Obamacare: Where We Stand, March 31st Edition

Health Overhaul Uninsured

The March 31st deadline for enrolling in Obamacare has come and gone. How fast time flies.

It was only late last year that the March 31st hard deadline was created. Oh, you don’t recall? The March 31 deadline for signing up was created in the end of October. Initially, you needed to have active insurance by March 31st, not just successful ‘enrollment’.  Under the law, to successfully meet the rules of the individual mandate, you needed to enroll by March 1st, in order to have active insurance by the deadline of March 31st.  And furthermore, this new deadline had been held as the final date; until, of course, the Administration allowed another waiver for anyone ‘enrolled’ to complete the enrollment process well into the month of April.

In any case, this is now, technically, the day by which most have pointed to as the first real target date by which the government should be making solid progress in insuring the uninsured, and providing an adequate pool of payers into the insurance exchanges.

What we know, and maybe more importantly, what we don’t know, is critical to understanding the debate that will revolve around health care for the next few months.

So what do we know, for certain?

We know that around 7 million enrollments have gone through the exchanges by the end of March. That is admittedly a relative success in and of itself for the administration, which had such a disastrous start to the enrollment period. In my piece in the end of December, I did believe they would get the exchanges fixed, but I still thought they would be hard pressed to reach the 7 million mark.

The problem now becomes what the definition of enrollments are.  Enrollments are NOT people who have actually successfully been insured.  They ARE people who have successfully chosen an insurance policy on the exchange, and placed it in their ‘shopping cart’ on the website.

I am sure many can already see the problems with this.  First, the system has no way of telling if you are a repeat customer.  I for one have two accounts that have insurance policies in my cart, neither which I ever plan to purchase.  I was simply testing the exchange website.  Am I being counted?  I am unsure, but I do know I am receiving emails regularly to remind me to complete my purchase.

Second, until you complete the payment process, you are not insured.  HHS has clearly stated this on many occasions. Health experts such as Bob Laszweski have stated that in his discussions with insurers, he puts the ‘unpaid policy’ number at somewhere in the range of 15-20%.  My own personal discussions with insurers backs this up; and on March 30th, HHS Sec. Kathleen Sebelius stated the rate was around 10-20%.  So there is general agreement on this issue.

The rate of people insured really is the crux of the issue for the overall cause of health care reform.  The other metrics are far less important in the long run.  Several surveys, including the Gallup survey, have shown a short-term decreases in the rate of uninsured, but it is uncertain whether this is statistical noise or a true permanent trend. A new RAND corporation survey that was leaked to the LA Times has also shown a trend in decreasing the uninsured.

My own opinion is that the rate of uninsured must be dropping.  The real question is, by how much, and by what method?

Let us remember that initially, the CBO predicted that the vast majority of those purchasing health care insurance on the Obamacare exchanges would be uninsured persons, looking for access to the health insurance.  If this had been the case, then we should see a dramatic decrease in the number of uninsured.

However, it is difficult to believe this is the case. The same RAND study referred to above also shows that only about 1/3 of those on the exchanges were previously uninsured. Jonathan Cohn of the New Republic uses specific state numbers, like the enrollments in Kentucky and New York, to show that the number of uninsured is outpacing CBO predictions.  However, that doesn’t seem to be the case nationwide; I am willing to stipulate there are probably a few states that are doing well, but overall, it appears they will miss their target.   Philip Klein of the Washington Examiner points out the counter case, that is that it appears the exchanges are underperforming when it comes to insuring the previously uninsured.

Even using Cohn’s arguments, even he accepts it is highly unlikely that even a simple majority of those on the exchanges nationwide were uninsured previously.  Thus, the majority of those purchasing on the exchanges were persons who were buying insurance already, but simply were looking for government subsidies so they could get a better deal.

What does this mean in the grand scheme?  It means that the decrease in the rate of uninsured will be less than expected by many.  That doesn’t mean the rate will not decrease; Medicaid enrollments alone should decrease the rate of uninsured by a couple of millon, at least. It just means those actually purchasing insurance on the exchanges, by and large, were not the uninsured at all.

The next issue that will arise is how all of these factors affect premiums for the coming year.  I have talked about the demographics affecting the exchanges; primarily that young people have not signed up at a rate as great as expected initially.  The CBO and HHS had initially predicted that about 39% of those in the exchanges would be composed of those ages 18-35.  The average, across the nation, appears to currently be less than 30%, a number that Kathleen Sebelius now has basically accepted publicly.

This is important because, to subsidize those that are older or in poor health, the insurance pools require more healthy (and generally younger) payors into the system. Without those payors, the general cost of premiums will increase.  Liberals argue that age is a poor metric to calculate whether people are healthy or not.  This is true.  However, do they really believe that the people rushing to buy health insurance are the healthy among us, and not the ill?  There is a selection bias obviously involved here, and it is far more likely that those with poor health are the first to arrive in line for health insurance under Obamacare.

Almost everyone now stipulates that insurance premiums will rise more than the baseline expectations for 2015.  In fact, overall costs are already increasingUSA Today reported that health costs are increasing at the fastest rate in a decade…and that is before these cost pressures arise to affect premiums.

The biggest question left this year regarding Obamacare really is, how much will premiums increase?  If they increase at the same rate as the past 5 years (less than 4% a year on average) that will be a major success for the administration.  However, if they increase at a rate above 6% a year (and there are rumors the rates could increase by double digits), that could be catastrophic for the popularity of the program.

These are the core issues, though many other issues do remain.  Will people continue to be resentful to President Obama and Democrats for lying to them about being able to keep their insurance plans, and being able to keep seeing their same doctor?  Will the changes in their insurance policies make them more or less content?  Will increases in deductibles raise the ire of many Americans, who may or may not have understood those costs when they purchased their health policies?  These and many more questions remain, all of which ultimately will be more significant than the enrollment numbers of March 31st, 2014.

