Insurance Costs, ER Visits Up Under ACA - Uninsured? Not So Much

As I have said before, that the left's "solutions" to problems only creates more problems for government to solve is just icing on the cake for them.  Today's Case: The ironically named Affordable Care Act (ACA) was supposed to reign in medical costs, reduce emergency room use and end the tragedy of lack of coverage in America.  How are we doing?

First, health insurance costs (from the WSJ):

Health Insurers Seek Hefty Rate Boosts
Major insurers in some states are proposing hefty rate boosts for plans sold under the federal health law, setting the stage for an intense debate this summer over the law’s impact.
In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016. The biggest insurer in Tennessee, BlueCross BlueShield of Tennessee, has requested an average 36.3% increase. In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products. Moda Health, the largest insurer on the Oregon health exchange, seeks an average boost of around 25%.
All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act.

Emergency Room Visit Reductions (from USA Today):

Contrary to goals, ER visits rise under ObamacareThree-quarters of emergency physicians say they've seen ER patient visits surge since Obamacare took effect — just the opposite of what many Americans expected would happen.

Ending the tragedy of lack of insurance?  According to the widely quoted Kaiser Family Foundation survey on the uninsured the rate of uninsured will go from 17.87% to 14.22%.  So we wrecked the entire insurance market in America for 3.66% of the population and still left four times that number uninsured?  Another way of saying it is that only about one in five uninsured got covered.  That's disgusting.  The whole bill is disgusting.

What You Should Be Reading:

• CDR Salamander, because he takes on the Diversity Bullies every Thursday.  As he posts in that link, we are having some success.
• The Rational Male, if you have young men you need to mentor about relationships.

Crumbling Institutions of the Left - Government Run Healthcare

Government run and funded healthcare is having a bad year.  The Affordable Care Act (ACA) has not delivered on its promise to insure all Americans, with 75% of those previously lacking insurance still lacking.  I also think that the situation might actually be worse, since I don't trust surveys in the social sciences.  Meanwhile, VA healthcare is no longer touted as a model of care for all.

In Virginia, Republicans have shown how principled opposition to Medicaid expansion can be popular and helpful to the state's finances.  

In January a poll by the Wason Center for Public Policy at Christopher Newport University found that 38% of Virginians opposed the Medicaid expansion. By late April, 53% were against it.

Meanhwile, Medicare is being slowly changed by the semi-free market of Medicare Advantage plans.

Austin Frakt, writing in the NYT, says that Newt Gingrich's 1995 prediction that medicare would wither on the vine if people were allowed to choose subsidized private insurance is turning out to be correct.  From the article. 

No matter the reason, what’s clear is that Medicare Advantage is a strong and growing program, despite recent moderation in government subsidies. As Medicare Advantage grows, traditional Medicare necessarily shrinks and its influence on the American health care system weakens. If the trend continues, policies, including those in the Affordable Care Act, designed to use traditional Medicare as a tool to reshape health care delivery for all Americans may become less potent. Is there a tipping point at which traditional Medicare ceases to matter?

Meanwhile, the GOP is eventually going to have to provide some positive alternatives to the ACA.  There are no shortage of good ideas, see my proposals here.  Reason's Nick Gillespie steals some of these ideas (which I stole from John Mackey).

ACA Repeal UPDATE - Sebelius Denies, BDaddy Checks the Facts

The Hill reported that HHS Secretary Sebelius is denying that she repealed Obamacare.  That wasn't the actual question, but she did say that there was not plan to delay the individual mandate until 2016 as the WSJ reported yesterday and I repeated on this blog.  That prompted me to review the policy in question.  Turns out... it's complicated.  But this is the ACA, what else would we expect?
If you want to read the relevant documents they are here, here, and here.  Here is how I break it down.

The March 5th memo states:

On December 19, 2013, CMS issued guidance indicating that individuals whose policies are cancelled because the coverage is not compliant with the Affordable Care Act qualify for a hardship exemption if they find other options to be more expensive, and are able to purchase catastrophic coverage.³ This hardship exemption will continue to be available until October 1, 2016, for those individuals whose non-compliant coverage is cancelled and who meet the requirements specified in the guidance. 

In English: hardship for cancellations extended.  The footnote links to the actual December 19 memo which applies only to cancelled policies that did not meet the ACA standards.  The actual change in policy is that the exemption for cancelled policies is extended to 2016.  The WSJ makes the point that there seems to be a lax standard for proving that one's cancelled coverage is a reason to opt out.  But that depends on how much scrutiny HHS gives to such hardship applications. Not mentioned is the real possibility, in my view, that such applications may be denied. Also, it is clear that the rule change only applies to exemption category 13, cancellations on the HHS Exemption Form.  This makes the sub-headline misleading: HHS quietly repeals the individual purchase rule for two more years.  What is not discussed in the article is that the cancellation process is different from other processes, because the individual must submit the hardship exemption to another insurer who offers catastrophic coverage before the exemption can be considered.

So what of the realities of the individual mandate.  Hardship exemptions do seem fairly easy to obtain, but the rub is that since the process is so arcane, no one is going to know how to do this ahead of tax filing time.  As a matter of fact, it seems likely that only the better educated and therefor more well off will file an exemption.  Here are some comforting words from the HHS on getting your exemption, from the "What happens next?" part of the form.

 Except for cancellations, send your complete, signed application to the address on page 4. We’ll follow-up with you within 1–2 weeks and let you know if we need additional information. If you get this exemption, we’ll give you an Exemption Certificate Number that you’ll put on your federal income tax return. If you don’t hear from us, visit HealthCare.gov, or call the Health Insurance Marketplace Call Center at 1-800-318-2596. See page 4 for next steps for cancellations. 

So what if you just don't pay?  Here is what the IRS has to say about that:

The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any individual shared responsibility payment. However, if you owe a shared responsibility payment, the IRS may offset that liability against any tax refund that may be due to you.

So, you are better off owing the feds taxes, which I have always told people, because they can't impose a lien.  

