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Belmont Club

The 14th Fix

December 20th, 2013 - 1:21 pm

The people in charge of the Obamacare rollout have made their already difficult position even worse. The root of the latest self-inflicted catastrophe is their determination to forge ahead with an flawed product by simply papering over the cracks.  These bands aids eventually come off and they find themselves worse off than before.

Having attained the dubious achievement of canceling millions of policies in America, including practically all the health care insurance in Guam without providing a working replacement system, the administration has decided to temporarily allow people to buy the “bare-bones” insurance policies formerly allowed only to people under 30. This was suppose to bridge the gap between those who’ve lost their policies under Obamacare and the time when it finally works.

Reuters describes the move vividly.

The Obama Administration has essentially waived the individual mandate under the Affordable Care Act, saying people can seek a “hardship” exemption if they lost their coverage. Actually, it is much more complicated than that: If you lost coverage as a result of Obamacare because your policy was not considered good enough, you can either seek a substandard catastrophic policy in the market (which likely still costs more than the one you had) or just carry no insurance at all, at least through all of next year.

As John Fund at the National Review notes, it’s the 14th amendment of the statue by executive order since Nancy Pelosi passed it to find out what’s in it.

However as Reuters notes the 14th fix has made things even worse.

First, by waiving the individual mandate, it makes chumps out of those who waited patiently, sometimes all night to buy something — nobody knows quite what since payments systems to insurance companies don’t always work — from the perverse Obamacare website.

It also suggests that the few who were able to enroll in Obamacare once their private insurers were forced to cancel their policies can now not pay for the new coverage and just claim an exemption. If you battled through the tech glitches, enrolled and actually wrote a check, you’re out of luck. You get the privilege of paying for your shiny new insurance, while millions more can keep those premium dollars in their own wallets.

If this sounds unfair to those who believed it is perhaps more unfair than you think. Reuters notes that the Supreme Court held that the mandate was a tax. Now the administration is giving some people a pass on the tax after making others pay. Can the administration waive the mandate for some but not for others? The article continues:

Such a tax exemption is unprecedented in the law. Never has a president told some people in the same class that they don’t have to pay a tax and others that they do. Again, this effects a certain group of people: those who lost coverage because of Obamacare. But, some of those people found replacement coverage, almost always at a higher premium, and are not exempt from the tax. They can’t get out of their insurance coverage and reap the benefits of tax exemption now granted to the people who couldn’t sign up by the Obamacare deadline.

Avik Roy in Forbes explains that the so-called bargains people who have lost their insurance are being offered are overpriced.

“ACA-compliant “catastrophic plans” have to cover all of the services defined as “preventive” by the government, along with all of the Obamacare-defined ‘essential health benefits,’ like drug-addiction therapy …

The upshot of all this is that the catastrophic plans aren’t that much cheaper than the regular Obamacare plans. In California, for example, the median cost of a pre-Obamacare plan on eHealthInsurance.com, for a 25-year-old male non-smoker, was $92. The Obamacare bronze plans cost an average of $205 a month. The Obamacare catastrophic plans? $184. In some parts of the country, the catastrophic plans are actually more expensive than the bronze plans. …

It’s hard to come up with new ways to describe the Obama administration’s improvisational approach to the Affordable Care Act’s troubled health insurance exchanges. But last night, the White House made its most consequential announcement yet. The administration will grant a “hardship exemption” from the law’s individual mandate, requiring the purchase of health insurance, to anyone who has had their prior coverage canceled and who “believes” that Obamacare’s offerings “are unaffordable.” These exemptions will substantially alter the architecture of the law’s insurance marketplaces. Insurers are at their wits’ end, trying to make sense of what to do next.

Of course the administration can turn this around to argue they were so incompetent the exemptions have not been discriminatory because they saved the consumers from the administration itself. In which case if the Supreme Court strikes down the exemption then the customers who got a “bargain” will be relieved of their lemons.

Reuters says of the temporary suspension, “it is another curious move by the administration, which has approached Obamacare as if it were some kind of dreadful stew – one where it didn’t quite know the recipe in the first place, so it has proceeded to add ingredients and spices, some with contradictory flavors, in the hopes that we all have a nice meal. Instead, it is proving hard to swallow.”