The only advice I can give is, be patient; only time will tell.

 

This was cross posted at Neoavatara

Why The New Obamacare Demographic Data Matters

On Monday, the Department of Health and Human Services released the first nationwide demographic data on those purchasing insurance through the various health care exchanges around the country.  The data largely affirms what many had suspected; that the young, relatively healthier members of the public so far are not buying into the system.

Most estimates, especially those from the Congressional Budget Office, stated that the exchange plans needed approximately 39-40% of their enrollees to consist of people in the youngest age group (18-34 years of age).  This was for a very basic reason:  to enable the financial sustainability of these plans, you needed younger (READ: HEALTHIER) patients to pay into the system, so those older (READ: LESS HEALTHY) patients could be subsidized at lower premium rates.

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The data so far should prove worrisome.  59% of those enrolling so far are age 45 and above.  Only 24% are age 34 and below.

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To give some perspective, a study by the Kaiser Family Foundation done several months ago ran several different scenarios to calculate the cost breakdown of what would happen with different demographic results. Their chosen ‘worst case scenario’?  25% of the pool would consist of young patients…which is actually a higher number than the demographic distribution as of today.

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The Kaiser study is quite useful in calculating what the cost of such a failure in getting young people to buy into the system is.  For every 10% less than the 40% target, Kaiser estimates the cost of premiums overall would increase by 1-2%.  At first glance, this doesn’t seem to be very significant.  However, once you realize that health insurers on average have a profit margin of around 4%, this could account for up to half of the total profits from health insurers.  And obviously, insurers won’t put up with that, meaning those costs will be passed on to the public.

Jonathan Cohn of The New Republic continues to argue that this is along the same pace as Romneycare in Massachusetts.  And in fact, a superficial examination of the data supports his argument.  In Massachusetts, as the state approached the deadline, more and more youths purchases insurance plans.  This gives hopes to liberals that we will continue to see an upward trend nationally as well.

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Here are the problems however.

First, note the actual number of youth enrollees in Massachusetts.  The maximum monthly percentage of new purchasers of insurance maxed out at 34%.  That is not only below the target of 40% set by the CBO; that is far below the number that the ACA would now need to meet their demographic goals.  By my rough calculations, approximately half of all new purchasers on the exchanges from January 1st through March 31st of this year would need to be age 18-34.  That seems highly unlikely, using Massachusetts as an example.

Additionally, unlike in Massachusetts, where there was one distinct deadline, in Obamacare there are really two practical deadlines. The first was January 1, 2014; this is because people who had insurance previously and wanted to continue their insurance needed to make sure they made their purchase already.  That would also explain the December surge of young buyers that the HHS claimed today.

The problem for ACA proponents is the second deadline, which has now been delayed until March 31st. The second deadline is a legal deadline, after which you are technically in violation of the law.  And theoretically, at that point you would be responsible for paying the Obamacare penalty (tax) based on your income level.

There are a couple of problems with the second deadline. The first is that unlike in Massachusetts, it may actually be in the financial best interest of some young people to pay the penalty (let us put aside whether or not it is a rational decision to go without health insurance; we are talking about a cost decision).  With premiums (even with subsidies) running several hundred dollars a month, a young person with income of less than $24,000 could easily pay the $95 penalty and be free of any other financial obligation.

Furthermore, many people doubt the IRS has the current capability of even levying the fine.  There has been some confusion on this point, but the head of the IRS in congressional testimony late last year admitted that if you were not receiving a tax refund from the IRS, they have no mechanism to levy the penalty at this time. So many youths simply could not be fined even if the IRS chose to do so.

Additionally, because of President Obama’s varying Obamacare delays, including delaying the individual mandate next year for people who had their insurance cancelled, it is fair to say much of the public doesn’t really believe there will be any practical penalty for not purchasing health care in 2014 if they choose not to.

Health care expert Bob Laszewski, in an interview with liberal blogger Ezra Klein, made the point quite clearly:

EK: That brings up two issues. The first is the individual mandate, which begins this year but is a much bigger penalty in year two, and then even bigger in year three. So one question here is how well that works.

RL: I have an interesting answer for that. I think the mandate is almost worthless because the word is getting around that they can’t really collect it. And by year three, it’s really a lot of money. I think there’ll be real pressure to just get rid of it. I don’t think you can force people to buy this insurance. If they don’t want it there’ll be a political groundswell to get rid of it. So in my mind the individual mandate is kind of irrelevant to this.

All that said, let me make a couple essential caveats to this discussion.

The first caveat here is that age is a poor substitute for what is actually most important: the health of these patients.  The risk pools need healthier people to pay into the system in order to pay for those that spend the most health dollars, i.e. the unhealthy.  In general, that means younger patients paying for older ones.  Although using age demographics is a decent substitute for this, it is an imperfect one.

Second, the ACA is a completely new system.  We have no idea if there is any historical analogue that can correlate.  We use Massachusetts and their experiment with Romneycare simply because there is nothing else even closely resembles Obamacare.

Third, and this is very important to remember, is that we are really not talking about a single national system, but 51 state and local systems.  Each state is their own microcosm.  Avik Roy had a nice breakdown:

The states with the biggest skews toward older exchange participants were West Virginia (total skew: 66 percent), Maine (65 percent), Wisconsin (64 percent), New Mexico (61 percent), and Ohio (60 percent). The states with the lowest skews were Massachusetts (28), Utah (29), Kentucky (39), Maryland (39), and Virginia (40).

Whether this becomes significant or not in the long-term is uncertain.  But the larger skewing you see toward the elderly population, the more likely they will see a net effect on future premiums.