Bottom Line:

How much of an actual mandate still exists is a matter of conjecture and based on unknown future behavior of citizens and the HHS.  This is a set up for both tyranny and revolt.  

A Whimper not A Bang - ACA Quietly Repealed by Sebelius

So this is what victory over the Affordable Care Act looks like.

But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you "believe that the plan options available in the [ObamaCare] Marketplace in your area are more expensive than your cancelled health insurance policy" or "you consider other available policies unaffordable."
This lax standard—no formula or hard test beyond a person's belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that "you experienced another hardship in obtaining health insurance," which only requires "documentation if possible." And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.

Well that was weird.  The ACA individual mandate, the whole Supreme Court fight, if you recall, was about its core essentiality to the success of the law.  And now the same Sebelius, defendant in National Federation of Independent Business v Sebelius, has very quietly gutted the individual mandate. As the WSJ article quoted above points out, the longer the mandate isn't enforced, the less likely that it will EVER be enforced.  And I thought we were going to have to wait until 2017 to have a chance at repeal.

Katherine, we've got to gut this thing before the GOP can.

Republicans should publicize this ruling far and wide, declaring victory over this hated law.  Then they need to work on real health care reform, because the problems with health care that has caused the electorate to tolerate the Democrats aren't going away either.  As I have published before, here is a start:

Liberty Movement Health Care Plan (first published in 2011):

Here is the plan that John Mackey of Whole Foods proposed, my comments in italics.

1. "Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts." Patients who have skin in the game and market knowledge will reduce costs faster than any government program.
2. "Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits."
3. Allow competition across state lines.
4. "Repeal government mandates regarding what insurance companies must cover."
5. "Enact tort reform."
6. "Make costs transparent."
7. "Enact medicare reform." Medicare policies that are mimicked by the private sector are strangling the medical profession.
8. Revise tax law to make it easier to donate to those without insurance.

To expand on these points.

1. The government could help lead this effort by reforming first Medicaid, by turning it into an insurance subsidy program for the poor. But the program would require those in the program to pay a high copay until a low catastrophic cap was reached. Such a system would create a market for a system where people have more incentive to shop for best value in medical care. This system could then be applied to Medicare.
2. The next big issue is that health care is tied to employment. My first impulse is to forbid the offering of insurance through employment, but that would make a conservative social engineer, instead of a liberal one. Removing the tax advantage would at least set a level playing field. To date, the portion of employee compensation that comes in the form of employer health insurance isn't taxed as compensation. This ties employees to their companies and needlessly. You would think that liberals would be opposed to a scheme where tax policy gives corporations leverage over employees. However, I dislike schemes whereby the government imposes on employee relations, so I will settle for leveling the playing field.
3. Interstate competition is not the norm in insurance. Surely the federal government has the right to "regulate" as in "make regular" this portion of interstate commerce, by insuring that any insurance offered for sale in a state would be available in the fifty states. Increasing competition will probably be opposed by the insurance industry, but freer markets benefit consumers.
4. One size never fits all. So mandating coverage should be banned. Insurance is always tricky business, even homeowner's insurance, as Road Dawg can attest to. Along with no mandates will be the need to enforce clear language in policies and communications with policy holders. I am a libertarian, but not so naive as to believe that some insurance companies won't try to wriggle out of agreements to save money. Court is expensive for individual consumers, so regulation that enforces good practices of transparency and clarity will be necessary. But regulation should always aim for simplicity and this also needs to be part of a reform package.
5. With regards to tort reform, we have seen positive results in Texas, where access to care increased after passage of reform.
6. Cost transparency is important to enable process improvement and allow patient choice. Most people don't know the true cost of a medical visit, even after the visit is over. Here again, Medicaid reform could lead the way, by insisting that patients receive better notice and understanding of their bill.
7. Medicare policies with regards to reimbursement are arcane and lead to huge misunderstandings on what is covered and unexpected bills. Transforming Medicare to save it for those who truly need it, into an insurance subsidy scheme, will get the government out of the rule writing business and free up insurance plans to compete.
8. Allowing Americans to donate to those who need health care insurance might make little difference, but maybe not. I see lots of do-gooder millionaires wanting to pay more taxes. Maybe they could pay for poor people's insurance in the interim.

If You Really Cared About Income Inequality - Tea Party Prescription

I have been stewing about the President's latest "pivot," this time to income inequality, for a while.  First, it isn't necessarily a problem. Second, Obama has no real solutions.  Income inequality is a problem per se, it depends on the source of the inequality.  If it is caused by a privileged class entrenching its grip on a not-so-free economy, like crony capitalist third-world economies, then this is fundamentally unfair.  But if caused by the inevitable winners and losers in a free-market economy, then we shouldn't care so much, in fact, we should rejoice that our system rewards endeavor.

By the way, actual income inequality is NOT increasing.  The welfare state and progressive taxation have vastly reduced the gap between the poor and everyone else.

According to Messrs. Ohanian and Hagopian, once the effect of taxes and transfer payments is taken into account, "inequality actually declined 1.8% during the 16-year period between 1993 and 2009, when the Gini coefficient dropped from .395 to .388."

Unfortunately, government policies are increasing pre-tax/pre-entitlement inequality (as defined as "earned income" inequality for this discussion).  There is some real evil going on that could be addressed to improve actual fairness and improve economic growth.  Here are some liberty movement suggestions.

End the Fed and Return to a Gold Standard.  The Federal Reserve lends Wall Street bands money at below market rates that they use to fund loans.  This is supposed to help the economy, but it just concentrates wealth in Wall Street which then gets bailed out when it makes bad bets.  If you want to really stop the shenanigans that funnel wealth to people who don't produce anything, return to the gold standard and disband the federal reserve system.

The biggest source of income inequality.

Stop Raising the Minimum Wage.  Raising the minimum wage reduces the opportunity for lower skilled and teens to enter the workforce and start making their way up the economic ladder.  Moving people into the workforce begins lifelong upward mobility. By raising the minimum wage, we keep youth out of the labor market.