The most unpalatable part about “affordable health care” is that it is unaffordable. Scott Gottlieb at Forbes looks at the enrollment data from state exchanges to explain why:

Totaled together, it shows that, on average, 54% of those purchasing plans were between the ages of 45 and 64. These states are California, Colorado, Connecticut, Minnesota, Rhode Island, and Washington State. …

These numbers were analyzed in an excellent report published yesterday by the managed care equity analysts at investment bank Morgan Stanley….

Very few people are signing up for the cheapest, catastrophic plans that are being marketed to the so-called “young invincibles.” … In California, just 1% of enrollees chose these plans, in Connecticut 2%, and Rhode Island 1%. For other states, there were too few enrollees to get to 1%. …

The weighted average across all the states shows that only 36% of those who have signed up (but not necessarily paid for) Obamacare, were put on private plans.

The rest have been added to the rolls of Medicaid.

Medicaid, you will recall, is already going bankrupt. Obamacare was supposed to save America from the Medicaid collapse. It has wound up expanding it. But we digress.

Gottlieb’s basic argument is that since mostly the sick and aging are enrolling in Obamacare and the young are staying away from it the system will be paying out more than the few will be paying in. It’s like a bank account where the withdrawals always exceed the deposits. And you know how that ends up. Gottlieb concludes, “it makes it likely that premiums will rise. And that more insurers will drop out of this market, and fewer will enter.”

And we never did quite get to how Obamacare, through oversight, totaled the insurance system on Guam. But you can read the link yourself. It basically says the law’s architects forgot that in addition to States, America had territories and Guam fell between the cracks.  Let’s roll that under “miscellaneous collateral damage”.

The problems of Obamacare are systemic. It is designed wrongly at the conceptual and business rule level. Fixing a glitch here and glitch there won’t make any difference.

Here’s the Obamacare flowchart from an older post.  The problem with it is evident at a glance; the system doesn’t deliver healthcare, it just moves money around. And the net consequence is that the same amount of butter has to be scraped over an increasingly large amount of toast. The cost curve isn’t being bent, so much as money being shuttled around as in a shell game.

Obamacare

Real affordable health care must mean more supply for the same demand. It must mean more doctors, cheaper procedures, better medicine, more advanced and effective technology. It cannot mean more red tape, greater complexity and a bigger bureaucracy. Obamacare is a giant check writing program that doesn’t even work. It’s architects thought “public” was a solution rather than a modifier.

Public doesn’t mean anything if its a public failure.


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Top Rated Comments   
One must remember, the effects of Obamacare started as soon as the law was passed. Policies began changing to meet the law's requirements immediately, and rates rose accordingly. I have previously chronicled my own situation, but will repeat: a $910 HMO for a family of 4, including $20 co-pays, vision, and dental, to $1500 for the same the next year, then back to $1000 for a couple when we dropped the kids coverage, back to $1500 the next year, then losing our insurance this year, and adding a "last resort" HIPAA policy for $1500 (dropping my wife's coverage to a high deductible plan). Now, a "bronze" plan for both of us with essentially no prescription coverage or anything else until we hit a $6000 deductible, or $1700 for the Platinum plan, with more "normal" Rx and co-pays, but > $6000 deductibles.

Bottom line is, we've been priced out of the health insurance market, and will have no insurance as of Jan 1 , 2014. We might qualify for Medicare or a public subsidy due to a bad business year, but under the ACA, the government could reclaim the premiums next year at tax time (we'd essentially be paying $1000 a month retroactively for virtually no benefits). And, we're one of those "high cost" old folks who "should be taking advantage" of the ACA rates. However, the rates have increased 4x since 2009, and we just can't justify the expense. We're going to refill prescriptions to cover us until March, and figure out where we are then. After that, we're "cash and carry" customers.

Obamacare (along with unlimited QE's) has ruined the economy, regardless of what the Obama Administration's faked economic and census numbers say. It's on it's way to ending the American health care system as we have known it for the past 70-100 years.

This public policy joke will touch every American, and very few will be happy with the result. Democrat Senators must be seeing their inside polling numbers, and should be absolutely freaking out. "Tar and Feather" may soon reenter the common American lexicon once again.
31 weeks ago
31 weeks ago Link To Comment
There has been a lot of mention of a “Death Spiral” in reference to Obamacare.