On a side note, there is some positive data for Obama and his allies.  A surprising 60% of all plans purchased on the exchanges are Silver level…meaning people are paying more to upgrade their plans, and pay less out-of-pocket later.  This is a political win for Democrats, who thus will not have to be responsible for as many people complaining for hefty out-of-pocket costs in 2014.

One data point that can be a positive or a negative depending on your point of view is the fact that 79% of all purchasers are subsidized.  This aligns with the CBO estimates, which roughly predicted a ration of 6:1.  I personally view this as a long-term negative, as this will drive up the debt on the Federal level, and in three years when the Federal guarantee of subsidization of state Medicaid program ends, this could put a huge burden on the states.  Liberals view this as a major victory, as they feel that insuring these people with tax dollars is beneficial to the country at large.

But the headline today is about the demographics.  What does all of this ultimately mean?  The most likely result of all this is that the risk pools for the exchanges will be mild to moderately worse than anyone predicted a few years ago.  No matter how much certain liberals would like to spin that this is on a similar pace as Massachusetts, the overall numbers tell a different story.  We are looking at risk pools that are worse than predicted; the CEO of Humana, Bruce Broussard, admitted as much at the JP Morgan Health Insurance conference on Monday.

Will this put Obamacare into a death spiral?  Unlikely.  As I have said for months, the death spiral is highly unlikely.  Additionally, because of the risk corridor program within the Affordable Care Act, the government will, for all practical purposes, ‘bail out’ the insurers if the risk pools cause too much of a negative effect on profits.

So what we are looking at is more upward bending of the cost curve, as these costs are passed down from the insurers to the public, with premiums increasing at a 1-2% rate higher than baseline expectations. And that means that going forward, premiums for most Americans will be higher than if we had never passed Obamacare in the first place.  The American people can decide if that extra cost was worth it or not.

The Band-Aid Presidency

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Last night, in the most classic way imaginable, the Obama administration dumped a 800 lb lump of coal into the stockings of liberal America on the eve of the Christmas holiday.

The Administration announced that any person who had their health insurance cancelled late this year are no longer obligated to legally abide by the individual mandate, the central taxation component of the Affordable Care Act.  Additionally, these same people could satisfy the mandate requirement by purchasing catastrophic insurance alone, which previously was not considered sufficient to satisfy the mandate requirements.

The argument that the administration is making is ironic in so many ways.  They argue that the individual mandate, arguably the most important cog to the workings of Obamacare, is a ‘hardship’ to millions of Americans.  Furthermore, they are arguing that because of this hardship, they will simply delay that part of the law.

Think about the legality for a second:  President Obama is issuing a hardship exemption for something the Supreme Court has defined…as a tax.

Can you imagine the fun a Republican President can have with that power?

Let us also remember that this invalidates virtually every Democrat and liberal argument against a deal to avert October’s congressional shutdown.  Let us not forget that Senators Ted Cruz and Mike Lee put a proposal on the table to avert the shutdown if the administration simply agreed to a 1 year delay to the individual mandate.  Yesterday, Barack Obama did just that…proving that much of his stance on the shutdown was political theater, nothing more.

In the larger picture, this type of policy change largely defines the entire Obama Presidency. The pattern is as follows:  Obama and liberals propose a policy that, any common sense would tell you, cannot function in the real world. They pass this policy, often distorting the facts to the American public to get their support.  Once passed, they all of a sudden realize the idiocies contained in their plan, and rush to distance themselves from the plan they were recently advocating.  Once the policy becomes active, they realize that reality is more powerful than ideology, and thus, look for any and all ways to get themselves out of the mess they created.   And they use every ‘Band-Aid’ measure possible to cover-up the mess they have created.

The Band-Aids are piling up, and it does not only refer to health care.  Look no further than foreign policy this.  Obama’s Syria ‘Red line’ policy is a perfect example.  Obama talked a good game, but then realize that there was no way to enforce his red-line in the real world.  He quickly ran away from that policy, only to end up with a policy that, ironically, strengthened the power of a man Obama said was ‘evil’, Bashar Assad.

If you want to go further back, the Obama stimulus often had many of these characteristics as well. They passed statutes for ‘shovel-ready’ projects, and later realized there was no such thing.  They then pumped out the money, regardless of effect, to lackluster consequences.

Think of the fallacy of this latest Band-Aid on Obamacare.  The administration is arguing that they have imposed a hardship on at least 5 million Americans who lost their health insurance because of Obamacare.  So, to help these people, they are going to exempt them from the individual mandate.  However, these same people argued during the shutdown that any delay of the individual mandate would be catastrophic to the functionality of the entire ACA system.

Furthermore, the hardship claim is dubious.  Is Obama actually saying that it is more a hardship for people to lose their insurance and have to purchase it on his own exchange, than the hardship of forcing the previously uninsured to dig deep in their pocketbooks to purchase that very same insurance on the exchanges?  He is saying the previously uninsured have no burden of hardship as well?

Another liberal fallacy also dies: the argument that these were ‘substandard’ insurance policies.  Obama has now stated it is o.k. for people to move to catastrophic insurance, when the majority of this cohort had comprehensive insurance prior to Obamacare coming into effect.  In other words, Obamacare diminished  the quality of health insurance plans in America, and Obama is not legitimizing that change.

Each of the policy changes are chinks in the armor of Obamacare; that armor is now thin and rusting. This is a virtual universal delay of the individual mandate for 2014, no matter how liberals spin it.  They will never politically be able to argue that those that lost their insurance because of Obamacare bear more hardship than the uninsured do, and thus, they will be forced to exempt all Americans.  Ted Cruz wins the policy debate.

