The Refinery ep.30: Boehner, RINOs, and Hoodies

On this episode of #TheRefinery, The Conservative Union’s Leslie & Ryan, The Party Of Choice’s Cori & Andy, and Free Radical Network’s Felicia, JD, & Stephen talk about the return of Darth Boehner!

With John Boehner regaining his position as Speaker Of The House, many on the right have… expressed some concerns… about the direction of the country and the RINOcity of certain House GOP members, The Refinery crew tackle what we need to do in light of this event, as well as debunking some hoodie myths and laughing at Harvard Professors.

THIS WEEK’S LINKS:

Boehner: ‘The Horse You Rode In On’ – http://freeradicalnetwork.com/the-army-you-have/

The Hoodie Ban is a Media Lie – http://freebeacon.com/blog/oklahoma-wants-to-ban-hoodies-nope-its-a-media-lie/

When Obamacare Came to Harvard – http://www.nationalreview.com/article/395777/when-obamacare-came-harvard-rich-lowry

The Refinery ep.1429: Resolutions for Conservatives

The Conservative Union’s Leslie & Ryan, The Party Of Choice’s Cori & Andy, and Free Radical Network’s Felicia & JD discuss some New Year’s Resolution ideas for the Conservative movement!

Resolutions like:

  • Remember Who The Real Enemy Is
  • Source Everything
  • Fight Hard, But Don’t Be A Jerk
  • Winning is a Principle
  • Think Twice Before You Write People Off
  • Calling people ‘stupid’ didn’t work for #Gruber, and it won’t work for us.

THIS WEEK’S LINKS

Andy’s article ‘Message to the GOP: Go Slow’ – http://www.thepartyofchoice.com/articles1/message-to-the-gop-go-slow-by-andy-peth

Red Tape is Strangling Good Samaritans – http://www.thedailybeast.com/articles/2014/12/27/the-red-tape-strangling-good-samaritans.html?via=desktop&source=facebook

Kid Tears Up Store – http://www.theblaze.com/stories/2014/12/30/little-hellion-goes-on-over-three-minute-rampage-terrorizing-a-store-until-one-person-gets-fed-up-and-does-the-right-thing/

Andy’s article ‘Intellectual Cover’ – http://www.thepartyofchoice.com/articles1/intellectual-cover-by-andy-peth

Clickbait Headlines – http://freeradicalnetwork.com/obama-to-force-congress-to-let-him-run-for-an-illegal-3rd-term-in-2016/

The Dexter Defense (You Are Stupid) – http://freeradicalnetwork.com/the-dexter-defense/

The Refinery ep.1426: Gruber, Lies, and Cookie Dough

On this episode of #TheRefinery, The Conservative Union’s Leslie & Ryan, The Party Of Choice’s Cori & Andy, and Free Radical Network’s Felicia & JD talk about the #Gruber hearing, the strategy and costs behind the Left’s lies, and the USDA’s warning on eating raw cookie dough!

Discussed During the Show:

Gruber Lawyers Up Regarding How Much Money He Made 

The Most Moving Moment of the Gruber Hearing

Lying for the Cause

Bad Week for Liberal Media

Government for the Strongest

Sermons for the King

Stop Eating Cookie Dough

Limit the Use of Police Force by Limiting the State

Thoughts On Halbig

HALBIG!!!! - Kirk screaming Khan - Meme Generator

 

There were two major Obamacare rulings scheduled to come out this year…and both ended up coming out within hours of each other on Tuesday.

In Halbig v. Burwell, the D.C. Appeals court ruled that the subsidies in the Affordable Care Act were intended only for exchanges established by states…thus excluding millions of participants in the Federally run exchange. Hours later, the 4th Circuit Court of Appeals, in King v. Burwell, declared virtually the opposite.

The legal arguments have been going on for a long time, and there are a lot of great discussions, some which are linked from Nicholas BagleyMichael CannonJonathan Adler, and others that will take you through the circuitous legal arguments.  If you are really interested, this podcast with Mr. Bagley and Mr. Adler could be fruitful for your search to understand more about the debate.

But here are my brief takes on the results of both cases:

1. The Halbig decision is a major boost to the momentum of the case of PPACA opponents.

Despite the 4th circuits ruling taking the steam out of the excitement over Halbig, this has to be a major victory for Misters Cannon and Adler, who were two of the earliest proponents for a case attacking the legal justification for subsidies in the Federal exchanges.  Even in the 4th circuit ruling, the court admits the litigants had a fairly reasonable cause to bring the suit, because the text of the law is quite clear that the subsidies are only for state-run exchanges.

This is key for the following reason: it now serves as an impetus for the Supreme Court to take up the case.  Although many liberals and others are arguing that because Halbig is likely to lose in the D.C. court on en banc session it will remove some of the justification for the Supreme Court to take up the case, that doesn’t by itself remove the legal and logical conflict of the case.