Introduce Competition into Education. Students are graduating from college and high school without discernible skills that allow them to enter the work force.  This was not alway so.  There was a time when a high school diploma indicated familiarity with basic math, reading and writing skills and at least a rudimentary knowledge of science.  No more.  Employers can no longer count on even college graduates being able to perform basic tasks needed in business.  This is the result of a century of monopoly in education.  Government schools have failed us.  Competition would restore the incentives for parents to be involved in education choices for their kids, and the result would cause employers to start to trust diplomas again.

Fix Immigration Policy to Favor Skilled Immigrants.  Amnesty for unskilled farm laborers is the opposite of this idea.  The United States is still the land of opportunity when compared to the rest of the world, even if our absolute level of opportunity has declined under Obama's leftist policies.  Bringing skilled immigrants to our country allows various tech teams to stay together and provides all sorts of additional jobs for native Americans as well.  However, if we limit immigration to unskilled farm workers, then we are bending the income curve to increase inequality.  If the President really care about income inequality he would have included a vast expansion of H-1B and other avenues to bring the skilled and wealthy, because he is such a smart policy dude.  Unfortunately, he did not.

Repeal the ACA.  There are plenty of incentives for people at the lower end of the income ladder to reduce their income in order to qualify for subsidies, including married couples getting divorced to reduce their household income.  The ACA is contributing to a rise in inequality by reducing the incentives for those in lower to middle income brackets to increase their income.

Of course, the President isn't really serious.  He is just making another speech about something he chose to ignore for five years, much like immigration.  But if we would like a larger middle class and economic growth, then my tea party policies should be considered.

What You Should Be Reading

I took a real vacation and paid only a little attention to the political world and made no attempt to blog.  It was worthwhile to re-unite with my oldest son and enjoy some of God's creation and some good man-made stuff too.  Mrs. Daddy and I loved the colder and wetter weather we encountered, not typical of Arizona.

We visited historic Jerome, AZ, where everything is reputed to be haunted, even the hamburger joint.

And we hit the trails to enjoy the local beauty of Sedona, AZ.  

And didn't neglect man-made pleasures either. Famous Pizza had great pizza and craft beer on tap including quite a few San Diego offerings.

In the meantime other San Diegans kept up the good work on keeping tabs on our state and local government.  

• Dean posted his latest entry in the long running saga of the California high speed rail debacle.  Was Judge Kenney's ruling that funding must halt and that the High-Speed Rail Authority had abused its discretion a death blow?  Read and judge for yourself.  The U-T has the full story.
• Felipe Monroig, president of the San Diego County Taxpayers Association, has done a public service by pointing out that the so-called linkage fee revenue isn't spent on affordable housing for the working poor, as the council debate would lead you to believe.  The Voice of San Diego's in depth analysis of the issue is also a public service.  Bottom line, most of the money goes to the homeless, not affordable housing for the working poor.
• The U-T reports that San Diego home prices increases are slowing. This is good news.  All of the conditions that caused the housing bubble and subsequent collapse in 2008 are still present.  Artificially high housing prices are not healthy for the economy.
• College Insurrection reports on how the ACA is affecting students at SDSU, bottom line: unintended consequences not making health care more affordable.

CA-52 Getting Interesting - #ACA Toxicity

To see the impact of the health care law's implosion on political campaigns, look no further than my own 52nd Congressional district here in San Diego.  Scott Peters, the incumbent,is expected to face a tough re-election campaign against the well-known Carl DeMaio.  (I supported DeMaio for Mayor last year.)  While DeMaio has a Republican primary to get past, his high name recognition and backing of the GOP central committee makes him the likely nominee.  DeMaio has been hammering Peters on the health care issue, even though the election is a year away.  Peters has said he would support a House Republican bill to allow individuals to keep their health care.  That Peters would be support a GOP bill on this issue is evidence of how toxic the issue has become.  Leading Democrats are attacking Fred Upton (R-MI) over his legislation, doubling down on the President's argument that the public doesn't understand how bad their policies really are and that this is just another GOP plot to undermine the law.  Scott Peters has been supporting the law until recently.

Carl DeMaio

Scott Peters

What You Should Be Reading

• The always brilliant Victor Davis Hanson plots the endgame for the ill-named Patient Protection and Affordable Care Act.  Bottom line, Obama will usurp authority to gut the law, declare victory and move on. 
• Holman Jenkins asks "Why have the stock prices of the insurance industry have enjoyed a huge run-up if the ACA is supposed to reign in special interests?"
• Dean reports on the end game for socialism in Venezuela and it's not pretty. Money quote: In this context, “free-market economists” can also mean “anybody that can rub two brain cells together”.
• Left Coast Rebel dissects the supply and demand of Lithium and its potential impact on future electric car production.  Left wing dreams of an electric utopia may have to be put on hold.

Personal Impacts of Government Shutdown

Some of you may know that I have spent almost my entire adult life working for the federal government.  I was active duty military for over twenty years and now I work for the feds in a research facility.  I am not complaining about the shutdown, but wanted to make clear to some people that I am not a disinterested party.  I took some heat on Twitter by retweeting that people should be embarassed about being worried about the shut down.  While that was certainly a bit of hyperbole, calling the tweet disgusting falls into the same category.

I am in an exempt category of employee so I am not out of work and am thankful for that.  But certainly, there are others on whom I depend for decisions and approvals who are gone and we can't make forward progress on joint projects.  On the personal front, both my wife and I can't get primary care medical appointments right now.  If the furlough goes on long enough, I suppose that a small veteran's benefit payment I receive might be interrupted.  At some point, I would also be furloughed, but that won't be for a while.  This is not overwhelming, but the impacts are real.  I tell you this to show that I am not a disinterested party.