Even worse, this fixes nothing long-term.  This is a classic Obama ‘Band-Aid’.  Sure, it theoretically stops millions of people from being required to pay approximately $95 in tax penalty this April. But the real issue is not the tax, but the health care exchange.  By exempting all of these people, the administration makes the entire insurance system much less financially stable.

Insurers who were already dubious of the administration’s competence on this are now outright furious at being lied to, time and again.  They fear this will further push the risk portfolios of their insurance plans to the extreme, and thus, will increase their costs. That further increases cost pressures on health insurance premiums across the board, increasing costs for everyone. The Obamacare upward bending of the cost curve continues.

The ‘Band-Aids’ are all for show.  Ultimately, the problem is that the law itself was inherently broken.  These temporary measures actually fix nothing in the system. They are a political attempt at cover.  But nobody can protect Democrats from the onslaught of public anger that is going to arise when they realize what the ACA does, when the Band-Aids finally come off.

Doctor shortage? The Answer Is Yes: Absolutely.

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In an editorial in the New York Times on December 5th, Scott Gottlieb, an internist and fellow at the American Enterprise Institute, and Ezekiel J. Emanuel, a former health policy adviser to the Obama administration, argued that there is no up coming physician shortage to threaten the country in the face of the implementation of the Affordable Care Act.

I beg to differ.

Drs. Gottlieb and Emanuel are both very intelligent and knowledgeable about health care policy in this country.  And I do have the greatest respect for their expertise and their work in this arena.  However, in this case, I think they are largely deluding themselves.

First, let us stipulate that we all agree that most of the major medical associations in the U.S. fully believe a shortage is going to occur in short order, as the authors in this piece state quite openly.  Let us also stipulate that Gottlieb and Emanuel are not the first to deny there is a doctor shortage.  For example, mathematician Linda Green argued in Health Affairs journal last year there was no real doctor shortage, if you made some structural changes.  However, what we see, as we go through their logical progression, is that their assumptions face the cold, hard reality of the real world where doctors actually practice, instead of the theoretical world they seem to exist in.

In the editorial in the NY Times, the authors first point to the Massachusetts experiment with Romneycare as a reason that we should not believe that the doctor shortage will occur.  They state:

Take Massachusetts, where Obamacare-style reforms were implemented beginning in 2006, adding nearly 400,000 people to the insurance rolls. Appointment wait times for family physicians, internists, pediatricians, obstetricians and gynecologists, and even specialists like cardiologists, have bounced around since but have not appreciably increased overall, according to a Massachusetts Medical Society survey.

There are many problems with this statement.  First and foremost is that Massachusetts is a poor analogy for the nation at large.  Massachusetts has the highest ratio of physicians per capita (462 doctors per 100,000 individuals). The national average?  About 300.  This means that Massachusetts has approximately 50% more physicians than the rest of the country on a per capita basis.

Now, even with that built-in advantage, the state had significant access disruption.  Let us put aside the fact that between 2009 and 2011, premiums in the state rose by 9.7 percent while benefits actually decreased by 5 percent. Deductibles during that time period rose 40 percent.  What Gottlieb and Emanuel failed to mention is that there are numerous surveys from the state showing that access to physicians is becoming problematic.

These results from a survey performed by the Massachusetts Medical Society:

The telephone survey of 838 doctors conducted in February and March found that 51 percent of internists are not accepting new patients, up from 49 percent the previous year. Fifty-three percent of family physicians, the other major group of primary care doctors, were also not taking new patients.

Even for patients fortunate enough to have a primary care doctor, waits for appointments continued to be lengthy. The average wait for an appointment with an internist was 48 days, which was five days shorter than last year, but the average wait for family medicine was 36 days, a week longer than in the 2010 survey.

Patients were also waiting longer to see specialists. The average wait for gastroenterologists, obstetricians/gynecologists, orthopedic surgeons and cardiologists were all higher than a year ago, the report said.

Now, Emanuel and Gottlieb are correct that these numbers have fluctuated, but that is to be expected.  Overall, however, access to physicians in Massachusetts has worsened over the past few years.  And don’t forget: Massachusetts is America’s best case scenario in regards to physician access.

Furthermore, even if their claim that there has been no decreased accesss in Massachusetts under Romneycare is true, that still doesn’t necessarily mean anything, because of the huge discrepancy in doctor to per capita ratio stated above.  Additionally, Massachuestts had the highest rate of insured in the country.  Therefore, the number of new patients entering the system that were previously uninsured is less than anywhere else in the nation.  To use a state such as Massachusetts that is skewed so heavily to one side of the scale seems to be foolish.

The editorial authors then go on to make several unsubstantiated claims:

Innovations, such as sensors that enable remote monitoring of disease and more timely interventions, can help pre-empt the need for inpatient treatment. Drugs and devices can also obviate the need for more costly treatments. Minimally invasive procedures, like laparoscopic surgeries, can be done more quickly with faster recovery times and fewer physicians.

There is virtually no evidence, anywhere, for this.This could be true, but it would take a massive improvement in current medical treatment methodologies that cannot be foreseen, and more importantly, are unlikely to occur in the near term.  I can speak for myself, as a radiologist who performs teleradiology on a significant scale; or my wife, who is Clinical Assistant Professor at a major medical center.  Neither of us can see the kind of transformation that Gottlieb, Emanuel, or Ms. Green are suggesting.  In short, these are dreams, not practical realities.

They go on to discuss what doctors call ‘physician extenders’, such as physician assistants, nurse practitioners, etc.  These professionals certainly have a place in the ever-expanding U.S. health care system.  They also can likely serve with more autonomy than they do today, in order to decrease the workload on physicians.  Of course, that would take a dramatic change not only in how we practice medicine, but also extensive changes in the medicolegal landscape of the country.