This doesn’t insure that the case will be resolved by the highest court in the land…but it increases the probability greatly.  Make note there are two additional cases also working their way through the District courts.  All this from a case where Mr. Adler once remarked he thought the chances of ultimate legal success were very, very low.  Not bad, all things considered.

2. Liberal arguments about ‘activist’ and ‘politicized’ judges are silly and naive.

Liberals howled today when the Halbig ruling was released, calling it a ‘highly politicized ruling by activist conservative judges’.

They yet were silent when the 4th circuit, in a ruling that relied highly on political arguments to make their case, ruled the reverse.

Furthermore, liberals are now relying on the en banc review of the case in the D.C. court, precisely because it is political.  The reason liberals are so confidant there is because of the large Democrat advantage in that court overall.

I think we can go back and forth about politicization of the courts, and which judges are activist or not.  But to rely on that  for your legal understanding of the case is simply naive.  Both sides have legitimate legal arguments, based in long-standing jurisprudence.  This is actually a complicated and difficult case…and to avoid giving credence to either side is being unfair.

3.  The ambiguity in the law weakens the government’s case far more than the litigants.

If you read the two rulings today, what you see is the D.C. court relied highly on the actual text of the PPACA.  Its argument was that the text was quite clear that the state exchanges were supposed to benefit from subsidies, while the Federal exchange would not.

In the 4th Circuit ruling, they rely heavily on what the law implies.  They don’t as much rely on the true text of the law itself.  Also note that the 4th circuit struggled to find a contemporary statement from Congress during the debate that clearly stated they wanted subsidies on all exchanges…which in my mind, greatly weakens the government’s case as well.

This is not to say the 4th circuit was incorrect as far is jurisprudence is concerned. Mr. Bagley makes this argument in a piece from Greg Sargent:

As Bagley explains it to me, the core distinction is whether you are arguing that “Congress didn’t really mean what the statute said,” or whether you are arguing that “what the statute says doesn’t actually mean what you think it means.” The former, Bagley says, is a losing argument. But that is not what proponents of the law are arguing. As noted above, the statute does not clearly say that those on the federal exchange don’t get subsidies. Therefore, the question is not, “what does the statute say” — that is not actually clear — but “what does the statute mean.”

The D.C. court also referred to this ambiguity.  But they made what is (to me, at least) a more sound argument: that although there is some ambiguity, there is absolutely no clarity in what the law implied.  And if the implied intent was uncertain, and the textual intent quite clear…you should rely on the form that is clear.  No?

In fact, if you go back to the discussions during the Obamacare debate…there were a few discussions about limiting the Federal exchange subsidies.  Also recall: Democrats presumed that all states would be forced to expand Medicaid, and almost all states would create exchanges.  The necessity of a Federal exchange was a backstop, and no more.  I think the argument that Congress clearly, indisputably intended for subsidies to be available on all exchanges has dubious factual merits.  But that is moot; 4th circuit agreed with that argument anyway.

Just to close on this point; how tenuous was the government’s argument that the 4th circuit accepted today?  Their ruling states it quite clearly:

“the court is of the opinion that the defendants have the stronger position, although only slightly.”

That is not the statement that one would hold as a bedrock of certainty.

4.  Politically, this causes a problem for both parties. 

For Democrats, this continues the general public opinion that the ACA was written incompetently, had severe problems in implementation, and to this day remains on shaky ground.  Most Americans are not going to dig into the weeds on this; they simply know that courts are ruling both ways, which makes the entire system appear shaky at best.

For Republicans, this is no slam dunk either.  For example, if Halbig becomes the law of the land, won’t that place enormous pressure on Republican governors to establish exchanges?  At least 5 million people will lose Federal subsidies if the court ruling goes into effect.  In this environment, can GOP Governors simply ignore those people?  And remember, even without this onslaught of complaints, GOP governors were already accepting Medicaid expansion in one form or another.  I find it highly unlikely that the GOP could simply ignore the political pressure on this.

5. All of this was caused by the incompetence of Congress.

When Nancy Pelosi said, “We need to pass it to find out what is in it”, THIS is what she meant.  Today, in Halbig…we found out what is, and isn’t, in the Affordable Care Act.

A careful proofreading and understanding of the plan would have resulted in people realizing the contradiction that government was literally, in textual form, preventing the Federal government from providing the same subsidies as the states were allowed to.

Now, liberals are arguing what the intent of the law was.  That is a fair argument, but generally, the safest way to understand what was intended in a law?  Is to clearly state that intent within the law.

That was not done here.

The rush to passage, the inability to allow public comment, and the negligence of Congress in failing to read their own bill led to this.  Simple as that.

————————————————————————–

Couple points in conclusion.

