It’s up now at the podcast page.
The subdepartment of “If You Like Your Coverage, You Can Keep Your Coverage“:
Small companies are starting to turn away from offering health plans as they seek to reduce costs and increasingly view the health law’s marketplaces as an inviting and affordable option for workers.
In the latest sign of a possible shift, WellPoint Inc. said Wednesday its small-business-plan membership is shrinking faster than expected and it has lost about 300,000 people since the start of the year, leaving a total of 1.56 million in small-group coverage.
Of course anyone with a brain and a passing understanding of economics and human nature saw this coming – despite the assurances of our elites. It is called “responding to incentives or disincentives” – something human beings have done since the dawn of our time.
Provide enough of a disincentive to maintain the status quo and you won’t. You’ll go with what is best for the business. And the incentive to drop health care plans has been provided by this awful ACA law. Now these people will go onto the exchanges and pick a plan with huge deductibles that will never be met in a year. They’ll effectively pay for their medical care. Or, we’ll pay for their medical care through subsidies.
Result? Well, as you can imagine with huge deductibles, people will likely go to the doctor less and one of the supposed reasons this law had to be passed was in order to stress and implement “preventive medicine”. But if you have a $6,000 deductible, and are a middle income family that wouldn’t qualify for subsidies, when are you going to visit the doctor? When whatever problem you have is so bad you have little choice. Of course, that’s the most costly way to do this, isn’t it?
So now we have a huge problem, don’t we? And what will we point to as the cause of that problem? That’s right … government intrusion. Oh, the good news? Their high deductible coverage will be portable. But we could have solved that problem without ever creating this health care monster we’re stuck with now, couldn’t we?
The Obama economy is a mess, with median incomes retreating, fudged employment numbers and generally the usual mess you can expect from a over-regulated and highly manipulated “market”. In other words, it stinks because of government as much as anything else. Our betters seem not to understand the very basics of human nature – humans respond to incentives. So they continue to cobble together more and more feel good projects (i.e. they make the “elite” feel good) that backfire. Why? Because humans respond to disincentives as well – and their feel good projects are long on disincentives, something they can’t seem to wrap their heads around.
By design, the next example of that will take place after the November mid-term elections:
Starting this year, the United States’ working population will face three major employment disincentives resulting from the very benefits the Affordable Care Act (ACA) provides: (1) an explicit tax on full-time work, (2) an implicit tax on full-time work for those who are ineligible for the ACA’s health insurance subsidies, and (3) an implicit tax that links the amount of available subsidies to workers’ incomes.
A new study published by the Mercatus Center at George Mason University advances the understanding of how much these ACA taxes will reduce overall employment, and why. It concludes that the reduction will be nearly double that projected by previous analyses. Labor markets ultimately will reduce weekly employment per person by about 3 percent—translating to roughly 4 million fewer full-time-equivalent workers.
4 million more jobs in an economy already suffering one of the lowest labor participation rates in its history. Why have “middle class” wages stagnated or dropped? One major reason has to do with disincentives like this. Its like the $15 minimum wage trope. Force it on business and they have a “disincentive” to hire people for jobs that aren’t worth that and an incentive to automate or go short handed and double up the work on someone else.
That’s precisely the type of disincentive that ObamaCare is about to inflict on the economy. We’ll then hear the usual nonsense about greedy and uncaring companies and how the “market” has failed us. It is as predictable as the next blizzard being somehow blamed on global warming.
Meanwhile, these 4 million that may join the currently unemployed are real people who will suffer real problems because of the disincentive provided by a very poorly thought out law that won’t effect those who passed it. All Democrats can hope is that enough people will drop off the unemployment roles by the time the next presidential election rolls around that the fudged unemployment stats look acceptable.
What a hell of a way to run a railroad.