But regardless, I support the idea that ordinary Americans deserve the same breaks from the Affordable Care Act that the administration has given their Big Business and Big Labor cronies.  This administration is exhibit A for the train wreck produced by crony capitalism.  The ACA is unmanageable and failing, and only by granting huge exemptions will health care insurance not be totally wrecked.  Boehner's current approach is sound and is in fact what I have advocated all along with spending bills.  Thin slice spending to make small cuts and only pass the programs you want.  Tie changes you desire to the spending the President and his party desires.  This is the historical prerogative of the House.  Each time the House offers a bill to fund a popular program, the Reid and Obama game plan is undermined.  I hope Boehner stays the course on this and dials up the heat.  I don't read the poll numbers on this; but my sense is that the Democrats have overplayed their hand. Spending money to shut down monuments and take down web sites is not playing with the public.  Eventually Democrat senators will feel the heat.

Photo courtesy of The Weekly Standard

Impact of Government Shutdown - As Little as 16% Affected

The actual impact of a government shutdown is much less than anyone might think.  Social Security, Medicare and Medicaid checks continue to get cut and the active duty military continues to perform their duties.  Furthermore, a significant portion of the defense civilian establishment in the form of the working capital funded activities continue operations.  Here is a breakdown of the budget.

Sorry for the extra large size, but its necessary to make my point.  Social Security, Medicare and Medicaid continue under a shutdown, totaling 41% of the budget.  The House has funded Defense separately, so we are up to 60% of the federal budget.  Interest on the debt has no direct, immediate impact, and accounts for 6%.  Finally, USA Today reports that:

Federal agencies have prepared plans to continue programs they deem critical to maintaining public safety and protecting property despite the shutdown. Employees who perform those critical functions will continue to work and get paid.

I believe that accounts for the 18% other mandatory programs, but have not been able to confirm.  However, essential functions account for a full 59% of non-defense workers.  Too bad that the NSA gang probably keeps coming to work.  All in all, I see about 78% of the federal budget having no impact during a shut down, and maybe even 84% if you don't care about interest on the debt.

In short, almost nothing that the American public actually cares about will be impacted by a #governmentshutdown.  The White House will make a big show of shutting White House down tours, but will be hard pressed to make the case.  The Democrats will of course be aided by a complicit media in puffing up a story about the impacts, but Republicans need to just hold the line and wait for no one to notice.

Boehner has done a reasonable job by sending over a clean continuing resolution that funds defense and bundling the rest of the budget with an ACA delay.

Predicting the News That Will Be Reported - Not That Hard

I sometimes wonder at what passes for news.  News is thought to be the reporting of events that are not expected, you know, man bites dog stuff.  Here are some utterly predictable news stories. I am not bothering to link because the stories are ubiquitous.

• News organizations do little to report that the latest Intergovernmental Panel on Climate Change does little to explain the recent lack of temperature rise (over the last 15 years or so).  There is an unsubstantiated claim that either deep sea warming or volcanoes have caused the relative lack of temperature rise.  The focus of news has been on the dire predictions of the report.  Those dire predictions keep getting pushed further into the future.
• Health care exchanges' online systems are having technical problems and won't be ready on October 1. Sorry, this was too easy to know in advance.  Complex rules make for complex software.  If the Secretary of HHS can't seem to be clear about who is exempted or not, as one small example, how is a programmer supposed to write code?  
• Younger, healthier workers to pay more under ACA.  This is a feature, not a bug of the system.  The problem for the administration is that most people have figured this out and are going to judge the penalties insufficient to cause them to sign up.  
• New revelations of other ways that the NSA was spying on you keep popping up.  Let's face it, the NSA considered every way imaginable to spy on U.S. citizens.

While we are on the ease of predicting the news, I predict the Republicans will cause a government shutdown lasting a day or so, and then cave, as the media whips up a false "The Sky is Falling and It's Republican's Fault" headlines.  If the Republicans would adopt a sensible strategy they wouldn't need to go through this pain.  They should pass bills that fund the rest of government in piecemeal fashion, then fight over the ACA funding in the HHS appropriation.  Medicare and Social Security payments continue, for example, so there is not any real pain to voters from a shutdown.  Why the House Republicans get backed into a corner is beyond my comprehension. Nothing prevents them from breaking up the appropriations bill to suit their agenda; they control the House for crying out loud.  The Republicans real leverage lies in the fact that "discretionary" operations of the HHS can be tied to defunding the ACA, but popular programs aren't put at risk.

Finally, there isn't any reason the Republicans couldn't start dismantling the law a bit at a time, by repealing the tax on medical devices for example, rather than going for the whole enchilada of defunding.  They could really be popular by delaying the individual mandate by one year.  Best of all, they could cause the system to collapse by repealing all exceptions granted by the Secretary of HHS.  Imagine the delicious irony of Obama vetoing a bill that Republicans pass that required tight adherence to a law he sponsored.  The Republicans lack of imagination on the subject is appalling.  But that's not news either.

What You Should Be Reading

• Iran backed hackers are already attacking Navy computers.  After America threatens to bomb Syria, Syrian hackers threaten retaliation.  Later, Iranian infiltration of U.S. Navy computers is revealed.  Iran is a major sponsor of the Syrian regime.  Love fest with Iranians ensues and we are now counting on Syria to cooperate in turning over chemical weapons.  As I predicted here and here, the Iranians tie the accusations to the U.S. semi-admission of introducing the Stuxnet virus into their nuclear program.  The incompetence of this administration's foreign policy apparatus is staggering.

Weekend Round Up

President To Ask Congress for Authorization for Syria Strike

I am not going to rehash this news.  My take is that Obama doesn't really to want strike Syria, especially without help from the Brits.  There is little upside and all downside for him.  This is classic Obama.  Just as he put the work of passing the ACA on Reid and Pelosi, minimizing his own downside; he can blame the failure to punish Syria for chemical weapons use if the Congress votes against the authorization.  Tough problem solved.  No wonder he immediately went golfing after the announcement.  

Syria: Problem solved. Time to work on my swing.

