Office Report, Estimates for the Insurance Coverage Provisions of the Affordable Care Act Updated for the Recent Supreme Court Decision (PDF, p.13):

CBO and JCT now estimate that the ACA, in comparison with prior law before the enactment of the ACA, will reduce the number of nonelderly people without health insurance coverage by 14 million in 2014 and by 29 million or 30 million in the latter part of the coming decade, leaving 30 million nonelderly residents uninsured by the end of the period. Before the Supreme Court’s decision, the latter number had been 27 million.

Thirty million is certainly less than the 48.6 million reported by NPR on Sept. 12, 2012, but only about a third less, and we all know how accurate government projections tend to be.

On that last one? Increasing taxes on the middle class to pay for Obamacare? A cursory search of the web shows a lot of conflict on that one, much of it centered on that “penalty” vs. “tax” language that the Supreme Court decision rested on, but in addition to the bolded bit in that first CBO report excerpt above, I did find this little tidbit:

Chicago Sun Times Letter to the Editor, Jan. 1, 2013:

Here is a little-known fact about the Affordable Care Act: As of Jan. 1, the threshold for deducting medical expenses on your income tax return increased from 7.5 percent to 10 percent of adjusted gross income for nearly everyone. Seniors 65 and older get a reprieve for three years. It’s interesting that almost every article I’ve read on ObamaCare fails to mention this tax increase that will hit the “middle class” the hardest. Then again, Rep. Nancy Pelosi, who was then speaker of the House, did say, “We have to pass the bill so that you can find out what is in it.”

Of course, that only matters to those of us who itemize, but still…

Feel free to add your own links in the comments!

UPDATE:  from the blog The Virginian:

It turns out that an upscale women’s fashion store that sells expensive women’s clothing and accessories has told its full time employee’s(sic) that they can’t work more than 21 hours per week and are hiring more people to take up the slack. As a result, they don’t have to provide health insurance to its part-timers.

But hey! “Hiring more people”! Unemployment’s coming down!