The New Republic publishes an article saying, in essence, “see, the ObamaCare increases are nothing to really get excited about“. And to emphasize the point, they issue this Price-Waterhouse map (the reason they use it is as an appeal to authority):
If you look at it, you’d likely conclude that they were mostly right … where’s the problem? Only Indiana seems to have a real problem and its increases are only around 15%.
And, you know, if Price-Waterhouse says it, it must be true.
Researching it beyond that, well, that would be journalism:
INDIANA: 2015 premiums increases ‘as high as … 46-percent’ “Initial 2015 premiums filed for the Obamacare exchanges in Indiana ranged from as high as a 46-percent hike to as low as a 9-percent cut.” (Indianapolis Business Journal, 5/19/14)
MARYLAND: 2015 premiums could increase up to 30% “Maryland’s dominant insurance company, CareFirst, is proposing hefty premium increases of 23 to 30 percent for consumers buying individual plans next year under the federal health-care law, according to filings released Friday.” (The Washington Post, 6/6/14)
WASHINGTON: 2015 premiums could increase ‘up to 26%’ “If approved, rate increases for 2015 individual health plans proposed by 12 insurance companies may affect most policyholders… [up] to an increase of 26 percent…” (The Seattle Times, 5/13/14)
ARIZONA: 2015 premium increases up to 25.5 percent “New filings trickling into the Arizona Department of Insurance show at least two health insurers plan to increase rates more than 10 percent. Cigna Wants To Increase Rates An Average Of 14.4 Percent And Humana, 25.5 Percent.” (The Arizona Republic, 6/2/14)
LOUISIANA: ‘Double-digit increases’ up to 24% possible “Some Louisiana private health insurers filed for double-digit percentage increases in 2015 for policies sold under the Affordable Care Act’s health exchange, according to filings this week with the Louisiana Department of Insurance.” (New Orleans Times Picayune, 7/15/14)
· “Blue Cross Blue Shield of Louisiana, the state’s largest provider, is proposing rate increases of between 18.3 percent and 19.7 percent for policyholders in its Blue Saver, Blue Max and its Multi-State individual health plans. The plans cover 52,638 people. … The 4,947 people who signed up with Human Louisiana facea hike of 15.7 percent, while the 966 insured residents with Time Insurance Company face a hike of 24 percent, according to the filings made public this week.”(New Orleans Times Picayune, 7/15/14)
TENNESSEE: 2015 Premiums Could Increase up to 21.7% “BlueCross BlueShield of Tennessee — the state’s dominant health insurance provider — is asking to raise rates by an average of 19 percent for its exchange plans in 2015, according to documents filed with the state of Tennessee. …the consumer will experience a rate increase between 6.1 percent and 21.7 percent, depending on the product he or she has bought.” (Chattanooga Times Free Press, 7/17/14)
· “Meanwhile, Cigna is requesting an average rate increase of 7.5 percent in 2015, while Kentucky-based Humana would like to boost marketplace rates by an average of 14.4 percent.” (Chattanooga Times Free Press, 7/17/14)
NEW YORK: 2015 premiums could increase up to 19.7% “Insurance firms participating in New York’s ObamaCare health exchange are seeking double-digit hikes for patient medical premiums in 2015, new figures reviewed by The Post reveal. The average hike sought by insurers for individual plans is 12 percent—but a number of firms serving large numbers of patients want to boost individual premiums by nearly 20 percent. Leading the charge is Excellus Health Plan, which is seeking to sock more than 24,000 customers with a 19.7 percent hike.” (New York Post, 7/3/14)
VERMONT: 2015 premiums could increase up to 18.3% “The two companies that sell policies on the state’s online health insurance marketplace — Vermont Health Connect — have filed requests with state regulators for big rate increases for 2015. Blue Cross Blue Shield of Vermont has asked for an average increase for its plans of 9.8 percent. … the increases would have averaged 3.3 percent if not for federal and state mandates. … MVP Health Care proposed an even bigger rate increase — an average 15.4 percent, with a range starting at 10.7 percent and rising to 18.3 percent.” (Burlington Free Press, 6/3/14)