But in aviation there are two different kinds of “death spirals.”

One is when a pilot is attempting to fly an airplane under instrument conditions and is responding not to what his instruments are telling him, but to what the “seat of his pants” is telling him. Thus he ignores the instruments and inevitably ends up in a downward spiral.

The other kind of a death spiral is when an airplane is being flown by someone in clear weather who is not a trained pilot and misunderstands how airplanes are flown. They typically think that turns are made by use of the rudder and that leads them into a power spiral. The engine is running just fine and they can see where they need to go, but they just do not understand how to manipulate the controls to do what is required.

But if the person attempting to fly the airplane sees the ground coming up and decides that he needs to pull back on the controls to go back up, the power spiral will almost certainly become a stall, followed by a spin. Then almost anything he is likely to do will make things worse. Pulling back on the controls to go up will merely ensure the airplane remains stalled. Trying to roll in the opposite direction to the spin without first breaking the spin by letting forward on the controls will also simply make sure the spin continues.

Obamacare clearly has been in a power spiral from the first. The people who made the rules genuinely do not understand how the economy “flys”; that ultimately is why the website did not work. They are now trying different things, but it appears they are entering a stall/spin situation.
31 weeks ago
31 weeks ago Link To Comment
By the Vaporous Balls of the Holy Ghost, if we only had something like an opposition political party in this country. Someone who would, if not sometimes stand against the Left, at least take notice that there was such a thing as a Constitution that is supposed to limit what the Unitary State can do.

>>>Reuters notes that the Supreme Court held that the mandate was a tax. Now the administration is giving some people a pass on the tax after making others pay. Can the administration waive the mandate for some but not for others?<<<

The only reason that Roberts could claim that this was constitutional was because he decreed the Mandate was a tax. If taxes are wholly dependent on who you know in the government, the Constitution is not in force, and our duty of obedience as civilians is void. And the military has another duty in reference to the Constitution. If the Institutional Republicans in the House [who apparently are the only people in the entire country who have standing to go to court against the regime] do not go to court over this; they are conceding the point and one other further point.

People are calling these changes Executive Orders. Executive Orders have a format, and are printed and registered with the government with a signature and seal. Most, if not all of these 14 changes, have been done by press release or blog posting. Where is the legal basis for doing anything in accordance to these, other than the declaration; "L'État, c'est moi"?

Subotai Bahadur

31 weeks ago
31 weeks ago Link To Comment
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All Comments   (90)
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Roberts gave the Okey Dokey for ruling by fiat when he pulled out his super secret decoder ring and began changing the words in the bill.

Basically, what we have is a tax that was passed by a grand total of five people in the entire Republic. The legislature passed a mandate which was struck down by the Supreme Court who then substituted their own legislation. Obama has since done likewise and substituted freely. But what he has done is no different than what the Supremes did other than the fact he has done it repeatedly.

We are ruled by treasonous idiots. They entire lot of them deserve to hang.
31 weeks ago
31 weeks ago Link To Comment
I have been convinced for several years that Obamacare would be a disaster and we will end up with a cash system with catastrophic (real catastrophic) insurance. The pre-existing subset have been screwed by Obama and will have to be in some sort of risk pool, as they have been for years. Doctors are going to be figuring out what to do as they will not be in the same prepaid care model we have had for 40 years Obama just brought the collapse sooner.
31 weeks ago
31 weeks ago Link To Comment
And don't forget the second company that was caught, was it Hughes? Even Boeing was guilty of sharing info with them. I've been saying for years the current Administration is just igniting bombs built and planted by the Klinton regime.
31 weeks ago
31 weeks ago Link To Comment
OT - but is anyone concerned with the lack of alarm over China 's rover now on the moon? This is a country that is bullying all her neighbors, threatens our Navy in the region (e.g. stoping short in front of our ships), and has now landed a rover on the moon. Back in the day when the Russians launched Sputnik, we woke up out of our slumber.

There is a space / arms race on and the American public is sleeping.