Even without those considerations, however, what the authors fail to declare is that expansion of the use of these professionals has already been the case for several decades.  As stated by Dr. Richard Cooper in an article in the Journal of the American Medical Association in the November 13, 2013 edition (page 1932), between 1990 and 2012, the number of physicians increased by 50%, while the number of nurse practitioners and physician assistants increased by a whopping 500%.  Therefore, Gottlieb and Emmanuel are suggesting a larger expansion in the use of these professionals than has already occurred.  That kind of dramatic change is not practical, and filling the gap with a huge number of these personnel should be considered unlikely.

The one solution that is advocated by most medical studies, the expansion of medical schools and residencies, is dismissed by the authors here. But one indisputable fact is that the United States is producing far too few physicians.  This started during the Clinton era, when Medicare purposefully capped the number of residency positions funded.  This was done because the argument was that decreasing the number of residencies would push more doctors into primary care; that prediction never came to fruition. In fact, if residency programs had not been capped in 1997, and annual growth in the number of positions had continued at a historical basis, there would be no physician shortage today.

Medical schools, both Osteopathic and Allopathic, have steadily increased medical school seats since 2000.  According to Dr. Cooper, 27,000 medical graduates will be produced by 2020, a 50% increase from 2000.  This is still far too few to close the gap we suffer from today.

Dr. Cooper in his JAMA article pleads for consensus among policy advisors.  He states the following:

To do nothing ignores the powerful economic and demographic trends and leaves future generations to ponder why they and their loved ones must experience illness without access to competent and caring physicians.

Drs. Gottlieb and Emanuel do a disservice to the medical community by distorting the realities of the demographics involved among the physician community of the United States.   We will very likely need far more physicians than they project, and most experts believe that a shortage of 200,000 physicians by the year 2020 is very likely. Depending on wishful thinking and technological advances that cannot even be seen by the most acute vision imaginable is not a thoughtful policy position; it is a Hail Mary.  The government must quickly come to terms with the major disaster that awaits us if we do not respond to this looming health care problem.

 

Links:

http://www.forbes.com/sites/scottgottlieb/2013/12/05/obamacare-wont-create-a-doctor-shortage-but-that-doesnt-mean-youll-have-ample-access-to-physicians/

http://www.census.gov/statab/ranks/rank18.html

http://www.mass.gov/chia/docs/r/pubs/13/ar-ma-health-care-market-2013.pdf

http://www.wbur.org/2011/05/09/doctors-survey

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/15/doctor-shortage-what-doctor-shortage/

http://content.healthaffairs.org/content/32/1/11.full

http://jama.jamanetwork.com/article.aspx?articleID=1769903

 

What Really Worries Democrats About Obamacare

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Ignore the media, and the liberal spin.  There is one simple political reality:  Democrats across the board are extremely worried about the Affordable Care Act, and its effect on the 2014 elections.

I have quite a few connections to staffers and other behind-the-scenes people in the Democrat Party.  Talking to them, there is a consensus: they are in trouble.

Some of them fully believe that Barack Obama, Kathleen Sebelius and the rest of the President’s administration can right the ship, and some make the Obamacare system functional enough to please the public.

Most, however, don’t believe anything of the sort.

There is a reason for this:  for all the bluster and hot air about the Obamacare website debacle, that is the least of the worries for liberal supporters of the health insurance reform plan.  In fact, the failure of the website may actually be hiding some of the more pernicious aspects to the health care law.

So here is a timeline of the largest hurdles  the supporters of Obamacare face over the next twelve months:

 

November through December 2013

The enrollment numbers for the first month were terrible, and that is unlikely to dramatically change any time soon.  Initial numbers stated the total enrollment nationwide for October was a meager 50,000 or so.  That is less than 1/10th of 1% of the total necessary to keep the system sustainable.

Obamacare defenders will try to spin that the tens of thousands added on to the Medicaid system as a sign of success, but even people not familiar with the ACA understand it is easy to give away free stuff; It is another thing entirely to get Americans to pay their hard-earned money into the system, when that system may not provide them any great benefit in the near term.

The website functionality is going to be an ongoing challenge as well. President Obama and HHS Secretary Kathleen Sebelius both promised that the website would be working by the end of November.  That now appears to be another ‘incorrect promise’ and frankly, most IT experts I talk to would be surprised if the system is up and running before February.

Website Security will be an issue as this process continues as well. Consumer Reports and others already warned Americans that they should wait until major fixes in the security loopholes were corrected. On 11/19/13, there was testimony that the website places user data at “critical risk” despite recent government assurances it is safe to use.   Several security experts have predicted a large-scale breach in security. Imagine millions of Social Security numbers, credit card numbers, along with IRS tax data and health data being breached.

Amazingly, the entire ACA Payment system also has to be built, after three years.  There is no system at present to transfer funds from the Federal government to the states or to insurers.  And even more shocking? On November 18th, the head of the IT for the ACA admitted that at least 30% of the ENTIRE IT INFRASTRUCTURE still needed to be constructed.

To compound matters, the system also has a nonfunctional subsidy calculator.  What does this mean?  Right now, they are only estimating individuals expected subsidies.  However, if the estimate is incorrect and over estimates your subsidy, you could be liable for hundreds or thousands of dollars more in premiums next year.  This would be problematic in the best of situations.

To compound this problem, the administration is trying to shunt customers to private insurance websites, as a ‘work around’ for  the broken Federal exchange.  The problem is, it is technically against the law for purchases outside of the exchanges to receive federal subsidies.  What happens if a legal entanglement results in those subsidies to be ultimately rejected?  Customers could be in for a real disaster if they agree to purchase insurance, only to find they are not eligible for subsidies.