MICHIGAN: 2015 premium increases up to 18 percent “Most people buying their own health insurance in Michigan could see near double-digit premium increases next year. State insurance regulators said Wednesday that dominant insurers Blue Care Network and Blue Cross Blue Shield want to raise rates by an average of 9.3 percent or 9.7 percent in 2015. … Humana is the insurer with the third most customers in Michigan’s individual market and seeks an average 18 percent rate increase affecting 16,600 customers.” (The Associated Press, 6/26/14)
VIRGINIA: 2015 premiums could increase up to 14.9% “…the Anthem HealthKeepers Inc. plan offered by a unit of WellPoint Inc. said it would raise premiums by an average of 8.5% across its individual plans in Virginia, which cover about 110,000 people and are sold on the online insurance exchange set up by the health law, as well as directly to consumers. … The Virginia filings show other health plans proposing rate increases ranging from 3.3% for Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc., with around 10,000 members in the state, to 14.9% for CareFirst BlueChoice Inc., which said it had about 32,000 members.” (The Wall Street Journal, 5/11/14)
IOWA: 2015 premium increases up to 14.5 percent “About a quarter of a million Iowans would see their insurance rates rise next year should the state approve a request from Iowa’s dominant health insurer. Wellmark Blue Cross and Blue Shield announced Friday that it is seeking to raise premium rates for 253,000 policyholders in Iowa. Those rate increases would affect individual policyholders and small businesses. Most — 92 percent — of the proposed rate increases would be less than 5.9 percent, according to numbers provided by Wellmark. … For the remaining 7.5 percent of policyholders — those who have post-Affordable Care Act plans for individuals under 65 — Wellmark is asking for a rate increase between 11.9 percent and 14.5 percent.” (Des Moines Register, 6/20/14)
OHIO: “Premiums would increase 13 percent next year for Ohioans who buy health coverage through the federally run insurance exchange, the Ohio Department of Insurance said yesterday.” (The Columbus Dispatch, 5/30/14)
OREGON: 2015 premiums could increase up to 12.5% “Moda Health captured more than 40 percent of the state’s exchange enrollees this year, with about 95,000 people covered under its plans. The company is proposing to increase prices by an average of 12.5 percent. Only one other carrier proposed a double-digit price increase.” (The Hill, 6/11/14)
RHODE ISLAND: 2015 premium increases ‘averaging 12 percent’ Blue Cross & Blue Shield of Rhode Island is proposing 2015 premium increases averaging 12 percent for individuals and families, and 8 percent for small groups.” (Providence Journal, 5/19/14)
DELAWARE: 2015 premiums could increase 5% “Delawareans could face higher insurance costs under the Affordable Care Act next year under new rate requests from insurers. Highmark Blue Cross Blue Shield is seeking average premium increases of 5 percent for individuals who bought insurance through Delaware’s exchange.”(The Associated Press, 7/15/14)
Premiums would rise an average 13.2 percent for Floridians, according to the Florida Office of Insurance Regulation. But actual increases would vary greatly on families’ size, financial circumstances, county of residence and the types of plans they select.
All that said, that’s not the argument is it? Wasn’t the promise that ObamaCare would save families an average of $2,500 a year?
That’s what I remember.
But, you know, it’s a great success.
This week, Michael, and Dale talk about the Halbig Decision, Immigration and lawn watering.
The podcast can be found on Stitcher here. Please remember the feed may take a couple of hours to update after this is first posted.
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The U.S. Court of Appeals for the D.C. Circuit delivered a huge blow to Obamacare this morning, ruling that the insurance subsidies granted through the federally run health exchange, which covered 36 states for the first open enrollment period, are not allowed by the law.
The highly anticipated opinion in the case of Jacqueline Halbig v. Sylvia Mathews Burwell reversed a lower court ruling finding that federally run exchanges did have the authority to disburse subsidies.