I hope we never forget the role Loral Space Corp with Bill Clinton played in helping China build her missile force. Of course with this media, we will be told that it all happened under Bush.
31 weeks ago
31 weeks ago Link To Comment
I am mildly alarmed myself, I share your dismay at the lack of alarm by others, and yet what have they done but duplicated some of what the US and Soviets did forty years ago. It's almost as if they landed a 25" color CRT television console on the moon. Today Google offers $30m to any bored billionaires or other speculators who can land on the moon and ... return samples to Earth? Nope, just send back some broadcasts!

http://www.googlelunarxprize.org/prize-details/rules-overview

I guess the Chinese have now done this, but it doesn't look to me like they signed up for the prize:

http://www.googlelunarxprize.org/teams

Perhaps sovereign entities were not allowed, I haven't read the rules in any detail.

Even deflated so it's an achievement beyond what Japan or even Europe has accomplished, not that they very much wanted to do so or that there is any immediate benefit from having done so. But military strength comes from mastering such high-tech details of execution, and now they have done so, and at least it must be noted.
31 weeks ago
31 weeks ago Link To Comment
When I was at the Pentagon I performed my own unauthorized - and largely unappreciated - analysis on what the PRC was learning from launching US built satellites. I did my own debriefing of the USAF officers that monitored those launches, and on my own time, going to see them after work and even going on leave to California at my own cost to do so.

My boss's boss thought it looked unimportant and threw it away. 7 years later I had the pleasure of testifying before a Congressional investigation committee. Fortunately I had given a copy to the USAF Foreign Technology people and they had not thrown theirs away - the fact that their chief of security at the time was an old friend of mine no doubt helped with that.

I gave a great performance to the committee, if I do say so myself. And better yet, my old boss's boss had to explain that he threw my work away.

31 weeks ago
31 weeks ago Link To Comment
What were your conclusions (if you can share them)?
31 weeks ago
31 weeks ago Link To Comment
To summarize very briefly, I found that the technology transfer plan was naturally oriented toward preventing the PRC from dismantling the spacecraft or otherwise finding out about its technical details. That issue could be dealt with in a straightforward manner.

But the PRC proved to be incredibly behind in areas such as integration, coordination and countdown management. Perhaps it was primarily ignorance or perhaps it was more cultural in nature, but the US spacecraft firms were ready to walk off and abandon the effort if they were not allowed to teach the Chinese how to run a countdown. It was impossible to even conduct the operation and not have them learn much of value.

I liken it to people building airplanes but not realizing you could fly them in formation. And then you send the Thunderbirds over on a friendship visit and they see the show and go “Ho Li Cao! Lookit!”
31 weeks ago
31 weeks ago Link To Comment
We have long agreed that the nuts and bolts of this scam is about insurance and not care....
From what I see of the Bronze plans below, they are worse than the charity care that was in place as little as two years ago...remember, public hospitals and ER's have always been the place of last resort. No it wasn't high end and included a triage function, but it was care...I haven't seen a ward or semi-private room in years and years. They are coming back. And I bet the free valet parking at my hospital is coming to an end as well. The problem is we are still paying for it.
31 weeks ago
31 weeks ago Link To Comment
Here's the problem with Obamacare and the ACA in a nutshell: It's WAY overpriced and ENTIRELY underperforming. "Bronze" is the worst health insurance plan anyone has ever seen - period.

In the past, I seriously evaluated and considered catastrophic type health insurance mated to an MSA (medical savings account). It made sense, to spend a few hundred dollars, certainly less than $500 on insurance for the family, and put an equal or greater amount into the MSA. The total out of pocket costs on those policies were, if I recall correctly, anywhere from $6000 to $12000 a year. However, if I put $6000 into the MSA annually, the risk of two back to back "bad years" maxing out the MSA seemed highly unlikely. However, we always ended up with a better option, e.g. an employer group health insurance plan, or such, before I pulled the trigger.

Now back to Obamacare: The problem with the "Bronze" plan is that it costs the same as what I just described above, but with lower benefits (i.e. patient pays 40% of costs, higher deductibles, and higher out of pocket cost), and :::: drum roll please ::: NO MSA $!!! You'll pay the same thing (catastrophic plan + MSA dollars), but have no pre-tax dollars left to pay for the deductibles and out of pocket costs.

Hence, my decision to go without coverage versus pay for a "Bronze" plan. Hey, it's bankruptcy (or a major financial hit) either way, if the worst should befall us: why pay for Obama's social plan? And, as I said before, we'll be all cash by middle of next year. We thought about buying a small retirement house for cash, but I'm thinking now we will rent the house, lease our car, and keep any other attachable assets underground. So, we won't be paying Obama's ACA tax either - guaranteed.