First off, I respect a lot of people, many named above, that have varied views on the results in this case.  Clearly I am on one side of this as far as the legal argument goes, but I think that most of those on the other side are honest participants in the debate.  I fully stipulate that both sides have legitimate legal and logical arguments for their position.

That, in turn, is what makes cases like these so hard.  There is simply no right answer.  It is thoroughly possible that Congress wrote the bill, in the literal sense, not to provide subsidies to those on the Federal exchange.  It might even be true they intended that result.

What is also possibly true is, at the very same time, they intended for everyone to have access to those very same subsidies.  Simply put, I don’t think those that voted on this bill understood the full extent and connotations of the items they were voting on.

The rest of us should be wary of attacking one set of jurists over the other as well.  These courts were put in this terrible position because of the incompetence of Congress; therein lies the blame.  That these judges now have to play Solomon ultimately is not their fault.

One final point: as a physician, this entire train wreck is horrible for our patients.  Congress committed an act of malpractice by not clarifying these issues before passage.  Even if Halbig is overturned (the result I expect and predict), that doesn’t really truly solve the problem, because the law remains ambiguous on this and numerous other issues.  We really should demand better from our political leaders, and hold them to account when they make such enormous blunders. I doubt that will happen however.

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

No, “THIS” is Not the Thing That Will Finally Kill Obamacare

Government Health CareWhy do I discount/ignore every story that says “This is what will kill Obamacare?”

Because, as one of my commenters just said:

by years end the ACA will be so entrenched that it won’t be able to be removed.

The goal of the left is simply to keep Obamacare, even if it is just in name, as a part of the Federal Government, providing “healthcare” to one or more people who can be claimed to be victims. They only need to hang on, just barely, and they will have a permanent huge bureaucracy that, like every federal government program, will grow over time. Success does not matter, only survival.

NOTHING will kill Obamacare other than full legislative repeal and dismantling of every supporting organization, which requires a LOT of people becoming unemployed. You and I know how impossible that actually is. Thus, Obamacare will remain, at best, only mostly dead. tumblr_m7ixmdxISg1qdmk7to4_400[1]

No “bad result” or horrifying statistic will ever persuade any legislators or lobbyists on the left to do anything other than KEEP MOVING FORWARD. They will not be persuaded by failure at all. The delays are merely to make it more palatable and inevitable. The facts do not matter. The CBO report does not matter. Actual costs do not matter. Not to the leftists. Not to the people in the federal government.

So, do we simply give up and accept that America will be like the UK, with our NHS zombie medical system? Of course not. We’re America, dammit, we don’t do things like everybody else, that’s why we are the best! Obamacare will never die, and that’s ok. Here’s why:

Obamacare’s huge mistake is that it was too much too fast. Too much change, too much that violated the laws of human nature, too much cronyism, corruption, and stupidity. It could not and did not just happen smoothly to a passive and compliant populace.

The delays and exemptions (illegal though they are) are actually the left doing what they need to do to keep the dream alive, keep the departments in place, keep the funding, keep the rules-making bodies, keep the conversation going – to hang on by their fingernails. There are plenty of true believers out there to help them. They comment on my G+ posts all the time. Ignore them all.

The end result of Obamacare is that it will be, as all socialized medicine is, the lower tier of medical care. Go ahead, look around, ALL socialized medicine results in a two tier system, those who participate in it, and those who can afford to NOT participate in it. The only difference is the income level at which people are able to opt out, and that is kind of related to the homgeneity and general level of compliance of the population.

I remain quite optimistic about America’s future, and our ability to find a way around this disastrous legislation. That’s because I have faith in the American people, the American dream, and the brilliance of the individual.

Individuals will do what they need to do in order to retain control over their own lives, and to make choices for themselves. Americans do not simply lay back and take it, we just don’t. Never have, never will.

We have the seeds, and actually, quite healthy sprouts, of the worlds best Free Market Health Care system already in place. Consumerism and the profit motive will ensure that here in America, our two-tier health system has a dividing line far lower than in most other nations. In some countries, nearly everyone uses government doctors, and only the super-rich use the cash system. For Canadians, even the middle class can use the cash system by coming over to America. I believe that here in America, we’ll have a two-tier system with a dividing line not much above the poverty level. Yes, we are THAT good.

I live in a city with a very large population of illegal aliens, and a very large service economy. That’s a lot of people who were really never in the 20th century employer-provided health insurance market. We have TONS of quick care clinics, all over the place. They compete against one another to provide fast, effective, low cost health care on a cash basis, and some of them take insurance as well. The drugstores will provide you with their own brand of “prescription insurance” if you don’t have your own, so that you can get your medicines there.