Today’s ruling vacates the Internal Revenue Service (IRS) regulation allowing the federal exchanges to give subsidies. The large majority of individuals, about 86 percent, in the federal exchange system received subsidies, and in those cases the subsidies covered about 76 percent of the premium on average.
The essence of the court’s ruling is that, according to the law, those subsidies are illegal. They were always illegal, and the administration never had the authority to offer them. (According to an administration official, however, the subsidies will continue to flow throughout the appeals process.)
Don’t get to excited about this yet. It was a 3 judge panel. And it will likely go to the Supreme Court. Finally, in a different Circuit (4th) a ruling says the subsidies are legal:
A different circuit court ruled today that subsidies offered through federally run exchanges are authorized on the law. This creates a circuit court split, which increases, but does not guarantee, the chances of an eventual hearing by the Supreme Court. It is also possible, and arguably even more likely, that the circuit split will be dealt with via en banc review.
Bottom line: a heavy shot across the bow of the sinking ship ObamaCare. If the DC Circuit finding survives the review and an appeal to the Supreme Court, then foundering ship will take the next shot below the water line. As for the law, it’s not going to get changed anytime soon with a Republican House.
As for the law, the DC Court said it was pretty clear to them:
“We conclude that appellants have the better of the argument: a federal Exchange is not an ‘Exchange established by the State,’ and [the relevant section of the law] does not authorize the IRS to provide tax credits for insurance purchased on federal Exchanges,” the decision says.
The law “plainly makes subsidies available only on Exchanges established by states,” the ruling says. “And in the absence of any contrary indications, that text is conclusive evidence of Congress’s intent. To hold otherwise would be to say that enacted legislation, on its own, does not command our respect—an utterly untenable proposition.”
Plain law, literally interpreted and applied. Certainly not what we’re used too. So let’s see how convoluted this gets moving up the line. My guess is it will be unrecognizable after the lawyers begin to redefine terms and words and make their arguments. By the end of it, it wouldn’t surprise me in the least to learn that “federal exchanges” now means whatever the IRS wants it to mean. But clearly, the way to kill this monstrosity is to starve it. And the way you starve it is to defund it … even if you have to do it bit by bit.
Why yes, yes they did. And they also told us it was because of the expense of this sort of medical care that the benevolent and non-intrusive federal government saw a reason to attempt to manage this through its new and wonderful law.
Nationally, nearly half of ER doctors responding to a recent poll by the American College of Emergency Physicians said they’ve seen more visits since Jan. 1, and nearly nine in 10 expect those visits to rise in the next three years. Mike Rust, president of the Kentucky Hospital Association, said members statewide describe the same trend.
Experts cite many reasons: A long-standing shortage of primary-care doctors leaves too few to handle all the newly insured patients. Some doctors won’t accept Medicaid. And poor people often can’t take time from work when most primary care offices are open, while ERs operate round-the-clock and by law must at least stabilize patients.
Plus, some patients who have been uninsured for years don’t have regular doctors and are accustomed to using ERs, even though it is much more expensive.
“It’s a perfect storm here,” said Dr. Ryan Stanton of Lexington, president of the Kentucky chapter of the ER physician group.”We’ve given people an ATM card in a town with no ATMs.”
I love the doc’s line about ATMs. He’s nailed it on the head.
Now I won’t bore you with the fact that we foresaw this and wrote about it. I mean we talked about doctor shortages, that an increase in those having insurance didn’t mean they’d be able to see a doctor and how doctors were dumping Medicare because of all the hassles and low payments.
But our ever faithful zealots on the left kept telling us that a) we didn’t know what we were talking about, b) human nature isn’t really human nature and c) now that everyone would have insurance all would be sunshine and roses and costs would magically come down (because, you know, the Democrats said they would).
Instead it is all mostly compost. ERs are seeing a surge in patient visits and expect it to get worse. Of course, that sort of care is much more costly than regular doctor office visits (according to the article, about $580 per visit more) but what they hey, they have subsidized insurance now … so you get to continue paying for it.