I value my freedom, and while Obama (and/or his policies) may take my life, he will not seize freedom from me.
31 weeks ago
31 weeks ago Link To Comment
And I repeat - high-deductible plans were originally just the kind of "insufficient" plans that Obamacare was going to ELIMINATE! Not only were they "substandard", but paying such small amounts (and sequestering your own money in your own MSA) was anti-social, "not carrying your fare share". Now they have MANDATED that we get the low coverage and the high price.

And where is the MSM, is this really beyond them?
31 weeks ago
31 weeks ago Link To Comment
fare/fair (sic)
31 weeks ago
31 weeks ago Link To Comment
Obamacare will indeed unravel in the near future with disastrous consequences for our country.

If we had an opposition party, there would be many things it could do to remedy the situation, but the Republicans will not.

THe Republicans have become the Crony Fascist/Corporatist Party and they, like their Magical Marxist Democrat brethren, behind closed doors approve of Obamacare, QE, illegal immigration, much higher taxes and spending, much higher regulation with the appropriate exemptions for their crony friends, the destruction of the middle class, the destruction of small business and the withering of American power - military or otherwise.

The idea of primaring these traitors out will be obliterated in the coming primaries in an hellacious onslaught of Corporatist/TBTF cash directed by Karl Rove and his cronies. Furgitabotit.

Also forget about that taking the Senate thing to repeal Obamacare. Just check out how many Pub Senators and Congressmen rushed to approve the latest budget sellout that actually raised spending and taxes in a depression! That should tell you just how true these Pub clowns are to conservative principles - not one wit.

The Pubs have jumped the shark. They aren't even making an attempt to conceal their enthusiastic glee in voting with the Dems or their contempt for conservatives, the Constitution or the American People.

The Pubs need to be punished for this traitorous sellout , figuratively tarred and feathered and rode outta town on a rail. Every Pub Leader who has sold out the Country - like Ryan, Boehner,Cantor,Mc Carthy, McConnell, Cronyn, and McCain needed to be taken out ASAP.

The only viable way to do that is to start a third Party -a Constitution Party- based on a return the Constitutional rule of law, that will without hesitation or mercy expose the Pubs as the complete sellouts that they are.

The best way to do that is to run people who are unafraid telling like it is, and presenting viable alternatives based on our system of justice and free markets.

That means among other things - repealing Obamacare, exposing the fraud of QE and all the nefarious schemes of Buraq and friends, reforming our corrupt banking system, enforcing present law, relentlessly and vigorously without remorse enforcing our liberties including property rights and equal protection across the board, drastically reducing unnecessary regulation, drilling wherever we can, and rebuilding our military and the American Hegemon.

People running for office that present a clear alternative to the marxist claptrap of the Democrats and mealy mouthed Republican friends, will attract political support from those pounded by this regime in droves.
31 weeks ago
31 weeks ago Link To Comment
It will only be disastrous if we do not run out of lamp posts in DC to decorate with those responsible.
31 weeks ago
31 weeks ago Link To Comment
Hangtown Bob: "What will be happening in just ELEVEN DAYS????? When some unfortunate ends up being critically injured in a traffic accident or has an unexpected heart attack, what does he do?? He lost his long-standing health insurance. He has been unable to sign up for the Unaffordable Non-care Act. He does not have sufficient cash on hand to pay directly for services."

He should throw away any ID and claim that his name is Juan Valdez, and that he is an illegal immigrant from South of the Border. He will be whisked past those foolish US taxpayers bleeding in the Emergency Room waiting area, and given the best of treatment with no questions about paying for it.

If he wants to be double-sure of Cadillac treatment, he should also assert that he is homosexual.
31 weeks ago
31 weeks ago Link To Comment
Public means the productive class gets to pay for it...
31 weeks ago
31 weeks ago Link To Comment
Obama routinely makes chumps from his voters. Every idiot who thought the spying, droning, torture would end; every idiot who thought the seas would cease rising and the planet would heal; every Obama voter is a chump.
31 weeks ago
31 weeks ago Link To Comment
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