DeMaio, Faulconer Are the Favorites on the Right for San Diego Mayor

Or so says sdrostra blogger and political analyst Steve Gramm.  His analysis is that DeMaio will receive less support from traditional Republican groups if he backs out of the 52nd Congressional race to run for mayor.  Faulconer could potentially run in the 52nd according to the one of the commenters.  Personally, I hope that DeMaio continues his run for Congress, he already has that campaign momentum going.  In a crowded field on the left, which includes Fletcher and Mike Aguirre, Faulconer would certainly make the run off, if he were the only well-known Republican.  DeMaio is reportedly going to decide and announce what he will do on Tuesday.  Look for a Faulconer announcement shortly after if DeMaio stays in the Congressional race.  I have already endorsed Faulconer, in part because I have liked him as my council member and because I want DeMaio to take back the CA-52 for Republicans. 

Affordable Care Act Heavily Subsidizes the Elderly at the Expense of the Young

But you already knew that.  However, the WSJ performed a public service by closely analyzing the effects of the law on residents of Toledo and concluded that the nature of the law is to so subsidize the elderly, that it will cause them to sign up for coverage disproportionately.  This isn't really news, except for the detailed and fairly irrefutable analysis of the situation.  Meanwhile, your friendly neighborhood federal propagandists are referring to the ACA as "Obamacare."  I don't do that, because it was really Reid's and Pelosi's monster, but also, really?  I expect better from a federal agency.

No one is invincible. Enter your video about why health insurance matters to you & win! http://t.co/gbKleAcdDA #hyavideocontest #ObamaCare
— HHS.gov (@HHSGov) August 26, 2013

I was asked about the prize mentioned:

@BDaddyLiberator @HHSGov What would you win, a "free pass" from the Death panel?
— Doo Doo Economics (@DooDooEcon) August 31, 2013

Turns out that winning propaganda can be worth up to $30,000 in cash prizes.  Does this strike anyone else as creepy?  If you follow the link to the HHS tweet, conservatives come out in force to lampoon this blatant effort.  If there were any Justice at HHS, this would be the winning video:

That's a wrap on the slow news weekend.

Slow Motion Train Wreck Continues - Congress/Staffers get ACA Exemption

Of course they did.  In apparently his only personal involvement with his signature achievement, Obama promised Dem Senators that "he would personally get involved to sort out the confusion," according to the Daily Caller.  The sudden reason for the exemption?

But it soon became apparent the provision contained no language that allowed federal contributions toward their health plans that cover about 75 percent of the premium costs.
This caused fears that staff would suddenly face sharply higher healthcare costs and leave federal service, causing a "brain drain" on Capitol Hill.

This last sentence was delivered without ironic tone, as far as we can tell.  Exit question. What brains? The brains that designed the law that they needed to pass to find out how badly they had screwed themselves? Yeah, those brains.

House Staffers inspect the results of the ACA.

What You Should Be Reading:

• Ron Paul believes that the death penalty is contrary to conservative and libertarian principles.
• Iran continues its offensive cyber operations according to the Heritage Foundation. The Talinn Manual on the Application of International Law Applicable to Cyber Warfare explains what might or might not be legal in cyber warfare.  My article on the Stuxnet virus explains what Iran's legal strategy might be if it is proved they are behind the attacks cited in the Heritage article. Page 61 of the Talinn Manual starts the section on necessity and proportionality of response.
• Leslie quotes Dean in her summary on Filner and our low information voters. 

Unaffordable Insanity - The Affordable Care Act

On July 4th I posted that business as usual in our politics has lead to insane outcomes that no one would have devised from scratch.  The so-called Affordable Care Act was my first exhibit and it continues to unravel.  Dean has a great take on the latest fiasco, delaying the employer mandates for a year.

The stated reason for the delay is that the administration couldn't figure out a way to implement the reporting requirements for the effected businesses. Going on 3-1/2 years after the law was passed and they still need another year to figure out how to work one of the key provisions of the law. In Washington D.C. this is known as the “Continuing to Implement the ACA in a Careful, Thoughtful Manner.” In Placentia, California, this is known as "incompetence".

And Dean notes that young voters are still on the hook whether they think they need insurance or not, big business, not so much.  You can file this under "Obama decides what the law is or is not."

But wait, there's more.  The WSJ takes down the administration for giving up on income verification to obtain subsidies for health exchanges, calling the decision a "Liar's Subsidy."

The White House seems to regard laws as mere suggestions, including the laws it helped to write. On the heels of last week's one-year suspension of the Affordable Care Act's employer mandate to offer insurance to workers, the Administration is now waiving a new batch of its own ObamaCare prescriptions.
. . .
In other words, anyone can receive subsidies tied to income without judging the income they declare against the income data the Internal Revenue Service collects. 

I guarantee you that the Democrat running for President in 2016 will be calling for an overhaul of the healthcare law and somehow blaming those rascawwy Republicans for sabotaging it, when in fact it will have collapsed of its own accord.  The far left is looking forward to this fail to take another run at a health care system fully funded by the federal government.  Fortunately, really bad budget numbers for Medicare should be kicking in right about then.  It will be an opportunity to shape the debate on sensible policy.

I have proposed sensible reforms before, with the ACA failing, time to resurrect our plan.  Since it is  a cut and paste, I am putting my policy prescriptions below the fold.

What You Should Be Reading 

• The details of Snowden's revelations about the NSA.  The surveillance state is coming for your liberty at full speed with the power of big data behind it.  It is not a coincidence that the big name in databases, Oracle, got its start in the intelligence field.  Screed of Momus (best blog name, ever) has a great run down on the various reasons the government is highly motivated to continue its various spying programs and to keep expanding them.
• Doo Doo Econ does the job I normally perform and analyzes the latest jobs data.  His conclusion? Despite the seemingly good numbers, the economy is still shaky.  I concur.

What You Should NOT Be Reading

• Anything to do with trial of George Zimmerman.  A young man is dead under murky circumstances, that is tragic.  The shooter alleges self defense.  A jury will decide. Only the MSM has a desire to pour the gasoline of race relations on this story while they light the match. Screw them, don't pay attention.
• Anything to do with the drama of Snowden's asylum.  That's the sideshow, which distracts from the very disturbing allegations he has made about the NSA.
• Anything about our foreign policy with respect to Egypt or Syria.  There is little we can do and no good outcomes in sight.  I despise this administration, but honestly, the situation there is so convoluted I don't think anyone could tell the difference between comptent foreign policy and Obama/Kerrry plan.  Yachting, golfing are indeed the correct response.