 

January through June 2014

The first problem is one I have already written about:  Obama will have to break his promise that If you like your doctor, you can keep your doctor.  This promise could never have held true in the market that Obamacare creates, because as predicted, many of the policies purposefully eliminate expensive and elite institutions.

I personally have been booted off of several health care plans because of a cancer center I work at.  I know many doctors stating similar experiences at elite institutions such as Memorial Sloan-Kettering Cancer Center, Mayo Clinic, Cleveland Clinic, and other prestigious institutions. The most famous case was a cancer patient in California who wrote an editorial in the Wall Street Journal, and who could no longer see her oncologists and other treating physicians, because the California exchange had no policies that would include all of her physicians.

The next major debacle will be the surprise of high deductible payments. The majority of the policies being sold are the cheaper ones on the exchanges; the so-called Bronze and Silver plans.  The average yearly deductible, after paying your premium for these policies, is around $5,000.  There is a high degree of variability, but on average these are high deductible plans.  What will happen the first time there is a sick child, and a $5,000 deductible stands between that poor family and a life saving procedure?

One interesting twist will be the use of Obamacare Navigators.  This was a program the administration started to ‘guide’ customers through the process.  Sounds great.  Except for one problem:  many of the Navigators were not appropriately screened, and there has already been a fair amount of fraud in this group of government workers. Undercover videos of Navigators telling customers to defraud the government have already surfaced, and I am sure you will see dozens of those as time goes on.

 

July through September 2014

This is actually when the rubber meets the road.  By this point, no matter how incompetent the administration’s IT experts are, virtually everyone that wants to have insurance should have insurance.  The website problems, even if they still persist, should no longer be relevant.

The first question that will arise is how many people chose to pay the penalty?  For many of the lowest income persons, a penalty of $95 was all that was required to opt out; with the high expense of many plans, a fair number of people will choose this option.

More important is the ratio of healthy individuals compared to sick ones in the exchanges.  For the exchanges to survive, they require a very high ratio of healthy people buying in, in order to subsidize the rest of the population.  Recent data from Kentucky (supposedly a liberal success story) shows that the ratio of healthy to sick is closer to 1:4 than the close to parity required for financial sustainability.

What happens if this does not occur?  Insurers will enter the oft talked about ‘death spiral’.  They will be required to raise their future premiums in 2015, because the cohort of patients in their insurance pools are less healthy, and thus, more expensive to treat.  The death spiral occurs as young, healthy persons realize that the increased costs of their insurance is not worth it, and opt out…further increasing the ratio of sick persons in the insurance pools, and further increasing costs.  This is the scenario that most scares Obamacare proponents.

The irony of all this is this presumes that the individual mandate  is not delayed.  Right now, the Upton and Landrieu bills sit in Congress, and Obama has announced his executive order to ‘fix’ the problem of policy cancellations.  The more delay of the individual mandate, either by legal methods or presidential signature, the more likely it is that insurers will have costlier insurance pools that will drive up premium costs moving forward.

The next problem is how this huge new population of insured patients will be treated by a system that is already overburdened.  A doctor shortage very well could arise.  Something similar, but to a lesser scale, occurred during Romneycare’s implementation in Massachusetts.  Massachusetts was more prepared than most states, as it has the highest ratio of doctors to patients in the country.  Even then, access to physicians, especially specialists, was restricted substantially.  Now imagine the states with low doctor to patient ratios, and you can imagine the complications that could arise.

That doesn’t even take into consideration that many physicians are likely to opt out to the largest expanding health care insurance program in the country:  Medicaid.  Already in states like New York, about a third of doctors have opted out.  Many physicians, especially those tied to hospitals, cannot opt out.  But this decrease in available primary physicians to handle this huge new number of Medicaid patients (who are among the sickest and poorest patients around) could be a disaster, and there is no short term solution to this problem.

 

October through December 2014

This is where all the real excitement occurs.  Let us assume some how, some way, Democrats have survived the year without any major catastrophes, and are holding their head above water as the midterm elections come.  There are several huge hurdles still remaining.

The first, and largest by far, will be the kicking in of the employer mandate. Remember that this mandate was supposed to occur this year; however, because of the completely broken and unworkable system, Obama delayed it (outside of legal bounds no less).  But the employer mandate is the crux of the entire system; the majority of Americans get their insurance through their employer, and insuring this mandate is vital to that majority.

The problem arises in the fact that in the same way that millions are losing their private insurance plans today, even a greater number of employees are likely to either lose their plans or see drastic changes next year.  This was predicted by the Department of Health and Human Services as far back as 2010.  Now is when that change kicks in.

Furthermore, millions of small business owners will have to decide whether to pay for insurance, or send their employees into the exchanges; the same exchanges that are so far struggling to handle the volume and load.

For employers that are going to continue their insurance plans, another problem: they will likely get notices from insurance companies that the plans they currently purchased no longer exist.  Sound familiar?  And insurers will, under Federal law, have to do that a minimum of 60 days before cancellation, meaning…the beginning of November, at the very latest.

And, remember the ‘death spiral’ we discussed above?  If insurers face that hurdle, they are likely to raise rates across the board.  Here is the biggest problem of all: for all the talk about these changes affecting only the people on the exchanges, if and when a ‘death spiral’ or anything like it occurs, costs will rise for everyone.  That means increased premiums for businesses, which will likely be passed on directly to employees.  Some employers will also likely choose the easy option, which is shifting their employees to the exchanges.

And all this will be announced just weeks before the election.

 

After all of this, you begin to understand why those that truly understand the steps necessary in the next year to implement the full-scale of the Affordable Care Act are worried.  Right now, we are seeing the tip of the iceberg: gross incompetence in establishing a website for entry into this behemoth government monstrosity.