I know, I was a cash patient for several years, needing biannual blood tests and montly prescriptions. I never had to make an appointment, paying cash was fast, cheap. My medical care was great. The free market has already taken over the “everyday basic” stuff, quite effectively. The free market also handles cosmetic surgery quite well – costs keep coming down and technology improves – just the same way things work in other industries.

Once insurance companies give up on Obamacare and come up with un-insurance plans, and clinics and doctors figure out a way around Obamacare – they will be competing for the business of all 300 million of us.

It will be chaos for a few years, and legislatively we have to keep fighting to get as much of Obamacare overturned as we can. However, American ingenuity will figure out how to work around all of it. Obamacare’s extreme overreach means that profit-minded organizations will figure out workarounds very quickly.

Obamacare will NOT result in “single payer for America”, it will bring back Individual Choice and Control over our own bodies. And it’s gonna be fun to watch. Just don’t get sidetracked by the true believers. Just as we have to work around the bad laws, walk around the true believers, just walk on by, pay them no mind. Don’t let them slow you down.

CU Talks: Obamacare – worse than we imagined ep.1405

Scott's_Run,_West_Virginia._(Unemployed_miners.)_-_NARA_-_518401[1]

Listen to the podcast here! In this week’s episode:

The more we experience Obamacare, the worse it gets.

Oregon was supposed to be the shining example of how great it could be – with ZERO signups, they’re likely to scrap their entire state exchange and go with the federal exchange. There’s so much corruption and cronyism that people may end up in jail for fraud.

There’s a new CBO report that confirms the worst projections that we anti-Obamacare folks had, from years ago. Originally it was pitched that it would create 4 million jobs. Now….the CBO even projects lob losses of 2.5 million, and a drag on the economy as far as their projections take them.

So…you won’t have a job, but at least you’ll have free, lousy, medical care! The left denies that bad things are bad, they deny that any of this was predicted. It continues to be nonsense on stilts and HORRIFIC policy.

Give the show a listen, then use the comments to let us know what topics you’d like us to cover in future episodes.

Listen to the show, you have options:

Here and now:

Google+ Event – read the Q&A and comments as well

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Sources:

About the show:

Every Thursday, 9pm Central, join us for an hour of Conservative Discussion with Real People from Real Places in America, NOT DC and NOT the Media.

CU Talks is the one hour weekly program from The Conservative Union, largest conservative community on Google Plus. We talk politics, with a focus on informing and educating our listeners, and finding ways to create the positive future we all want for ourselves and our posterity.

Your hosts will include James Pisano (The Chief), Nikolaos Dimopolous (Nikos) and Leslie P.

  • The Chief lives in California, is currently active duty in the Coast Guard, and drives a Prius – not because he’s afraid of global warming, but because it made sense for him to purchase it – FREE MARKET, YEAH!
  • Nikos was born in Greece, got here as soon as he could, will be a US Citizen eligible to vote in 2016, and is the American Dream personified.
  • Leslie is a native Texan and a redhead, she’ll cut you.

We may or may not all be armed.

CU Talks: SOTU, Over-regulation, and Obamacare ep.1404

state_of_the_union[1]In this show we began with a discussion of the State of the Union Address. Our expert, James Pisano, was unavailable, so rather than get into detailed analysis of the speech and the policies therein, we talked about the concept itself. It’s over the top and pompous and really not befitting a nation that went to war so that we wouldn’t have to answer to a King and have an aristocracy.

Then we discussed over-regulation, over-taxation, and haphazard legal enforcement – the limits those put on our ability to choose how to spend our time and our money. Next we talked Obamacare, and a lawsuit over 4 little words that could end up meaning a whole lot. We capped the episode with a mention of a coalition forming between conservative radio hosts – deciding to work together rather than against one another to help the country.

Give the show a listen, then use the comments to let us know what topics you’d like us to cover in future episodes.

Sources:

About the show:

Every Thursday, 9pm Central, join us for an hour of Conservative Discussion with Real People from Real Places in America, NOT DC and NOT the Media.

CU Talks is the one hour weekly program from The Conservative Union, largest conservative community on Google Plus. We talk politics, with a focus on informing and educating our listeners, and finding ways to create the positive future we all want for ourselves and our posterity.

Your hosts will include James Pisano (The Chief), Nikolaos Dimopolous (Nikos) and Leslie P.

  • The Chief lives in California, is currently active duty in the Coast Guard, and drives a Prius – not because he’s afraid of global warming, but because it made sense for him to purchase it – FREE MARKET, YEAH!
  • Nikos was born in Greece, got here as soon as he could, will be a US Citizen eligible to vote in 2016, and is the American Dream personified.
  • Leslie is a native Texan and a redhead, she’ll cut you.

We may or may not all be armed.

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.

kaiser-death-spiral-800x603

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.

ACA-enrollment-by-age-group

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.

slide2

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.

slide1_2

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

bandaid

 

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.