Liberty Movement Health Care Plan (first published in 2011):

Here is the plan that John Mackey of Whole Foods proposed, my comments in italics.

1. "Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts." Patients who have skin in the game and market knowledge will reduce costs faster than any government program.
2. "Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits."
3. Allow competition across state lines.
4. "Repeal government mandates regarding what insurance companies must cover."
5. "Enact tort reform."
6. "Make costs transparent."
7. "Enact medicare reform." Medicare policies that are mimicked by the private sector are strangling the medical profession.
8. Revise tax law to make it easier to donate to those without insurance.

To expand on these points.

1. The government could help lead this effort by reforming first Medicaid, by turning it into an insurance subsidy program for the poor. But the program would require those in the program to pay a high copay until a low catastrophic cap was reached. Such a system would create a market for a system where people have more incentive to shop for best value in medical care. This system could then be applied to Medicare.
2. The next big issue is that health care is tied to employment. My first impulse is to forbid the offering of insurance through employment, but that would make a conservative social engineer, instead of a liberal one. Removing the tax advantage would at least set a level playing field. To date, the portion of employee compensation that comes in the form of employer health insurance isn't taxed as compensation. This ties employees to their companies and needlessly. You would think that liberals would be opposed to a scheme where tax policy gives corporations leverage over employees. However, I dislike schemes whereby the government imposes on employee relations, so I will settle for leveling the playing field.
3. Interstate competition is not the norm in insurance. Surely the federal government has the right to "regulate" as in "make regular" this portion of interstate commerce, by insuring that any insurance offered for sale in a state would be available in the fifty states. Increasing competition will probably be opposed by the insurance industry, but freer markets benefit consumers.
4. One size never fits all. So mandating coverage should be banned. Insurance is always tricky business, even homeowner's insurance, as Road Dawg can attest to. Along with no mandates will be the need to enforce clear language in policies and communications with policy holders. I am a libertarian, but not so naive as to believe that some insurance companies won't try to wriggle out of agreements to save money. Court is expensive for individual consumers, so regulation that enforces good practices of transparency and clarity will be necessary. But regulation should always aim for simplicity and this also needs to be part of a reform package.
5. With regards to tort reform, we have seen positive results in Texas, where access to care increased after passage of reform.
6. Cost transparency is important to enable process improvement and allow patient choice. Most people don't know the true cost of a medical visit, even after the visit is over. Here again, Medicaid reform could lead the way, by insisting that patients receive better notice and understanding of their bill.
7. Medicare policies with regards to reimbursement are arcane and lead to huge misunderstandings on what is covered and unexpected bills. Transforming Medicare to save it for those who truly need it, into an insurance subsidy scheme, will get the government out of the rule writing business and free up insurance plans to compete.
8. Allowing Americans to donate to those who need health care insurance might make little difference, but maybe not. I see lots of do-gooder millionaires wanting to pay more taxes. Maybe they could pay for poor people's insurance in the interim.

What Has Your Government Screwed Up Today?

Government action in a Republic is subject to politics and bureaucracy, by definition.  It should attempt nothing that can be performed by the private sector, because politics and bureaucratic rules will cause its efforts to fail.

This news was filled with examples last week.

First, the City of El Cajon is out $600K over a loan made to a brewery as part of an effort to revitalize the city center.  Hey, why not a brewery?  Maybe because San Diego already has over 30 breweries, almost Belgianesque.  Now the brewery is closing after being unable to emerge from bankruptcy.  In the comments section of the linked article, Stephen Meadows, the owner, is called a con man by someone who appears to be his brother.

Meanwhile, at the Federal level, Fisker Automotive, which took a $529 million loan in 2009 to build luxury electric cars in Finland, laid off about three quarters of its work force as it "worked through financial difficulties" like no buyers for its cars and preparing for bankruptcy.  To be fair, it did not receive all of the proceeds from that loan, but the company does owe the $129 million to the DOE.

Various provisions of the Affordable Care Act are unlikely to be implemented on time, proving that even if we had read the bill, we still wouldn't know what was in it.  This week? The federal government's health insurance marketplace for small businesses, SHOP, will be delayed, with no reported date of delivery.

The reason for the delay is likely that the government "underestimated a logistical challenge inherent in getting these exchanges up and running," said Bob Graboyes, senior fellow, health care, at the National Federation of Independent Business, a small-business lobbying group in Washington that opposes the law. 

"The information-technology needs required to get these up and running are staggering," he said. "They didn't leave enough time and they underestimated the extent of the task."

I am an IT Manager for the federal government, and I know that even the simplest system is complex to deliver, because government regulation requires reasonable assurances about system security and performance.  But this is a reason to let the private sector do this job.  Further, the government's IT will always fall short for a system like this.  In the private sector, the business has a vested interest in understanding the translation of complex business processes into IT functional requirements.  In fact, business engagement with the IT team is one of the key predictors of IT project success.  However, the federal government is acting as a middleman in this application.  There is no one who really has a business interest in the successful outcome of the system.  I doubt if they will ever build a reasonable IT system.  The alternative will be a very expensive hybrid manual system.

Even though I loathe the idea of the government running an exchange at all, a better solution would be to bid out the business function of running the marketplace and give a cut of the action to the winning bidder.  Then there would be a business with a vested interest in assessing cost, schedule and performance trade-offs necessary to deliver a reasonable system.  It's cheaper to give a business a cut of the action than the billions that will be wasted on a system that is never really going to work.

Putting a bow on this; if only microbreweries needed complex IT systems, maybe I could go to work in my ideal industry in the private sector.