Another in a long line (and getting even longer) of predictions about the effect of a program that this administration has gotten completely bass ackwards.
It just doesn’t exist in Washington DC and especially with this administration.
Or so says a new McKinsey survey of the numbers:
One of the principal flaws in the coverage of Obamacare’s exchange enrollment numbers to date has been that the press has not made distinctions between those who have “signed up” for Obamacare-based plans, and those who have actually paid for those plans and thereby achieved enrollment in health insurance. A new survey from McKinsey indicates that a large majority of people signing up are now paying for their coverage. This is progress for the health law. But the survey still indicates that three-fourths of enrollees were previously insured.
Of course we’ve seen the propaganda push from the White House that has claimed the numbers (8 million enrolled) mean that the law is working. As usual, the devil is in the details. If the law was designed to provide coverage to those who were uninsured, 25% of the total enrolled fitting that description is hardly indicative of that claim’s efficacy. And when you break down that 25% number, it’s even less indicative:
At most around 930,000 people have gained coverage from Obamacare’s under-26 “slacker mandate” (not 3 million, as is commonly suggested); another 3 million or so have gained coverage from the law’s expansion of Medicaid. Approximately 2.6 million previously uninsured individuals have obtained coverage through the ACA exchanges and the related off-exchange individual markets; however, the off-exchange purchases are mostly unsubsidized, and therefore can’t necessarily be credited to Obamacare.
Here’s a graphic that breaks the McKinsey survey’s results down into a more understandable form:
In reality, what the law has essentially done rearranged the burden of payment among those enrolled while really not doing much at all in terms of reaching those for whom it was supposedly designed to help:
What the exchanges appear to be doing is mainly helping people who were previously insured. If you’re 62 years old, say, and your income is $30,000, and you were paying for your own coverage before, you’re now eligible for plans that are much cheaper for you, thanks to taxpayer-funded subsidies and higher premiums for young people.
Of course that means that other people are paying more. “My old plan was canceled under Obamacare,” an exasperated Californian told me last week. “The new Obamacare plan costs twice as much, and the deductibles are higher. And yet Obama is counting me as one of his 8 million people!” But hey—at least he has maternity coverage.
And I’m sure our Californian is eternally grateful for big brother deciding for him that maternity care was an absolute necessity for which he must pay. But the point is the 8 million number remains very shaky (and that’s being kind) and it really doesn’t at all reflect what the White House would have you believe it reflects – that the law is working.
The demographic that was key to holding down health care costs apparently came in well below the level necessary to ensure that:
Just more than a quarter of the eight million people who signed up for health plans under the Affordable Care Act are in the prized demographic of 18 to 34 years old, falling short of the figure considered ideal to keep down policy prices.
The data, released Thursday by the Obama administration, painted a more complete picture of enrollment in the plans. They show that about 28% of people picking plans on the state and federal insurance exchanges by April 19—after most states’ enrollment deadlines passed—were 18 to 34 years old, a generally healthy group. The proportion is higher than previous counts. But it is significantly below the 40% level that some analysts consider important for holding down rates by balancing the greater medical spending generated by older enrollees.
Insurers right now are setting rates for 2015, and the age data will be a key factor in their decisions. Some insurers say that despite seeing a late surge in younger enrollees, their sign-ups still skewed older overall than they had expected.