But once you enter this behemoth, you start to understand that there are numerous interweaving and interconnected cogs that will need to work relatively smoothly, or the system as a whole will flounder.

That doesn’t even tell the political story.  Every week, if not daily, there will be a story about individuals who are being harmed by the ACA.  Those stories will drown out any of the positive stories, because we know that ultimately the media highlights the negative.  As stated above, when a child or young mother is denied life saving treatment because of restrictions placed upon them by Obamacare, who takes the blame?

Liberals are trying to circle the wagons, to keep sustainable political support for the plan, in the hopes that the Obama Administration can fix the problems in short order.  But as you can see above, there is no simple fix.  Many of the ‘problems’ with Obamacare are inherent to the system that Democrats devised.  These were intended results.  How do you fix the plan, when it is the intent of the plan that is the problem in the first place.

So batten down the hatches, America…it is going to be a bumpy ride.

 

The Left’s Obamacare Debacle Denialists

Obamacare launch in 3...2...1....d'oh.

Many of my liberal friends are apparently quite happy to live in an alternate reality.

In this reality, the Obamacare rollout is going just great; the issues are simple ‘glitches’ that can easily be remedied.  And of course, none of this will have repercussions to the larger program, nor will the public be turned off by the apparent hiccup.

Yeah, it must be nice living in that world…because the real world is not so great.

See this story from Oregon:

Is the Affordable Health Care Act making health care unaffordable for some people?

Some customers of Regence Blue Cross Blue Shield, one of Oregon’s largest insurance providers, say that’s exactly what’s happening. They say they are finding their health care plans are dramatically changing under the Affordable Care Act.

“Policy holders are seeing almost double their monthly premiums,” said a KATU viewer named Larry in an email. He said his wife’s premium will increase by $300 under the Affordable Care Act.

Cover Oregon spokesman Michael Cox says most insurance plans that focus on lower premiums and higher deductibles will be replaced by plans with lower deductibles and higher benefits.

Or this story from Illinois:

The Tribune‘s Peter Frost found that a typical user in the system — a 33-year-old single father in this case — would see his premiums “more than double” from the current average of $233 a month. But if the single dad wants his premiums to remain in range, he’ll need to sign up for an annual deductible of $12,700. The average deductible before ObamaCare for this consumer would have been $3,500.

You will note I specifically chose states which are run by Democrats, where the states set up their own exchanges, and everything is going as Democrats planned.

If this is success, I would hate to see failure.  I would assume that ‘failure’ scenario has zombies and floods of lava involved.

Oh, but it gets worse.  In a post on the liberal blogging site the Daily Kos, a long time diarist posted his new reality…of much higher premium costs.

My wife and I just got our updates from Kaiser telling us what our 2014 rates will be. Her monthly has been $168 this year, mine $150. We have a high deductible. We are generally healthy people who don’t go to the doctor often. I barely ever go. The insurance is in case of a major catastrophe.

Well, now, because of Obamacare, my wife’s rate is gong to $302 per month and mine is jumping to $284.

I am canceling insurance for us and I am not paying any $#%#^# penalty. What the hell kind of reform is this?

If you take a look, be sure to read the comments section.  It is riddled with hate filled rants about how this poster is idea a GOP plant, a troll, or a liar.  A few helpful commenters told others to hold back the attacks until they knew the facts…to no avail.

This is pretty common in the left-wing bubble these days.  Many liberals have convinced themselves that there is no possible way Obamacare could fail.  They simply have faith that Obama could not be that incompetent.

It is almost a religious level of fervor.

To be sure, there are a couple liberal commentators that are facing the hard truths of this big government failure. Robert Gibbs, former Communication director, had this to say:

“This was excruciatingly embarrassing for the White House and for the Department of Health and Human Services.”

“This was bungled badly. This was not a server problem, like too many people came to the website. This was a website architecture problem.”

“When they get this fixed, I hope they fire some people…”

A glowing endorsement, indeed.

Ezra Klein, Washington Post blogger and longtime Obamacare aficionado, was even more harsh; and even better, it is while he was on MSNBC:

“The way this I.P. is going is a disaster, I really don’t think people should soft pedal what a bad launch this is. They’ve done a terrible job on this website,” Klein said on Monday’s Morning Joe.“We’re a couple of weeks in and people can’t sign up, people have tried 20, 30, 40 times, I mean it’s one thing for that to be true the first three or four days, it’s another thing for it to be true two or three weeks in.”

Klein went on to say this in his blog:

So far, the Affordable Care Act’s launch has been a failure. Not “troubled.” Not “glitchy.” A failure. But “so far” only encompasses 14 days. The hard question is whether the launch will still be floundering on day 30, and on day 45.

Kudos to Klein and Gibbs for…facing glaringly obvious reality.

This is fundamentally the problem when you create a big government solution to a large-scale problem.  When you create such a program, facts be damned; success is about political victory, not necessarily making the lives of Americans better. And if facts get in the way of that, ignore the facts.  It is frightening how many otherwise rational liberals have totally deluded themselves into believe that Obamacare is a guaranteed success, when nothing can be farther from the truth.

Furthermore, there is no culpability in big government.  In most private ventures, a failure of a $600 million program to meet its most basic goals would result in a demand for and ultimately receipt of a resignation.  What are the chances of Obama demanding HHS Secretary Kathleen Sibelius to resign, and her submitting her resignation?  Slim to none.  Because in government, you can do no wrong.

Today, most Democrats are oblivious to the realities that Gibbs and Klein are stating.  They still believe Obamacare is the bait-and-switch sale job that Obama sold to them in 2010.  They are still under the illusion this is a plan that will cover everyone (it will not), will reduce the debt (the CBO and GAO say that those cuts are less and less likely), and that it will cut the average American family’s premiums by $2,500 (always a joke, now proven to be a joke).