Strange Bedfellows Say ACA and Defense Spending Incompatible

David Brooks and Mark Steyn aren't normally fellows that reach similar conclusions, but they have within days of each other, opined that the U.S. can afford entitlement spending, especially on healthcare, or current military spending, but not both.  Both commentaries are prompted by considering what the nomination of Chuck Hagel for Defense Secretary might mean.  Here is Brooks:

Medicare spending is set to nearly double over the next decade. This is the crucial element driving all federal spending over the next few decades and pushing federal debt to about 250 percent of GDP in 30 years.. . .As the federal government becomes a health care state, there will have to be a generation of defense cuts that overwhelm anything in recent history. Keep in mind how brutal the budget pressure is going to be. According to the Government Accountability Office, if we act on entitlements today, we will still have to cut federal spending by 32 percent and raise taxes by 46 percent over the next 75 years to meet current obligations.. . .Chuck Hagel has been nominated to supervise the beginning of this generation-long process of defense cutbacks. If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot.

Mark Steyn is more entertaining, but reaches the same conclusions:

That’s why Obama’s offered him the gig. Because Obamacare at home leads inevitably to Obamacuts abroad. In that sense, America will be doing no more than following the same glum trajectory of every other great power in the postwar era.. . .You can have Euro-sized entitlements or a global military, but not both. What’s easier to do if you’re a democratic government that’s made promises it can’t afford — cut back on nanny-state lollipops, or shrug off thankless military commitments for which the electorate has minimal appetite?

Mark Steyn also agrees that Defense spending needs to be cut on the theory that it is not very effective at winning wars, despite the lopsided advantage in technology and material that America has.  I agree, actually, but as usual, the Administration is acting childish, proposing across the board cuts, so that all programs will limp along, spending money, but not delivering anything, because they have all been cut.  We need more big cuts to failed programs in Defense in order to save money for research and for programs actually working.  For example, in 2011, the Joint Tactical Radio System was cancelled, because defense planners bet against the market about the need for a software radio that could do everything.  See an excellent analysis at Ars Technica.

Ultimately, America is going to have to decide if it wants fewer soldiers and sailors, because the big bill comes from the cost of labor.  Defense isn't immune to the same analysis that face many other businesses.  Fewer soldiers mean we can't put boots on the ground again like we did in Iraq.  That may or may not be a good thing, depending on your point of view.  But we are going to have to live with toppling dictators, if we choose, but not controlling the outcome, like in Libya.  Rather than shaping the post-war landscape, like in Iraq.  Given the expense of the latter, one might argue that boots on the ground are a luxury we can no longer afford.  However, adversaries are going to notice, and it will change the calculus of world politics.  If you think America is the source of all that's wrong in the world, you might like that.  I think it will make the world more dangerous; but I also think we never thought hard enough about what force composition and programs were necessary for our national security strategy and ended up wasting a lot of money as a consequence.

The IRS Issues Even More Health Insurance Rules

CNS News is reporting on the IRS' efforts to ensure that employers don't avoid compliance with ACA requirements.  The IRS is issuing regulatory rulemaking to make everything clear, in a tersely worded 144 page notice.  Here is a little excerpt

   Section 4980H generally provides that an applicable large employer is subject to an assessable payment if either (1) the employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage (MEC) under an eligible employer-sponsored plan and any full-time employee is certified to the employer as having received an applicable premium tax credit or cost-sharing reduction (section 4980H(a) liability), or (2) the employer offers its full-time employees (and their dependents) the opportunity to enroll in MEC under an eligible employer-sponsored plan and one or more full-time employees is certified to the employer as having received an applicable premium tax credit or cost-sharing reduction (section 4980H(b) liability).
Generally, section 4980H(b) liability may arise because, with respect to a full-time employee who has been certified to the employer as having received an applicable premium tax credit or cost-sharing reduction, the employer’s coverage is unaffordable within the meaning of section 36B(c)(2)(C)(i) or does not provide minimum value within the meaning of section 36B(c)(2)(C)(ii).  As noted, an employer may be liable for an assessable payment under section 4980H(a) or (b) only if one or more full-time employees are certified to the employer as having received an applicable premium tax credit or cost-sharing reduction.
  The assessable payment under section 4980H(a) is based on all (excluding the first 30) full-time employees, while the assessable payment under section 4980H(b) is based on the number of full-time employees who are certified to the employer as having received an applicable premium tax credit or cost-sharing reduction with respect to that employee’s purchase of health insurance for himself or herself on an Exchange. In contrast, an employee’s receipt of a premium tax credit or cost sharing reduction with respect to coverage for a dependent will not result in liability for the employer under section 4980H. Under section 4980H(b), liability is contingent on whether the employer offers minimum essential coverage under an eligible employer-sponsored plan, and whether that coverage is affordable and provides minimum value, as determined by reference to the cost and characteristics of employee-only coverage offered to the employee. Section 4980H(c)(4) provides that a full-time employee with respect to any month is an employee who is employed on average at least 30 hours of service per week. An applicable large employer with respect to a calendar year is defined in section 4980H(c)(2) as an employer that employed an average of at least 50 full-time employees on business days during the preceding calendar year. For purposes of determining whether an employer is an applicable large employer, full-time equivalent employees (FTEs), which are statutorily determined based on the hours of service of employees who are not full-time employees, are taken into account.

It goes on like this for another 100 or more mind numbing pages.  The law will predictably do nothing to improve health care in this country, because it is too complex for anyone to understand or comply with.  If I were running a business, I would just say forget it, drop all coverage, pay my fine and raise my prices to make up for the lost profit.

Predictably, fewer Americans will have health insurance after this law goes into full effect.

ACA Taxes and Impacts Coming My Way and Yours

I already have been hit with fallout from the so called Affordable Care Act.  The maximum amount that you can set aside, tax free, for out of pocket medical expenses is being reduced from $5,000 to $2,500.  My medical coverage doesn't include dental and vision and has some other limitations, so this means that I will pay more my health care this year. Thank you, Democratic party. What crap, why should the cost of health care increase under this bill.

Some other gems are coming our way:

• Medicare withholding from wages goes up by 0.9 percent and there is a new 3.8 percent tax on investment income for those making more than $200,000.  Families making that much are hardly rich. 
• The threshold for deducting medical expenses will increase from 7.5 to 10 percent of income.
• Medical device manufacturers face a new tax.