Because the “healthy” demographic sign-up fell well below expectations, the rates for 2015 are expected to be at a higher rate. And, of course, there’s the further problem that “enrollment” doesn’t necessarily mean that the enrollee has paid for coverage. As noted in earlier:
Data provided to the committee by every insurance provider in the health care law’s Federally Facilitated Marketplace (FFM) shows that, as of April 15, 2014, only 67 percent of individuals and families that had selected a health plan in the federally facilitated marketplace had paid their first month’s premium and therefore completed the enrollment process. Nationwide, only 25 percent of paid enrollees are ages 18 to 34…
And finally, the assumption is that the 18 to 34 demographic will be a “healthy demographic” relatively speaking and will carry the cost for the more sickly among us. That too may be an erroneous assumption:
While the 18-34-year-old cohort has been dubbed the “young and healthy,” a more accurate moniker might be “young and somewhat healthy.” 68 percent of 18-34-year-olds on the federal exchanges chose a silver plan. As I’ve written previously:
Why does this matter for the death spiral? Because so many enrollees choosing silver plans suggests that the risk pool may be sicker than is optimal. For enrollees at or below 250 percent of the federal poverty level, silver plans tend to offer the most coverage for the lowest price. For persons under 250 percent FPL, ObamaCare offers help with copays and deductibles, but only if the consumer chooses a silver plan. The actuarial value for a silver plan is 70 percent (that is, a silver plan must, on average, cover 70 percent of a policyholder’s medical claims), but when the subsidies for cost-sharing are included, the actuarial value rises to between 73 and 94 percent. As one writer notes, “Why would someone opt for a silver-level plan over a cheaper bronze or catastrophic-level plan? The most plausible explanation is that the enrollee anticipates incurring significant medical expenses over the coming year, which is to say that he’s not healthy.”
Since income tends to be lower the younger one is, a lot of those 18-34-year-olds are probably in that <250 percent FPL range. The inordinate number of 18-34-year-olds choosing silver plans suggests that the exchanges have attracted young and healthy people that are not that healthy.
Not only may they not be young and healthy, but they’ll most likely be receiving high subsidies which again sort of defeats the whole purpose of signing up that demographic, doesn’t it? And it certainly calls into further question whether or not even the 28% that signed up will have any significant effect in helping to lower costs.
Bottom line? Well, to quote a well-known conservative talk show host, we’ve again been treated to a heaping helping of “bovine scatology”. Not that anyone at all familiar with this president and his administration should at all be surprised.
And that reality is the American people aren’t buying the propaganda being pushed by the administration. After its celebration of the dubious enrollment of 8 million and unilateral declaration that ObamaCare was a “success”, new poll numbers show no difference among the public’s opinion of the law than before their declaration:
What’s perhaps more telling is that, despite the rare good news of the past few weeks, their perceptions of the law remain basically as-is — that is, pretty dim. To wit:
- Americans say 50-41 that the implementation of the law has been worse than they expected rather than better.
- They say 44-24 that the health-care system is getting worse rather than getting better as a result of Obamacare.
- They say 29-14 that the quality of care is getting worse rather than better.
- They say 47-8 that their health-care costs are increasing due to the law rather than decreasing.
- They say 58-11 that the overall cost of health care in the United States is increasing rather than decreasing.
Almost all of these numbers are basically unchanged from in recent months.
What is it politicians like to tell us about politics? Ah, yes, perception is reality. And as I pointed out when you mess with people’s health care, the reality becomes very personal. It isn’t something that you view from afar and doesn’t effect you. It is something everyone is interested in in some form or fashion.
The numbers above are their perception of that awful law’s impact on their lives. The propaganda simply isn’t going to change that. “8 million enrolled” is something the people really don’t care about. Higher premiums, more red tape and fewer options for health care, not to mention having to give up their doctor and the health insurance they liked is something they care about. That is the result of the law and it is the reason for the numbers.
As we’ve mentioned previously, the numbers you see above are numbers that exist before the most onerous regulations and requirements (now delayed until after the election) are finally put into effect. If you think these numbers are bad, wait till after November.
The bottom line is ObamaCare sucks and the people know it and no administration sponsored dog and pony show is going to change that perception. We see a lot of Democrats now trying to claim that ObamaCare really won’t hurt them in the mid-terms.
I invite them to look at the above numbers, understand that it is they who are going to get “credit” for the law, and rethink their claim prior to their coming unemployment.
That way it won’t come as such a surprise when they’re defeated.