But self-delusion is a powerful thing.  And although a majority of Americans now see Obamacare as damaging to their well-being, liberals appear to be willing to go down fighting, to defend a reality that simply doesn’t exist.

On the Government Shutdown vs the Supreme Court

So in the fury of the Government Shutdown, the left has become apoplectic about the “Affordable Care Act”.  You’ll more likely recognize it as “Obamacare”. They consider it to be Constitutionally tested by the Supreme Court, therefore it’s the “law of the land”.

This logic is fundamentally unsound, let’s debunk it.

http://www.law.cornell.edu/constitution/articleiii

1) The Constitution does not grant “kingly” powers to the Supreme Court.  Their job is to rule on the law brought before them, and to clear up controversies between states.

2) Nowhere in article III of the Constitution or in the Federalist papers, Thomas Jefferson’s letters, etc do you see that the Supreme Court was supposed to be the “final say”.  Jefferson in fact believed their power should be limited even further, than the Constitution did already.

3) We know for a fact the left doesn’t actually believe their own words. Let’s go through their history of fighting against the Constitution itself :

3.A) The Progressive Income tax was tried several times before the amendment was brought up and each time it was found unconstitutional.  Did that stop the Progressives from trying to trash the Constitution and implement their marxist utopian tax?  NOPE.  They kept fighting and eventually (and illegally) amended the Constitution to add the Progressive Income tax.

3.B) The recent rulings declaring corporations have free speech and that every citizen has a right to defend themselves with a firearm.  Has the left stopped fighting against Corporate speech?  Have they stopped fighting for gun control?  HELL NO.  They never give up on those things, even though, in their own words, “The Supreme Court is the law of the land.”

4) The Supreme Court only ruled on one part of the law, the individual mandate.  But as this site states;

Feel free to examine the entire text of Article III to assure yourself that no power of Judicial Review is granted by the Constitution.

“Well,” you might say, “someone has to review laws for constitutionality. Why not the Supreme Court?” Some possible answers:

  • First and foremost, it is not a power granted to the Supreme Court by the Constitution. When the Supreme Court exercises Judicial Review, it is acting unconstitutionally.
  • It is a huge conflict of interest. The Federal Government is judging the constitutionality of its own laws. It is a classic case of “the fox guarding the hen house.”
  • The Constitution’s “checks and balances” were designed to prevent any one branch of government (legislative, executive or judicial) from becoming too powerful and running roughshod over the other branches. There is no such system of checks and balances to protect the states and the people when multiple branches of government, acting in concert, erode and destroy the rights and powers of the states and the people.
  • Even if the Supreme Court could be counted on to keep the Executive and Legislative branches from violating the Constitution, who is watching the Supreme Court and will prevent the Judicial branch from acting unconstitutionally? Unless you believe that the Supreme Court is infallible (and, demonstrably, it is not), then allowing the Supreme Court to be the sole arbiter of Constitutionality issues is obviously flawed.
  • Justices are appointed, not elected and may only be removed for bad behavior (which has happened in the distant past but these days, appointment to the Supreme Court is like a lifetime appointment). If the court upholds unconstitutional laws, there is no recourse available. We the People cannot simply vote them out to correct the situation. Thomas Jefferson wrote, in 1823:”At the establishment of our constitution, the judiciary bodies were supposed to be the most helpless and harmless members of the government. Experience, however, soon showed in what way they were to become the most dangerous; that the insufficiency of the means provided for their removal gave them a freehold and irresponsibility in office; that their decisions, seeming to concern individual suitors only, pass silent and unheeded by the public at large; that these decisions, nevertheless, become law by precedent, sapping, by little and little, the foundations of the constitution, and working its change by construction, before any one has perceived that that invisible and helpless worm has been busily employed in consuming its substance. In truth, man is not made to be trusted for life, if secured against all liability to account.

Therefore, it doesn’t matter if the individual mandate was ruled constitutional by the Government.  They are exercising an authority that doesn’t belong to them.  It certainly was never meant to be the *final* verdict on constitutionality.  As http://constitutionality.us/SupremeCourt.html – so poignantly points out;

“It is the Constitution, not the Supreme Court, which is the Supreme Law of the Land. Even the Supreme Court should be accountable for overstepping Constitutional limits on federal power.

Conclusion:

Obamacare is bad and unconstitutional law, just like the Alcohol Prohibition, which was upheld by the Supreme Court, and Slavery, which was also upheld in the Supreme Court.  The Supreme Court is not the final say in our Country, we are not a country ruled by Justices.  The Constitution is the final say, and it’s up to EACH body and Representative to uphold and fight for that document.  The Government Shutdown MUST continue until we defund/delay the implementation of this HORRIBLE law, that none of the proponents bothered to read before voting YES.

ObamaCare-Totally-Safe

Obamacare is killing jobs, Obamacare is killing privacy, Obamacare will kill people.

The goal of Obamacare, is not to increase Health Care access.

It’s goal is to decrease the amount of money we’re spending on Health Care.  That’s all the left talks about.  How much more we spend on Healthcare than countries with “wonderful” universal Healthcare.

I hate to burst their bubble, but life is not all sunshine and lollipops with Universal Healthcare.  ObamaCare AKA the Affordable Care Act, is a step towards Universal Healthcare and will destroy the wonderful Health Care this nation enjoys.

It is completely appropriate to compare it to Slavery, as the Government will judge your worth, and determine if you are worthy of being helped.  You belong to the state. 

That is why Republicans need to keep the Government Shutdown! We CANNOT stop fighting hard enough against this bill, it is bondage.

Shackled to ObamaCare