Of course, in 2014, if you don't have a qualified plan, expect interaction with the IRA.

Good thing we've had a chance to read the bill, to find out what's in it.

Paul Ryan's Speech

Was spending some time with family tonight, so not much time for blogging. I made it a point to catch Paul Ryan's speech. It was the speech I wish I was able to give myself. It made the points that needed to be made about crony capitalism and the poverty of thinking that is the ACA. However, I know I'm not a typical voter, so I wondered if it really connected.

The best line in his speech was about the so called Affordable Care Act:

Obamacare comes to more than two thousand pages of rules, mandates, taxes, fees, and fines that have no place in a free country.

The way he emphasized the words free country got my attention. It is that freedom which is under assault, and the left refuses to apologize for its assault on our freedom. Ostensibly, they claim that it is Republicans who want to put "y'all back in chains." But their policies are the true threat to freedom.

To see the quote above, skip to 9:05.

ACA Anti-Tax Protest Rally - Bilbray Also Speaks - UPDATE

I attended the Anti-Tax Rally today in downtown San Diego held in front of the County Administration Building. Brian Bilbray was clearly the most famous speaker invited. He is in a competitive district, as I have previously discussed. The rally started with doctors in white lab coats speaking about the harm done to health care under the law. Doctor Gary Gonsalves led off the doctors segment. (It seems that Obama's stunt at the White House has made it de rigueur to put the docs in lab coats.


Among the issues raised by the doctors were the further insertion of bureaucracy between doctors and patients, the stripping of medicare, and the imposition of more regulations that will discourage doctor and exacerbate a doctor shortage. The last doctor to speak was Dr. Gina Loudon, who was the most exciting doctor speaker, befitting her role as radio personality. She pointed out that the GOP has not always been consistent in opposing an expansion of government which led her to work in the tea party movement, as opposed to mere Republicanism. (I agree.)

Dr. Gina Loudon talks about her tea party experience.

Many of the argument about health care proffered by speakers have been covered in some of my previous posts. But I also heard some new ideas for reforming health care and health insurance.

1. Let credit card companies manage Health Savings Accounts (that use pre-tax dollars) because they are good at detecting fraud. Further, allowing HSAs to roll from year to year would encourage people to shop around and reduce health costs. As a current user of a flexible spending account for some of my health care, I like this idea. But, the current system pushes me to spend all my eligible funds in one year, leading to some wasteful spending.
2. Get the states and the AMA out of nursing licensing. Doctors and hospitals are capable of judging the quality of nurses, this just restricts supply.
3. Get the AMA out of limiting doctor licensing and medical school accreditation, because they have a vested interest in decreasing the supply of doctors.

I was very interested to hear Brian Bilbray's take on the law. He made great points. I know he has offended some purists who believe that nothing in the law should be retained because it is an affront to freedom. I agree, but politics is the art of the possible. Bilbray makes the very good point that right now, coverage for pre-existing conditions and children to age 26 are very popular parts of the legislation. But he made the point that those good ends could still be achieved without the monstrosity of so many new taxes and fees in the law. He hammered at the tax theme. He also pointed out that the law is a sop to to lawyers and insurance companies who wrote the law at the expense of the American people. His opponent, Scott Peters, is fully supportive of the law, so even if you challenge Bilbray for not being tough enough in standing against the law, his vote will be for repeal, but a Peters vote would not be. More prominent members of the tea party do not agree with my assessment of Bilbray, you can read the opinion here.

Brian Bilbray addresses tea party rally against ACA taxes.

Nick Popaditch, was a much more dynamic and absolutist opponent of the bill. I cannot do justice to his speaking style. However, he made this great point. When the leftists like Obama and Pelosi argue their positions they attack their fellow Americans. In arguing that the reason for the mandate is because of "free riders," they are attacking their fellow Americans who have exercised their God-given right not to purchase health insurance. The attacks on Americans exercising their rights is a hallmark of this administration, my opinion. (My answer for the free rider issue? Allow insurance to offer catastrophic coverage and allow hospitals to be aggressive in collecting from dead beats who can pay.)

Nick Popaditch decries the attacks on Americans by supporters of the ACA.

A few other thoughts. Chief Justice Roberts came in for more than a little criticism. His logic that the law is a tax, does not square with the Congressional language. That is legislating from the bench, as some speakers pointed out. All in all, it was an inspiring rally that is one small piece of the larger movement to limit government.

Frequent commenter arhooley also attended; she had this to say.

I just got back from it, and although it was great, I'd like to see one change at these Tea Party rallies: a secular or agnostic Tea Party speaker. Maybe even an ex-liberal. There are plenty of us out here, and we don't always feel we're being addressed or included in speeches laden with calls to religion. An added bonus is that we're not all preaching to the choir; we know how to talk to liberals about the supposed generosity of Obamacare and similar laws and movements.

I agree about not preaching to the choir, but have to say that many of the doctors couched their discussion in non-partisan, less political terms.

UPDATE

Shane Atwell also blogged about the event. He reminded me of a point made by Popaditch that I forgot to include. We can't protect people from making bad economic choices. (He used the decision to buy a Chevy Volt as an example, to much laughter.) This is a big part of the leftist argument for government regulation of health care. If people were required to suffer the consequences of poor choices, like going bankrupt as a result of foregoing health care insurance, then they might make better choices.

The U-T's Craig Gustafson has an article about the event as well. He quotes the Scott Peters campaign's insistence that somehow Bilbray is a tea partyer now. For better or worse, that is patently untrue.

Affordable Care Tax

After the Supreme Court ruled on the ACA, I opined as to how the decision wasn't as horrible as we might have feared and a little about why it might have gone that way. However, I believe I might have been misunderstood, the decision contravenes reasonable constitutional principles. The Congress explicitly stated that the penalties in the ACA are not a tax; the Congress should have been hoist on its own petard and the entire law declared unconstitutional because they also refused to include a severability clause. The Democratic congress that passed this law dared the Supreme Court to rule in a consistent manner and the Chief Justice blinked. Despite the silver linings, this is no victory for the constitution.